~~0000719739sivb:FundManagementMembersivb:SVBLeerinkSegmentMember2021-04-012021-06-30~~0000719739us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:OtherAssetsMemberus-gaap:OtherAssetsMember2022-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File Number: 001-39154

SVB FINANCIAL GROUP

(Exact name of registrant as specified in its charter)


Delaware						91-1962278
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3003 Tasman Drive, Santa Clara, California 95054-1191

(Address of principal executive offices) (Zip Code)

(408) 654-7400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Exchange on Which Registered

Common Stock, par value $0.001 per share

SIVB

The Nasdaq Stock Market LLC

Depositary shares, each representing a 1/40th ownership interest in a share of 5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A

SIVBP

The Nasdaq Stock Market LLC

At ~~July 31, 2021,56,436,504~~April 30, 2022, 58,851,167 shares of the registrant’s common stock ($0.001 par value) were outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION		4

Item 1.	Interim Consolidated Financial Statements	4

	Interim Consolidated Balance Interim Consolidated Balance Sheets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (Unaudited)	4

	Interim Consolidated Statements of Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	5

	Interim Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	6

	Interim Consolidated Statements of Stockholders' Equity for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	67

	Interim Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)	8

	Notes to Interim Consolidated Financial Statements (Unaudited)	89

	Note 1. Basis of Presentation	9
	Note 2. Stockholders' Equity and EPS	9
	Note 3. Variable Interest Entities	11
	Note 4. Cash and Cash Equivalents	12
	Note 5. Investment Securities	13
	Note 6. Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments	19
	Note 7. Goodwill and Other Intangible Assets	28
	Note 8. Derivative Financial Instruments	28
	Note 9. Noninterest Income	33
	Note 10. Segment Reporting	40
	Note 11. Off-Balance Sheet Arrangements, Guarantees and Other Commitments	42
	Note 12. Income Taxes	43
	Note 13. Fair Value of Financial Instruments	43
	Note 14. Legal Matters	50
	Note 15. Related Parties	51
	N ote 16. Subsequent Events	51

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6252

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	~~106~~87

Item 4.	Controls and Procedures	~~109~~89

PART II - OTHER INFORMATION		~~110~~91

Item 1.	Legal Proceedings	~~110~~91

Item 1A.	Risk Factors	~~110~~91

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~110~~91

Item 3.	Defaults Upon Senior Securities	~~110~~91

Item 4.	Mine Safety Disclosures	~~110~~91

Item 5.	Other Information	~~110~~91

Item 6.	Exhibits	~~111~~91

SIGNATURES		~~112~~92

Table of Contents

Glossary of acronyms and abbreviations that may be used in this Report

~~ACL — Allowance for Credit Losses~~

~~AFS — Available-for-Sale~~

~~AIR — Accrued Interest Receivable~~

~~ALCO — Asset Liability Management Committee~~

~~AOCI — Accumulated Other Comprehensive Income~~

~~ARRC — Alternative Reference Rates Committee~~

~~ASC — Accounting Standards Codification~~

~~ASU — Accounting Standards Update~~

~~Boston Private — Boston Private Financial Holdings, Inc.~~

~~BPS — Basis Points~~

~~CECL — Current Expected Credit Losses~~

~~CET — Common Equity Tier~~

~~CMBS — Commercial Mortgage-Backed Securities~~

~~CMO — Collateralized Mortgage Obligations~~

~~CRA — Community Reinvestment Act~~

~~EHOP — Employee Home Ownership Program of the Company~~

~~EPS — Earnings Per Share~~

~~ERI — Energy and Resource Innovation~~

~~ESOP — Employee Stock Ownership Plan of the Company~~

~~ESPP — 1999 Employee Stock Purchase Plan of the Company~~

~~EVE — Economic Value of Equity~~

~~FASB — Financial Accounting Standards Board~~

~~FDIC — Federal Deposit Insurance Corporation~~

~~FHLB — Federal Home Loan Bank~~

~~FRB — Federal Reserve Bank~~

~~FTE — Full-Time Employee~~

~~FTP — Funds Transfer Pricing~~

~~GAAP — Accounting principles generally accepted in the United States of America~~

~~GCB — Global Commercial Bank~~

~~HTM — Held-to-Maturity~~

~~IASB — International Accounting Standards Board~~

~~IOSCO — International Organization of Securities Commissions~~

~~IPO — Initial Public Offering~~

~~IRS — Internal Revenue Service~~

~~ISDA — International Swaps and Derivatives Association, Inc.~~

~~IT — Information Technology~~

~~LCR — Liquidity Coverage Ratio~~

~~LIBOR — London Interbank Offered Rate~~

~~M&A — Merger and Acquisition~~

~~MBS — Mortgage-Backed Securities~~

~~NFSR — Net Stable Funding Ratio~~

~~NII — Net Interest Income~~

~~NM — Not meaningful~~

~~OREO — Other Real Estate Owned~~

~~PPP — Paycheck Protection Program~~

~~PPPLF — Paycheck Protection Program Lending Facility~~

~~SBA — U.S. Small Business Association~~

~~SEC — Securities and Exchange Commission~~

~~SOFR — Secured Overnight Financing Rate~~

~~SPAC — Special Purpose Acquisition Company~~

~~SPD-SVB — SPD Silicon Valley Bank Co., Ltd. (the Bank's joint venture bank in China)~~

~~SVB Leerink — SVB Leerink Holdings LLC~~

~~TDR — Troubled Debt Restructuring~~

~~U.K. — United Kingdom~~


ACL — Allowance for Credit Losses			HTM — Held-to-Maturity
AFS — Available-for-Sale			IASB — International Accounting Standards Board
AIR — Accrued Interest Receivable			IOSCO — International Organization of Securities Commissions
ALCO — Asset Liability Management Committee			IPO — Initial Public Offering
AOCI — Accumulated Other Comprehensive Income			IRS — Internal Revenue Service
ARRC — Alternative Reference Rates Committee			ISDA — International Swaps and Derivatives Association, Inc.
ASC — Accounting Standards Codification			IT — Information Technology
ASU — Accounting Standards Update			LCR — Liquidity Coverage Ratio
AUM — Private Bank Assets Under Management			LIBOR — London Interbank Offered Rate
Boston Private — Boston Private Financial Holdings, Inc.			M&A — Merger and Acquisition
BPS — Basis Points			MBS — Mortgage-Backed Securities
C&I — Commercial and Industrial			NFSR — Net Stable Funding Ratio
CECL — Current Expected Credit Losses			NII — Net Interest Income
CET1 — Common Equity Tier 1			NM — Not meaningful
CMBS — Commercial Mortgage-Backed Securities			OREO — Other Real Estate Owned
CMO — Collateralized Mortgage Obligations			PCD — Purchased Credit-Deteriorated
CRA — Community Reinvestment Act			PPP — Paycheck Protection Program
CRE — Commercial Real Estate			PPPLF — Paycheck Protection Program Lending Facility
EHOP — Employee Home Ownership Program of the Company			SBA — U.S. Small Business Association
EPS — Earnings Per Share			SEC — Securities and Exchange Commission
ERI — Energy and Resource Innovation			SLBO — Sponsor-Led Buy-Out
ESOP — Employee Stock Ownership Plan of the Company			SOFR — Secured Overnight Financing Rate
ESPP — 1999 Employee Stock Purchase Plan of the Company			SPAC — Special Purpose Acquisition Company
EVE — Economic Value of Equity			SPD-SVB — SPD Silicon Valley Bank Co., Ltd. (the Bank's joint venture
FASB — Financial Accounting Standards Board			bank in China)
FDIC — Federal Deposit Insurance Corporation			SVB Securities — SVB Securities Holdings LLC
FHLB — Federal Home Loan Bank			TDR — Troubled Debt Restructuring
FRB — Federal Reserve Bank			U.K. — United Kingdom
FTE — Full-Time Employee			VIE — Variable Interest Entity
FTP — Funds Transfer Pricing
GAAP — Accounting principles generally accepted in the United
States of America

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~SVB FINANCIAL GROUP AND SUBSIDIARIES~~

~~INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)~~

(Dollars in millions, except par value and share data) June 30, 2021 December 31, 2020
Assets:
Cash and cash equivalents $ 23,959 $ 17,675
Available-for-sale securities, at fair value (cost of $23,776 and $30,245, respectively) 23,876 30,913
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $5 and $0 (fair value of $60,107 and $17,217, respectively) 59,992 16,592
Non-marketable and other equity securities 1,943 1,802
Total investment securities 85,811 49,307
Loans, amortized cost 50,754 45,181
Allowance for credit losses: loans (396) (448)
Net loans 50,358 44,733
Premises and equipment, net of accumulated depreciation and amortization 196 176
Goodwill 143 143
Other intangible assets, net 57 61
Lease right-of-use assets 225 210
Accrued interest receivable and other assets 2,650 3,206
Total assets $ 163,399 $ 115,511
Liabilities and total equity:
Liabilities:
Noninterest-bearing demand deposits $ 101,259 $ 66,519
Interest-bearing deposits 44,579 35,463
Total deposits 145,838 101,982
Short-term borrowings 34 21
Lease liabilities 277 259
Other liabilities 3,449 3,972
Long-term debt 1,834 844
Total liabilities 151,432 107,078
Commitments and contingencies (Note 13 and Note 16) 0 0
SVBFG stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 367,500 and 350,000 shares issued and outstanding, respectively 2,064 340
Common stock, $0.001 par value, 150,000,000 shares authorized; 54,530,307 shares and 51,888,463 shares issued and outstanding, respectively 0 0
Additional paid-in capital 2,755 1,585
Retained earnings 6,706 5,672
Accumulated other comprehensive income 142 623
Total SVBFG stockholders’ equity 11,667 8,220
Noncontrolling interests 300 213
Total equity 11,967 8,433
Total liabilities and total equity $ 163,399 $ 115,511

~~See accompanying notes to interim consolidated financial statements (unaudited).~~

~~Table of~~ ~~Contents~~

~~SVB FINANCIAL GROUP AND SUBSIDIARIES~~

~~INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions, except per share amounts) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Interest income:
Loans $ 472 $ 365 $ 903 $ 748
Investment securities:
Taxable 251 142 475 296
Non-taxable 24 14 45 27
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities 4 3 7 20
Total interest income 751 524 1,430 1,091
Interest expense:
Deposits 12 6 22 43
Borrowings 11 5 20 11
Total interest expense 23 11 42 54
Net interest income 728 513 1,388 1,037
Provision for credit losses 35 66 54 310
Net interest income after provision for credit losses 693 447 1,334 727
Noninterest income:
Gains on investment securities, net 305 35 472 81
Gains on equity warrant assets, net 122 27 344 40
Client investment fees 15 32 35 75
Foreign exchange fees 67 36 124 84
Credit card fees 31 21 59 50
Deposit service charges 28 21 53 45
Lending related fees 18 11 34 24
Letters of credit and standby letters of credit fees 13 11 26 23
Investment banking revenue 103 142 245 188
Commissions 17 17 41 33
Other 42 16 72 27
Total noninterest income 761 369 1,505 670
Noninterest expense:
Compensation and benefits 425 320 870 575
Professional services 97 64 178 103
Premises and equipment 37 28 70 55
Net occupancy 17 19 35 37
Business development and travel 3 3 7 17
FDIC and state assessments 10 7 20 12
Merger-related charges 19 0 19 0
Other 45 39 90 80
Total noninterest expense 653 480 1,289 879
Income before income tax expense 801 336 1,550 518
Income tax expense 173 88 360 137
Net income before noncontrolling interests 628 248 1,190 381
Net income attributable to noncontrolling interests (113) (14) (138) (12)
Preferred stock dividends (13) (5) (18) (8)
Net income available to common stockholders $ 502 $ 229 $ 1,034 $ 361
Earnings per common share—basic $ 9.23 $ 4.44 $ 19.40 $ 7.00
Earnings per common share—diluted 9.09 4.42 19.10 6.97

~~See accompanying notes to interim consolidated financial statements (unaudited).~~

~~Table of~~ ~~Contents~~

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(Dollars in millions, except par value and share data)	March 31, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	20,606	$	14,619
Available-for-sale securities, at fair value (cost of $27,287 and $27,370, respectively)	25,991		27,221
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $6 and $7 (fair value of $91,667 and $97,227, respectively)	98,707		98,195
Non-marketable and other equity securities	2,605		2,543
Total investment securities	127,303		127,959
Loans, amortized cost	68,665		66,276
Allowance for credit losses: loans	(421)		(422)
Net loans	68,244		65,854
Premises and equipment, net of accumulated depreciation and amortization	283		270
Goodwill	375		375
Other intangible assets, net	154		160
Lease right-of-use assets	302		313
Accrued interest receivable and other assets	3,088		1,928
Total assets	$	220,355	$	211,478
Liabilities and total equity:
Liabilities:
Noninterest-bearing demand deposits	$	127,997	$	125,851
Interest-bearing deposits	70,137		63,352
Total deposits	198,134		189,203
Short-term borrowings	99		121
Lease liabilities	374		388
Other liabilities	2,817		2,587
Long-term debt	2,571		2,570
Total liabilities	203,995		194,869
Commitments and contingencies (Note 11 and Note14)	0		0
SVBFG stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 383,500 and 383,500 shares issued and outstanding, respectively	3,646		3,646
Common stock, $0.001 par value, 150,000,000 shares authorized; 58,840,156 and 58,748,469 shares issued and outstanding, respectively	—		—
Additional paid-in capital	5,180		5,157
Retained earnings	7,914		7,442
Accumulated other comprehensive income	(760)		(9)
Total SVBFG stockholders’ equity	15,980		16,236
Noncontrolling interests	380		373
Total equity	16,360		16,609
Total liabilities and total equity	$	220,355	$	211,478

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


	Three months ended March 31,
(Dollars in millions, except per share amounts)	2022		2021
Interest income:
Loans	$	570	$	430
Investment securities:
Taxable	511		225
Non-taxable	35		21
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities	6		3
Total interest income	1,122		679
Interest expense:
Deposits	22		10
Borrowings	18		9
Total interest expense	40		19
Net interest income	1,082		660
Provision for credit losses	11		19
Net interest income after provision for credit losses	1,071		641
Noninterest income:
Gains on investment securities, net	85		167
Gains on equity warrant assets, net	63		222
Client investment fees	35		20
Wealth management and trust fees	22		—
Foreign exchange fees	73		57
Credit card fees	37		28
Deposit service charges	30		25
Lending related fees	19		16
Letters of credit and standby letters of credit fees	14		13
Investment banking revenue	93		142
Commissions	25		24
Other	21		30
Total noninterest income	517		744
Noninterest expense:
Compensation and benefits	584		445
Professional services	106		81
Premises and equipment	58		33
Net occupancy	23		18
Business development and travel	14		4
FDIC and state assessments	16		10
Merger-related charges	16		—
Other	56		45
Total noninterest expense	873		636
Income before income tax expense	715		749
Income tax expense	182		187
Net income before noncontrolling interests	533		562
Net income attributable to noncontrolling interests	(18)		(25)
Preferred stock dividends	(43)		(5)
Net income available to common stockholders	$	472	$	532
Earnings per common share—basic	$	8.03	$	10.20
Earnings per common share—diluted	7.92		10.03

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three months ended June 30, Six months ended June 30,
(Dollars in millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Net income before noncontrolling interests $ 628 $ 248 $ 1,190 $ 381
Other comprehensive income, net of tax:
Change in foreign currency cumulative translation gains and losses:
Foreign currency translation gains (losses) 2 0 2 (9)
Related tax (expense) benefit (1) 0 (1) 2
Change in unrealized gains and losses on AFS securities:
Unrealized holding gains (losses) 270 47 (554) 591
Related tax (expense) benefit (75) (13) 154 (164)
Reclassification adjustment for gains included in net income 0 0 0 (61)
Related tax expense 0 0 0 17
Cumulative-effect adjustment for unrealized losses on securities transferred from AFS to HTM (87) 0 (78) 0
Related tax benefit 25 0 22 0
Amortization of unrealized holding net gains on securities transferred from AFS to HTM (2) 0 (5) (1)
Related tax expense 0 0 1 0
Change in unrealized gains and losses on cash flow hedges:
Unrealized gains 0 0 0 232
Related tax expense 0 0 0 (64)
Reclassification adjustment for gains included in net income (16) (16) (31) (18)
Related tax expense 5 4 9 5
Other comprehensive income (loss), net of tax 121 22 (481) 530
Comprehensive income 749 270 709 911
Comprehensive income attributable to noncontrolling interests (113) (14) (138) (12)
Comprehensive income attributable to SVBFG $ 636 $ 256 $ 571 $ 899


	Three months ended March 31,
(Dollars in millions)	2022		2021
Net income before noncontrolling interests	$	533	$	562
Other comprehensive income (loss), net of tax:
Change in foreign currency cumulative translation gains and losses:
Foreign currency translation (losses) gains	(9)		—
Related tax benefit	3		—
Change in unrealized gains and losses on AFS securities:
Unrealized holding gains (losses)	(978)		(823)
Related tax benefit	277		229
Reclassification adjustment for gains included in net income	(49)		—
Related tax expense	14		—
Cumulative-effect adjustment for unrealized gains on securities transferred from AFS to HTM	—		9
Related tax benefit (expense)	—		(3)
Amortization of unrealized holding net gains (losses) on securities transferred from AFS to HTM	3		(3)
Related tax (expense) benefit	(1)		1
Change in unrealized gains and losses on cash flow hedges:
Reclassification adjustment for losses (gains) included in net income	(15)		(16)
Related tax (benefit) expense	4		4
Other comprehensive income (loss), net of tax	(751)		(602)
Comprehensive income (loss)	(218)		(40)
Comprehensive (income) loss attributable to noncontrolling interests	(18)		(25)
Comprehensive income (loss) attributable to SVBFG	$	(236)	$	(65)

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


		Preferred Stock				Common Stock						Additional Paid-in Capital		Retained Earnings				Accumulated Other Comprehensive Income				Total SVBFG Stockholders’ Equity			Noncontrolling Interests				Total Equity				Preferred Stock				Common Stock					Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total SVBFG Stockholders’ Equity		Noncontrolling Interests		Total Equity
(Dollars in millions, except share data)	(Dollars in millions, except share data)			Shares			Amount													(Dollars in millions, except share data)				Shares								Amount
Balance at December 31, 2019				$	340		51,655,607			$	0					$	1,470			$	4,576						$	84			$	6,470			$	151		$	6,621
Cumulative adjustment for the day one adoption of ASC 326, net of tax		—				—		—				—		(35)				—				(35)			—				(35)
Balance at December 31, 2020																																Balance at December 31, 2020	$	340			51,888,463			$	—	$	1,585	$	5,672	$	623	$	8,220	$	213	$	8,433
Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	—				329,330		0				14		—				—				14			—				14			Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	—				113,334			—		2		—		—		2		—		2

Net income		—				—		—				—		369				—				369			12				381
Issuance of Common Stock																																Issuance of Common Stock	—				2,000,000			—		972						972				972
Issuance of Preferred Stock																																Issuance of Preferred Stock	739				—			—								739				739
Net Income																																Net Income	—				—			—				537				537		25		562
Capital calls and distributions, net	Capital calls and distributions, net	—				—		—				—		—				—				—			(14)				(14)			Capital calls and distributions, net	—				—			—		—		—		—		—		(12)		(12)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—				—		—				—		—				530				530			—				530			Other comprehensive income, net of tax	—				—			—		—		—		(602)		(602)		—		(602)
Share-based compensation, net																																Share-based compensation, net	—				—			—		27		—		—		27		—		27
Dividends on preferred stock																																Dividends on preferred stock	—				—			—		—		(5)		—		(5)		—		(5)
Others, net																																Others, net	—				—			—		5		—		—		5		—		5
Balance at March 31, 2021																																Balance at March 31, 2021	$	1,079			54,001,797			$	—	$	2,591	$	6,204	$	21	$	9,895	$	226	$	10,121
Balance at December 31, 2021																																Balance at December 31, 2021	$	3,646			58,748,469			$	—	$	5,157	$	7,442	$	(9)	$	16,236	$	373	$	16,609

Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations																																Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	—				91,687			—		(27)		—		—		(27)		—		(27)

Share-based compensation, net		—				—		—				39		—				—				39			—				39
Common stock repurchases		—				(244,223)		0				—		(60)				—				(60)			—				(60)
Dividends on preferred stock		—				—		—				—		(8)				—				(8)			—				(8)

Balance at June 30, 2020		$	340			51,740,714		$	0			$	1,523	$	4,842			$	614			$	7,319		$	149			$	7,468
Balance at December 31, 2020		$	340			51,888,463		$	0			$	1,585	$	5,672			$	623			$	8,220		$	213			$	8,433

Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations		—				341,844		0				(3)		—				—				(3)			—				(3)

Issuance of Common Stock		—				2,300,000		0				1,118		—				—				1,118			—				1,118
Issuance of Preferred Stock		1,724				—		—				—		—				—				1,724			—				1,724
Net income	Net income	—				—		—				—		1,052				—				1,052			138				1,190			Net income	—				—			—		—		515		—		515		18		533
Capital calls and distributions, net	Capital calls and distributions, net	—				—		—				—		—				—				—			(51)				(51)			Capital calls and distributions, net	—				—			—		—		—		—		—		(11)		(11)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—				—		—				—		—				(481)				(481)			—				(481)			Other comprehensive income, net of tax	—				—			—		—		—		(751)		(751)		—		(751)

Share-based compensation, net	Share-based compensation, net	—				—		—				55		—				—				55			—				55			Share-based compensation, net	—				—			—		50		—		—		50		—		50

Dividends on preferred stock	Dividends on preferred stock	—				—		—				—		(18)				—				(18)			—				(18)			Dividends on preferred stock	—				—			—		—		(43)		—		(43)		—		(43)

Balance at June 30, 2021		$	2,064			54,530,307		$	0			$	2,755	$	6,706			$	142			$	11,667		$	300			$	11,967
Balance at March 31, 2022																																Balance at March 31, 2022	$	3,646			58,840,156			$	—	$	5,180	$	7,914	$	(760)	$	15,980	$	380	$	16,360

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		(Dollars in millions)	2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income before noncontrolling interests	Net income before noncontrolling interests	$	1,190	$	381	Net income before noncontrolling interests	$	533	$	562
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	Provision for credit losses	54		310		Provision for credit losses	11		19
Changes in fair values of equity warrant assets, net of proceeds from exercises	Changes in fair values of equity warrant assets, net of proceeds from exercises	(40)		21		Changes in fair values of equity warrant assets, net of proceeds from exercises	(33)		(29)
Changes in fair values of derivatives, net	Changes in fair values of derivatives, net	7		(59)		Changes in fair values of derivatives, net	104		14
Gains on investment securities, net	Gains on investment securities, net	(472)		(81)		Gains on investment securities, net	(85)		(167)
Distributions of earnings from non-marketable and other equity securities	Distributions of earnings from non-marketable and other equity securities	104		49		Distributions of earnings from non-marketable and other equity securities	15		22
Depreciation and amortization	Depreciation and amortization	61		50		Depreciation and amortization	50		31
Amortization of premiums and discounts on investment securities, net	Amortization of premiums and discounts on investment securities, net	166		30		Amortization of premiums and discounts on investment securities, net	109		49
Amortization of share-based compensation	Amortization of share-based compensation	55		39		Amortization of share-based compensation	51		27
Amortization of deferred loan fees	Amortization of deferred loan fees	(115)		(78)		Amortization of deferred loan fees	(70)		(53)
Deferred income tax expense (benefit)		33		(73)
Deferred income tax expense						Deferred income tax expense	47		58
Excess tax benefit from exercise of stock options and vesting of restricted shares	Excess tax benefit from exercise of stock options and vesting of restricted shares	(30)		(2)		Excess tax benefit from exercise of stock options and vesting of restricted shares	(10)		(11)

Changes in other assets and liabilities:	Changes in other assets and liabilities:					Changes in other assets and liabilities:
Accrued interest receivable and payable, net	Accrued interest receivable and payable, net	(86)		16		Accrued interest receivable and payable, net	(13)		(41)
Accounts receivable and payable, net	Accounts receivable and payable, net	18		3		Accounts receivable and payable, net	4		10
Income tax receivable and payable, net	Income tax receivable and payable, net	(49)		131		Income tax receivable and payable, net	90		93
Accrued compensation	Accrued compensation	(137)		(115)		Accrued compensation	(560)		(279)
Foreign exchange spot contracts, net	Foreign exchange spot contracts, net	245		(6)		Foreign exchange spot contracts, net	143		107
Proceeds from termination of interest rate swaps		0		228

Other, net	Other, net	(309)		(99)		Other, net	(27)		(198)
Net cash provided by operating activities	Net cash provided by operating activities	695		745		Net cash provided by operating activities	359		214
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of AFS securities	Purchases of AFS securities	(2,289)		(8,071)		Purchases of AFS securities	(5,665)		(450)
Proceeds from sales of AFS securities	Proceeds from sales of AFS securities	0		2,654		Proceeds from sales of AFS securities	5,099		—
Proceeds from maturities and paydowns of AFS securities	Proceeds from maturities and paydowns of AFS securities	2,948		1,550		Proceeds from maturities and paydowns of AFS securities	462		1,654
Purchases of HTM securities	Purchases of HTM securities	(42,683)		(568)		Purchases of HTM securities	(4,631)		(21,685)
Proceeds from maturities and paydowns of HTM securities	Proceeds from maturities and paydowns of HTM securities	5,104		1,544		Proceeds from maturities and paydowns of HTM securities	3,974		1,770
Purchases of non-marketable and other equity securities	Purchases of non-marketable and other equity securities	(75)		(119)		Purchases of non-marketable and other equity securities	(106)		(21)
Proceeds from sales and distributions of capital of non-marketable and other equity securities	Proceeds from sales and distributions of capital of non-marketable and other equity securities	568		58		Proceeds from sales and distributions of capital of non-marketable and other equity securities	41		274
Net increase in loans	Net increase in loans	(5,573)		(3,530)		Net increase in loans	(2,342)		(2,538)
Purchases of premises and equipment	Purchases of premises and equipment	(41)		(51)		Purchases of premises and equipment	(32)		(14)

Net cash used for investing activities	Net cash used for investing activities	(42,041)		(6,533)		Net cash used for investing activities	(3,200)		(21,010)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net increase in deposits	Net increase in deposits	43,856		12,748		Net increase in deposits	8,931		22,168
Net increase in short-term borrowings		13		34
Net (decrease) increase in short-term borrowings						Net (decrease) increase in short-term borrowings	(22)		18
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	990		495		Proceeds from issuance of long-term debt	—		494
(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(51)		(14)		(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(11)		(12)
Net proceeds from the issuance of preferred stock	Net proceeds from the issuance of preferred stock	1,724		0		Net proceeds from the issuance of preferred stock	—		739
Payment of preferred stock dividend	Payment of preferred stock dividend	(17)		(8)		Payment of preferred stock dividend	(43)		(5)
Common stock repurchases		0		(60)

Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	1,115		13		Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	(27)		974
Net cash provided by financing activities	Net cash provided by financing activities	47,630		13,208		Net cash provided by financing activities	8,828		24,376
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	6,284		7,420		Net increase in cash and cash equivalents	5,987		3,580
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	17,675		6,782		Cash and cash equivalents at beginning of period	14,619		17,675
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	23,959	$	14,202	Cash and cash equivalents at end of period	$	20,606	$	21,255
Supplemental disclosures:	Supplemental disclosures:					Supplemental disclosures:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest	Interest	$	31	$	67	Interest	$	43	$	17
Income taxes	Income taxes	370		58		Income taxes	31		29
Noncash items during the period:	Noncash items during the period:					Noncash items during the period:
Changes in unrealized gains and losses on AFS securities, net of tax	Changes in unrealized gains and losses on AFS securities, net of tax	$	(400)	$	383	Changes in unrealized gains and losses on AFS securities, net of tax	$	(736)	$	(594)
Distributions of stock from investments		43		11

Transfers from AFS securities to HTM	Transfers from AFS securities to HTM	5,766		0		Transfers from AFS securities to HTM	—		2,868

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

1. Basis of Presentation

SVB Financial Group is a diversified financial services company, as well as a bank holding company and a financial holding company. SVB Financial was incorporated in the state of Delaware in March 1999. Through our various subsidiaries and divisions, we offer a diverse set of banking and financial products and services to support our clients of all sizes and stages throughout their life cycles. In these notes to our unaudited interim consolidated financial statements, when we refer to “SVB,” “SVB Financial Group,” “SVBFG," the “Company,” “we,” “our,” “us” or use similar words, we mean SVB Financial Group and all of its subsidiaries collectively, including Silicon Valley Bank (the “Bank”), unless the context requires otherwise. When we refer to “SVB Financial” or the “Parent” we are referring only to the parent company, SVB Financial Group (not including subsidiaries).

The accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal and recurring nature that are, in the opinion of management, necessary to fairly present our financial position, results of operations and cash flows in accordance with GAAP. Such unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 are not necessarily indicative of results to be expected for any future periods. These unaudited interim consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 (“~~2020~~2021 Form 10-K”).

Use of Estimates and Assumptions

The preparation of unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates may change as new information is obtained. ~~Items~~Among the more significant estimates are those that ~~are subject to such estimates include:~~relate to: 1) ~~measurements of fair value, the~~ACL for loans and for unfunded credit commitments, 2) valuation of non-marketable and other equity securities, ~~and the~~3) valuation of equity warrant assets, 2)4) goodwill, intangible assets and other purchase accounting related adjustments, and 5) income ~~taxes and 3) the adequacy of the ACL for loans and for unfunded credit commitments.~~taxes.

Principles of Consolidation and Presentation

Our unaudited interim consolidated financial statements include the accounts of SVB Financial Group and consolidated entities. We consolidate voting entities in which we have control through voting interests or entities through which we have a controlling financial interest in a VIE. We determine whether we have a controlling financial interest in a VIE by determining if we have: (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses or (c) the right to receive the expected returns of the entity. Generally, we have significant variable interests if our commitments to a limited partnership investment represent a significant amount of the total commitments to the entity. We also evaluate the impact of related parties on our determination of variable interests in our consolidation conclusions. We consolidate VIEs in which we are the primary beneficiary based on a controlling financial interest. If we are not the primary beneficiary of a VIE, we record our pro-rata interests based on our ownership percentage.

VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity or (c) the right to receive the expected returns of the entity. We assess VIEs to determine if we are the primary beneficiary of a VIE. A primary beneficiary is defined as a variable interest holder that has a controlling financial interest. A controlling financial interest requires both: (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) obligation to absorb losses or receive benefits of a VIE that could potentially be significant to a VIE. Under this analysis, we also evaluate kick-out rights and other participating rights, which could provide us a controlling financial interest. The primary beneficiary of a VIE is required to consolidate the VIE.

We also evaluate fees paid to managers of our limited partnership investments. We exclude those fee arrangements that are not deemed to be variable interests from the analysis of our interests in our investments in VIEs and the determination of a primary beneficiary, if any. Fee arrangements based on terms that are customary and commensurate with the services provided are deemed not to be variable interests and are, therefore, excluded.

All significant intercompany accounts and transactions with consolidated entities have been eliminated. ~~We have not provided financial or other support during the periods presented~~For a further description of our accounting policies regarding consolidation refer to ~~any VIE that we were not previously contractually required to provide.~~

Consolidated Financial Statements and Supplementary Data~~Table~~— Note 2 — “Summary of ~~Contents~~Significant Accounting Policies” under Part II, Item 8 of our 2021 Form 10-K.

Reclassifications

Certain prior period amounts ~~primarily related~~have been reclassified to conform to current period presentation. Changes include the presentation ~~changes to~~of our table summarizing the activity relating to our ACL for loans ~~and~~as a result of the acquisition of Boston Private, the consolidation of certain line items in our Consolidated Statement of Stockholders' Equity (unaudited)~~, have been reclassified~~ and changes to ~~conform to current period presentation.~~our reportable segments.

Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements have been prepared on a consistent basis with the accounting policies described in Consolidated Financial Statements and Supplementary Data — Note 2 — “Summary of Significant Accounting Policies” under Part II, Item 8 of our ~~2020~~2021 Form 10-K.

~~Adoption of New Accounting Standards~~

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which is part of the FASB’s initiative to reduce cost and complexity related to accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the general principles of ASC 740, Income Taxes, and simplifies income tax accounting in several areas.~~We adopted the guidance on January 1, 2021, on a modified retrospective basis. The adoption did not have a material impact on our financial position, results of operations, cash flows or disclosures.~~

2. Stockholders' Equity and EPS

AOCI

The following table summarizes the items reclassified out of AOCI into the Consolidated Statements of Income (unaudited) for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) Income Statement Location 2021 2020 2021 2020
Reclassification adjustment for gains on AFS securities included in net income Gains on investment securities, net $ 0 $ 0 $ 0 $ (61)
Related tax expense Income tax expense 0 0 0 17
Reclassification adjustment for gains on cash flow hedges included in net income Net interest income (16) (16) (31) (18)
Related tax expense Income tax expense 5 4 9 5
Total reclassification adjustment for gains included in net income, net of tax $ (11) $ (12) $ (22) $ (57)

Table of Contents


		Three months ended March 31,
(Dollars in millions)	Income Statement Location	2022		2021
Reclassification adjustment for (gains) losses on AFS securities included in net income	Gains on investment securities, net	$	(49)	$	—
Related tax expense (benefit)	Income tax expense	14		—
Reclassification adjustment for (gains) losses on cash flow hedges included in net income	Net interest income	(15)		(16)
Related tax expense (benefit)	Income tax expense	4		4
Total reclassification adjustment for (gains) losses included in net income, net of tax		$	(46)	$	(12)

The table below summarizes the activity relating to net gains and losses on our cash flow hedges included in AOCI for the three ~~and six~~ months ~~ended June 30, 2021 and 2020. Refer to Note 9 — “Derivative Financial Instruments” for additional information regarding the termination of our cash flow hedges during the quarter~~ ended March 31, ~~2020.~~2022 and 2021. Over the next 12 months, we expect that approximately ~~$61~~$52 million in AOCI at ~~June 30, 2021,~~March 31, 2022, related to unrealized gains will be reclassified out of AOCI and recognized in net income.

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
Balance, beginning of period, net of tax $ 118 $ 164 $ 129 $ (2)
Net increase in fair value, net of tax 0 0 0 168
Net realized gain reclassified to net income, net of tax (11) (11) (22) (13)
Balance, end of period, net of tax $ 107 $ 153 $ 107 $ 153

~~Table of~~ ~~Contents~~


	Three months ended March 31,
(Dollars in millions)	2022		2021
Balance, beginning of period, net of tax	$	83	$	130

Net realized (gain) loss reclassified to net income, net of tax	(11)		(12)
Balance, end of period, net of tax	$	72	$	118

EPS

Basic EPS is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issuable for stock options and restricted stock unit awards outstanding under our 2006 Equity Incentive Plan and our ESPP. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. The following is a reconciliation of basic EPS to diluted EPS for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three months ended June 30, Six months ended June 30,
(Dollars in millions except per share amounts, shares in thousands) 2021 2020 2021 2020
Numerator:
Net income available to common stockholders $ 502 $ 229 $ 1,034 $ 361
Denominator:
Weighted average common shares outstanding—basic 54,353 51,581 53,272 51,573
Weighted average effect of dilutive securities:
Stock options and ESPP 272 114 274 140
Restricted stock units and awards 527 100 569 135
Weighted average common shares outstanding—diluted 55,152 51,795 54,115 51,848
Earnings per common share:
Basic $ 9.23 $ 4.44 $ 19.40 $ 7.00
Diluted 9.09 4.42 19.10 6.97


	Three months ended March 31,
(Dollars in millions except per share amounts, shares in thousands)	2022		2021
Numerator:
Net income available to common stockholders	$	472	$	532
Denominator:
Weighted average common shares outstanding—basic	58,800		52,180
Weighted average effect of dilutive securities:
Stock options and ESPP	261		294
Restricted stock units and awards	538		602
Weighted average common shares outstanding—diluted	59,599		53,076
Earnings per common share:
Basic	$	8.03	$	10.20
Diluted	7.92		10.03

The following table summarizes the weighted-average common shares excluded from the diluted EPS calculation due to the antidilutive effect for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,		Six months ended June 30,			Three months ended March 31,
(Shares in thousands)	(Shares in thousands)	2021	2020	2021	2020	(Shares in thousands)	2022	2021
Stock options	Stock options	36	288	18	247	Stock options	46	—
Restricted stock units	Restricted stock units	0	312	44	310	Restricted stock units	45	18
Total	Total	36	600	62	557	Total	91	18

~~Common Stock~~

Table of Contents

On April 14, 2021, the Company issued and sold 300,000 additional shares of common stock under the full exercise of the underwriters' over-allotment option from our March 22, 2021 underwritten public offering. We received additional net proceeds of $146 million after deducting underwriting discounts and commissions.

Preferred Stock

On December 9, 2019, the Company issued 5.25% Non-Cumulative Perpetual Series A Preferred Stock (''Series A Preferred Stock''). The public offering consists of 14,000,000 depositary shares, each representing a 1/40th ownership interest in a shares of the Series A preferred stock with $0.001 par value and liquidation preference of $1,000 per share, or $25 per depositary share.~~The Series A Preferred Stock is redeemable at the Company’s option, subject to all applicable regulatory approvals, on or after February 15, 2025.~~

~~Table of~~ ~~Contents~~

~~On February 2, 2021, the Company issued 4.10%~~ ~~Non-Cumulative Perpetual Series B Preferred Stock (''Series B Preferred Stock''). The public offering consists of 750,000~~ depositary shares, each representing a 1/100th ownership interest in shares of Series B Preferred Stock with $0.001 par value and liquidation preferences of $100,000 per share, or $1,000 per depositary share. Dividends, if approved and declared by the Board of Directors, are payable quarterly, in arrears, at a rate per annum equal to (i) 4.10 percent from the original issue date to, but excluding, February 15, 2031 and (ii) for the February 15, 2031 dividend date and during each subsequent ten year period, the ten-year treasury rate (calculated ~~three~~ ~~business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for ten-year maturities) plus 3.064 percent.~~

~~On May 13, 2021, the Company issued 4.00%~~ ~~Non-Cumulative Perpetual Series C Preferred Stock (''Series C Preferred Stock''). The public offering consists of 1,000,000~~ depositary shares, each representing a 1/100th ownership interest in shares of Series C Preferred Stock with $0.001 par value and liquidation preferences of $100,000 per share, or $1,000 per depositary share. Dividends, if approved and declared by the Board of Directors, are payable quarterly, in arrears, at a rate per annum equal to (i) 4.000 percent from the original issue date to, but excluding, May 15, 2026, and (ii) for the May 15, 2026 dividend date and during each subsequent five years period, the five-year treasury rate (calculated ~~three~~ ~~business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities) plus 3.202 percent.~~

The following table summarizes our preferred stock at ~~June 30, 2021:~~March 31, 2022:

Series Description Amount outstanding (in millions) Carrying value
(in millions) Shares issued and outstanding Par Value Ownership interest per depositary share Liquidation preference per depositary share 2021 dividends paid per depositary share
Series A 5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock $ 350 $ 340 350,000 $ 0.001
1/40th
$ 25 $ 0.66
Series B 4.100% Fixed-Rate Non-Cumulative Perpetual Preferred Stock 750 739 7,500 0.001
1/100th
1,000 1.17
Series C 4.000% Fixed-Rate Non-Cumulative Perpetual Preferred Stock 1,000 985 10,000 0.001
1/100th
1,000 0

~~Table of~~ ~~Contents~~

~~Consolidated Statement of Changes in Equity~~

~~The following table summarizes the changes in our consolidated equity for the three months ended June 30, 2021 and 2020:~~

Preferred
Stock Common Stock Additional
Paid-in Capital Retained
Earnings Accumulated
Other
Comprehensive Income Total SVBFG
Stockholders’ Equity Noncontrolling Interests Total
Equity
(Dollars in millions, except share data) Shares Amount
Balance at March 31, 2020 $ 340 51,490,342 $ 0 $ 1,489 $ 4,613 $ 592 $ 7,034 $ 148 $ 7,182
Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations — 250,372 — 14 — — 14 — 14
Net income — — — — 234 — 234 14 248
Capital calls and distributions, net — — — — — — — (13) (13)
Other comprehensive income, net of tax — — — — — 22 22 — 22
Share-based compensation, net — — — 20 — — 20 — 20
Dividends on preferred stock — — — — (5) — (5) — (5)
Balance at June 30, 2020 $ 340 51,740,714 $ 0 $ 1,523 $ 4,842 $ 614 $ 7,319 $ 149 $ 7,468
Balance at March 31, 2021 $ 1,079 54,001,797 $ 0 $ 2,591 $ 6,204 $ 21 $ 9,895 $ 226 $ 10,121
Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations — 228,510 — (5) — — (5) — (5)
Issuance of Common Stock — 300,000 0 146 — — 146 — 146
Issuance of Preferred Stock 985 — — — — — 985 — 985
Net income — — — — 515 — 515 113 628
Capital calls and distributions, net — — — — — — — (39) (39)
Other comprehensive income, net of tax — — — — — 121 121 — 121
Share-based compensation, net — — — 28 — — 28 — 28
Dividends on preferred stock — — — — (13) — (13) — (13)
Other, net — — — (5) — — (5) — (5)
Balance at June 30, 2021 $ 2,064 54,530,307 $ 0 $ 2,755 $ 6,706 $ 142 $ 11,667 $ 300 $ 11,967


Series	Description	Amount outstanding (in millions)		Carrying value (in millions)		Shares issued and outstanding	Par Value		Ownership interest per depositary share	Liquidation preference per depositary share		2022 dividends paid per depositary share
Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340	350,000	$	0.001	1/40th	$	25	$	0.33
Series B	4.100% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	750		739		7,500	0.001		1/100th	1,000		10.25
Series C	4.000% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	1,000		985		10,000	0.001		1/100th	1,000		10.00
Series D	4.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	1,000		989		10,000	0.001		1/100th	1,000		12.63
Series E	4.700% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	600		593		6,000	0.001		1/100th	1,000		13.97

3. Variable Interest Entities

Our involvement with VIEs includes our investments in venture capital and private equity funds, debt funds, private and public portfolio companies, ~~and~~ qualified affordable housing ~~projects.~~projects, and subordinated debt instruments.

The following table presents the carrying amounts and classification of ~~significant~~ variable interests in consolidated and unconsolidated VIEs as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

~~Table of~~ ~~Contents~~


(Dollars in millions)	(Dollars in millions)	Consolidated VIEs		Unconsolidated VIEs		Maximum Exposure to Loss in Unconsolidated VIEs		(Dollars in millions)	Consolidated VIEs		Unconsolidated VIEs		Maximum Exposure to Loss in Unconsolidated VIEs
June 30, 2021:
March 31, 2022:								March 31, 2022:
Assets:	Assets:							Assets:
Cash and cash equivalents	Cash and cash equivalents	$	13	$	0	$	—	Cash and cash equivalents	$	7	$	—	$	—
Non-marketable and other equity securities (1)	Non-marketable and other equity securities (1)	618		955		955		Non-marketable and other equity securities (1)	888		1,231		1,231
Accrued interest receivable and other assets		24		0		—
Accrued interest receivable and other assets (2)								Accrued interest receivable and other assets (2)	31		6		—
Total assets	Total assets	$	655	$	955	$	955	Total assets	$	926	$	1,237	$	1,231
Liabilities:	Liabilities:							Liabilities:
Other liabilities (1)	Other liabilities (1)	14		415		—		Other liabilities (1)	19		469		—
Long term debt (2)								Long term debt (2)	—		90		—
Total liabilities	Total liabilities	$	14	$	415	$	—	Total liabilities	$	19	$	559	$	—
December 31, 2020:
December 31, 2021:								December 31, 2021:
Assets:	Assets:							Assets:
Cash and cash equivalents	Cash and cash equivalents	$	15	$	0	$	—	Cash and cash equivalents	$	13	$	—	$	—
Non-marketable and other equity securities (1)	Non-marketable and other equity securities (1)	422		859		859		Non-marketable and other equity securities (1)	768		1,233		1,233
Accrued interest receivable and other assets		1		0		—
Accrued interest receivable and other assets (2)								Accrued interest receivable and other assets (2)	31		6		—
Total assets	Total assets	$	438	$	859	$	859	Total assets	$	812	$	1,239	$	1,233
Liabilities:	Liabilities:							Liabilities:
Other liabilities (1)	Other liabilities (1)	1		370		—		Other liabilities (1)	$	18	$	482	—
Long term debt (2)								Long term debt (2)	—		90		$	—
Total liabilities	Total liabilities	$	1	$	370	$	—	Total liabilities	$	18	$	572	$	—

(1) Included in our unconsolidated non-marketable and other equity securities portfolio at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are investments in qualified affordable housing projects of ~~$696~~$957 million and ~~$616~~$954 million, respectively, and related other liabilities consisting of unfunded commitments of ~~$415~~$469 million and ~~$370~~$482 million, respectively.

(2) Included in our unconsolidated accrued interest receivable and other assets are investments in statutory trusts for junior subordinated debt and included in long term debt previously issued by Boston Private and assumed in the acquisition of $6 million and $90 million, respectively, at March 31, 2022 and December 31, 2021.

Non-marketable and other equity securities

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD-SVB, debt funds, private and public portfolio companies and qualified affordable housing projects. Many of these are investments held by SVB Financial in third-party funds in which we do not have controlling or significant variable interests. These investments represent our unconsolidated VIEs in the table above. Our non-marketable and other

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equity securities portfolio also includes investments from SVB Capital. SVB Capital is the funds management business of SVB Financial Group, which focuses primarily on venture capital investments. The SVB Capital family of funds is comprised of direct venture funds that invest in companies and funds of funds that invest in other venture capital funds. We have a controlling and significant variable interest in 34 of these SVB Capital funds and consolidate these funds for financial reporting purposes.

~~All~~Most investments are generally nonredeemable, and distributions are expected to be received through the liquidation of the underlying investments throughout the life of the investment fund. Investments may only be sold or transferred subject to the notice and approval provisions of the underlying investment agreement. Subject to applicable regulatory requirements, including the Volcker Rule, we also make commitments to invest in venture capital and private equity funds. For additional details, see Note 1311 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments.”

The Bank also has variable interests in low income housing tax credit funds, in connection with fulfilling its responsibilities under the CRA, that are designed to generate a return primarily through the realization of federal tax credits. These investments are typically limited partnerships in which the general partner, other than the Bank, holds the power over significant activities of the VIE; therefore, these investments are not consolidated. For additional information on our investments in qualified affordable housing projects, see Note 5 — “Investment Securities.".

As of ~~June 30, 2021,~~March 31, 2022, our exposure to loss with respect to the consolidated VIEs is limited to our net assets of ~~$641~~$907 million and our exposure to loss for our unconsolidated VIEs is equal to our investment in these assets of ~~$955 million.~~$1.2 billion.

Junior subordinated debentures

~~Table~~SVB Financial Group assumed two statutory trusts during the merger with Boston Private. These trusts were for the purpose of ~~Contents~~issuing trust preferred securities and investing the proceeds in junior subordinated debentures. These statutory trusts created by legacy Boston Private are not consolidated within the financial statements as the Company is not the primary beneficiary of the trusts; however, the total junior subordinated debentures payable to the preferred stockholders of statutory trusts are reported as long-term debt in the financial statements.

4. Cash and Cash Equivalents

The following table details our cash and cash equivalents at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Cash and due from banks ~~(1)~~	Cash and due from banks ~~(1)~~	$	23,197	$	17,448	Cash and due from banks ~~(1)~~	$	1,713	$	2,201
Securities purchased under agreements to resell (2)		762		227

Interest bearing deposits with the Federal Reserve Bank						Interest bearing deposits with the Federal Reserve Bank	13,246		5,686
Interest bearing deposits with other institutions						Interest bearing deposits with other institutions	5,147		5,773
Securities purchased under agreements to resell (1)						Securities purchased under agreements to resell (1)	420		607
Other short-term investment securities						Other short-term investment securities	80		352
Total cash and cash equivalents	Total cash and cash equivalents	$	23,959	$	17,675	Total cash and cash equivalents	$	20,606	$	14,619

(1)At ~~June 30, 2021~~March 31, 2022 and December 31, 2020, $16.4 billion and $13.7 billion, respectively, of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate, and interest-earning deposits in other financial institutions~~were $5.8 billion and $3.0 billion, respectively.~~

~~(2)At June 30,~~ 2021, ~~and December 31, 2020,~~ securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of ~~$777~~$427 million and ~~$232~~$620 million, respectively. ~~NaN~~None of these securities were sold or repledged as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

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5. Investment Securities

Our investment securities portfolio consists of: (i) an AFS securities portfolio and a HTM securities portfolio, both of which represent interest-earning investment securities, and (ii) a non-marketable and other equity securities portfolio, which primarily represents investments managed as part of our funds management business, investments in qualified affordable housing projects, as well as public equity securities held as a result of equity warrant assets exercised.

AFS Securities

The major components of our AFS investment securities portfolio at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:


		June 30, 2021									March 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value		(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value
AFS securities, at fair value:	AFS securities, at fair value:									AFS securities, at fair value:
U.S. Treasury securities	U.S. Treasury securities	$	6,051	$	189	$	(5)	$	6,235	U.S. Treasury securities	$	17,152	$	6	$	(519)	$	16,639
U.S. agency debentures	U.S. agency debentures	84		0		(3)		81		U.S. agency debentures	162		—		(11)		151
Foreign government debt securities	Foreign government debt securities	15		0		0		15		Foreign government debt securities	59		—		—		59
Residential MBS:	Residential MBS:									Residential MBS:
Agency-issued MBS	Agency-issued MBS	11,606		80		(124)		11,562		Agency-issued MBS	7,471		1		(626)		6,846
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	4,497		17		(90)		4,424		Agency-issued CMO—fixed rate	911		—		(51)		860

Agency-issued CMBS	Agency-issued CMBS	1,523		44		(8)		1,559		Agency-issued CMBS	1,532		—		(96)		1,436

Total AFS securities	Total AFS securities	$	23,776	$	330	$	(230)	$	23,876	Total AFS securities	$	27,287	$	7	$	(1,303)	$	25,991

December 31, 2020
(Dollars in millions) Amortized
Cost Unrealized
Gains Unrealized
Losses Carrying
Value
AFS securities, at fair value:
U.S. Treasury securities $ 4,198 $ 272 $ 0 $ 4,470
U.S. agency debentures 234 4 (1) 237
Foreign government debt securities 24 0 0 24
Residential MBS:
Agency-issued MBS 13,271 233 (1) 13,503
Agency-issued CMO—fixed rate 8,077 40 (10) 8,107
Agency-issued CMBS 4,441 134 (3) 4,572
Total AFS securities $ 30,245 $ 683 $ (15) $ 30,913

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	December 31, 2021
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value
AFS securities, at fair value:
U.S. Treasury securities	$	15,799	$	121	$	(70)	$	15,850
U.S. agency debentures	200		—		(4)		196
Foreign government debt securities	61		—		—		61
Residential MBS:
Agency-issued MBS	8,786		13		(210)		8,589
Agency-issued CMO—fixed rate	988		3		(9)		982

Agency-issued CMBS	1,536		27		(20)		1,543

Total AFS securities	$	27,370	$	164	$	(313)	$	27,221

The following table summarizes sale activity of AFS securities during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ as recorded in the line item “Gains on investment securities, net," a component of noninterest income:

For the three and six months ended June 30, 2021 and three months ended June 30, 2020 we did not have any sales proceeds, gross unrealized gains, or gross unrealized losses from our AFS securities portfolio.


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Sales proceeds	Sales proceeds	$	0	$	0	$	0	$	2,654	Sales proceeds	$	5,099	$	—
Net realized gains and losses:	Net realized gains and losses:									Net realized gains and losses:
Gross realized gains	Gross realized gains	$	0	$	0	$	0	$	61	Gross realized gains	144		—
Gross realized losses	Gross realized losses	0		0		0		0		Gross realized losses	(95)		—
Net realized gains	Net realized gains	$	0	$	0	$	0	$	61	Net realized gains	$	49	$	—

The following tables summarize our AFS securities in an unrealized loss position for which an ACL has not been recorded and summarized into categories of less than 12 months, or 12 months or longer, as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

June 30, 2021
Less than 12 months 12 months or longer (1) Total
(Dollars in millions) Fair Value of
Investments Unrealized
Losses Fair Value of
Investments Unrealized
Losses Fair Value of
Investments Unrealized
Losses
AFS securities:
U.S. Treasury securities $ 2,218 $ (5) $ 0 $ 0 $ 2,218 $ (5)
U.S. agency debentures 81 (3) 0 0 81 (3)
Residential MBS:
Agency-issued MBS 8,268 (124) 0 0 8,268 (124)
Agency-issued CMO —fixed rate 2,832 (89) 76 (1) 2,908 (90)
Agency-issued CMBS 651 (8) 0 0 651 (8)
Total AFS securities (1) $ 14,050 $ (229) $ 76 $ (1) $ 14,126 $ (230)

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	March 31, 2022
	Less than 12 months				12 months or longer				Total
(Dollars in millions)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses
AFS securities:
U.S. Treasury securities	$	13,377	$	(515)	$	46	$	(4)	$	13,423	$	(519)
U.S. agency debentures	76		(2)		74		(9)		150		(11)

Residential MBS:
Agency-issued MBS	2,548		(193)		4,027		(433)		6,575		(626)
Agency-issued CMO —fixed rate	782		(44)		71		(7)		853		(51)

Agency-issued CMBS	1,254		(70)		183		(26)		1,437		(96)
Total AFS securities (1)	$	18,037	$	(824)	$	4,401	$	(479)	$	22,438	$	(1,303)

(1)As of ~~June 30, 2021,~~March 31, 2022, we identified a total of ~~344~~627 investments that were in unrealized loss positions with 2132 investments in an unrealized loss position for a period of time greater than 12 months. Based on our analysis of the securities in an unrealized loss position as of ~~June 30, 2021,~~March 31, 2022, the decline in value is unrelated to credit loss and is related to changes in market interest rates since purchase and therefore changes in value for securities are included in other comprehensive income. Market valuations and credit loss analyses on assets in the AFS securities portfolio are reviewed and monitored on a quarterly basis. As of ~~June 30, 2021,~~March 31, 2022, we do not intend to sell any of our securities in an unrealized loss position prior to recovery of our amortized cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our amortized cost basis. None of the investments in our AFS securities portfolio were past due as of ~~June 30, 2021.~~March 31, 2022.


		December 31, 2020													December 31, 2021
		Less than 12 months				12 months or longer				Total					Less than 12 months				12 months or longer				Total
(Dollars in millions)	(Dollars in millions)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		(Dollars in millions)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses
AFS securities:	AFS securities:													AFS securities:
U.S. Treasury securities ~~(1)~~	U.S. Treasury securities ~~(1)~~	$	60	$	0	$	0	$	0	$	60	$	0	U.S. Treasury securities ~~(1)~~	$	7,777	$	(70)	$	—	$	—	$	7,777	$	(70)
U.S. agency debentures	U.S. agency debentures	133		(1)		0		0		133		(1)		U.S. agency debentures	196		(4)		—		—		196		(4)

Residential MBS:	Residential MBS:													Residential MBS:
Agency-issued MBS	Agency-issued MBS	904		(1)		0		0		904		(1)		Agency-issued MBS	8,280		(210)		—		—		8,280		(210)
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	2,199		(10)		0		0		2,199		(10)		Agency-issued CMO—fixed rate	740		(9)		—		—		740		(9)

Agency-issued CMBS	Agency-issued CMBS	989		(3)		0		0		989		(3)		Agency-issued CMBS	603		(11)		163		(9)		766		(20)

Total AFS securities ~~(2)~~(1)	Total AFS securities ~~(2)~~(1)	$	4,285	$	(15)	$	0	$	0	$	4,285	$	(15)	Total AFS securities ~~(2)~~(1)	$	17,596	$	(304)	$	163	$	(9)	$	17,759	$	(313)

(1)~~At December 31, 2020, gross unrealized losses totaled less than $1 million for U.S. Treasury AFS securities with a loss duration of less than less than 12 months.~~

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~~(2)~~As of December 31, ~~2020,~~2021, we identified a total of 93475 investments that were in unrealized loss positions, of which 04 investments are in an unrealized loss position for a period of time greater than 12 months. None of the investments in our AFS securities portfolio were past due as of December 31, ~~2020.~~2021.

The following table summarizes the fixed income securities, carried at fair value, classified as AFS as of ~~June 30, 2021~~March 31, 2022 by the remaining contractual principal maturities. For U.S. Treasury securities, U.S. agency debentures and foreign government debt securities, the expected maturity is the actual contractual maturity of the notes. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as AFS typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments.


		June 30, 2021											March 31, 2022
(Dollars in millions)	(Dollars in millions)	Total		One Year or Less		After One Year to Five Years		After Five Years to Ten Years		After Ten Years		(Dollars in millions)	Total		One Year or Less		After One Year to Five Years		After Five Years to Ten Years		After Ten Years
U.S. Treasury securities	U.S. Treasury securities	$	6,235	$	41	$	6,037	$	157	$	0	U.S. Treasury securities	$	16,639	$	25	$	16,614	$	—	$	—
U.S. agency debentures	U.S. agency debentures	81		0		0		81		0		U.S. agency debentures	151		41		35		75		—
Foreign government debt securities	Foreign government debt securities	15		15		0		0		0		Foreign government debt securities	59		59		—		—		—
Residential MBS:	Residential MBS:											Residential MBS:
Agency-issued MBS	Agency-issued MBS	11,562		0		0		0		11,562		Agency-issued MBS	6,846		—		—		—		6,846
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	4,424		0		0		0		4,424		Agency-issued CMO—fixed rate	860		—		—		—		860

Agency-issued CMBS	Agency-issued CMBS	1,559		0		0		1,559		0		Agency-issued CMBS	1,436		—		105		1,331		—
Total	Total	$	23,876	$	56	$	6,037	$	1,797	$	15,986	Total	$	25,991	$	125	$	16,754	$	1,406	$	7,706

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HTM Securities

During the second quarter of 2021, we re-designated certain securities from the classification of AFS to HTM. The securities re-designated consisted of agency-issued CMBS with a total carrying value of $5.7 billion at June 30, 2021. At the time of re-designation the securities included $78 million of pretax net unrealized loss in other comprehensive income and are being amortized over the life of the securities in a manner consistent with the amortization of a premium or discount. Our decision to re-designate the securities was based on our ability and intent to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding. HTM securities are carried on the balance sheet at amortized cost and the changes in the value of these securities, other than an ACL, are not reported on the financial statements.

The components of our HTM investment securities portfolio at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:


		June 30, 2021											March 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		ACL		(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		ACL
HTM securities, at cost:	HTM securities, at cost:											HTM securities, at cost:
U.S. agency debentures (1)	U.S. agency debentures (1)	$	552	$	19	$	0	$	571	$	0	U.S. agency debentures (1)	$	536	$	—	$	(24)	$	512	$	—
Residential MBS:	Residential MBS:											Residential MBS:
Agency-issued MBS	Agency-issued MBS	36,724		194		(302)		36,616		0		Agency-issued MBS	63,517		7		(4,444)		59,080		—
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	4,474		29		(23)		4,480		0		Agency-issued CMO—fixed rate	11,231		—		(800)		10,431		—
Agency-issued CMO—variable rate	Agency-issued CMO—variable rate	117		1		0		118		0		Agency-issued CMO—variable rate	93		—		—		93		—
Agency-issued CMBS	Agency-issued CMBS	12,492		76		(61)		12,507		0		Agency-issued CMBS	15,141		7		(1,030)		14,118		—
Municipal bonds and notes	Municipal bonds and notes	5,265		189		(16)		5,438		0		Municipal bonds and notes	7,484		34		(742)		6,776		1
Corporate bonds	Corporate bonds	373		4		0		377		5		Corporate bonds	711		—		(54)		657		5
Total HTM securities	Total HTM securities	$	59,997	$	512	$	(402)	$	60,107	$	5	Total HTM securities	$	98,713	$	48	$	(7,094)	$	91,667	$	6

(1) Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.

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		December 31, 2020											December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		ACL		(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		ACL
HTM securities, at amortized cost:	HTM securities, at amortized cost:											HTM securities, at amortized cost:
U.S. agency debentures (1)	U.S. agency debentures (1)	$	402	$	19	$	0	$	421	$	0	U.S. agency debentures (1)	$	609	$	8	$	(2)	$	615	$	—
Residential MBS:	Residential MBS:											Residential MBS:
Agency-issued MBS	Agency-issued MBS	7,740		240		(2)		7,978		0		Agency-issued MBS	64,439		124		(887)		63,676		—
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	1,735		23		0		1,758		0		Agency-issued CMO—fixed rate	10,226		9		(145)		10,090		—
Agency-issued CMO—variable rate	Agency-issued CMO—variable rate	137		1		0		138		0		Agency-issued CMO—variable rate	100		1		—		101		—
Agency-issued CMBS	Agency-issued CMBS	2,943		124		0		3,067		0		Agency-issued CMBS	14,959		39		(277)		14,721		—
Municipal bonds and notes	Municipal bonds and notes	3,635		221		(1)		3,855		0		Municipal bonds and notes	7,157		185		(27)		7,315		1
Corporate bonds												Corporate bonds	712		2		(5)		709		6
Total HTM securities	Total HTM securities	$	16,592	$	628	$	(3)	$	17,217	$	0	Total HTM securities	$	98,202	$	368	$	(1,343)	$	97,227	$	7

(1) Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.

Allowance for Credit Losses for HTM Securities

For HTM securities, the three months ended ~~June 30, 2021~~March 31, 2022 had a beginning ACL balance of $1$7 million, a ~~provision for~~reduction of credit losses of $4$1 million, and an ending ACL balance of $5$6 million.

For HTM securities, the ~~six~~three months ended ~~June 30,~~March 31, 2021, ~~had a~~the beginning ACL balance ofwas less than $1 million, a provision for credit losses ~~of $5~~was approximately $1 million and anthe ending ACL balance ~~of $5 million.~~

For the three and six months ended June 30, 2020, the beginning ACL balance, the day one impact of adopting ASC 326, the provision for credit losses and the ending balance of ACL for HTM securities, in each case, were all less thanwas $1 million.

AIR from HTM securities totaled ~~$144~~$216 million at ~~June 30, 2021~~March 31, 2022 and ~~$55~~$225 million at December 31, ~~2020~~2021 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

Credit Quality Indicators

On a quarterly basis, management monitors the credit quality for HTM securities through the use of standard credit ratings. The following table summarizes our amortized cost of HTM securities aggregated by credit quality indicator at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~

(Dollars in millions) June 30, 2021 December 31, 2020
Municipal bonds and notes:
Aaa $ 2,680 $ 2,070
Aa1 1,619 1,145
Aa2 802 420
Aa3 152 0
A1 12 0
Total municipal bonds and notes $ 5,265 $ 3,635
Corporate bonds:
Aa1 $ 10 $ 0
Aa2 28 0
Aa3 24 0
A1 158 0
A2 153 0
Total corporate bonds $ 373 $ 0

2021:

1815

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(Dollars in millions)	March 31, 2022		December 31, 2021
Municipal bonds and notes:
Aaa	$	4,141	$	3,774
Aa1	1,991		2,031
Aa2	1,153		1,154
Aa3	172		172
A1	27		26
Total municipal bonds and notes	$	7,484	$	7,157
Corporate bonds:
Aaa	$	39	$	39

Aa2	42		42
Aa3	105		105
A1	283		251
A2	231		264
A3	11		11
Total corporate bonds	$	711	$	712

The following table summarizes the remaining contractual principal maturities on fixed income investment securities classified as HTM as of ~~June 30, 2021.~~March 31, 2022. For U.S. agency debentures, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as HTM typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments; however, we expect to collect substantially all of the recorded investment on these securities.


		June 30, 2021																					March 31, 2022
		Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years					Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		(Dollars in millions)	Net Carry Value		Fair Value		Net Carry Value		Fair Value		Net Carry Value		Fair Value		Net Carry Value		Fair Value		Amortized Cost		Fair Value
U.S. agency debentures	U.S. agency debentures	$	552	$	571	$	4	$	4	$	141	$	146	$	407	$	421	$	0	$	0	U.S. agency debentures	$	536	$	512	$	4	$	4	$	109	$	106	$	423	$	402	$	—	$	—
Residential MBS:	Residential MBS:																					Residential MBS:
Agency-issued MBS	Agency-issued MBS	36,724		36,616		3		4		9		9		449		465		36,263		36,138		Agency-issued MBS	63,517		59,080		—		—		6		6		1,181		1,161		62,330		57,913
Agency-issued CMO—fixed rate		4,474		4,480		0		0		5		5		404		413		4,065		4,062
Agency-issued CMO—variable rate		117		118		0		0		0		0		0		0		117		118
Agency-issued CMO—fixed rate																						Agency-issued CMO—fixed rate	11,231		10,431		—		—		31		31		266		259		10,934		10,141
Agency-issued CMO—variable rate																						Agency-issued CMO—variable rate	93		93		—		—		—		—		—		—		93		93
Agency-issued CMBS	Agency-issued CMBS	12,492		12,507		0		0		0		0		535		554		11,957		11,953		Agency-issued CMBS	15,141		14,118		32		32		178		170		970		904		13,961		13,012
Municipal bonds and notes	Municipal bonds and notes	5,265		5,438		61		61		113		118		833		881		4,258		4,378		Municipal bonds and notes	7,483		6,776		37		37		187		186		1,231		1,190		6,028		5,363
Corporate bonds	Corporate bonds	373		377		0		0		0		0		373		377		0		0		Corporate bonds	706		657		—		—		52		49		654		608		—		—
Total	Total	$	59,997	$	60,107	$	68	$	69	$	268	$	278	$	3,001	$	3,111	$	56,660	$	56,649	Total	$	98,707	$	91,667	$	73	$	73	$	563	$	548	$	4,725	$	4,524	$	93,346	$	86,522

1916

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Non-marketable and Other Equity Securities

The major components of our non-marketable and other equity securities portfolio at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Non-marketable and other equity securities:	Non-marketable and other equity securities:					Non-marketable and other equity securities:
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):					Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments (1)	Consolidated venture capital and private equity fund investments (1)	$	108	$	89	Consolidated venture capital and private equity fund investments (1)	$	196	$	130
Unconsolidated venture capital and private equity fund investments (2)	Unconsolidated venture capital and private equity fund investments (2)	187		185		Unconsolidated venture capital and private equity fund investments (2)	210		208
Other investments without a readily determinable fair value (3)	Other investments without a readily determinable fair value (3)	79		61		Other investments without a readily determinable fair value (3)	169		164
Other equity securities in public companies (fair value accounting) (4)	Other equity securities in public companies (fair value accounting) (4)	107		281		Other equity securities in public companies (fair value accounting) (4)	55		117
Non-marketable securities (equity method accounting) (5):	Non-marketable securities (equity method accounting) (5):					Non-marketable securities (equity method accounting) (5):
Venture capital and private equity fund investments	Venture capital and private equity fund investments	544		362		Venture capital and private equity fund investments	721		671
Debt funds	Debt funds	7		5		Debt funds	5		5
Other investments	Other investments	215		203		Other investments	292		294
Investments in qualified affordable housing projects, net (6)	Investments in qualified affordable housing projects, net (6)	696		616		Investments in qualified affordable housing projects, net (6)	957		954
Total non-marketable and other equity securities	Total non-marketable and other equity securities	$	1,943	$	1,802	Total non-marketable and other equity securities	$	2,605	$	2,543

(1)The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and our ownership percentage of each fund at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (fair value accounting):

June 30, 2021 December 31, 2020
(Dollars in millions) Amount Ownership % Amount Ownership %
Strategic Investors Fund, LP $ 5 12.6 % $ 5 12.6 %
Capital Preferred Return Fund, LP 51 20.0 50 20.0
Growth Partners, LP 52 33.0 34 33.0
Total consolidated venture capital and private equity fund investments $ 108 $ 89


	March 31, 2022				December 31, 2021
(Dollars in millions)	Amount		Ownership %		Amount		Ownership %
Strategic Investors Fund, LP	$	3	12.6	%	$	2	12.6	%
Capital Preferred Return Fund, LP	61		20.0		61		20.0
Growth Partners, LP	65		33.0		67		33.0
Redwood Evergreen Fund, LP	67		100.0		—		—
Total consolidated venture capital and private equity fund investments	$	196			$	130

(2)The carrying value represents investments in ~~157and 162~~150 funds (primarily venture capital funds) at ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively,~~2021, where our ownership interest is typically less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating activities and financial policies. We carry our unconsolidated venture capital and private equity fund investments at fair value based on the fund investments' net asset values per share as obtained from the general partners of the investments. For each fund investment, we adjust the net asset value per share for differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example ~~March~~December 31st for our ~~June 30~~March 31th stconsolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

(3)These investments include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted.

2017

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The following table shows the changes to the carrying amount of other investments without a readily determinable fair value for the ~~six~~three months ended ~~June 30, 2021:~~March 31, 2022:

(Dollars in millions) Six months ended June 30, 2021 Cumulative Adjustments
Measurement alternative:
Carrying value at June 30, 2021 $ 79
Carrying value adjustments:
Impairment $ 0 $ (1)
Upward changes for observable prices 12 16
Downward changes for observable prices (2) (6)


(Dollars in millions)	Three months ended March 31, 2022		Cumulative Adjustments
Measurement alternative:
Carrying value at March 31, 2022	$	169
Carrying value adjustments:
Impairment	$	—	$	1
Upward changes for observable prices	—		72
Downward changes for observable prices	—		(11)

(4)Investments classified as other equity securities (fair value accounting) represent shares held in public companies as a result of exercising public equity warrant assets and direct equity investments in public companies held by our consolidated funds. Changes in equity securities measured at fair value are recognized through net income.

(5)The following table shows the carrying value and our ownership percentage of each investment at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (equity method accounting):


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		Ownership %		Amount		Ownership %		(Dollars in millions)	Amount		Ownership %		Amount		Ownership %
Venture capital and private equity fund investments:	Venture capital and private equity fund investments:									Venture capital and private equity fund investments:
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	$	4	8.6	%	$	4	8.6	%	Strategic Investors Fund II, LP	$	3	8.6	%	$	3	8.6	%
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	28		5.9		16		5.9		Strategic Investors Fund III, LP	22		5.9		25		5.9
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	36		5.0		25		5.0		Strategic Investors Fund IV, LP	34		5.0		36		5.0
Strategic Investors Fund V funds	Strategic Investors Fund V funds	87		Various		67		Various		Strategic Investors Fund V funds	90		Various		87		Various
CP II, LP (i)	CP II, LP (i)	8		5.1		8		5.1		CP II, LP (i)	2		5.1		2		5.1
Other venture capital and private equity fund investments	Other venture capital and private equity fund investments	381		Various		242		Various		Other venture capital and private equity fund investments	570		Various		518		Various
Total venture capital and private equity fund investments	Total venture capital and private equity fund investments	$	544			$	362			Total venture capital and private equity fund investments	$	721			$	671
Debt funds:	Debt funds:									Debt funds:
Gold Hill Capital 2008, LP (ii)	Gold Hill Capital 2008, LP (ii)	$	5	15.5	%	$	4	15.5	%	Gold Hill Capital 2008, LP (ii)	$	4	15.5	%	$	4	15.5	%
Other debt funds	Other debt funds	2		Various		1		Various		Other debt funds	1		Various		1		Various
Total debt funds	Total debt funds	$	7			$	5			Total debt funds	$	5			$	5
Other investments:	Other investments:									Other investments:
SPD Silicon Valley Bank Co., Ltd.	SPD Silicon Valley Bank Co., Ltd.	$	115	50.0	%	$	115	50.0	%	SPD Silicon Valley Bank Co., Ltd.	$	156	50.0	%	$	154	50.0	%
Other investments	Other investments	100		Various		88		Various		Other investments	136		Various		140		Various
Total other investments	Total other investments	$	215			$	203			Total other investments	$	292			$	294

(i)Our ownership includes direct ownership interest of 1.3 percentand indirect ownership interest of 3.8 percentthrough our investments in Strategic Investors Fund II, LP.

(ii)Our ownership includes direct ownership interest of 11.5 percent ~~in the fund~~ and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0 percent.

(6)The following table presents the balances of our investments in qualified affordable housing projects and related unfunded commitments included as a component of “Other liabilities” on our consolidated balance sheets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

(Dollars in millions) June 30, 2021 December 31, 2020
Investments in qualified affordable housing projects, net $ 696 $ 616
Other liabilities 415 370

~~Table of~~ ~~Contents~~


(Dollars in millions)	March 31, 2022		December 31, 2021
Investments in qualified affordable housing projects, net	$	957	$	954
Other liabilities	469		482

The following table presents other information relating to our investments in qualified affordable housing projects for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Tax credits and other tax benefits recognized	Tax credits and other tax benefits recognized	$	26	$	20	$	54	$	31	Tax credits and other tax benefits recognized	$	27	$	28
Amortization expense included in provision for income taxes (i)	Amortization expense included in provision for income taxes (i)	14		10		30		22		Amortization expense included in provision for income taxes (i)	19		16

(i)All investments are amortized using the proportional amortization method and amortization expense is included in the provision for income taxes.

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The following table presents the net gains and losses on non-marketable and other equity securities for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ as recorded in the line item “Gains on investment securities, net," a component of noninterest income:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020		(Dollars in millions)	2022		2021
Net gains (losses) on non-marketable and other equity securities:	Net gains (losses) on non-marketable and other equity securities:									Net gains (losses) on non-marketable and other equity securities:
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):									Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments	Consolidated venture capital and private equity fund investments	$	19	$	1	$	36	$	4	Consolidated venture capital and private equity fund investments	$	3	$	17
Unconsolidated venture capital and private equity fund investments	Unconsolidated venture capital and private equity fund investments	15		(2)		32		(1)		Unconsolidated venture capital and private equity fund investments	3		13
Other investments without a readily determinable fair value	Other investments without a readily determinable fair value	(1)		(1)		12		(4)		Other investments without a readily determinable fair value	1		14
Other equity securities in public companies (fair value accounting)	Other equity securities in public companies (fair value accounting)	18		13		92		6		Other equity securities in public companies (fair value accounting)	(32)		78
Non-marketable securities (equity method accounting):	Non-marketable securities (equity method accounting):									Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments	Venture capital and private equity fund investments	250		26		295		18		Venture capital and private equity fund investments	59		45
Debt funds		1		0		2		0

Other investments	Other investments	3		(2)		3		(3)		Other investments	2		—
Total net gains on non-marketable and other equity securities	Total net gains on non-marketable and other equity securities	$	305	$	35	$	472	$	20	Total net gains on non-marketable and other equity securities	$	36	$	167

Less: realized net gains on sales of non-marketable and other equity securities		61		0		127		0
Less: realized net gains (losses) on sales of non-marketable and other equity securities										Less: realized net gains (losses) on sales of non-marketable and other equity securities	(19)		70
Net gains on non-marketable and other equity securities still held	Net gains on non-marketable and other equity securities still held	$	244	$	35	$	345	$	20	Net gains on non-marketable and other equity securities still held	$	55	$	97

6. Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments

We serve a variety of commercial clients in the private equity/venture capital, technology, life science/healthcare, premium wine and commercial real estate industries. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls and ~~premium wine industries.~~are reported under the Global Fund Banking class of financing receivable below. Our technology clients generally tend to be in the industries of hardware (such as semiconductors, communications, data, storage and electronics), software/internet (such as infrastructure software, applications, software services, digital content and advertising technology) and ERI. Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans to our technology and life science/healthcare ~~and ERI~~ clients are reported under the Investor Dependent, Cash Flow Dependent - SLBO and ~~Balance Sheet Dependent risk-based segments~~Innovation C&I classes of financing receivable below. ~~Loans made~~We also make commercial and industrial loans, such as working capital lines and term loans for equipment and fixed assets, to ~~private equity/venture capital firm~~ clients ~~typically enable them to fund investments prior to their receipt~~that are not in the technology and life science/healthcare industries mainly as a function of ~~funds from capital calls~~our wine and legacy Boston Private portfolios, which are reported ~~under~~in the ~~Global Fund Banking portfolio segment~~Other C&I class of financing receivable below. Loans to the premium wine industry focus on vineyards and wineries that produce grapes and wines of high quality. Commercial real estate loans are generally acquisition financing for commercial properties such as office buildings, retail properties, apartment buildings, and industrial/warehouse space, which moving forward will predominantly support the innovation economy segments. In addition to commercial loans, we make consumer loans through SVB Private ~~Bank~~ and provide real estate secured loans to eligible employees through our EHOP.

We also provide community development loans made as part of our responsibilities under the CRA. These loans are included within “construction loans” below and are primarily secured by real estate. Additionally, beginning in April 2020, we accepted applications under the PPP administered by the SBA under the Coronavirus Aid, Relief, and Economic Security Act

~~Table of~~ ~~Contents~~

~~(the~~ (the "CARES Act") and originated loans to qualified small businesses. ~~Disbursement of~~ PPP funds under the CARES Act ~~originally expired on August 8,~~were disbursed throughout 2020 ~~however, on December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits,~~ and ~~Venues Act (the "Economic Aid Act") was enacted, which extended the application period for PPP loans~~ up ~~to March 31, 2021, and allowed for certain PPP borrowers to apply for second draw loans. The disbursement phase of the PPP was further extended~~ to June 30, ~~2021 pursuant to the PPP Extension Act~~2021.

Table of ~~2021.~~Contents

Loan Portfolio Segments and Classes of Financing Receivables

The composition of loans at amortized cost basis broken out by ~~risk-based segment~~class of financing receivable at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 is presented in the following table:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Global fund banking	Global fund banking	$	30,630	$	25,543	Global fund banking	$	39,344	$	37,958
Investor dependent:	Investor dependent:					Investor dependent:
Early stage	Early stage	1,565		1,486		Early stage	1,707		1,593
Mid stage		1,708		1,565
Later stage		2,055		1,921
Growth stage						Growth stage	4,032		3,951
Total investor dependent	Total investor dependent	5,328		4,972		Total investor dependent	5,739		5,544
Cash flow dependent:
Sponsor led buyout		1,917		1,989
Other		2,926		2,945
Total cash flow dependent		4,843		4,934
Cash flow dependent - SLBO						Cash flow dependent - SLBO	1,826		1,798
Innovation C&I						Innovation C&I	7,260		6,673
Private bank (4)	Private bank (4)	5,297		4,901		Private bank (4)	9,235		8,743
Balance sheet dependent		2,804		2,191
CRE (4)						CRE (4)	2,595		2,670
Premium wine (4)	Premium wine (4)	1,002		1,053		Premium wine (4)	997		985
Other C&I						Other C&I	1,175		1,257
Other (4)	Other (4)	7		28		Other (4)	319		317
SBA loans		843		1,559
PPP						PPP	175		331
Total loans (1) (2) (3)	Total loans (1) (2) (3)	$	50,754	$	45,181	Total loans (1) (2) (3)	$	68,665	$	66,276
ACL	ACL	(396)		(448)		ACL	(421)		(422)
Net loans	Net loans	$	50,358	$	44,733	Net loans	$	68,244	$	65,854

(1) Total loans at amortized cost is net of unearned income, deferred fees and costs, and net unamortized premiums and discounts of ~~$248~~$207 million and ~~$226~~$250 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(2) Included within our total loan portfolio are credit card loans of ~~$509~~$627 million and ~~$400~~$583 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(3) Included within our total loan portfolio are construction loans of ~~$84~~$384 million and ~~$118~~$367 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(4) Of our total loans, the table below includes those secured by real estate at amortized cost at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and were comprised of the following:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Real estate secured loans:	Real estate secured loans:					Real estate secured loans:
Private bank:	Private bank:					Private bank:
Loans for personal residence	Loans for personal residence	$	3,773	$	3,392	Loans for personal residence	$	7,302	$	6,939
Loans to eligible employees	Loans to eligible employees	447		481		Loans to eligible employees	463		455
Home equity lines of credit	Home equity lines of credit	61		43		Home equity lines of credit	130		130
Other	Other	131		143		Other	134		135
Total private bank loans secured by real estate	Total private bank loans secured by real estate	$	4,412	$	4,059	Total private bank loans secured by real estate	$	8,029	$	7,659
CRE:						CRE:
Multifamily and residential investment						Multifamily and residential investment	980		1,021
Retail						Retail	511		524
Office and medical						Office and medical	480		499
Manufacturing, industrial and warehouse						Manufacturing, industrial and warehouse	353		336
Hospitality						Hospitality	141		142
Other						Other	130		148
Total CRE loans secured by real estate						Total CRE loans secured by real estate	$	2,595	$	2,670
Premium wine	Premium wine	807		824		Premium wine	794		793
Other	Other	34		57		Other	348		334
Total real estate secured loans	Total real estate secured loans	$	5,253	$	4,940	Total real estate secured loans	$	11,766	$	11,456

2320

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Credit Quality Indicators

For each individual client, we establish an internal credit risk rating for that loan, which is used for assessing and monitoring credit risk as well as performance of the loan and the overall portfolio. Our internal credit risk ratings are also used to summarize the risk of loss due to failure by an individual borrower to repay the loan. For our internal credit risk ratings, each individual loan is given a risk rating of 1 through 10. Loans risk-rated 1 through 4 are performing loans and translate to an internal rating of “Pass,” with loans risk-rated 1 being cash secured. Loans risk-rated 5 through 7 are performing loans; however, we consider them as demonstrating higher risk, which requires more frequent review of the individual exposures; these translate to an internal rating of “Criticized.” All of our nonaccrual loans are risk-rated 8 or 9 and are classified with the internal rating of "Nonperforming." Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators on a quarterly basis for performance and appropriateness of risk ratings as part of our evaluation process for our ACL for loans.

~~Table of~~ ~~Contents~~

The following tables summarize the credit quality indicators, broken out by ~~risk-based segment~~class of financing receivable and vintage year, as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

Term Loans by Origination Year
June 30, 2021 (Dollars in millions) 2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Loans Unallocated (1) Total
Global fund banking:
Risk rating:
Pass $ 567 $ 165 $ 42 $ 55 $ 20 $ 7 $ 29,766 $ 1 $ 0 $ 30,623
Criticized 0 0 0 0 0 0 5 2 0 7
Nonperforming 0 0 0 0 0 0 0 0 0 0
Total global fund banking $ 567 $ 165 $ 42 $ 55 $ 20 $ 7 $ 29,771 $ 3 $ 0 $ 30,630
Investor dependent:
Early stage:
Risk rating:
Pass $ 392 $ 520 $ 237 $ 53 $ 10 $ 0 $ 144 $ 1 $ 0 $ 1,357
Criticized 8 93 51 14 2 5 24 0 0 197
Nonperforming 0 1 5 4 0 0 1 0 0 11
Total early stage $ 400 $ 614 $ 293 $ 71 $ 12 $ 5 $ 169 $ 1 $ 0 $ 1,565
Mid stage:
Risk rating:
Pass $ 505 $ 654 $ 215 $ 106 $ 16 $ 2 $ 100 $ 5 $ 0 $ 1,603
Criticized 8 49 9 13 3 0 18 0 0 100
Nonperforming 0 0 2 3 0 0 0 0 0 5
Total mid stage $ 513 $ 703 $ 226 $ 122 $ 19 $ 2 $ 118 $ 5 $ 0 $ 1,708
Later stage:
Risk rating:
Pass $ 576 $ 829 $ 290 $ 63 $ 10 $ 2 $ 195 $ 0 $ 0 $ 1,965
Criticized 6 29 16 3 2 0 13 0 0 69
Nonperforming 0 15 0 0 0 0 6 0 0 21
Total later stage $ 582 $ 873 $ 306 $ 66 $ 12 $ 2 $ 214 $ 0 $ 0 $ 2,055
Total investor dependent $ 1,495 $ 2,190 $ 825 $ 259 $ 43 $ 9 $ 501 $ 6 $ 0 $ 5,328
Cash flow dependent:
Sponsor led buyout:
Risk rating:
Pass $ 588 $ 548 $ 341 $ 141 $ 120 $ 4 $ 44 $ 0 $ 0 $ 1,786
Criticized 0 14 15 40 10 13 5 0 0 97
Nonperforming 0 0 12 10 7 0 5 0 0 34
Total sponsor led buyout $ 588 $ 562 $ 368 $ 191 $ 137 $ 17 $ 54 $ 0 $ 0 $ 1,917
Other
Risk rating:
Pass $ 540 $ 720 $ 332 $ 137 $ 108 $ 0 $ 868 $ 0 $ 0 $ 2,705


	Term Loans by Origination Year
March 31, 2022 (Dollars in millions)	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:
Risk rating:
Pass	$	292	$	294	$	122	$	33	$	4	$	12	$	38,587	$	—	$	—	$	39,344
Criticized	—		—		—		—		—		—		—		—		—		—
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total global fund banking	$	292	$	294	$	122	$	33	$	4	$	12	$	38,587	$	—	$	—	$	39,344
Investor dependent:
Early stage:
Risk rating:
Pass	$	236	$	769	$	195	$	75	$	14	$	2	$	194	$	—	$	—	$	1,485
Criticized	8		81		69		20		5		2		32		—		—		217
Nonperforming	—		2		1		—		—		1		1		—		—		5
Total early stage	$	244	$	852	$	265	$	95	$	19	$	5	$	227	$	—	$	—	$	1,707
Growth stage:
Risk rating:
Pass	$	538	$	1,878	$	730	$	144	$	58	$	12	$	328	$	4	$	—	$	3,692
Criticized	18		172		78		19		2		3		45		—		—		337
Nonperforming	—		1		—		1		1		—		—		—		—		3
Total growth stage	$	556	$	2,051	$	808	$	164	$	61	$	15	$	373	$	4	$	—	$	4,032
Total investor dependent	$	800	$	2,903	$	1,073	$	259	$	80	$	20	$	600	$	4	$	—	$	5,739
Cash flow dependent - SLBO:
Risk rating:
Pass	$	289	$	753	$	298	$	225	$	68	$	65	$	29	$	—	$	—	$	1,727
Criticized	—		—		16		4		26		13		8		—		—		67
Nonperforming	—		—		—		11		9		7		5		—		—		32
Total cash flow dependent - SLBO	$	289	$	753	$	314	$	240	$	103	$	85	$	42	$	—	$	—	$	1,826
Innovation C&I
Risk rating:
Pass	$	673	$	2,115	$	977	$	248	$	76	$	57	$	2,635	$	—	$	—	$	6,781
Criticized	1		106		119		35		12		—		206		—		—		479
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total innovation C&I	$	674	$	2,221	$	1,096	$	283	$	88	$	57	$	2,841	$	—	$	—	$	7,260
Private bank:
Risk rating:
Pass	$	771	$	2,929	$	1,932	$	1,044	$	485	$	1,248	$	782	$	8	$	—	$	9,199
Criticized	—		—		—		2		—		11		2		—		—		15
Nonperforming	—		—		1		2		7		9		2		—		—		21
Total private bank	$	771	$	2,929	$	1,933	$	1,048	$	492	$	1,268	$	786	$	8	$	—	$	9,235
CRE
Risk rating:
Pass	$	91	$	323	$	212	$	310	$	125	$	1,007	$	88	$	2	$	—	$	2,158
Criticized	2		2		39		117		37		205		18		12		—		432

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Criticized		0		10		35		37		0		0		138		0		0		220
Nonperforming	Nonperforming	0		0		0		0		0		0		1		0		0		1		Nonperforming	—		—		—		5		—		—		—		—		—		5
Total other		$	540	$	730	$	367	$	174	$	108	$	0	$	1,007	$	0	$	0	$	2,926
Total cash flow dependent		$	1,128	$	1,292	$	735	$	365	$	245	$	17	$	1,061	$	0	$	0	$	4,843
Private bank:
Risk rating:
Pass		$	1,047	$	1,748	$	980	$	321	$	243	$	513	$	406	$	1	$	0	$	5,259
Criticized		0		1		8		3		4		11		4		0		0		31
Nonperforming		0		0		0		6		0		1		0		0		0		7
Total private bank		$	1,047	$	1,749	$	988	$	330	$	247	$	525	$	410	$	1	$	0	$	5,297
Balance sheet dependent:
Risk rating:
Pass		$	657	$	728	$	130	$	158	$	31	$	0	$	928	$	0	$	0	$	2,632
Criticized		0		65		42		0		0		0		64		1		0		172
Nonperforming		0		0		0		0		0		0		0		0		0		0
Total balance sheet dependent		$	657	$	793	$	172	$	158	$	31	$	0	$	992	$	1	$	0	$	2,804
Total CRE																						Total CRE	$	93	$	325	$	251	$	432	$	162	$	1,212	$	106	$	14	$	—	$	2,595
Premium wine:	Premium wine:																					Premium wine:
Risk rating:	Risk rating:																					Risk rating:
Pass	Pass	$	52	$	128	$	195	$	72	$	74	$	210	$	112	$	36	$	0	$	879	Pass	$	28	$	217	$	112	$	144	$	68	$	206	$	140	$	34	$	—	$	949
Criticized	Criticized	2		15		12		16		10		47		21		0		0		123		Criticized	—		1		7		11		9		10		10		—		—		48
Nonperforming	Nonperforming	0		0		0		0		0		0		0		0		0		0		Nonperforming	—		—		—		—		—		—		—		—		—		—
Total Premium wine		$	54	$	143	$	207	$	88	$	84	$	257	$	133	$	36	$	0	$	1,002
Total premium wine																						Total premium wine	$	28	$	218	$	119	$	155	$	77	$	216	$	150	$	34	$	—	$	997
Other C&I																						Other C&I
Risk rating:																						Risk rating:
Pass																						Pass	$	6	$	173	$	170	$	76	$	93	$	322	$	276	$	12	$	—	$	1,128
Criticized																						Criticized	—		4		6		7		7		5		10		4		—		43
Nonperforming																						Nonperforming	—		—		1		—		1		1		1		—		—		4
Total other C&I																						Total other C&I	$	6	$	177	$	177	$	83	$	101	$	328	$	287	$	16	$	—	$	1,175
Other:	Other:																					Other:
Risk rating:	Risk rating:																					Risk rating:
Pass	Pass	$	0	$	17	$	13	$	0	$	1	$	0	$	3	$	0	$	(27)	$	7	Pass	$	5	$	82	$	157	$	53	$	20	$	14	$	10	$	—	$	(36)	$	305
Criticized	Criticized	0		0		0		0		0		0		0		0		0		0		Criticized	—		—		11		1		—		2		—		—		—		14
Nonperforming	Nonperforming	0		0		0		0		0		0		0		0		0		0		Nonperforming	—		—		—		—		—		—		—		—		—		—
Total other	Total other	$	0	$	17	$	13	$	0	$	1	$	0	$	3	$	0	$	(27)	$	7	Total other	$	5	$	82	$	168	$	54	$	20	$	16	$	10	$	—	$	(36)	$	319
SBA loans:
PPP:																						PPP:
Risk rating:	Risk rating:																					Risk rating:
Pass	Pass	$	401	$	368	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	769	Pass	$	—	$	134	$	25	$	—	$	—	$	—	$	—	$	—	$	(3)	$	156
Criticized	Criticized	46		28		0		0		0		0		0		0		0		74		Criticized	—		12		7		—		—		—		—		—		—		19
Nonperforming	Nonperforming	0		0		0		0		0		0		0		0		0		0		Nonperforming	—		—		—		—		—		—		—		—		—		—
Total SBA loans		$	447	$	396	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	843
Total PPP																						Total PPP	$	—	$	146	$	32	$	—	$	—	$	—	$	—	$	—	$	(3)	$	175
Total loans	Total loans	$	5,395	$	6,745	$	2,982	$	1,255	$	671	$	815	$	32,871	$	47	$	(27)	$	50,754	Total loans	$	2,958	$	10,048	$	5,285	$	2,587	$	1,127	$	3,214	$	43,409	$	76	$	(39)	$	68,665

(1) These amounts consist of fees and clearing items that have not yet been allocated at the loan level.


	Term Loans by Origination Year
December 31, 2021 (Dollars in millions)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:
Risk rating:
Pass	$	764	$	115	$	36	$	6	$	8	$	4	$	36,955	$	—	$	—	$	37,888
Criticized	50		18		—		—		—		1		1		—		—		70
Nonperforming	—		—		—		—		—		—		—		—		—		—
Total global fund banking	$	814	$	133	$	36	$	6	$	8	$	5	$	36,956	$	—	$	—	$	37,958
Investor dependent:
Early stage:
Risk rating:
Pass	$	754	$	287	$	122	$	26	$	6	$	1	$	171	$	—	$	—	$	1,367
Criticized	64		87		30		5		—		—		29		—		—		215
Nonperforming	2		5		3		—		—		—		1		—		—		11
Total early stage	$	820	$	379	$	155	$	31	$	6	$	1	$	201	$	—	$	—	$	1,593
Growth stage:
Risk rating:
Pass	$	2,072	$	910	$	265	$	78	$	14	$	1	$	286	$	5	$	—	$	3,631
Criticized	159		85		27		6		3		—		34		—		—		314
Nonperforming	2		—		1		2		—		—		1		—		—		6
Total growth stage	$	2,233	$	995	$	293	$	86	$	17	$	1	$	321	$	5	$	—	$	3,951
Total investor dependent	$	3,053	$	1,374	$	448	$	117	$	23	$	2	$	522	$	5	$	—	$	5,544
Cash flow dependent - SLBO:
Risk rating:
Pass	$	875	$	384	$	252	$	72	$	76	$	2	$	35	$	—	$	—	$	1,696
Criticized	—		—		20		25		—		13		10		—		—		68
Nonperforming	—		—		12		10		7		—		5		—		—		34
Total cash flow dependent - SLBO	$	875	$	384	$	284	$	107	$	83	$	15	$	50	$	—	$	—	$	1,798

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		Term Loans by Origination Year
December 31, 2020 (Dollars in millions)		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Global fund banking:
Innovation C&I:																				Innovation C&I:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	440	$	48	$	69	$	23	$	2	$	6	$	24,947	$	2	$	25,537	Pass	$	2,230	$	1,058	$	288	$	123	$	58	$	—	$	2,411	$	—	$	—	$	6,168
Criticized	Criticized	0		0		0		0		0		0		0		6		6		Criticized	64		130		62		12		—		—		236		—		—		504
Nonperforming	Nonperforming	0		0		0		0		0		0		0		0		0		Nonperforming	—		—		—		—		—		—		1		—		—		1
Total global fund banking		$	440	$	48	$	69	$	23	$	2	$	6	$	24,947	$	8	$	25,543
Investor dependent:
Early stage:
Total Innovation C&I																				Total Innovation C&I	$	2,294	$	1,188	$	350	$	135	$	58	$	—	$	2,648	$	—	$	—	$	6,673
Private bank:																				Private bank:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	667	$	370	$	121	$	32	$	1	$	1	$	96	$	1	$	1,289	Pass	$	2,952	$	2,015	$	1,122	$	520	$	432	$	952	$	705	$	8	$	—	$	8,706
Criticized	Criticized	47		73		26		10		4		0		19		0		179		Criticized	—		—		2		—		2		9		3		—		—		16
Nonperforming	Nonperforming	2		9		5		1		0		0		1		0		18		Nonperforming	—		—		2		9		—		8		2		—		—		21
Total early stage		$	716	$	452	$	152	$	43	$	5	$	1	$	116	$	1	$	1,486
Mid stage:
Total private bank																				Total private bank	$	2,952	$	2,015	$	1,126	$	529	$	434	$	969	$	710	$	8	$	—	$	8,743
CRE																				CRE
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	840	$	302	$	146	$	23	$	5	$	1	$	101	$	3	$	1,421	Pass	$	326	$	215	$	344	$	155	$	236	$	868	$	110	$	2	$	—	$	2,256
Criticized	Criticized	43		48		26		8		0		5		10		0		140		Criticized	3		39		114		37		47		139		18		12		—		409
Nonperforming	Nonperforming	0		1		0		3		0		0		0		0		4		Nonperforming	—		—		5		—		—		—		—		—		—		5
Total mid stage		$	883	$	351	$	172	$	34	$	5	$	6	$	111	$	3	$	1,565
Later stage:
Total CRE																				Total CRE	$	329	$	254	$	463	$	192	$	283	$	1,007	$	128	$	14	$	—	$	2,670
Premium wine:																				Premium wine:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	906	$	394	$	170	$	38	$	0	$	8	$	224	$	5	$	1,745	Pass	$	217	$	112	$	156	$	69	$	71	$	162	$	125	$	34	$	—	$	946
Criticized	Criticized	22		55		30		1		0		2		37		0		147		Criticized	1		7		11		9		—		—		11		—		—		39
Nonperforming	Nonperforming	17		2		4		0		0		0		6		0		29		Nonperforming	—		—		—		—		—		—		—		—		—		—
Total later stage		$	945	$	451	$	204	$	39	$	0	$	10	$	267	$	5	$	1,921
Total investor dependent		$	2,544	$	1,254	$	528	$	116	$	10	$	17	$	494	$	9	$	4,972
Cash flow dependent:
Sponsor led buyout:
Total Premium wine																				Total Premium wine	$	218	$	119	$	167	$	78	$	71	$	162	$	136	$	34	$	—	$	985
Other C&I																				Other C&I
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	791	$	452	$	274	$	167	$	37	$	0	$	75	$	0	$	1,796	Pass	$	181	$	175	$	82	$	86	$	28	$	301	$	350	$	11	$	—	$	1,214
Criticized	Criticized	0		70		39		22		13		0		9		0		153		Criticized	5		6		6		7		2		—		8		5		—		39
Nonperforming	Nonperforming	0		12		16		7		0		0		5		0		40		Nonperforming	—		—		—		2		—		1		1		—		—		4
Total sponsor led buyout		$	791	$	534	$	329	$	196	$	50	$	0	$	89	$	0	$	1,989
Other
Total other C&I																				Total other C&I	$	186	$	181	$	88	$	95	$	30	$	302	$	359	$	16	$	—	$	1,257
Other:																				Other:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	880	$	513	$	179	$	133	$	39	$	0	$	933	$	0	$	2,677	Pass	$	61	$	144	$	82	$	20	$	14	$	—	$	7	$	—	$	(21)	$	307
Criticized	Criticized	19		68		34		4		0		0		137		0		262		Criticized	—		7		1		—		2		—		—		—		—		10
Nonperforming																				Nonperforming	—		—		—		—		—		—		—		—		—		—
Total other																				Total other	$	61	$	151	$	83	$	20	$	16	$	—	$	7	$	—	$	(21)	$	317
PPP:																				PPP:
Risk rating:																				Risk rating:
Pass																				Pass	$	226	$	72	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	298
Criticized																				Criticized	22		9		—		—		—		—		—		—		—		31
Nonperforming																				Nonperforming	2		—		—		—		—		—		—		—		—		2
Total PPP																				Total PPP	$	250	$	81	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	331
Total loans																				Total loans	$	11,032	$	5,880	$	3,045	$	1,279	$	1,006	$	2,462	$	41,516	$	77	$	(21)	$	66,276

~~Table~~(1) These amounts consist of ~~Contents~~

Nonperforming 0 0 5 0 0 0 1 0 6
Total other $ 899 $ 581 $ 218 $ 137 $ 39 $ 0 $ 1,071 $ 0 $ 2,945
Total cash flow dependent $ 1,690 $ 1,115 $ 547 $ 333 $ 89 $ 0 $ 1,160 $ 0 $ 4,934
Private bank:
Risk rating:
Pass $ 1,878 $ 1,153 $ 394 $ 353 $ 295 $ 406 $ 382 $ 1 $ 4,862
Criticized 3 10 5 1 5 8 1 0 33
Nonperforming 0 0 3 0 0 2 1 0 6
Total private bank $ 1,881 $ 1,163 $ 402 $ 354 $ 300 $ 416 $ 384 $ 1 $ 4,901
Balance sheet dependent:
Risk rating:
Pass $ 838 $ 190 $ 199 $ 19 $ 0 $ 0 $ 858 $ 1 $ 2,105
Criticized 56 4 0 0 0 0 26 0 86
Nonperforming 0 0 0 0 0 0 0 0 0
Total balance sheet dependent $ 894 $ 194 $ 199 $ 19 $ 0 $ 0 $ 884 $ 1 $ 2,191
Premium wine:
Risk rating:
Pass $ 127 $ 194 $ 71 $ 79 $ 115 $ 154 $ 135 $ 36 $ 911
Criticized 18 24 36 10 13 6 34 0 141
Nonperforming 0 0 0 0 1 0 0 0 1
Total Premium wine $ 145 $ 218 $ 107 $ 89 $ 129 $ 160 $ 169 $ 36 $ 1,053
Other:
Risk rating:
Pass $ 0 $ 16 $ 11 $ 0 $ 0 $ 1 $ 0 $ 0 $ 28
Criticized 0 0 0 0 0 0 0 0 0
Nonperforming 0 0 0 0 0 0 0 0 0
Total other $ 0 $ 16 $ 11 $ 0 $ 0 $ 1 $ 0 $ 0 $ 28
SBA loans:
Risk rating:
Pass $ 1,456 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,456
Criticized 103 0 0 0 0 0 0 0 103
Nonperforming 0 0 0 0 0 0 0 0 0
Total SBA loans $ 1,559 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,559
Total loans $ 9,153 $ 4,008 $ 1,863 $ 934 $ 530 $ 600 $ 28,038 $ 55 $ 45,181

fees and clearing items that have not yet been allocated at the loan level.

2823

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Allowance for Credit Losses: Loans

In the ~~second~~first quarter of ~~2021,~~2022, the ACL for loans ~~increased~~decreased by $4$1 million, ~~from the prior quarter,~~ driven primarily by net charge-offs and a release of individually assessed reserves related to a decrease in our nonperforming loans, partially offset by growth in our loan ~~portfolio, partially offset by improved economic conditions within our forecasted assumptions.~~portfolio.

The ~~economic forecast in~~ Moody's Analytics ~~June 2021~~March 2022 forecast was utilized in our quantitative model for the ACL as of ~~June 30, 2021.~~March 31, 2022. The forecast assumptions included ~~an improvement~~improvements in the unemployment rate asand housing pricing index growth rate, offset by a ~~result of continued business re-openings and the effect of government aid programs, as well as an improved~~lower forecasted gross domestic product growth rate. The overall impact of these assumptions was a moderately better forecast than that used at December 31, 2021. We determined the forecast to be a reasonable view of the outlook for the economy given the available information at current quarter end. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics ~~June 2021~~March 2022 forecast, we addressed the risk through management's qualitative adjustments to our ACL.

We do not estimate expected credit losses on AIR on loans, as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled ~~$143~~$181 million at~~June 30, 2021~~ March 31, 2022 and ~~$126~~$171 million at December 31, ~~2020~~2021 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

The following tables summarize the activity relating to our ACL for loans for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ broken out by portfolio segment:

Three months ended June 30, 2021 Beginning Balance March 31, 2021 Charge-offs Recoveries Provision (Reduction) for Credit Losses Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking $ 60 $ 0 $ 0 $ 6 $ 66
Investor dependent:
Early stage 62 (5) 2 (4) 55
Growth stage 106 (1) 1 (3) 103
Total investor dependent 168 (6) 3 (7) 158
Cash flow and balance sheet dependent 112 (7) 0 14 119
Private bank 44 (2) 0 5 47
Premium wine and other 8 0 0 (2) 6
Total ACL $ 392 $ (15) $ 3 $ 16 $ 396


Three months ended March 31, 2022	Beginning Balance December 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Foreign Currency Translation Adjustments		Ending Balance March 31, 2022
(Dollars in millions)
Global fund banking	$	67	$	—	$	—	$	(1)	$	—	$	66
Investor dependent	146		(17)		8		11		—		148
Cash flow dependent and innovation C&I	118		—		—		(3)		—		115
Private bank	33		—		2		2		—		37
CRE	36		—		—		(2)		—		34
Other C&I	14		(1)		—		(1)		—		12
Premium wine and other	8		—		—		2		(1)		9


Total ACL	$	422	$	(18)	$	10	$	8	$	(1)	$	421

Three months ended June 30, 2020 Beginning Balance March 31, 2020 Charge-offs Recoveries Provision (Reduction) for Credit Losses Ending Balance June 30, 2020
(Dollars in millions)
Global fund banking $ 57 $ 0 $ 0 $ (3) $ 54
Investor dependent:
Early stage 127 (2) 3 20 148
Growth stage 149 (4) 1 (2) 144
Total investor dependent 276 (6) 4 18 292
Cash flow and balance sheet dependent 104 (8) 0 27 123
Private bank 88 (1) 0 4 91
Premium wine and other 24 0 0 2 26
SBA loans 0 0 0 4 4
Total ACL $ 549 $ (15) $ 4 $ 52 $ 590


Three months ended March 31, 2021	Beginning Balance December 31, 2020		Charge-offs		Recoveries		Provision (Reduction) for Credit Loss for Loans		Ending Balance March 31, 2021
(Dollars in millions)
Global fund banking	$	46	$	(80)	$	—	$	94	$	60
Investor dependent	213		(14)		5		(36)		168
Cash flow dependent and innovation C&I	125		—		—		(13)		112
Private Bank	53		—		—		(9)		44




Premium wine and other	9		(1)		—		—		8
PPP	2		—		—		(2)		—
Total ACL	$	448	$	(95)	$	5	$	34	$	392

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Six months ended June 30, 2021 Beginning Balance December 31, 2020 Charge-offs Recoveries Provision (Reduction) for Credit Losses Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking $ 46 $ (80) $ 0 $ 100 $ 66
Investor dependent:
Early stage 86 (19) 3 (15) 55
Growth stage 127 (1) 5 (28) 103
Total investor dependent 213 (20) 8 (43) 158
Cash flow and balance sheet dependent 125 (7) 0 1 119
Private bank 53 (2) 0 (4) 47
Premium wine and other 9 (1) 0 (2) 6
SBA loans 2 0 0 (2) 0
Total ACL $ 448 $ (110) $ 8 $ 50 $ 396

Six months ended June 30, 2020 Beginning Balance December 31, 2019 Impact of adopting ASC 326 Charge-offs Recoveries Provision for Credit Losses Foreign Currency Translation Adjustments Ending Balance June 30, 2020
(Dollars in millions)
Global fund banking $ 107 $ (70) $ 0 $ 0 $ 17 $ 0 $ 54
Investor dependent:
Early stage 26 40 (12) 4 91 (1) 148
Growth stage 56 32 (27) 5 79 (1) 144
Total investor dependent 82 72 (39) 9 170 (2) 292
Cash flow and balance sheet dependent 81 (1) (11) 3 51 0 123
Private bank 22 12 (2) 0 59 0 91
Premium wine and other 13 12 0 0 0 1 26
SBA loans 0 0 0 0 4 0 4
Total ACL $ 305 $ 25 $ (52) $ 12 $ 301 $ (1) $ 590

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The following table summarizes the aging of our loans broken out by ~~risk-based segment~~class of financing receivable as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	30 - 59 Days Past Due		60 - 89 Days Past Due		Equal to or Greater Than 90 Days Past Due		Total Past Due		Current		Total		Loans Past Due 90 Days or More Still Accruing Interest		(Dollars in millions)	30 - 59 Days Past Due		60 - 89 Days Past Due		Equal to or Greater Than 90 Days Past Due		Total Past Due		Current		Total		Loans Past Due 90 Days or More Still Accruing Interest
June 30, 2021:
March 31, 2022:																March 31, 2022:
Global fund banking	Global fund banking	$	0	$	0	$	0	$	0	$	30,630	$	30,630	$	0	Global fund banking	$	—	$	—	$	—	$	—	$	39,344	$	39,344	$	—
Investor dependent:	Investor dependent:															Investor dependent:
Early stage	Early stage	1		0		1		2		1,563		1,565		0		Early stage	2		1		1		4		1,703		1,707		—
Mid stage		0		2		0		2		1,706		1,708		0
Later stage		1		0		0		1		2,054		2,055		0
Growth stage																Growth stage	33		—		—		33		3,999		4,032		—
Total investor dependent	Total investor dependent	2		2		1		5		5,323		5,328		0		Total investor dependent	35		1		1		37		5,702		5,739		—
Cash flow dependent:
Sponsor led buyout		0		0		0		0		1,917		1,917		0
Cash flow dependent - SLBO																Cash flow dependent - SLBO	—		—		—		—		1,826		1,826		—
Innovation C&I																Innovation C&I	7		1		—		8		7,252		7,260		—
Private bank																Private bank	24		1		11		36		9,199		9,235		—
CRE																CRE	1		—		—		1		2,594		2,595		—
Premium wine																Premium wine	—		—		—		—		997		997		—
Other C&I																Other C&I	12		—		1		13		1,162		1,175		—
Other	Other	5		0		0		5		2,921		2,926		0		Other	—		—		—		—		319		319		—
Total cash flow dependent		5		0		0		5		4,838		4,843		0
Private bank		0		0		2		2		5,295		5,297		2
Balance sheet dependent		1		3		0		4		2,800		2,804		0
Premium wine		2		0		0		2		1,000		1,002		0
Other		0		0		0		0		7		7		0
SBA loans		0		1		1		2		841		843		1
PPP																PPP	—		—		3		3		172		175		2
Total loans	Total loans	$	10	$	6	$	4	$	20	$	50,734	$	50,754	$	3	Total loans	$	79	$	3	$	16	$	98	$	68,567	$	68,665	$	2
December 31, 2020:
December 31, 2021:																December 31, 2021:
Global fund banking	Global fund banking	$	28	$	0	$	0	$	28	$	25,515	$	25,543	$	0	Global fund banking	$	—	$	—	$	—	$	—	$	37,958	$	37,958	$	—
Investor dependent:	Investor dependent:															Investor dependent:
Early stage	Early stage	6		2		0		8		1,478		1,486		0		Early stage	6		5		—		11		1,582		1,593		—
Mid stage		6		0		1		7		1,558		1,565		0
Later stage		5		0		0		5		1,916		1,921		0
Growth stage																Growth stage	16		—		—		16		3,935		3,951		—
Total investor dependent	Total investor dependent	17		2		1		20		4,952		4,972		0		Total investor dependent	22		5		—		27		5,517		5,544		—
Cash flow dependent
Sponsor led buyout		0		0		0		0		1,989		1,989		0
Cash flow dependent - SLBO																Cash flow dependent - SLBO	—		—		—		—		1,798		1,798		—
Innovation C&I																Innovation C&I	7		—		7		14		6,659		6,673		7
Private bank																Private bank	28		1		12		41		8,702		8,743		—
CRE																CRE	1		—		—		1		2,669		2,670		—
Premium wine																Premium wine	3		—		—		3		982		985		—
Other C&I																Other C&I	1		2		1		4		1,253		1,257		—
Other	Other	6		0		0		6		2,939		2,945		0		Other	—		—		—		—		317		317		—
Total cash flow dependent		6		0		0		6		4,928		4,934		0
Private bank		4		4		0		8		4,893		4,901		0
Balance sheet dependent		1		1		0		2		2,189		2,191		0
Premium wine		3		0		1		4		1,049		1,053		0
Other		0		0		0		0		28		28		0
SBA loans		0		0		0		0		1,559		1,559		0
PPP																PPP	1		—		—		1		330		331		—
Total loans	Total loans	$	59	$	7	$	2	$	68	$	45,113	$	45,181	$	0	Total loans	$	63	$	8	$	20	$	91	$	66,185	$	66,276	$	7

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Nonaccrual Loans

The following table summarizes our nonaccrual loans with no allowance for credit loss at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

June 30, 2021 December 31, 2020
(Dollars in millions) Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss
Investor dependent:
Early stage $ 11 $ 3 $ 18 $ 0
Mid stage 5 0 4 3
Later stage 21 0 29 0
Total investor dependent 37 3 51 3
Cash flow dependent:
Sponsor led buyout 34 0 40 0
Other 1 1 6 1
Total cash flow dependent 35 1 46 1
Private bank 7 2 6 3
Premium wine 0 0 1 1
Total nonaccrual loans $ 79 $ 6 $ 104 $ 8


	March 31, 2022				December 31, 2021
(Dollars in millions)	Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss		Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss

Investor dependent:
Early stage	$	5	$	1	$	11	$	—
Growth stage	3		—		6		—
Total investor dependent	8		1		17		—
Cash flow dependent - SLBO	32		—		34		—
Innovation C&I	—		—		1		1
Private bank	21		13		21		8
CRE	5		5		5		—

Other C&I	4		1		4		—

PPP	—		—		2		—
Total nonaccrual loans	$	70	$	20	$	84	$	9

TDRs

As of ~~June 30, 2021,~~March 31, 2022, we had 1265 TDRs with a total carrying value of ~~$61~~$92 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. ~~There were 0~~We had $2 million of unfunded commitments available for funding to the clients associated with these TDRs as of ~~June 30, 2021.~~March 31, 2022.

The following table summarizes our loans modified in TDRs, broken out by ~~risk-based segment,~~class of financing receivable at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		(Dollars in millions)	March 31, 2022		December 31, 2021
Loans modified in TDRs:	Loans modified in TDRs:					Loans modified in TDRs:

Investor dependent:	Investor dependent:					Investor dependent:
Early stage	Early stage	$	1	$	7	Early stage	$	2	$	12
Mid stage		5		4
Later stage		15		25
Growth stage						Growth stage	3		3
Total investor dependent	Total investor dependent	21		36		Total investor dependent	5		15
Cash flow dependent:
Sponsor led buyout		34		22
Other		1		1
Total cash flow dependent		35		23
Cash flow dependent - SLBO						Cash flow dependent - SLBO	33		34

Private bank	Private bank	3		0		Private bank	18		12
CRE						CRE	33		33

Premium wine		2		2
Other C&I						Other C&I	3		2

Total loans modified in TDRs	Total loans modified in TDRs	$	61	$	61	Total loans modified in TDRs	$	92	$	96

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The following table summarizes the recorded investment in loans modified in TDRs, broken out by ~~risk-based segment,~~class of financing receivable, for modifications made during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
Loans modified in TDRs during the period:
Investor dependent:
Early stage $ 1 $ 0 $ 1 $ 0
Mid stage 0 5 0 11
Later stage 0 4 0 7
Total investor dependent 1 9 1 18
Cash flow dependent:
Sponsor led buyout 0 0 13 0
Other 0 4 0 4
Total cash flow dependent 0 4 13 4
Private bank 1 0 3 0
Premium wine 0 1 0 1
Total loans modified in TDRs during the period (1) $ 2 $ 14 $ 17 $ 23


	Three months ended March 31,
(Dollars in millions)	2022		2021
Loans modified in TDRs during the period:

Investor dependent:

Growth stage	$	1	—
Total investor dependent	1		—
Cash flow dependent - SLBO	—		18
Innovation C&I	—		4
Private bank	6		2


Other C&I	1		—


Total loans modified in TDRs during the period (1)	$	8	$	24

(1)There were $6$5 million ~~and $7~~partial charge-offs for the three months ended March 31, 2022 compared to $2 million of partial charge-offs for the three ~~and six~~ months ended ~~June 30, 2021, respectively, and $5 million and $18 million of partial charge-offs for the three and six months ended June 30, 2020, respectively.~~March 31, 2021.

During the three months ended ~~June 30, 2021 and 2020,~~March 31, 2022, new TDRs of $1$6 million and $14 million, respectively, were modified through payment deferrals granted to our clients. During the three months ended June 30, 2021, new TDRs of $1 million were modified through forgiveness of principal; there were 0 modifications of principal forgiveness during the three months ended June 30, 2020. During the six months ended June 30, 2021 and 2020,~~$14 millionand $23 million, respectively,~~ were modified through payment deferrals granted to our clients, ~~and $3 million and less than~~ $1 million ~~respectively,~~ were modified through term extensions and $1 million were modified through settlement. During the three months ended March 31, 2021, new TDRs of $22 million were modified through payment deferrals and $2 million through forgiveness of principal.

~~The following table summarizes the recorded investment in~~Of loans modified in TDRs within the previous 12 months, ~~that subsequently~~none defaulted during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022. The recorded investment of loans that defaulted during the three months ended March 31, 2021, ~~and June 30, 2020:~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
TDRs modified within the previous 12 months that defaulted during the period:
Cash flow dependent:
Sponsor led buyout $ 0 $ 10 $ 0 $ 10
Total cash flow dependent 0 10 0 10
Total TDRs modified within the previous 12 months that defaulted in the period $ 0 $ 10 $ 0 $ 10
that had been modified in the previous 12 months was $4 million, all in the Innovation C&I class of financing receivable.

Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the ACL for loans, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and nonaccrual loans as well as management’s overall outlook of macroeconomic factors that affect the reserve on the loan portfolio as a whole. After evaluating the charge-offs and defaults experienced on our TDRs we determined that no change to our reserving methodology for TDRs was necessary to determine the ACL for loans as of ~~June 30, 2021.~~March 31, 2022.

ACL: Unfunded Credit Commitments

We maintain a separate ACL for unfunded credit commitments that is determined using a methodology that is inherently similar to the methodology used for calculating the ACL for loans. At ~~June 30, 2021~~March 31, 2022, our ACL estimates utilized the ~~improved~~ Moody's economic forecasts from ~~June 2021~~March 31, 2022 as mentioned above.

~~Table~~ In the first quarter of ~~Contents~~2022, the ACL for unfunded commitments increased

by $4 million from

the prior quarter, driven primarily by growth in our outstanding commitments and compositional changes in our portfolio.

The following table summarizes the activity relating to our ACL for unfunded credit commitments for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
ACL: unfunded credit commitments, beginning balance	ACL: unfunded credit commitments, beginning balance	$	105	$	85	$	121	$	67	ACL: unfunded credit commitments, beginning balance	$	171	$	121
Impact of adopting ASC 326		0		0		0		23
Provision of credit losses		15		14		(1)		9

Provision for (reduction in) credit losses										Provision for (reduction in) credit losses	4		(16)

ACL: unfunded credit commitments, ending balance (1)	ACL: unfunded credit commitments, ending balance (1)	$	120	$	99	$	120	$	99	ACL: unfunded credit commitments, ending balance (1)	$	175	$	105

(1)The “ACL: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 1311 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” ~~of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1~~ of this report for additional disclosures related to our commitments to extend credit.

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7. Goodwill and Other Intangible Assets

Goodwill

Goodwill at both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was ~~$143~~$375 million which was a result of ~~revenue generating synergies expected from our acquisition~~goodwill recognized for the acquisitions of SVB ~~Leerink in 2019 as well as our acquisition of~~Securities, WestRiver Group's debt fund business, ~~in December 2020.~~Boston Private and MoffettNathanson LLC.

Other Intangible Assets

The components of net other intangible assets were as follows:


		June 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
(Dollars in millions)	(Dollars in millions)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount		(Dollars in millions)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount
Other intangible assets:	Other intangible assets:													Other intangible assets:
Customer relationships	Customer relationships	$	42	$	10	$	32	$	42	$	8	$	34	Customer relationships	$	135	$	20	$	115	$	135	$	16	$	119
Other	Other	36		11		25		36		9		27		Other	57		18		39		57		16		41
Total other intangible assets	Total other intangible assets	$	78	$	21	$	57	$	78	$	17	$	61	Total other intangible assets	$	192	$	38	$	154	$	192	$	32	$	160

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we recorded amortization expense of $4$6 million. Assuming no future impairments of other intangible assets or additional acquisitions or dispositions, the following table presents the Company's future expected amortization expense for other intangible assets that will continue to be amortized as of ~~June 30, 2021:~~March 31, 2022:

Years ended December 31,
(Dollars in millions) Other
Intangible Assets
2021 (excluding the six months ended June 30, 2021) $ 4
2022 8
2023 8
2024 8
2025 7
2026 and thereafter 22
Total future amortization expense $ 57

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~~8. Short-Term Borrowings and Long-Term Debt~~

~~The following table represents outstanding short-term borrowings and long-term debt at June 30, 2021 and December 31, 2020:~~

Carrying Value
(Dollars in millions) Maturity Principal value at June 30, 2021 June 30, 2021 December 31, 2020
Short-term borrowings:
Other short-term borrowings (1) $ 34 $ 34 $ 21
Total short-term borrowings $ 34 $ 21
Long-term debt:
3.50% Senior Notes January 29, 2025 $ 350 $ 349 $ 349
3.125% Senior Notes June 5, 2030 500 495 495
1.800% Senior Notes February 2, 2031 500 494 0
2.100% Senior Notes May 15, 2028 500 496 0
Total long-term debt $ 1,834 $ 844

~~(1)Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.~~

~~Interest expense related to short-term borrowings and long-term debt was $11 millionand$20 million~~for the three and six months ended June 30, 2021, respectively and $5 million and $11 million for the three and six months ended June 30, 2020, respectively. The weighted average interest rate associated with our short-term borrowings was 0.8 percent as of June 30, 2021 and 0.8 percent as of as of December 31, 2020.

~~Short-term Borrowings~~

We have certain facilities in place to enable us to access short-term borrowings on a secured and unsecured basis. Our secured facilities include collateral pledged to the FHLB of San Francisco and the discount window at the FRB (using both fixed income securities and loans as collateral). Our unsecured facility consists of our uncommitted federal funds lines. As of June 30, 2021, collateral pledged to the FHLB of San Francisco was comprised primarily of fixed income investment securities and loans and had a carrying value of $7.1 billion, of which $5.9 billion was available to support additional borrowings. As of June 30, 2021, collateral pledged to the discount window at the FRB was comprised of fixed income investment securities and had a carrying value of $0.9 billion, all of which was unused and available to support additional borrowings. Our total unused and available borrowing capacity for our uncommitted federal funds lines totaled $1.9 billion at June 30, 2021. Our total unused and available borrowing capacity under our master repurchase agreements with various financial institutions totaled $4.0 billion at June 30, 2021.

~~3.50% Senior Notes~~

In January 2015, SVB Financial issued $350 million of 3.50% Senior Notes due in January 2025. We received net proceeds of approximately $346 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.50% Senior Notes at June 30, 2021 was $349 million, which is reflective of $1 million of debt issuance costs and a discount of less than $1 million.

~~3.125% Senior Notes~~

On June 5, 2020, the Company issued $500 million of 3.125% Senior Notes due in June 2030 ("3.125% Senior Notes"). The 3.125% Senior Notes may be redeemed by us, at our option, at any time prior to March 5, 2030, at a redemption price equal to the full aggregate principal amount plus a “make-whole” premium payment. We received net proceeds from this offering of approximately $495 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.125% Senior Notes at June 30, 2021 was $495 million, which is reflective of $4 million of debt issuance costs and a discount of less than $1 million.

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~~1.800% Senior Notes~~

~~On February 2, 2021~~ ~~the Company issued~~ ~~$500 million~~ ~~of 1.800% Senior Notes due February 2031 ("1.800% Senior Notes"), with interest payments starting August 2, 2021, and payable every February 2~~nd ~~and August 2~~nd~~. The notes are senior unsecured obligations of SVB Financial Group and rank equally with all of our other unsecured and unsubordinated indebtedness.~~ ~~We received net proceeds from this offering of approximately $494 million after deducting underwriting discounts and commissions and issuance costs. The balance of our~~ ~~1.800%~~ ~~Senior Notes at June 30, 2021 was $494 million, which is reflective of $4 million of debt issuance costs and a $2 million discount.~~

~~2.100% Senior Notes~~

~~On May 13, 2021~~ ~~the Company issued~~ ~~$500 million~~ ~~of 2.100% Senior Notes due May 2028 ("2.100% Senior Notes"), with interest payments starting November 15, 2021, and payable every May 15~~th ~~and November 15~~th~~. The notes are senior unsecured obligations of SVB Financial Group and rank equally with all of our other unsecured and unsubordinated indebtedness.~~ ~~We received net proceeds from this offering of approximately $496 million after deducting underwriting discounts and commissions and issuance costs. The balance of our~~ ~~2.100%~~ ~~Senior Notes at June 30, 2021 was $496 million, which is reflective of $4 million of debt issuance costs and a discount of less than $1 million.~~


Years ended December 31, (Dollars in millions)	Other Intangible Assets
2022 (excluding the three months ended March 31, 2022)	$	18
2023	22
2024	20
2025	17
2026	30
2027 and thereafter	47
Total future amortization expense	$	154

9.8. Derivative Financial Instruments

We primarily use derivative financial instruments to manage interest rate risk and currency exchange rate risk and to assist customers with their risk management objectives, which may include currency exchange rate risks and interest rate risks. Also, in connection with negotiating credit facilities and certain other services, we often obtain equity warrant assets giving us the right to acquire stock in private, venture-backed companies in the technology and life science/healthcare industries.

Interest Rate Risk

Interest rate risk is our primary market risk and can result from timing and volume differences in the repricing of our interest rate sensitive assets and liabilities and changes in market interest rates. To manage interest rate risk on our interest rate sensitive assets, we have entered into interest rate swap contracts to hedge against future changes in interest rates. We designate these interest rate swap contracts as fair value and cash flow hedges.

Fair Value Hedges

To manage interest rate risk on our AFS securities portfolio, we enter into pay-fixed, receive-floating interest rate swap contracts to hedge against exposure to changes in the fair value of the securities resulting from changes in interest rates. We designate these interest rate swap contracts as fair value hedges that qualify for hedge accounting under ASC 815, Derivatives and Hedging ("ASC 815") and have elected to account for a portion of them using the last-of-layer method as outlined in ASC 815. We record the fair value hedges in other assets and other liabilities. For qualifying fair value hedges, both the changes in the fair value of the derivative and the portion of the fair value adjustments associated with the last-of-layer attributable to the hedged risk will be recognized into earnings as they occur. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item in the line item "investment securities" as part of interest income, a component of consolidated net income.

We assess hedge effectiveness under ASC 815 on a quarterly basis to ensure all hedges remain highly effective and hedge accounting under ASC 815 can be applied. In conjunction with the assessment of effectiveness, we assess the hedged item to ensure it is expected to be outstanding at the hedged item’s assumed maturity date and the last-of-layer method of

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accounting under ASC 815 can be applied. If the hedging relationship no longer exists or no longer qualifies as a hedge per ASC 815, any remaining fair value basis adjustments are allocated to the individual assets in the portfolio and amortized into earnings over a period consistent with the amortization of other discounts and premiums associated with the respective assets. As allowed under GAAP, we applied the "shortcut" method of accounting to a portion of our fair value hedges which assumes there is perfect effectiveness.

~~Table of~~ ~~Contents~~

The following table summarizes the amortized cost basis of hedged assets that are designated and qualify as fair value hedges and the cumulative amount of fair value hedging adjustments included in the carrying value that have been recorded on our unaudited interim consolidated balance sheets as of ~~June 30, 2021:~~March 31, 2022:


		June 30, 2021				March 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost Basis of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets			(Dollars in millions)	Amortized Cost Basis of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (2)
AFS securities (1)	AFS securities (1)	$	21,817	$	4		AFS securities (1)	$	9,604	$	(252)

(1)These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At ~~June 30, 2021,~~March 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was~~$17.5~~ $9.6 billion, the amounts of the designated hedged items was ~~$8.8~~$5.9 billion and the cumulative basis adjustments associated with these hedging relationships was $258 million.

(2)The balance includes $6 ~~million.~~million of hedging adjustments on discontinued hedging relationships at March 31, 2022.

Cash Flow Hedges

To manage interest rate risk on our variable-interest rate loan portfolio, we enter into interest rate swap contracts to hedge against future changes in interest rates by using hedging instruments to lock in future cash inflows that would otherwise be impacted by movements in the market interest rates. We designate these interest rate swap contracts as cash flow hedges that qualify for hedge accounting under ASC 815 and record them in other assets and other liabilities. For qualifying cash flow hedges, changes in the fair value of the derivative are recorded in AOCI and recognized in earnings as the hedged item affects earnings. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item in the line item ~~"Loans"~~"loans" as part of interest income, a component of consolidated net income.

We assess hedge effectiveness under ASC 815 on a quarterly basis to ensure all hedges remain highly effective and hedge accounting under ASC 815 can be applied. If the hedging relationship no longer exists or no longer qualifies as a hedge per ASC 815, any amounts remaining as gain or loss in AOCI are reclassified into earnings in the line item ~~"Loans"~~"loans" as part of interest income, a component of consolidated net income. As of March 31, 2020, all derivatives previously classified as hedges with notional balances totaling $5.0 billion and a net asset fair value of $228 million were terminated. As of ~~June 30, 2021,~~March 31, 2022, the total unrealized gains on terminated cash flow hedges remaining in AOCI was ~~$148~~$101 million, ~~$107~~$72 million net of tax. The unrealized gains will be reclassified into interest income as the underlying forecasted transactions impact earnings through the original maturity of the hedged forecasted transactions. The total remaining term over which the unrealized gains will be reclassified into earnings is approximately ~~four~~three years.

Currency Exchange Risk

We enter into foreign exchange forward contracts to economically reduce our foreign exchange exposure risk associated with the net difference between foreign currency denominated assets and liabilities. We do not designate any foreign exchange forward contracts as derivative instruments that qualify for hedge accounting. Gains or losses from changes in currency rates on foreign currency denominated instruments are recorded in the line item “other” as part of noninterest income, a component of consolidated net income. We may experience ineffectiveness in the economic hedging relationship, because the instruments are revalued based upon changes in the currency’s spot rate on the principal value, while the forwards are revalued on a discounted cash flow basis. We record forward agreements in gain positions in other assets and loss positions in other liabilities, while net changes in fair value are recorded in the line item “other” as part of noninterest income, a component of consolidated net income.

Other Derivative Instruments

We issue loans to clients with conversion features allowing SVBFG to convert the contingent conversion rights to stock in private or public companies. All of our contingent conversion rights qualify as derivatives and are reported at fair value as a component of other assets on our consolidated balance sheet. Any changes in fair value after the grant date are recognized as net gains or losses in the line item "other" in noninterest income, a component of consolidated net income.

We enter into total return swaps related to certain of our equity funds, which manages the the risk of exposure from the volatility of equity investments and in the funds. We do not designate any total return swaps as derivative instruments that qualify for hedge accounting. Gains or losses from changes in fair value are recognized as net gains or losses in the line item "other" in noninterest income, a component of consolidated net income.

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Also included in our derivative instruments are equity warrant assets and client forward and option contracts, and client interest rate contracts. For further description of these other derivative instruments, refer to Note 2 — “Summary of Significant Accounting Policies" under Part II, Item 8 of our ~~2020~~2021 Form 10-K.

Counterparty Credit Risk

We are exposed to credit risk if counterparties to our derivative contracts do not perform as expected. We mitigate counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral, as appropriate. With respect to measuring counterparty credit risk for derivative instruments, we measure the fair value of a group of financial assets and financial liabilities on a net risk basis by counterparty portfolio.

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The total notional or contractual amounts and fair value of our derivative financial instruments at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were as follows:


		June 30, 2021								December 31, 2020										March 31, 2022								December 31, 2021
		Notional or Contractual Amount			Fair Value					Notional or Contractual Amount			Fair Value							Notional or Contractual Amount			Fair Value					Notional or Contractual Amount			Fair Value
(Dollars in millions)	(Dollars in millions)			Derivative Assets (1)			Derivative Liabilities (1)					Derivative Assets (1)			Derivative Liabilities (1)	(Dollars in millions)						Derivative Assets (1)			Derivative Liabilities (1)					Derivative Assets (1)			Derivative Liabilities (1)
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:																		Derivatives designated as hedging instruments:
Interest rate risks:	Interest rate risks:																	Interest rate risks:
Interest rate swaps(2)	Interest rate swaps(2)	$	9,775		$	16		$	—	$	0		$	0		$	—	Interest rate swaps(2)		$	5,900		$	—		$	—	$	10,700		$	18		$	—
Interest rate swaps	Interest rate swaps	3,025			—			2		0			—			0		Interest rate swaps		—			—			—		—			—			—
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:																	Derivatives not designated as hedging instruments:
Currency exchange risks:	Currency exchange risks:																	Currency exchange risks:
Foreign exchange forwards		616			10			—		68			0			—
Foreign exchange forwards		184			—			2		567			—			20
Foreign exchange forwards and swaps																		Foreign exchange forwards and swaps		586			1			—		701			16			—
Foreign exchange forwards and swaps																		Foreign exchange forwards and swaps		852			—			6		62			—			2
Other derivative instruments:	Other derivative instruments:																	Other derivative instruments:
Equity warrant assets	Equity warrant assets	301			266			—		253			203			—		Equity warrant assets		334			323			—		322			277			—
Client foreign exchange forwards		11,234			165			—		8,026			215			—
Client foreign exchange forwards		10,717			—			153		7,491			—			188
Contingent conversion rights																		Contingent conversion rights		50			7			—		—			—			—
Client foreign exchange forwards and swaps																		Client foreign exchange forwards and swaps		8,522			168			—		8,245			146			—
Client foreign exchange forwards and swaps																		Client foreign exchange forwards and swaps		7,915			—			151		7,764			—			126

Total return swaps																		Total return swaps		46			—			8		—			—			—
Client foreign currency options	Client foreign currency options	233			2			—		98			2			—		Client foreign currency options		556			10			—		688			9			—
Client foreign currency options	Client foreign currency options	233			—			2		98			—			2		Client foreign currency options		556			—			10		688			—			9
Client interest rate derivatives (2)																		Client interest rate derivatives (2)		2,117			51			—		2,178			99			—
Client interest rate derivatives	Client interest rate derivatives	1,306			65			—		1,082			68			—		Client interest rate derivatives		2,273			—			109		2,315			—			101
Client interest rate derivatives (2)		1,483			—			59		1,251			—			27
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments				508			216					488			237		Total derivatives not designated as hedging instruments					560			284					547			238
Total derivatives	Total derivatives				$	524		$	218				$	488		$	237	Total derivatives					$	560		$	284				$	565		$	238

(1)Derivative assets and liabilities are included in "accrued interest receivable and other assets" and "other liabilities", respectively, on our consolidated balance sheets.

(2)The amount reported reflects reductions of approximately $6$313 million and ~~$45~~$112 million of derivative ~~liabilities~~assets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, reflecting variation margin treated as settlement of the related derivative fair values for legal and accounting purposes as required by central clearing houses.

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A summary of our derivative activity and the related impact on our consolidated statements of income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


			Three months ended June 30,				Six months ended June 30,						Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	Statement of income location	2021		2020		2021		2020		(Dollars in millions)	Statement of income location	2022		2021
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:										Derivatives designated as hedging instruments:
Interest rate risks:	Interest rate risks:										Interest rate risks:
Amounts reclassified from AOCI into income	Amounts reclassified from AOCI into income	Interest income - loans	$	16	$	16	$	31	$	18	Amounts reclassified from AOCI into income	Interest income - loans	$	15	$	16
Change in fair value of interest rate swaps hedging investment securities	Change in fair value of interest rate swaps hedging investment securities	Interest income - investment securities taxable	(14)		0		4		0		Change in fair value of interest rate swaps hedging investment securities	Interest income - investment securities taxable	330		18
Change in fair value of hedged investment securities	Change in fair value of hedged investment securities	Interest income - investment securities taxable	4		0		(13)		0		Change in fair value of hedged investment securities	Interest income - investment securities taxable	(331)		(17)
Net gains associated with interest rate risk derivatives	Net gains associated with interest rate risk derivatives		$	6	$	16	$	22	$	18	Net gains associated with interest rate risk derivatives		$	14	$	17
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:										Derivatives not designated as hedging instruments:
Currency exchange risks:	Currency exchange risks:										Currency exchange risks:
Gains (losses) on revaluations of internal foreign currency instruments, net	Gains (losses) on revaluations of internal foreign currency instruments, net	Other noninterest income	$	7	$	11	(21)		$	3	Gains (losses) on revaluations of internal foreign currency instruments, net	Other noninterest income	$	2	$	(28)
(Losses) gains on internal foreign exchange forward contracts, net		Other noninterest income	(6)		(9)		21		(1)
Net gains associated with internal currency risk			$	1	$	2	$	0	$	2
Gains on internal foreign exchange forward contracts, net											Gains on internal foreign exchange forward contracts, net	Other noninterest income	1		27
Net gains (losses) associated with internal currency risk											Net gains (losses) associated with internal currency risk		$	3	$	(1)
Other derivative instruments:	Other derivative instruments:										Other derivative instruments:
Gains (losses) on revaluations of client foreign currency instruments, net		Other noninterest income	$	17	$	5	$	15	$	(3)
(Losses) gains on client foreign exchange forward contracts, net		Other noninterest income	(12)		(7)		(10)		1
Net gains (losses) associated with client currency risk			$	5	$	(2)	$	5	$	(2)
Losses on revaluations of client foreign currency instruments, net											Losses on revaluations of client foreign currency instruments, net	Other noninterest income	$	(5)	$	(3)
Gains on client foreign exchange forward contracts, net											Gains on client foreign exchange forward contracts, net	Other noninterest income	2		3
Net (losses) gains associated with client currency risk											Net (losses) gains associated with client currency risk		$	(3)	$	—
Losses on total return swaps											Losses on total return swaps	Other noninterest income	$	(8)	$	—
Net gains on equity warrant assets	Net gains on equity warrant assets	Gains on equity warrant assets, net	$	122	$	27	$	344	$	40	Net gains on equity warrant assets	Gains on equity warrant assets, net	$	63	$	222
Net (losses) gains on other derivatives		Other noninterest income	$	(2)	$	0	$	2	$	(5)
Net gains on other derivatives											Net gains on other derivatives	Other noninterest income	$	3	$	5

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Balance Sheet Offsetting

Certain of our derivative and other financial instruments are subject to enforceable master netting arrangements with our counterparties. These agreements provide for the net settlement of multiple contracts with a single counterparty through a single payment, in a single currency, in the event of default on or termination of any one contract.

The following table summarizes our assets subject to enforceable master netting arrangements as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


		Gross Amounts of Recognized Assets		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Assets Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount			Gross Amounts of Recognized Assets			Gross Amounts offset in the Statement of Financial Position		Net Amounts of Assets Presented in the Statement of Financial Position			Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount
(Dollars in millions)	(Dollars in millions)					Financial Instruments			Cash Collateral Received (1)		(Dollars in millions)							Financial Instruments					Cash Collateral Received (1)
June 30, 2021
March 31, 2022															March 31, 2022
Derivative assets:	Derivative assets:														Derivative assets:
Interest rate swaps		$	16	$	0		$	16	$	(2)	$	0	$	14
Foreign exchange forwards		175		0			175		(48)		(31)		96

Foreign exchange forwards and swaps															Foreign exchange forwards and swaps	$	169		$	—	$	169		$	(63)	$	(23)	$	83
Foreign currency options	Foreign currency options	2		0			2		(1)		0		1		Foreign currency options	10			—		10			(7)		—		3
Client interest rate derivatives	Client interest rate derivatives	65		0			65		(62)		(3)		0		Client interest rate derivatives	51			—		51			(40)		(11)		—
Total derivative assets	Total derivative assets	258		0			258		(113)		(34)		111		Total derivative assets	230			—		230			(110)		(34)		86
Reverse repurchase, securities borrowing, and similar arrangements	Reverse repurchase, securities borrowing, and similar arrangements	762		0			762		(762)		0		0		Reverse repurchase, securities borrowing, and similar arrangements	420			—		420			(420)		—		—
Total	Total	$	1,020	$	0		$	1,020	$	(875)	$	(34)	$	111	Total	$	650		$	—	$	650		$	(530)	$	(34)	$	86
December 31, 2020
December 31, 2021															December 31, 2021
Derivative assets:	Derivative assets:														Derivative assets:
Interest rate swaps	Interest rate swaps	$	0	$	0		$	0	$	0	$	0	$	0	Interest rate swaps	$	18		$	—	$	18		$	—	$	(13)	$	5
Foreign exchange forwards		215		0			215		(76)		(21)		118
Foreign exchange forwards and swaps															Foreign exchange forwards and swaps	162			—		162			(77)		(32)		53
Foreign currency options	Foreign currency options	2		0			2		(1)		0		1		Foreign currency options	9			—		9			(1)		(7)		1
Client interest rate derivatives	Client interest rate derivatives	68		0			68		(68)		0		0		Client interest rate derivatives	99			—		99			(91)		(8)		—
Total derivative assets	Total derivative assets	285		0			285		(145)		(21)		119		Total derivative assets	288			—		288			(169)		(60)		59
Reverse repurchase, securities borrowing, and similar arrangements	Reverse repurchase, securities borrowing, and similar arrangements	227		0			227		(227)		0		0		Reverse repurchase, securities borrowing, and similar arrangements	607			—		607			(607)		—		—
Total	Total	$	512	$	0		$	512	$	(372)	$	(21)	$	119	Total	$	895		$	—	$	895		$	(776)	$	(60)	$	59

(1)Cash collateral received from our counterparties in relation to market value exposures of derivative contracts in our favor is recorded as a component of “short-term borrowings” on our consolidated balance sheets.

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The following table summarizes our liabilities subject to enforceable master netting arrangements as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


		Gross Amounts of Recognized Liabilities		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Liabilities Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount			Gross Amounts of Recognized Liabilities			Gross Amounts offset in the Statement of Financial Position		Net Amounts of Liabilities Presented in the Statement of Financial Position			Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount
(Dollars in millions)	(Dollars in millions)					Financial Instruments			Cash Collateral Pledged (1)		(Dollars in millions)							Financial Instruments					Cash Collateral Pledged (1)
June 30, 2021
March 31, 2022															March 31, 2022
Derivative liabilities:	Derivative liabilities:														Derivative liabilities:
Interest rate swaps		$	2	$	0		$	2	$	(2)	$	0	$	0
Foreign exchange forwards		155		0			155		(54)		(42)		59

Foreign exchange forwards and swaps															Foreign exchange forwards and swaps	$	157		$	—	$	157		$	(76)	$	(16)	$	65
Total return swaps															Total return swaps	8			—		8			—		(8)		—
Foreign currency options	Foreign currency options	2		0			2		0		(1)		1		Foreign currency options	10			—		10			(3)		—		7
Client interest rate derivatives	Client interest rate derivatives	59		0			59		(37)		(21)		1		Client interest rate derivatives	109			—		109			(80)		(29)		—
Total derivative liabilities	Total derivative liabilities	218		0			218		(93)		(64)		61		Total derivative liabilities	284			—		284			(159)		(53)		72
Repurchase, securities lending, and similar arrangements	Repurchase, securities lending, and similar arrangements	0		0			0		0		0		0		Repurchase, securities lending, and similar arrangements	63			—		63			—		—		63
Total	Total	$	218	$	0		$	218	$	(93)	$	(64)	$	61	Total	$	347		$	—	$	347		$	(159)	$	(53)	$	135
December 31, 2020
December 31, 2021															December 31, 2021
Derivative liabilities:	Derivative liabilities:														Derivative liabilities:
Interest rate swaps		$	0	$	0		$	0	$	0	$	0	$	0
Foreign exchange forwards		208		0			208		(84)		(45)		79

Foreign exchange forwards and swaps															Foreign exchange forwards and swaps	$	128		$	—	$	128		$	(55)	$	(4)	$	69
Foreign currency options	Foreign currency options	2		0			2		(1)		0		1		Foreign currency options	9			—		9			(2)		—		7
Client interest rate derivatives	Client interest rate derivatives	27		0			27		0		(26)		1		Client interest rate derivatives	101			—		101			(44)		(57)		—
Total derivative liabilities	Total derivative liabilities	237		0			237		(85)		(71)		81		Total derivative liabilities	238			—		238			(101)		(61)		76
Repurchase, securities lending, and similar arrangements	Repurchase, securities lending, and similar arrangements	0		0			0		0		0		0		Repurchase, securities lending, and similar arrangements	61			—		61			—		—		61
Total	Total	$	237	$	0		$	237	$	(85)	$	(71)	$	81	Total	$	299		$	—	$	299		$	(101)	$	(61)	$	137

(1)Cash collateral pledged to our counterparties in relation to market value exposures of derivative contracts in a liability position and repurchase agreements are recorded as a component of “cash and cash equivalents" on our consolidated balance sheets.

~~10.~~9. Noninterest Income

All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income. Included below is a summary of noninterest income for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
Noninterest income:
Gains on investment securities, net $ 305 $ 35 $ 472 $ 81
Gains on equity warrant assets, net 122 27 344 40
Client investment fees 15 32 35 75
Foreign exchange fees 67 36 124 84
Credit card fees 31 21 59 50
Deposit service charges 28 21 53 45
Lending related fees 18 11 34 24
Letters of credit and standby letters of credit fees 13 11 26 23
Investment banking revenue 103 142 245 188
Commissions 17 17 41 33
Other 42 16 72 27
Total noninterest income $ 761 $ 369 $ 1,505 $ 670

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	Three months ended March 31,
(Dollars in millions)	2022		2021
Noninterest income:
Gains on investment securities, net	$	85	$	167
Gains on equity warrant assets, net	63		222
Client investment fees	35		20
Wealth management and trust fees	22		—
Foreign exchange fees	73		57
Credit card fees	37		28
Deposit service charges	30		25
Lending related fees	19		16
Letters of credit and standby letters of credit fees	14		13
Investment banking revenue	93		142
Commissions	25		24
Other	21		30
Total noninterest income	$	517	$	744

Gains on investment securities, net

Net gains on investment securities include both gains and losses from our non-marketable and other equity securities, which include public equity securities held as a result of exercised equity warrant assets, gains and losses from sales of our AFS debt securities portfolio, when applicable, and carried interest.

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Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD-SVB, debt and credit funds, private and public portfolio companies, which ~~includes~~include public equity securities held as a result of exercised equity warrant assets, and qualified affordable housing projects. We experience variability in the performance of our non-marketable and other equity securities from period to period, which results in net gains or losses on investment securities (both realized and unrealized). This variability is due to a number of factors, including unrealized changes in the values of our investments, changes in the amount of realized gains from distributions, changes in liquidity events and general economic and market conditions. Unrealized gains from non-marketable and other equity securities for any single period are typically driven by valuation changes.

The extent to which any unrealized gains or losses will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which these equity securities may be subject to (e.g., lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities, and the timing of such actual sales or distributions, which, to the extent such securities are managed by our managed funds, are subject to our funds' separate discretionary sales/distributions and governance processes.

Carried interest is comprised of preferential allocations of profits recognizable when the return on assets of our individual managed fund of funds and direct venture funds exceeds certain performance targets and is payable to us, as the general partners of the managed funds. The carried interest we earn is often shared with employees, who are also members of the general partner entities. We record carried interest on a quarterly basis by measuring fund performance to date versus the performance target. For our unconsolidated managed funds, carried interest is recorded as gains on investment securities, net. For our consolidated managed funds, it is recorded as a component of net income attributable to noncontrolling interests. Carried interest allocated to others is recorded as a component of net income attributable to noncontrolling interests. Any carried interest paid to us (or our employees) may be subject to reversal to the extent fund performance declines to a level where inception to date carried interest is lower than actual payments made by the funds. The limited partnership agreements for our funds provide that carried interest is generally not paid to the general partners until the funds have provided a full return of contributed capital to the limited partners. Accrued, but unpaid carried interest may be subject to reversal to the extent that the fund performance declines to a level where inception-to-date carried interest is less than prior amounts recognized. Carried interest income is accounted for under an ownership model based on ASC 323 — Equity Method of Accounting and ASC 810 — Consolidation.

Our AFS securities portfolio is a fixed income investment portfolio that is managed with the objective of earning an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/liability management objectives. Though infrequent, sales of debt securities in our AFS securities portfolio may result in net gains or losses and are conducted pursuant to the guidelines of our investment policy related to the management of our liquidity position and interest rate risk.

Gains on investment securities are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our investment-related activities. A summary of gains and losses on investment securities for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Gains on non-marketable and other equity securities, net	Gains on non-marketable and other equity securities, net	$	305	$	35	$	472	$	20	Gains on non-marketable and other equity securities, net	$	36	$	167
Gains on sales of AFS securities, net	Gains on sales of AFS securities, net	0		0		0		61		Gains on sales of AFS securities, net	49		—
Total gains on investment securities, net	Total gains on investment securities, net	$	305	$	35	$	472	$	81	Total gains on investment securities, net	$	85	$	167

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Gains on equity warrant assets, net

Gains on equity warrant assets are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities. A summary of net gains on equity warrant assets for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Equity warrant assets:	Equity warrant assets:									Equity warrant assets:
Gains on exercises, net	Gains on exercises, net	$	78	$	9	$	251	$	33	Gains on exercises, net	$	12	$	160
Terminations	Terminations	(1)		0		(1)		(1)		Terminations	(1)		—
Changes in fair value, net	Changes in fair value, net	45		18		94		8		Changes in fair value, net	52		62
Total net gains on equity warrant assets	Total net gains on equity warrant assets	$	122	$	27	$	344	$	40	Total net gains on equity warrant assets	$	63	$	222

Client investment fees

Client investment fees include fees earned from discretionary investment management services for ~~substantially all clients,~~ managing clients’ portfolios based on their investment policies, and strategies and ~~objectives and investment advisory fees.~~objectives. Revenue is recognized on a monthly basis upon completion of our performance obligation and consideration is typically received in the subsequent month. Included in our sweep money market fees are Rule 12(b)-1 fees, revenue sharing and customer transactional-based fees. Rule 12(b)-1 fees and revenue sharing are recognized as earned based on client funds that are invested in the period, typically monthly. Transactional based fees are earned and recognized on fixed income securities when the transaction is executed on the clients' behalf. Amounts paid to third-party service providers are predominantly expensed, such that client investment fees are recorded gross of payments made to third parties. A summary of client investment fees by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Client investment fees by type:	Client investment fees by type:									Client investment fees by type:
Sweep money market fees	Sweep money market fees	$	7	$	19	$	18	$	42	Sweep money market fees	$	24	$	10
Asset management fees (1)	Asset management fees (1)	8		12		16		21		Asset management fees (1)	10		9
Repurchase agreement fees	Repurchase agreement fees	0		1		1		12		Repurchase agreement fees	1		1
Total client investment fees (2)	Total client investment fees (2)	$	15	$	32	$	35	$	75	Total client investment fees (2)	$	35	$	20

(1)Represents fees earned from investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.

(2)Represents fees earned on client investment funds that are maintained at third-party financial institutions and are not recorded on our balance sheet.

Wealth management and trust fees

Wealth management fees are earned for providing wealth management, retirement plan advisory, family office, financial planning, trust services and other financial advisory services to clients. The Company’s performance obligation under these contracts is satisfied over time as the services are provided. Fees are recognized monthly based on the average monthly, beginning-of-quarter, or, for a small number of clients, end-of-quarter market value of the Private Bank AUM and the applicable fee rate, depending on the terms of the contracts. Fees are also recognized monthly based either on a fixed fee amount or are based on the quarter-end (in arrears) market value of the Private Bank AUM and the applicable fee rate, depending on the terms of the contracts. No performance-based incentives are earned under wealth management contracts. Receivables are recorded on the Consolidated Balance Sheets in the "Accrued interest receivable and other assets" line item.

Trust fees are earned when the Company is appointed as trustee for clients. As trustee, the Company administers the client’s trust and manages the assets of the trust, including investments and property. The Company’s performance obligation under these agreements is satisfied over time as the administration and management services are provided. Fees are recognized monthly or, in certain circumstances, quarterly based on a percentage of the market value of the account as outlined in the agreement. Payment frequency is defined in the individual contracts, which primarily stipulate monthly in arrears. No performance-based incentives are earned on trust fee contracts. Receivables are recorded on the Consolidated Balance Sheets in the "Accrued interest receivable and other assets" line item. A summary of wealth management and trust fees by instrument type for the three months ended March 31, 2022 and 2021 is as follows:

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	Three months ended March 31,
(Dollars in millions)	2022		2021
Wealth management and trust fees by type:
Wealth management fees	$	20	$	—
Trust fees	2		—
Total wealth management and trust fees	$	22	$	—

Foreign exchange fees

Foreign exchange fees represent the income differential between purchases and sales of foreign currency on behalf of our clients, primarily from spot contracts. Foreign exchange spot contract fees are recognized upon the completion of the single performance obligation, the execution of a spot trade in exchange for a fee. In line with customary business practice, the legal right transfers to the client upon execution of a foreign exchange contract on the trade date, and as such, we currently recognize our fees based on the trade date and the transactions are typically settled within two business days.

~~Table of~~ ~~Contents~~

Forward contract and option premium fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities. A summary of foreign exchange fee income by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Foreign exchange fees by instrument type:	Foreign exchange fees by instrument type:									Foreign exchange fees by instrument type:
Spot contract commissions	Spot contract commissions	$	60	$	33	$	115	$	74	Spot contract commissions	$	66	$	55
Forward contract commissions	Forward contract commissions	6		3		8		10		Forward contract commissions	6		2
Option premium fees	Option premium fees	1		0		1		0		Option premium fees	1		—
Total foreign exchange fees	Total foreign exchange fees	$	67	$	36	$	124	$	84	Total foreign exchange fees	$	73	$	57

Credit card fees

Credit card fees include interchange income from credit and debit cards and fees earned from processing transactions for merchants. Interchange income is earned after satisfying our performance obligation of providing nightly settlement services to a payment network. Costs related to rewards programs are recorded when the rewards are earned by the customer and presented as a reduction to interchange fee income. Rewards programs continue to be accounted for under ASC 310 - Receivables. Our performance obligations for merchant service fees are to transmit data and funds between the merchant and the payment network. Credit card interchange and merchant service fees are earned daily upon completion of transaction settlement services.

Annual card service fees are recognized on a straight-line basis over a 12-month period and continue to be accounted for under ASC 310 - Receivables.

A summary of credit card fees by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Credit card fees by instrument type:	Credit card fees by instrument type:									Credit card fees by instrument type:
Card interchange fees, net	Card interchange fees, net	$	26	$	15	$	49	$	37	Card interchange fees, net	$	30	$	23
Merchant service fees	Merchant service fees	4		5		8		10		Merchant service fees	5		4
Card service fees	Card service fees	1		1		2		3		Card service fees	2		1
Total credit card fees	Total credit card fees	$	31	$	21	$	59	$	50	Total credit card fees	$	37	$	28

Deposit service charges

Deposit service charges include fees earned from performing cash management activities and other deposit account services. Deposit services include, but are not limited to, the following: receivables services, which include merchant services, remote capture, lockbox, electronic deposit capture, and fraud control services. Payment and cash management products and services include wire transfer and automated clearing house payment services to enable clients to transfer funds more quickly, as well as business bill pay, business credit and debit cards, account analysis, and disbursement services. Deposit service charges are recognized over the period in which the related performance obligation is provided, generally on a monthly basis, and are presented in the "Disaggregation of revenue from contracts with customers" ~~table~~tables below.

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Lending related fees

Unused commitment fees, minimum finance fees and unused line fees are recognized as earned on a monthly basis. Fees that qualify for syndication treatment are recognized at the completion of the syndicated loan deal for which the fees were received. Lending related fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our lending-related activities. A summary of lending related fees by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Lending related fees by instrument type:	Lending related fees by instrument type:									Lending related fees by instrument type:
Unused commitment fees	Unused commitment fees	$	15	$	8	$	28	$	17	Unused commitment fees	$	15	$	12
Other	Other	3		3		6		7		Other	4		4
Total lending related fees	Total lending related fees	$	18	$	11	$	34	$	24	Total lending related fees	$	19	$	16

Letters of credit and standby letters of credit fees

~~Commercial and standby~~Standby letters of credit represent conditional commitments issued by us on behalf of a client to guarantee the performance of the client to a third party when certain specified future events have occurred. Fees generated from letters of credit and standby letters of credit are deferred as a component of other liabilities and recognized in noninterest income over the commitment period using the straight-line method, based on the likelihood that the commitment being drawn down will be remote. Letters of credit and standby letters of credit fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our lending related activities.

Investment banking revenue

We earn investment banking revenue from clients for providing services related to securities underwriting, private placements and advisory services on strategic matters such as mergers and acquisitions. Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized at the point in time when the offering has been deemed to be completed by the lead manager of the underwriting group. Once the offering is completed, the performance obligation has been satisfied; we recognize the applicable management fee as well as the underwriting fee, net of consideration payable to customers. Private placement fees are recognized at the point in time when the private placement is completed, which is generally when the client accepts capital from the fund raise. Advisory fees from mergers and acquisitions engagements are generally recognized at the point in time when the related transaction is completed. Expenses are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at a point in time. All other deal-related expenses are expensed as incurred. We have determined that we act as principal in the majority of these transactions and therefore present expenses gross within other operating expenses.

A summary of investment banking revenue by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Investment banking revenue:	Investment banking revenue:									Investment banking revenue:
Underwriting fees	Underwriting fees	$	84	$	131	$	209	$	162	Underwriting fees	$	32	$	125
Advisory fees	Advisory fees	9		9		13		24		Advisory fees	54		4
Private placements and other	Private placements and other	10		2		23		2		Private placements and other	7		13
Total investment banking revenue	Total investment banking revenue	$	103	$	142	$	245	$	188	Total investment banking revenue	$	93	$	142

Commissions

Commissions include commissions received from customers for the execution of agency-based brokerage transactions in listed and over-the-counter equities. The execution of each trade order represents a distinct performance obligation and the transaction price is fixed at the point in time or trade order execution. Trade execution is satisfied at the point in time that the customer has control of the asset and as such, fees are recorded on a trade date basis. The Company also earns subscription fees for market intelligence services that are recognized over the period in which they are delivered. Fees received before the subscription period ends are initially recorded as deferred revenue (a contract liability) in other liabilities in our consolidated balance sheet. Commissions are presented in the ~~"Disaggregation~~"Disaggregation of revenue from contracts with customers"table below.

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Other

Other noninterest income primarily includes income from fund management fees, gains from conversion of convertible debt options and service revenue. Fund management fees are comprised of fees charged directly to our managed funds of funds and direct venture funds. Fund management fees are based upon the contractual terms of the limited partnership agreements and are generally recognized as earned over the specified contract period, which is generally equal to the life of the individual fund. Fund management fees are calculated as a percentage of committed capital and collected in advance and are received quarterly. Fund management fees for certain of our limited partnership agreements are calculated as a percentage of distributions made by the funds and revenue is recorded only at the time of a distribution event. As distribution events are not predetermined for these certain funds, management fees are considered variable and constrained under ASC 606.

Gains from conversion of convertible debt options represent unrealized valuation gains on loan conversion derivative assets, and realized gains from the conversion of debt instruments, convertible into a third party’s common stock upon a triggering event such as an IPO. Gains from conversion of convertible debt options are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities.

Other service revenue primarily consists of dividend income on FHLB/FRB stock, correspondent bank rebate income, incentive fees, or performance fees related to carried interest and other fee income. We recognize revenue when our performance obligations are met and record revenues on a daily/monthly, quarterly, semi-annual or annual basis. For event driven revenue sources, we recognize revenue when: (i) persuasive evidence of an arrangement exists, (ii) we have performed the service, provided we have no other remaining obligations to the customer, (iii) the fee is fixed or determinable and (iv) collectability is probable.

A summary of other noninterest income by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Other noninterest income by instrument type:	Other noninterest income by instrument type:									Other noninterest income by instrument type:
Fund management fees	Fund management fees	$	21	$	8	$	36	$	16	Fund management fees	$	13	$	15
Net gains on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)		6		0		5		0
Net losses on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)										Net losses on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)	—		(1)
Other service revenue	Other service revenue	15		8		31		11		Other service revenue	8		16
Total other noninterest income	Total other noninterest income	$	42	$	16	$	72	$	27	Total other noninterest income	$	21	$	30

(1)Represents the net revaluation of client and internal foreign currency denominated financial instruments. We enter into foreign exchange forward contracts to economically reduce our foreign exchange exposure related to client and internal foreign currency denominated financial instruments.

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Disaggregation of revenue from contracts with customers

The following tables present our revenues from contracts with customers disaggregated by revenue source and segment for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


Three months ended June 30, 2021		Global Commercial Bank (2)			SVB Private Bank				SVB Capital (2)				SVB Leerink (2)				Other Items			Total
Three months ended March 31, 2022											Three months ended March 31, 2022				Silicon Valley Bank (2)								SVB Private			SVB Capital (2)				SVB Securities (2)			Other Items				Total
(Dollars in millions)	(Dollars in millions)			Global Commercial Bank (2)							SVB Private Bank						SVB Capital (2)			SVB Leerink (2)								Other Items							Total				(Dollars in millions)
Revenue from contracts with customers:	Revenue from contracts with customers:												Revenue from contracts with customers:
Client investment fees	Client investment fees	$	14				$	1			$	0				$			0		$	0		$	15		Client investment fees			$	35		$	—			$	—			$	—		$	—	$	35
Wealth management and trust fees																							Wealth management and trust fees		—				22			—				—				—			22
Spot contract commissions	Spot contract commissions	60			0				0				0				0			60			Spot contract commissions		65				1			—				—				—			66
Card interchange fees, gross	Card interchange fees, gross	48			0				0				0				1			49			Card interchange fees, gross		56				—			—				—				1			57
Merchant service fees	Merchant service fees	4			0				0				0				0			4			Merchant service fees		5				—			—				—				—			5
Deposit service charges	Deposit service charges	27			0				0				0				1			28			Deposit service charges		29				1			—				—				—			30
Investment banking revenue	Investment banking revenue	0			0				0				103				0			103			Investment banking revenue		—				—			—				93				—			93
Commissions	Commissions	0			0				0				17				0			17			Commissions		—				—			—				25				—			25
Fund management fees	Fund management fees	0			0				20				1				0			21			Fund management fees		—				—			12				1				—			13
Performance fees	Performance fees	0			0				8				0				0			8			Performance fees		—				—			4				—				—			4
Correspondent bank rebates	Correspondent bank rebates	1			0				0				0				0			1			Correspondent bank rebates		2				—			—				—				—			2
Total revenue from contracts with customers	Total revenue from contracts with customers	$	154		$	1			$	28			$	121			$	2		$	306		Total revenue from contracts with customers		$	192			$	24		$	16			$	119			$	1		$	352

Revenues outside the scope of ASC 606 (1)	Revenues outside the scope of ASC 606 (1)	20			0				147				28				260			455			Revenues outside the scope of ASC 606 (1)		20				1			49				2				93			165
Total noninterest income	Total noninterest income	$	174		$	1			$	175			$	149			$	262		$	761		Total noninterest income		$	212			$	25		$	65			$	121			$	94		$	517

(1)Amounts are accounted for under separate guidance than ASC 606.

(2)~~Global Commercial~~Silicon Valley Bank’s, SVB Capital’s and SVB ~~Leerink's~~Securities's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."


Three months ended June 30, 2020		Global Commercial Bank (2)			SVB Private Bank				SVB Capital (2)				SVB Leerink (2)				Other Items			Total
Three months ended March 31, 2021											Three months ended March 31, 2021				Silicon Valley Bank (2)								SVB Private			SVB Capital (2)				SVB Securities (2)			Other Items				Total
(Dollars in millions)	(Dollars in millions)			Global Commercial Bank (2)							SVB Private Bank						SVB Capital (2)			SVB Leerink (2)								Other Items							Total				(Dollars in millions)
Revenue from contracts with customers:	Revenue from contracts with customers:												Revenue from contracts with customers:
Client investment fees	Client investment fees	$	31				$	1			$	0				$			0		$	0		$	32		Client investment fees			$	19		$	1			$	—			$	—		$	—	$	20
Spot contract commissions	Spot contract commissions	33			0				0				0				0			33			Spot contract commissions		55				—			—				—				—			55
Card interchange fees, gross	Card interchange fees, gross	26			0				0				0				0			26			Card interchange fees, gross		41				—			—				—				—			41
Merchant service fees	Merchant service fees	5			0				0				0				0			5			Merchant service fees		4				—			—				—				—			4
Deposit service charges	Deposit service charges	21			0				0				0				0			21			Deposit service charges		25				—			—				—				—			25
Investment banking revenue	Investment banking revenue	0			0				0				142				0			142			Investment banking revenue		—				—			—				142				—			142
Commissions	Commissions	0			0				0				17				0			17			Commissions		—				—			—				24				—			24
Fund management fees	Fund management fees	0			0				7				1				0			8			Fund management fees		—				—			13				2				—			15
Performance fees																							Performance fees		—				—			—				—				—			—
Correspondent bank rebates	Correspondent bank rebates	1			0				0				0				0			1			Correspondent bank rebates		1				—			—				—				—			1
Total revenue from contracts with customers	Total revenue from contracts with customers	$	117		$	1			$	7			$	160			$	0		$	285		Total revenue from contracts with customers		$	145			$	1		$	13			$	168			$	—		$	327

Revenues outside the scope of ASC 606 (1)	Revenues outside the scope of ASC 606 (1)	16			0				14				4				50			84			Revenues outside the scope of ASC 606 (1)		14				—			56				2				345			417
Total noninterest income	Total noninterest income	$	133		$	1			$	21			$	164			$	50		$	369		Total noninterest income		$	159			$	1		$	69			$	170			$	345		$	744

(1)Amounts are accounted for under separate guidance than ASC 606.

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Six months ended June 30, 2021 Global
Commercial
Bank (2) SVB Private
Bank SVB Capital (2) SVB
Leerink (2) Other Items Total
(Dollars in millions)
Revenue from contracts with customers:
Client investment fees $ 33 $ 2 $ 0 $ 0 $ 0 $ 35
Spot contract commissions 115 0 0 0 0 115
Card interchange fees, gross 89 0 0 0 1 90
Merchant service fees 8 0 0 0 0 8
Deposit service charges 52 0 0 0 1 53
Investment banking revenue 0 0 0 245 0 245
Commissions 0 0 0 41 0 41
Fund management fees 0 0 33 3 0 36
Performance fees 0 0 8 0 0 8
Correspondent bank rebates 2 0 0 0 0 2
Total revenue from contracts with customers $ 299 $ 2 $ 41 $ 289 $ 2 $ 633
Revenues outside the scope of ASC 606 (1) 34 0 203 30 605 872
Total noninterest income $ 333 $ 2 $ 244 $ 319 $ 607 $ 1,505

~~(1)Amounts are accounted for under separate guidance than ASC 606.~~

~~(2)Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items.~~"

Six months ended June 30, 2020 Global
Commercial
Bank (2) SVB Private
Bank SVB Capital (2) SVB
Leerink (2) Other Items Total
(Dollars in millions)
Revenue from contracts with customers:
Client investment fees $ 74 $ 1 $ 0 $ 0 $ 0 $ 75
Spot contract commissions 74 0 0 0 0 74
Card interchange fees, gross 62 0 0 0 1 63
Merchant service fees 10 0 0 0 0 10
Deposit service charges 45 0 0 0 0 45
Investment banking revenue 0 0 0 188 0 188
Commissions 0 0 0 33 0 33
Fund management fees 0 0 14 2 0 16
Correspondent bank rebates 2 0 0 0 0 2
Total revenue from contracts with customers $ 267 $ 1 $ 14 $ 223 $ 1 $ 506
Revenues outside the scope of ASC 606 (1) 33 0 12 3 116 164
Total noninterest income $ 300 $ 1 $ 26 $ 226 $ 117 $ 670

~~(1)Amounts are accounted for under separate guidance than ASC 606.~~

The timing of revenue recognition may differ from the timing of cash settlements or invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, and unearned revenue when revenue is recognized subsequent to receipt of consideration. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ changes in our contract assets, contract liabilities and receivables were not material. Additionally, revenues recognized during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and 2020 that were included in the corresponding contract liability balance at the beginning of the periods were not material.

~~Table of~~ ~~Contents~~

~~11. Other Noninterest Expense~~

~~A summary of other noninterest expense for the three and six months ended June 30, 2021 and 2020 is as follows:~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
Lending and other client related processing costs $ 8 $ 7 $ 15 $ 16
Correspondent bank fees 5 4 9 8
Investment banking activities 3 8 9 11
Trade order execution costs 3 2 6 5
Data processing services 5 3 10 7
Telephone 2 2 4 4
Dues and publications 1 1 3 2
Postage and supplies 1 1 1 1
Other 17 11 33 26
Total other noninterest expense $ 45 $ 39 $ 90 $ 80

~~12.~~10. Segment Reporting

We have 4 reportable segments for management reporting purposes: ~~Global Commercial~~Silicon Valley Bank, SVB Private, ~~Bank,~~ SVB Capital and SVB ~~Leerink.~~Securities. The results of our reportable and operating segments are based on our internal management reporting process.

We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reporting segments. During the quarter ended March 31, 2022, we reevaluated our segments. Based on this reevaluation, the Premium Wine reporting division was moved from Silicon Valley Bank to the SVB Private segment. These changes were made to reflect the manner in which the Company is organized for purposes of making operating decisions and assessing performance. For the three months ended March 31, 2021, prior period balances for our Premium Wine reporting division previously reported in "Silicon Valley Bank" have been recasted to the reportable segment “SVB Private” to properly reflect organizational changes effective January 1, 2022. The reclassification of historical segment information has no effect on the Company's previously reported consolidated balance sheets, statements of income, or cash flows and the change did not have any impact on the determination of the reporting units used to assess impairment under ASC 350, Intangibles - Goodwill and Other. Please refer to Note 10 — “Segment Reporting” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.

Our ~~Global Commercial~~Silicon Valley Bank and SVB Private ~~Bank~~ segments primary source of revenue is from net interest income, which is primarily the difference between interest earned on loans, net of FTP, and interest paid on deposits, net of FTP. Accordingly, these segments are reported using net interest income, net of FTP. FTP is an internal measurement framework designed to assess the financial impact of a financial institution’s sources and uses of funds. It is the mechanism by which a funding credit is given for deposits raised, and a funding charge is made for funded loans. FTP is calculated at an instrument level based on account characteristics.

We also evaluate performance based on provision for credit losses, noninterest income and noninterest expense, which are presented as components of segment operating profit or loss. In calculating each operating segment’s noninterest expense, we consider the direct costs incurred by the operating segment as well as certain allocated direct costs. As part of this review, we allocate certain corporate overhead costs to a corporate account. We do not allocate income tax expense or the provisions for unfunded credit commitments or HTM securities (included in provision for credit losses) to our segments. Additionally, our management reporting model is predicated on average asset balances; therefore, period-end asset balances are not presented for segment reporting purposes. Changes in an individual client’s primary relationship designation have resulted, and in the future may result, in the inclusion of certain clients in different segments in different periods.

Unlike financial reporting, which benefits from the comprehensive structure provided by GAAP, our internal management reporting process is highly subjective, as there is no comprehensive, authoritative guidance for management reporting. Our management reporting process measures the performance of our operating segments based on our internal operating structure, which is subject to change from time to time, and is not necessarily comparable with similar information for other financial services companies.

For reporting purposes, SVB Financial Group has 4 ~~reportable~~operating segments for which we report our financial information:

•Silicon Valley Bank (formerly known as Global Commercial ~~Bank~~ Bank) is ~~comprised of results from the following operating segments:~~

◦~~Our~~ ~~Commercial Bank~~our commercial bank which offers products and services ~~are~~ provided by the Bank and its subsidiaries to commercial clients in key innovation markets. The Bank provides solutions to the financial needs of commercial clients through credit, treasury management, foreign exchange, trade finance, and other services. In addition, the Bank and its subsidiaries offer a variety of investment services and solutions to its clients that enable them to effectively manage their assets.

◦Our ~~Global Fund Banking Division~~ ~~provides banking products~~commercial bank consists of services provided to clients in the Tech and ~~services primarily to our~~Healthcare industries, as well as private equity and venture capital ~~clients.~~

◦~~SVBWine~~ ~~provides banking products~~firms, and ~~services to our premium wine industry~~includes clients ~~including vineyard development loans.~~ from international operations in EMEA, Asia and Canada.

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•SVB Private ~~Bank~~(formerly known as SVB Private Bank) is ~~the~~our private ~~banking division~~bank and wealth management segment of the ~~Bank, which~~Bank. SVB Private provides a range of personal financial solutions for consumers. Our clients are primarily private

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equity/venture capital professionals and executive leaders of the innovation companies they ~~support.~~support as well as high net worth clients acquired from Boston Private and our premium wine clients. We offer a customized suite of private banking services, including mortgages, home equity lines of credit, restricted and private stock loans, capital call lines of credit, ~~and~~ other secured and unsecured lending products and vineyard development loans (previously reported as part of Silicon Valley Bank), as well as ~~cash~~planning-based financial strategies, wealth management, family office, financial planning, tax planning and ~~wealth management~~trust services. In addition, we provide real estate secured loans to eligible employees through our EHOP.

•SVB Capital is the funds management business of SVB Financial Group, which focuses primarily on venture capital investments. SVB Capital manages funds (primarily venture capital funds) on behalf of third-party limited partners and, on a more limited basis, SVB Financial Group. The SVB Capital family of funds is comprised of direct venture funds that invest in companies and funds of funds that invest in other venture capital funds, ~~investments in certain~~as well as debt funds ~~in which we are a strategic investor~~that provide lending and ~~WestRiver Group's debt fund business.~~other financing solutions. SVB Capital generates income for the Company primarily from investment returns (including carried interest allocations) and management fees.

•SVB ~~Leerink~~Securities is an investment bank ~~specializing in~~focused on the ~~equity and convertible capital markets, mergers and acquisitions, equity research and sales and trading for growth and innovation-minded healthcare and life science companies~~innovation economy and operates as a wholly-owned subsidiary of SVB ~~Financial.~~Financial Group. SVB ~~Leerink~~Securities provides investment banking services across all ~~subsectors~~major sub-sectors of ~~healthcare including: biotechnology, pharmaceuticals, medical devices, diagnostic~~Healthcare and ~~life science tools, healthcare services~~Technology. Healthcare sub-sectors include Biopharma, Digital Health and ~~digital health.~~HealthTech, Healthcare Services, Medical Devices and Tools and Diagnostics. Technology sub-sectors include Consumer Internet, Commerce Enablement and Marketing Software, Digital Infrastructure and Tech-Enabled Services, Education Technology, Enterprise Software, Industrial Technology and FinTech. SVB ~~Leerink~~Securities focuses on ~~two primary lines of business: (i) investment banking focused on providing companies with capital-raising services, financial advice on mergers~~four main product and ~~acquisitions, sales~~service offerings: Capital Raising, M&A Advisory, Equity Research and ~~trading services~~Sales and ~~equity research, and (ii) sponsorship of private investment funds.~~Trading.

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The following table presents a summary of financial results of our reportable segments along with a reconciliation to our consolidated interim results. Our reportable segment information for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


(Dollars in millions)	(Dollars in millions)	Global Commercial Bank (1)		SVB Private Bank		SVB Capital (1)		SVB Leerink (1)		Other Items (2)		Total		(Dollars in millions)	Silicon Valley Bank (1)		SVB Private		SVB Capital (1)		SVB Securities (1)		Other Items (2)		Total
Three months ended June 30, 2021
Three months ended March 31, 2022														Three months ended March 31, 2022
Net interest income	Net interest income	$	715	$	29	$	0	$	0	$	(16)	$	728	Net interest income	$	854	$	81	$	—	$	—	$	147	$	1,082
Provision for credit losses		(11)		(5)		0		0		(19)		(35)
Noninterest income		174		1		175		149		262		761
Noninterest expense (3)		(307)		(15)		(18)		(98)		(215)		(653)
Income before income tax expense (4)		$	571	$	10	$	157	$	51	$	12	$	801
Total average loans, amortized cost		$	42,727	$	5,154	$	0	$	0	$	1,931	$	49,812
Total average assets (5) (6)		131,885		5,199		613		729		12,291		150,717
Total average deposits		128,918		3,977		0		0		865		133,760
Three months ended June 30, 2020
Net interest income		$	485	$	19	$	0	$	0	$	9	$	513
Provision for credit losses		(44)		(4)		0		0		(18)		(66)
(Provision for) reduction of credit losses														(Provision for) reduction of credit losses	(7)		(1)		—		—		(3)		(11)
Noninterest income	Noninterest income	133		1		21		164		50		369		Noninterest income	212		25		65		121		94		517
Noninterest expense (3)	Noninterest expense (3)	(241)		(10)		(8)		(109)		(112)		(480)		Noninterest expense (3)	(397)		(94)		(20)		(134)		(228)		(873)
Income (loss) before income tax expense (4)	Income (loss) before income tax expense (4)	$	333	$	6	$	13	$	55	$	(71)	$	336	Income (loss) before income tax expense (4)	$	662	$	11	$	45	$	(13)	$	10	$	715
Total average loans, amortized cost	Total average loans, amortized cost	$	30,472	$	4,036	$	0	$	0	$	2,004	$	36,512	Total average loans, amortized cost	$	52,234	$	14,298	$	—	$	—	$	538	$	67,070
Total average assets (5) (6)	Total average assets (5) (6)	67,936		4,072		430		455		5,540		78,433		Total average assets (5) (6)	177,944		15,987		892		993		20,252		216,068
Total average deposits	Total average deposits	65,091		2,120		0		0		706		67,917		Total average deposits	175,424		14,416		—		—		878		190,718
Six months ended June 30, 2021
Net interest income		$	1,334	$	56	$	0	$	0	$	(2)	$	1,388
Three months ended March 31, 2021														Three months ended March 31, 2021
Net interest income (7)														Net interest income (7)	$	611	$	35	$	—	$	—	$	14	$	660
(Provision for) reduction of credit losses	(Provision for) reduction of credit losses	(56)		4		0		0		(2)		(54)		(Provision for) reduction of credit losses	(45)		9		—		—		17		(19)
Noninterest income	Noninterest income	333		2		244		319		607		1,505		Noninterest income	159		1		69		170		345		744
Noninterest expense (3)		(585)		(28)		(34)		(235)		(407)		(1,289)
Income before income tax expense (4)		$	1,026	$	34	$	210	$	84	$	196	$	1,550
Total average loans, amortized cost		$	41,016	$	5,066	$	0	$	0	$	1,974	$	48,056
Total average assets (5) (6)		120,470		5,114		595		748		10,910		137,837
Total average deposits		117,655		3,636		0		0		957		122,248
Six months ended June 30, 2020
Net interest income		$	949	$	34	$	0	$	0	$	54	$	1,037
Provision for credit losses		(238)		(59)		0		0		(13)		(310)
Noninterest income		300		1		26		226		117		670
Noninterest expense (3)		(466)		(20)		(17)		(171)		(205)		(879)
Income (loss) before income tax expense (4)		$	545	$	(44)	$	9	$	55	$	(47)	518
Total average loans, amortized cost		$	29,805	$	3,946	$	0	$	0	$	1,335	$	35,086
Total average assets (5) (6)		64,871		3,982		439		469		5,659		75,420
Total average deposits		62,153		2,021		0		0		689		64,863
Noninterest expense (3) (7)														Noninterest expense (3) (7)	(276)		(15)		(16)		(136)		(193)		(636)
Income before income tax expense (4) (7)														Income before income tax expense (4) (7)	$	449	$	30	$	53	$	34	$	183	$	749
Total average loans, amortized cost (7)														Total average loans, amortized cost (7)	$	38,221	$	6,043	$	—	$	—	$	2,017	$	46,281
Total average assets (5) (6) (7)														Total average assets (5) (6) (7)	107,859		6,097		577		767		9,515		124,815
Total average deposits (7)														Total average deposits (7)	106,016		3,545		—		—		1,047		110,608

(1)~~Global Commercial~~Silicon Valley Bank’s, SVB Capital’s and SVB ~~Leerink's~~Securities's components of net interest income, noninterest income, noninterest expense and total average assets are shown net of noncontrolling interests for all periods presented. Noncontrolling interest is included within “Other Items."

(2)The “Other Items” column reflects the adjustments necessary to reconcile the results of the reportable segments to the consolidated financial statements prepared in conformity with GAAP. Net interest income consists primarily of interest earned from our fixed income investment portfolio, net of FTP. Noninterest income consists primarily of gains or losses on equity warrant assets, gains or losses on the sale of AFS securities and gains or losses on equity securities from exercised warrant assets. Noninterest expense consists primarily of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses.

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(3)The ~~Global Commercial~~Silicon Valley Bank segment includes direct depreciation and amortization of $8$10 million and $6$7 million for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $14 millionand $11 million for the six months ended June 30, 2021 and 2020,~~ respectively.

(4)The internal reporting model used by management to assess segment performance does not calculate income tax expense by segment. Our effective tax rate is a reasonable approximation of the segment rates.

(5)Total average assets equal the greater of total average assets or the sum of total average liabilities and total average stockholders' equity for each segment to reconcile the results to the consolidated financial statements prepared in conformity with GAAP.

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(6)Included in the total average assets for SVB ~~Leerink~~Securities is goodwill of $174 million and for Private Bank is goodwill of $201 million for the three months ended March 31, 2022 and included in the total average assets for SVB Securities is goodwill of $138 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021.

(7)For the three months ended March 31, 2021, ~~and 2020.~~prior period balances for our Premium Wine reporting division previously reported in "Silicon Valley Bank" have been allocated to the reportable segment “SVB Private” to properly reflect organizational changes effective January 1, 2022. The reallocation had no impact on the "Total" amount.

~~13.~~11. Off-Balance Sheet Arrangements, Guarantees and Other Commitments

Commitments to Extend Credit

The following table summarizes information related to our commitments to extend credit at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

(Dollars in millions) June 30, 2021 December 31, 2020
Loan commitments available for funding: (1) $ 33,174 $ 28,975
Commercial and standby letters of credit (2) 3,211 3,007
Total unfunded credit commitments $ 36,385 $ 31,982
Allowance for unfunded credit commitments (3) 120 121


(Dollars in millions)	March 31, 2022		December 31, 2021
Loan commitments (1)	$	40,737	$	40,327



Standby letters of credit (2)	3,843		3,612
Commercial letters of credit (3)	105		77
Total unfunded credit commitments	$	44,685	$	44,016

Allowance for unfunded credit commitments (4)	175		171

(1)Represents commitments which are available for funding, due to clients meeting all collateral, compliance and financial covenants required under loan commitment agreements.

(2)See below for additional information on our commercial and standby letters of credit.

(3)Commercial letters of credit are issued primarily for inventory purchases by a client and are typically short-term in nature.

(4)Our allowance for credit losses for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit.

~~Commercial and~~ Standby Letters of Credit

The table below summarizes our ~~commercial and~~ standby letters of credit at ~~June 30, 2021.~~March 31, 2022. The maximum potential amount of future payments represents the amount that could be remitted under letters of credit if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from the collateral held or pledged.


(Dollars in millions)	(Dollars in millions)	Expires in One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments		(Dollars in millions)	Expires in One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments
Financial standby letters of credit	Financial standby letters of credit	$	2,916	$	101	$	3,017	$	3,017	Financial standby letters of credit	$	3,621	$	140	$	3,761	$	3,761
Performance standby letters of credit	Performance standby letters of credit	121		5		126		126		Performance standby letters of credit	74		8		82		82
Commercial letters of credit		23		45		68		68
Total	Total	$	3,060	$	151	$	3,211	$	3,211	Total	$	3,695	$	148	$	3,843	$	3,843

Deferred fees related to financial and performance standby letters of credit were $18 million at ~~June 30, 2021~~March 31, 2022 and ~~$17~~$20 million at December 31, ~~2020. At June 30, 2021, collateral in the form of cash of $1.9 billion was available to us to reimburse losses, if any, under financial and performance standby letters of credit.~~2021.

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Commitments to Invest in Venture Capital and Private Equity Funds

We make commitments to invest in venture capital and private equity funds, which generally make investments in privately-held companies. Commitments to invest in these funds are generally made for a 10-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from calling 100% of committed capital in one year, it is customary for these funds to call most of the capital commitments over 5 to 7 years, and in certain cases, the funds may not call 100% of committed capital. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate. The following table details our total capital commitments, unfunded capital commitments, and our ownership percentage in each fund at ~~June 30, 2021:~~March 31, 2022:


(Dollars in millions)	(Dollars in millions)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund		(Dollars in millions)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund
Redwood Evergreen Fund, LP								Redwood Evergreen Fund, LP	$	250	$	186	100.0	%
CP II, LP (1)	CP II, LP (1)	$	1	$	0	5.1	%	CP II, LP (1)	1		—		5.1
Capital Preferred Return Fund, LP	Capital Preferred Return Fund, LP	13		0		20.0		Capital Preferred Return Fund, LP	13		—		20.0
Growth Partners, LP	Growth Partners, LP	25		1		33.0		Growth Partners, LP	25		1		33.0
Strategic Investors Fund, LP	Strategic Investors Fund, LP	15		1		12.6		Strategic Investors Fund, LP	15		1		12.6
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	15		1		8.6		Strategic Investors Fund II, LP	15		1		8.6
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	15		1		5.9		Strategic Investors Fund III, LP	15		1		5.9
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	12		2		5.0		Strategic Investors Fund IV, LP	12		2		5.0
Strategic Investors Fund V funds	Strategic Investors Fund V funds	1		0		Various		Strategic Investors Fund V funds	1		—		Various
Other venture capital and private equity fund investments (equity method accounting)	Other venture capital and private equity fund investments (equity method accounting)	11		3		Various		Other venture capital and private equity fund investments (equity method accounting)	18		6		Various
Debt funds (equity method accounting)	Debt funds (equity method accounting)	59		0		Various		Debt funds (equity method accounting)	59		—		Various
Other fund investments (2)	Other fund investments (2)	267		16		Various		Other fund investments (2)	249		10		Various
Total	Total	$	434	$	25			Total	$	673	$	208

(1)Our ownership includes direct ownership of 1.3 percent and indirect ownership interest of 3.8 percent through our investment in Strategic Investors Fund II, LP.

(2)Represents commitments to ~~163~~156 funds (primarily venture capital funds) where our ownership interest is generally less than 55.0 percent of the voting interests of each such fund.

~~The following table details the amounts~~At March 31, 2022 we had $3 million of remaining unfunded commitments to venture capital and private equity funds by our consolidated managed funds of funds (including our interest and the noncontrolling interests) ~~at June 30, 2021:~~


~~(Dollars in millions)~~	~~Unfunded Commitments~~

~~Capital Preferred Return Fund, LP~~	$	2
~~Growth Partners, LP~~	1
~~Total~~	$	3

~~14.~~12. Income Taxes

We are subject to income tax and non-income based taxes by the U.S. federal tax authorities as well as various state and foreign tax authorities. We have identified the U.S. federal and California state jurisdictions as major tax filings. The state of California is currently examining the years 2013-2016. Our U.S. federal tax returns remain open to full examination for ~~2017~~2018 and subsequent tax years. Our California tax returns remain open to full examination for ~~2016~~2017 and subsequent tax years.

At ~~June 30, 2021,~~March 31, 2022, our unrecognized tax benefit was ~~$22~~$42 million, the recognition of which would reduce our income tax expense by ~~$18~~$33 million. We ~~do not expect that our~~are unable to estimate the unrecognized tax benefit that will materially change in the next 12 months.

We recognize interest and penalties related to income tax matters as part of income before income taxes. Interest and penalties were not material for the three ~~and six~~ months ended ~~June 30, 2021.~~

March 31, 2022.

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~~15.~~13. Fair Value of Financial Instruments

Fair Value Measurements

Our AFS securities, derivative instruments and certain non-marketable and other equity securities are financial instruments recorded at fair value on a recurring basis. We make estimates regarding valuation of assets and liabilities measured at fair value in preparing our interim consolidated financial statements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (the “exit price”) in an orderly transaction between market participants at the measurement date. There is a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable and on the significance of those inputs in the fair value measurement. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data and views of market participants. The three levels for measuring fair value are based on the reliability of inputs and are as follows:

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Level 1

Fair value measurements based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. Assets utilizing Level 1 inputs include U.S. Treasury securities, foreign government debt securities, exchange-traded equity securities, ~~and~~ certain marketable securities accounted for under fair value ~~accounting.~~accounting, and assets and liabilities related to the deferred compensation plan assumed during the merger with Boston Private.

Level 2

Fair value measurements based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Valuations for the AFS securities are provided by independent pricing service providers who have experience in valuing these securities and ~~by comparison~~are compared to ~~and/or~~the average of quoted market prices obtained from independent brokers. We perform a monthly analysis on the values received from third parties to ensure that the prices represent a reasonable estimate of the fair value. The procedures include, but are not limited to, initial and ongoing review of third-party pricing methodologies, review of pricing trends and monitoring of trading volumes. Additional corroboration, such as obtaining a non-binding price from a broker, may be obtained depending on the frequency of trades of the security and the level of liquidity or depth of the market. ~~We ensure prices~~Prices received from independent brokers represent a reasonable estimate of the fair value and are validated through the use of observable market inputs including comparable trades, yield curve, spreads and, when available, market indices. ~~As a result of this analysis, if the Company determines~~If we determine that there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. Below is a summary of the significant inputs used for each class of Level 2 assets and liabilities:

U.S. agency debentures: Fair value measurements of U.S. agency debentures are based on the characteristics specific to bonds held, such as issuer name, issuance date, coupon rate, maturity date and any applicable issuer call option features. Valuations are based on market spreads relative to similar term benchmark market interest rates, generally U.S. Treasury securities.

Agency-issued MBS: Agency-issued MBS are pools of individual conventional mortgage loans underwritten to U.S. agency standards with similar coupon rates, tenor, and other attributes such as geographic location, loan size and origination vintage. Fair value measurements of these securities are based on observable price adjustments relative to benchmark market interest rates taking into consideration estimated loan prepayment speeds.

Agency-issued CMO: Agency-issued CMO are structured into classes or tranches with defined cash flow characteristics and are collateralized by U.S. agency-issued mortgage pass-through securities. Fair value measurements of these securities incorporate similar characteristics of mortgage pass-through securities such as coupon rate, tenor, geographic location, loan size and origination vintage, in addition to incorporating the effect of estimated prepayment speeds on the cash flow structure of the class or tranche. These measurements incorporate observable market spreads over an estimated average life after considering the inputs listed above.

Agency-issued CMBS: Fair value measurements of these securities are based on spreads to benchmark market interest rates (usually U.S. Treasury rates or rates observable in the swaps market), prepayment speeds, loan default rate assumptions and loan loss severity assumptions on underlying loans.

Foreign exchange forward and option contract assets and liabilities: Fair value measurements of these assets and liabilities are priced based on spot and forward foreign currency rates and option volatility assumptions.

Interest rate derivative and interest rate swap assets and liabilities: Fair value measurements of interest rate derivatives and interest rate swaps are priced considering the coupon rate of the fixed leg of the contract and the

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variable coupon rate on the floating leg of the contract. Valuation is based on both spot and forward rates on the swap yield curve and the credit worthiness of the contract counterparty.

Total return swaps: Fair value measurements of total return swaps are based upon the performance of the reference asset, the variable coupon rate and spread of the floating leg of the contract.

Other equity securities: Fair value measurements of equity securities of public companies are priced based on quoted market prices less a discount if the securities are subject to certain sales restrictions. Certain sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sale restrictions which typically range from three to six months.

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companies (underlying stock price), stated strike prices, warrant expiration dates, the risk-free interest rate and market-observable option volatility assumptions.

Level 3

The fair value measurement is derived from valuation techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions we believe market participants would use in pricing the asset. The valuation techniques are consistent with the market approach, income approach and/or the cost approach used to measure fair value. Below is a summary of the valuation techniques used for each class of Level 3 assets:

Venture capital and private equity fund investments not measured at net asset value: Fair value measurements are based on consideration of a range of factors including, but not limited to, the price at which the investment was acquired, the term and nature of the investment, local market conditions, values for comparable securities, and as it relates to the private company, the current and projected operating performance, exit strategies and financing transactions subsequent to the acquisition of the investment. The significant unobservable inputs used in the fair value measurement include the information about each portfolio company, including actual and forecasted results, cash position, recent or planned transactions and market comparable companies. Significant changes to any one of these inputs in isolation could result in a significant change in the fair value measurement; however, we generally consider all factors available through ongoing communication with the portfolio companies and venture capital fund managers to determine whether there are changes to the portfolio company or the environment that indicate a change in the fair value measurement.

Equity warrant assets (public portfolio): Fair value measurements of equity warrant assets of publicly-traded portfolio companies are valued based on the Black-Scholes option pricing model. The model uses the price of publicly-traded companies (underlying stock price), stated strike prices, warrant expiration dates, the risk-free interest rate and market-observable option volatility assumptions. Modeled asset values are further adjusted by applying a discount of up to 20 percent for certain warrants that have certain sales restrictions or other features that indicate a discount to fair value is warranted. As sale restrictions are lifted, discounts are adjusted downward to zero once all restrictions expire or are removed.

Equity warrant assets (private portfolio): Fair value measurements of equity warrant assets of private portfolio companies are priced based on a Black-Scholes option pricing model to estimate the asset value by using stated strike prices, option expiration dates, risk-free interest rates and option volatility assumptions. Option volatility assumptions used in the Black-Scholes model are based on public market indices whose members operate in similar industries as companies in our private company portfolio. Option expiration dates are modified to account for estimates to actual life relative to stated expiration. Overall model asset values are further adjusted for a general lack of liquidity due to the private nature of the associated underlying company. There is a direct correlation between changes in the volatility and remaining life assumptions in isolation and the fair value measurement while there is an inverse correlation between changes in the liquidity discount assumption and the fair value measurement.

Contingent conversion rights (public portfolio): Fair value measurements of contingent conversion rights of publicly-traded portfolio companies are valued based on the Black-Scholes option pricing model. The model uses the price of publicly-traded companies (underlying stock price), stated strike prices, warrant expiration dates, the risk-free interest rate and market-observable option volatility assumptions. Modeled asset values are further adjusted by applying a discount of up to 20 percent for certain conversion rights that have certain sales restrictions or other features that indicate a discount to fair value is warranted. As sale restrictions are lifted, discounts are adjusted downward to zero once all restrictions expire or are removed.

Contingent conversion rights (private portfolio): Fair value measurements are based on consideration of a range of factors including, but not limited to, actual and forecasted enterprise values, probability of conversion event occurring and limitations and conversion pricing outlined in the convertible debt agreement. Additionally, we have ongoing communication with the portfolio companies and relationship teams, to determine whether there is a material change in fair value. We use company provided valuation reports, if available, to support our valuation assumptions. These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.

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The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of ~~June 30, 2021:~~March 31, 2022:


(Dollars in millions)	(Dollars in millions)	Level 1		Level 2		Level 3		Balance at June 30, 2021		(Dollars in millions)	Level 1		Level 2		Level 3		Balance at March 31, 2022
Assets:	Assets:									Assets:
AFS securities:	AFS securities:									AFS securities:
U.S. Treasury securities	U.S. Treasury securities	$	6,235	$	0	$	0	$	6,235	U.S. Treasury securities	$	16,639	$	—	$	—	$	16,639
U.S. agency debentures	U.S. agency debentures	0		81		0		81		U.S. agency debentures	—		151		—		151
Foreign government debt securities	Foreign government debt securities	15		0		0		15		Foreign government debt securities	59		—		—		59
Residential MBS:	Residential MBS:									Residential MBS:
Agency-issued MBS	Agency-issued MBS	0		11,562		0		11,562		Agency-issued MBS	—		6,846		—		6,846
Agency-issued CMO—fixed rate		0		4,424		0		4,424
Agency-issued CMO—fixed rate										Agency-issued CMO—fixed rate	—		860		—		860

Agency-issued CMBS	Agency-issued CMBS	0		1,559		0		1,559		Agency-issued CMBS	—		1,436		—		1,436
Total AFS securities	Total AFS securities	6,250		17,626		0		23,876		Total AFS securities	16,698		9,293		—		25,991
Non-marketable and other equity securities (fair value accounting):	Non-marketable and other equity securities (fair value accounting):									Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:	Non-marketable securities:									Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value	Venture capital and private equity fund investments measured at net asset value	—		—		—		295		Venture capital and private equity fund investments measured at net asset value	—		—		—		406

Other equity securities in public companies	Other equity securities in public companies	35		72		0		107		Other equity securities in public companies	39		16		—		55
Total non-marketable and other equity securities (fair value accounting)	Total non-marketable and other equity securities (fair value accounting)	35		72		0		402		Total non-marketable and other equity securities (fair value accounting)	39		16		—		461
Other assets:	Other assets:									Other assets:
Foreign exchange forward and option contracts		0		177		0		177
Foreign exchange forward, swap and option contracts										Foreign exchange forward, swap and option contracts	—		179		—		179
Equity warrant assets	Equity warrant assets	0		9		257		266		Equity warrant assets	—		8		315		323
Interest rate swaps		0		16		0		16
Contingent conversion rights										Contingent conversion rights	—		—		7		7

Client interest rate derivatives	Client interest rate derivatives	0		65		0		65		Client interest rate derivatives	—		51		—		51
Other assets										Other assets	8		—		—		8
Total assets	Total assets	$	6,285	$	17,965	$	257	$	24,802	Total assets	$	16,745	$	9,547	$	322	$	27,020
Liabilities:	Liabilities:									Liabilities:
Foreign exchange forward and option contracts		$	0	$	157	$	0	$	157
Interest rate swaps		0		2		0		2
Foreign exchange forward, swap and option contracts										Foreign exchange forward, swap and option contracts	$	—	$	167	$	—	$	167

Total return swaps										Total return swaps	—		8		—		8
Client interest rate derivatives	Client interest rate derivatives	0		59		0		59		Client interest rate derivatives	—		109		—		109
Other liabilities										Other liabilities	8		—		—		8
Total liabilities	Total liabilities	$	0	$	218	$	0	$	218	Total liabilities	$	8	$	284	$	—	$	292

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The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	Level 1		Level 2		Level 3		Balance at December 31, 2020		(Dollars in millions)	Level 1		Level 2		Level 3		Balance at December 31, 2021
Assets:	Assets:									Assets:
AFS securities:	AFS securities:									AFS securities:
U.S. Treasury securities	U.S. Treasury securities	$	4,470	$	0	$	0	$	4,470	U.S. Treasury securities	$	15,850	$	—	$	—	$	15,850
U.S. agency debentures	U.S. agency debentures	0		237		0		237		U.S. agency debentures	—		196		—		196
Foreign government debt securities	Foreign government debt securities	24		0		0		24		Foreign government debt securities	61		—		—		61
Residential MBS:	Residential MBS:									Residential MBS:
Agency-issued MBS	Agency-issued MBS	0		13,503		0		13,503		Agency-issued MBS	—		8,589		—		8,589
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	0		8,107		0		8,107		Agency-issued CMO—fixed rate	—		982		—		982

Agency-issued CMBS	Agency-issued CMBS	0		4,572		0		4,572		Agency-issued CMBS	—		1,543		—		1,543

Total AFS securities	Total AFS securities	4,494		26,419		0		30,913		Total AFS securities	15,911		11,310		—		27,221
Non-marketable and other equity securities (fair value accounting):	Non-marketable and other equity securities (fair value accounting):									Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:	Non-marketable securities:									Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value	Venture capital and private equity fund investments measured at net asset value	—		—		—		274		Venture capital and private equity fund investments measured at net asset value	—		—		—		338

Other equity securities in public companies	Other equity securities in public companies	43		238		0		281		Other equity securities in public companies	43		74		—		117
Total non-marketable and other equity securities (fair value accounting)	Total non-marketable and other equity securities (fair value accounting)	43		238		0		555		Total non-marketable and other equity securities (fair value accounting)	43		74		—		455
Other assets:	Other assets:									Other assets:

Foreign exchange forward and option contracts	Foreign exchange forward and option contracts	0		217		0		217		Foreign exchange forward and option contracts	—		171		—		171
Equity warrant assets	Equity warrant assets	0		11		192		203		Equity warrant assets	—		8		269		277

Interest rate swaps										Interest rate swaps	—		18		—		18
Client interest rate derivatives	Client interest rate derivatives	0		68		0		68		Client interest rate derivatives	—		99		—		99
Other assets										Other assets	8		$	—	$	—	8
Total assets	Total assets	$	4,537	$	26,953	$	192	$	31,956	Total assets	$	15,962	$	11,680	$	269	$	28,249
Liabilities:	Liabilities:									Liabilities:
Foreign exchange forward and option contracts	Foreign exchange forward and option contracts	$	0	$	210	$	0	$	210	Foreign exchange forward and option contracts	$	—	$	137	$	—	$	137

Client interest rate derivatives	Client interest rate derivatives	0		27		0		27		Client interest rate derivatives	—		101		—		101
Other liabilities										Other liabilities	8		—		—		8
Total liabilities	Total liabilities	$	0	$	237	$	0	$	237	Total liabilities	$	8	$	238	$	—	$	246

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

(Dollars in millions) Beginning Balance Total Net Gains Included in Net Income (1) Sales/Exits Issuances Transfers out of Level 3 Ending Balance
Three months ended June 30, 2021
Equity warrant assets $ 233 $ 121 $ (104) $ 7 $ 0 $ 257
Three months ended June 30, 2020
Equity warrant assets 150 24 (15) 6 0 165
Six months ended June 30, 2021
Equity warrant assets 192 341 (285) 13 (4) 257
Six months ended June 30, 2020
Equity warrant assets 161 39 (46) 11 0 165


(Dollars in millions)	Beginning Balance		Total Net Gains Included in Net Income		Sales/Exits		Issuances		Transfers Out of Level 3		Ending Balance
Three months ended March 31, 2022

Equity warrant assets (1)	$	269	$	65	$	(23)	$	6	$	(2)	$	315

Contingent conversion rights (2)	—		—		—		7		—		7
Three months ended March 31, 2021



Equity warrant assets (1)	192		220		(181)		6		(4)		233

(1)Realized and unrealized gains (losses) are recorded in the line item “Gains on equity warrant assets, net," a component of noninterest income.

(2)

~~Table~~Unrealized gains and losses are recorded in the line item "Other noninterest income," a component of ~~Contents~~noninterest income.

The following table presents the amount of net unrealized gains and losses included in earnings attributable to Level 3 assets still held at ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 2021 2020
Other assets:
Equity warrant assets (1) $ 31 $ 11 $ 92 $ 7
Total unrealized gains, net $ 31 $ 11 $ 92 $ 7

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	Three months ended March 31,
(Dollars in millions)	2022		2021


Other assets:
Equity warrant assets (1)	$	54	$	61

Total unrealized gains, net	$	54	$	61

(1)Unrealized gains and losses are recorded in the line item “Gains on equity warrant assets, net," a component of noninterest income.

(2)Unrealized gains and losses are recorded in the line item "Other noninterest income," a component of noninterest income.

The extent to which any unrealized gains or losses will become realized is subject to a variety of factors, including, among other things, the expiration of current sales restrictions to which these securities are subject, the actual sales of securities and the timing of such actual sales.

The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. We have not included in this table our venture capital and private equity fund investments (fair value accounting) as we use net asset value per share (as obtained from the general partners of the investments) as a practical expedient to determine fair value.


(Dollars in millions)	(Dollars in millions)	Fair value	Valuation Technique		Significant Unobservable Inputs		Input Range		Weighted Average		(Dollars in millions)			Fair value					Valuation Technique					Significant Unobservable Inputs						Input Range						Weighted Average
June 30, 2021:
March 31, 2022:											March 31, 2022:
Equity warrant assets (public portfolio)	Equity warrant assets (public portfolio)	12	Black-Scholes option pricing model		Volatility		48.2% - 58.5%		49.0	%	Equity warrant assets (public portfolio)			$	1				Black-Scholes option pricing model					Volatility						45.0% - 53.2%						51.7		%
				Risk-Free interest rate		1.2- 1.5		1.2									Risk-Free interest rate							2.3- 2.4						2.3
				Sales restrictions discount (1)		20.0		20.0									Sales restrictions discount (1)							20.0						20.0
Equity warrant assets (private portfolio)	Equity warrant assets (private portfolio)	245		Black-Scholes option pricing model		Volatility		25.4 - 58.5				46.3		Equity warrant assets (private portfolio)				314					Black-Scholes option pricing model						Volatility						24.1 - 53.2						42.5
					Risk-Free interest rate		0.02 - 1.05		0.4													Risk-Free interest rate							0.52 - 2.45						2.1
					Marketability discount (2)		22.0		22.0											Marketability discount (2)						18.8						18.8
					Remaining life assumption (3)		40.0		40.0											Remaining life assumption (3)						40.0						40.0
December 31, 2020:
Contingent conversion rights (public portfolio)											Contingent conversion rights (public portfolio)					2					Black-Scholes option pricing model							Volatility						53.2						53.2
																									Risk-Free interest rate						2.12- 2.32						2.1
																								Sales restrictions discount (1)						20.0						20.0
Contingent conversion rights (private portfolio)											Contingent conversion rights (private portfolio)					5						Private company equity pricing					(4)						(4)						(4)

December 31, 2021:												December 31, 2021:
Equity warrant assets (public portfolio)	Equity warrant assets (public portfolio)	1		Black-Scholes option pricing model		Volatility		46.0% - 56.8%			49.1	%	Equity warrant assets (public portfolio)					2									Black-Scholes option pricing model						Volatility						27.8% - 55.0%			43.7	%
					Risk-Free interest rate		0.3- 0.9		0.6											Risk-Free interest rate					0.6- 1.5								1.1
					Sales restrictions discount (1)		10.0 - 20.0		10.2											Sales restrictions discount (1)					10.0 - 20.0								10.7
Equity warrant assets (private portfolio)	Equity warrant assets (private portfolio)	191	Black-Scholes option pricing model		Volatility		24.4 - 56.8		43.2		Equity warrant assets (private portfolio)			267						Black-Scholes option pricing model					Volatility						24.7 - 55.0						43.0
				Risk-Free interest rate		0.01 - 0.52		0.1									Risk-Free interest rate								0.06 - 1.40						0.8
				Marketability discount (2)		20.6		20.6									Marketability discount (2)								20.1						20.1
				Remaining life assumption (3)		40.0		40.0									Remaining life assumption (3)								40.0						40.0

(1)We adjust quoted market prices of public companies, which are subject to certain sales restrictions. Sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sales restrictions, which typically range from three to six months.

(2)Our marketability discount is applied to all private company warrants to account for a general lack of liquidity due to the private nature of the associated underlying company. The quantitative measure used is based upon various option-pricing models. On a quarterly basis, a sensitivity analysis is performed on our marketability discount.

(3)We adjust the contractual remaining term of private company warrants based on our estimate of the actual remaining life, which we determine by utilizing historical data on terminations and exercises. At ~~June 30, 2021,~~March 31, 2022, the weighted average contractual remaining term was ~~6.7~~6.4 years, compared to our estimated remaining life of ~~2.7~~2.6 years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.

(4)In determining the fair value of our private contingent conversion rights portfolio (not valued using the Black-Scholes model), we evaluate a variety of factors related to each underlying private portfolio company including, but not limited to, actual and forecasted enterprise values, the probability of a conversion event occurring and limitations and conversion pricing outlined in the convertible debt agreement. Additionally, we have ongoing communication with the portfolio companies and relationship teams, to determine whether there is a material change in fair value. We use company provided valuation reports, if available, to support our valuation assumptions. These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we did not have any transfers between Level 3 and Level 1. All transfers from Level 3 to Level 2 for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ were due to the transfer of equity warrant assets from our private portfolio to our public portfolio (see our Level 3 reconciliation above).

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Financial Instruments not Carried at Fair Value

FASB guidance over financial instruments requires that we disclose estimated fair values for our financial instruments not carried at fair value. The following fair value hierarchy table presents the estimated fair values of our financial instruments that are not carried at fair value at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


				Estimated Fair Value											Estimated Fair Value
(Dollars in millions)	(Dollars in millions)	Carrying Amount		Total		Level 1		Level 2		Level 3		(Dollars in millions)	Carrying Amount		Total		Level 1		Level 2		Level 3
June 30, 2021:
March 31, 2022:												March 31, 2022:
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	23,959	$	23,959	$	23,959	$	0	$	0	Cash and cash equivalents	$	20,606	$	20,606	$	20,606	$	—	$	—
HTM securities	HTM securities	59,992		60,107		0		60,107		0		HTM securities	98,707		91,667		—		91,667		—
Non-marketable securities not measured at net asset value	Non-marketable securities not measured at net asset value	262		262		0		0		262		Non-marketable securities not measured at net asset value	432		432		—		—		432
Non-marketable securities measured at net asset value	Non-marketable securities measured at net asset value	583		583		0		0		0		Non-marketable securities measured at net asset value	755		755		—		—		—
Net commercial loans		45,108		46,353		0		0		46,353
Net consumer loans		5,250		5,395		0		0		5,395
Net loans												Net loans	68,244		69,394		—		—		69,394

FHLB and Federal Reserve Bank stock	FHLB and Federal Reserve Bank stock	83		83		0		0		83		FHLB and Federal Reserve Bank stock	304		304		—		—		304
Financial liabilities:	Financial liabilities:											Financial liabilities:

Short-term borrowings	Short-term borrowings	34		34		0		34		0		Short-term borrowings	99		99		—		99		—
Non-maturity deposits (1)	Non-maturity deposits (1)	145,193		145,193		145,193		0		0		Non-maturity deposits (1)	195,607		195,607		195,607		—		—
Time deposits	Time deposits	645		645		0		645		0		Time deposits	2,527		2,436		—		2,436		—
3.50% Senior Notes	3.50% Senior Notes	349		379		0		379		0		3.50% Senior Notes	349		352		—		352		—
3.125% Senior Notes	3.125% Senior Notes	495		534		0		534		0		3.125% Senior Notes	496		482		—		482		—
1.80% Senior Notes		494		479		0		479		0
2.10% Senior Notes		496		507		0		507		0
1.800% Senior Notes due 2031												1.800% Senior Notes due 2031	494		431		—		431		—
2.100% Senior Notes due 2028												2.100% Senior Notes due 2028	496		457		—		457		—
1.800% Senior Notes due 2026												1.800% Senior Notes due 2026	645		605		—		605		—
Junior subordinated debentures												Junior subordinated debentures	90		82		—		82		—
Off-balance sheet financial assets:	Off-balance sheet financial assets:											Off-balance sheet financial assets:
Commitments to extend credit	Commitments to extend credit	0		41		0		0		41		Commitments to extend credit	—		45		—		—		45
December 31, 2020:
December 31, 2021:												December 31, 2021:
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	17,675	$	17,675	$	17,675	$	0	$	0	Cash and cash equivalents	$	14,619	$	14,619	$	14,619	$	—	$	—
HTM securities	HTM securities	16,592		17,217		0		17,217		0		HTM securities	98,195		97,227		—		97,227		—
Non-marketable securities not measured at net asset value	Non-marketable securities not measured at net asset value	241		241		0		0		241		Non-marketable securities not measured at net asset value	424		424		—		—		424
Non-marketable securities measured at net asset value	Non-marketable securities measured at net asset value	390		390		0		0		0		Non-marketable securities measured at net asset value	710		710		—		—		—
Net commercial loans		39,886		40,412		0		0		40,412
Net consumer loans		4,847		4,911		0		0		4,911
Net loans												Net loans	65,854		67,335		—		—		67,335
FHLB and Federal Reserve Bank stock	FHLB and Federal Reserve Bank stock	61		61		0		0		61		FHLB and Federal Reserve Bank stock	107		107		—		—		107
Financial liabilities:	Financial liabilities:											Financial liabilities:

Short-term borrowings	Short-term borrowings	21		21		0		21		0		Short-term borrowings	121		121		—		121		—
Non-maturity deposits (1)	Non-maturity deposits (1)	101,294		101,294		101,294		0		0		Non-maturity deposits (1)	187,464		187,464		187,464		—		—
Time deposits	Time deposits	688		502		0		502		0		Time deposits	1,739		1,728		—		1,728		—
3.50% Senior Notes	3.50% Senior Notes	349		383		0		383		0		3.50% Senior Notes	349		370		—		370		—
3.125% Senior Notes	3.125% Senior Notes	495		564		0		564		0		3.125% Senior Notes	496		526		—		526		—
1.800% Senior Notes due 2031												1.800% Senior Notes due 2031	494		474		—		474		—
2.100% Senior Notes due 2028												2.100% Senior Notes due 2028	496		501		—		501		—
1.800% Senior Notes due 2026												1.800% Senior Notes due 2026	645		649		—		649		—
Junior subordinated debentures												Junior subordinated debentures	90		92		—		92		—
Off-balance sheet financial assets:	Off-balance sheet financial assets:											Off-balance sheet financial assets:
Commitments to extend credit	Commitments to extend credit	0		37		0		0		37		Commitments to extend credit	—		47		—		—		47

(1)Includes noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits.

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Investments in Entities that Calculate Net Asset Value Per Share

FASB guidance over certain fund investments requires that we disclose the fair value of funds, significant investment strategies of the investees, redemption features of the investees, restrictions on the ability to sell investments, estimate of the period of time over which the underlying assets are expected to be liquidated by the investee and unfunded commitments related to the investments.

Our investments in debt funds and venture capital and private equity fund investments generally cannot be redeemed. Alternatively, we expect distributions, if any, to be received primarily through IPO and M&A activity of the underlying assets of the fund. Subject to applicable requirements under the Volcker Rule, we do not have any plans to sell any of these fund investments. If we decide to sell these investments in the future, the investee fund’s management must approve of the buyer before the sale of the investments can be completed. The fair values of the fund investments have been estimated using the net asset value per share of the investments, adjusted for any differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example ~~March~~December 31st for our ~~June 30~~March 31thst consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

The following table is a summary of the estimated fair values of these investments and remaining unfunded commitments for each major category of these investments as of ~~June 30, 2021:~~March 31, 2022:


(Dollars in millions)	(Dollars in millions)	Carrying Amount		Fair Value		Unfunded Commitments		(Dollars in millions)	Carrying Amount		Fair Value		Unfunded Commitments
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):							Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	Venture capital and private equity fund investments (1)	$	295	$	295	$	19	Venture capital and private equity fund investments (1)	$	406	$	406	$	13
Non-marketable securities (equity method accounting):	Non-marketable securities (equity method accounting):							Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments (2)	Venture capital and private equity fund investments (2)	544		544		8		Venture capital and private equity fund investments (2)	721		721		13
Debt funds (2)	Debt funds (2)	7		7		0		Debt funds (2)	5		5		—
Other investments (2)	Other investments (2)	32		32		1		Other investments (2)	29		29		1
Total	Total	$	878	$	878	$	28	Total	$	1,161	$	1,161	$	27

(1)Venture capital and private equity fund investments within non-marketable securities (fair value accounting) include investments made by our managed funds of funds and one of our direct venture funds (consolidated VIEs) and investments in venture capital and private equity fund investments (unconsolidated VIEs). Collectively, these investments in venture capital and private equity funds are primarily in U.S. and global technology and life science/healthcare companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are ~~$79~~$94 million and $2 million, respectively, attributable to noncontrolling interests. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of terms of the funds.

(2)Venture capital and private equity fund investments, debt funds, and other fund investments within non-marketable securities (equity method accounting) include funds that invest in or lend money to primarily U.S. and global technology and life science/healthcare companies. It is estimated that we will receive distributions from the funds over the next 5 to 8 years, depending on the age of the funds and any potential extensions of the terms of the funds.

~~16.~~14. Legal Matters

Certain lawsuits and claims arising in the ordinary course of business have been filed or are pending against us and/or our affiliates, and we may from time to time be involved in other legal or regulatory proceedings. In accordance with applicable accounting guidance, we establish accruals for all such matters, including expected settlements, when we believe it is probable that a loss has been incurred and the amount of the loss is reasonably estimable. When a loss contingency is not both probable and estimable, we do not establish an accrual. Any such loss estimates are inherently uncertain, based on currently available information and are subject to management’s judgment and various assumptions. Due to the inherent subjectivity of these estimates and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate resolution of such matters.

To the extent we believe any potential loss relating to such matters may have a material impact on our liquidity, consolidated financial position, results of operations, and/or our business as a whole and is reasonably possible but not probable, we aim to disclose information relating to such potential loss. We also aim to disclose information relating to any material potential loss that is probable but not reasonably estimable. In such cases, where reasonably practicable, we aim to

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provide an estimate of loss or range of potential loss. No disclosures are generally made for any loss contingencies that are deemed to be remote.

Based upon information available to us, our review of lawsuits and claims filed or pending against us to date and consultation with our outside legal counsel, we have not recognized a material accrual liability for any such matters, nor do we currently expect that these matters will result in a material liability to the Company. However, the outcome of litigation and other legal and regulatory matters is inherently uncertain, and it is possible that one or more of such matters currently

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pending or threatened could have an unanticipated material adverse effect on our liquidity, consolidated financial position, results of operations, and/or our business as a whole, in the future.

~~17.~~15. Related Parties

We have no material related party transactions requiring disclosure. In the ordinary course of business, the Bank may extend credit to related parties, including executive officers, directors, principal shareholders and their related interests. Additionally, we provide real estate secured loans to eligible employees through our EHOP. For additional details, see Note 19 — “Employee Compensation and Benefit Plans" under Part II, Item 8 of our ~~2020~~2021 Form 10-K.

~~18.~~ 16.Subsequent Events

~~Acquisition of Boston Private~~Senior Notes Offerings

On April 29, 2022, the SVB Financial Group issued $350 million of 4.345% Senior Fixed Rate/Floating Rate Notes due on April 2028 ("Senior Notes due 2028") and $450 million of 4.570% Senior Fixed Rate/Floating Rate Notes due on April 2033 ("Senior Notes due 2033").

The Senior Notes due 2028 will begin semi-annual fixed interest payments starting on October 29, 2022 and every October 29th and April 29th and ending on April 29, 2027 at a fixed rate of 4.345%. Beginning on April 29, 2027, the Senior Notes due 2028 will begin quarterly interest payments on July ~~1, 2021 we completed~~29, 2027, October 29, 2027, January 29, 2028 and October 29, 2028 as a floating rate of compounded SOFR plus 1.713%. The Senior Notes due 2028 will be redeemable at SVB Financial Group's option, in whole but not in part, on April 29, 2027 and on or after the ~~acquisition of Boston Private for approximately $1.2 billion in consideration. Under~~30th day prior to the ~~terms~~2028 maturity date at a redemption price equal to 100% of the ~~merger agreement each share~~principal amount of ~~Boston Private common stock was converted into~~ the ~~right~~Senior Notes due 2028, plus accrued and unpaid interest, if any, to, ~~receive 0.228 shares of SIVB common stock and $2.10 in cash. For~~but excluding, the transaction, we issued approximately 1.9 million shares of SIVB common stock and registered an additional 99,000 shares of SIVB common stock issuable upon the exercise, vesting or settlement of converted legacy Boston Private equity awards.redemption date.

The ~~acquisition~~Senior Notes due 2033 will begin semi-annual fixed interest payments starting on October 29, 2022 and every October 29th and April 29th and ending on April 29, 2032 at a fixed rate of 4.570%. Beginning on April 29, 2032, the Senior Notes due 2033 will begin quarterly interest payments on July 29, 2032, October 29, 2032, January 29, 2033 and October 29, 2033 as a floating rate of compounded SOFR plus 1.967%. The Senior Notes due 2028 will be ~~accounted for as~~redeemable at SVB Financial Group's option, in whole but not in part, on April 29, 2032 and on or after the 90th day prior to the 2033 maturity date at a business combination. Accordingly, we will begin consolidating Boston Private's financial results in our consolidated financial statements in the third quarter of 2021. We are in the process of performing our valuationredemption price equal to 100% of the ~~acquired assets and liabilities. Given the recent date~~principal amount of the ~~acquisition, we have not finalized~~Senior Notes due 2033, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The notes will be senior unsecured obligations of SVB Financial Group and will rank equally with all of our ~~determination of the fair value of the assets~~other unsecured and ~~liabilities as we continue to gather information to complete our valuations.~~unsubordinated indebtedness.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Forward-Looking Statements

This Quarterly Report on Form 10-Q, including in particular “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part I, Item 2 of this report, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, management has in the past and might in the future make forward-looking statements to analysts, investors, the media and others. Forward-looking statements are statements that are not historical facts. Broadly speaking, forward-looking statements include, but are not limited to, the following:

•Financial projections, including with respect to our net interest income, net interest margin, noninterest income, EPS, noninterest expenses (including professional services, compliance, compensation and other costs), cash flows, balance sheet positions, capital expenditures, deposit growth, liquidity and capitalization, effective tax rate or other financial items;

•Descriptions of our strategic initiatives, plans or objectives for future operations, including pending sales or acquisitions, such as the continuing integration of Boston ~~Private;~~Private and the expansion of SVB Securities into the technology investment banking sector;

•Forecasts of private equity and venture capital funding, investment level and exit activity;

•Forecasts of future interest rates, economic performance, and income from investments;

•Forecasts of expected levels of provisions for credit losses, net loan charge-offs, nonperforming loans, loan growth, loan mix, loan yields and client funds;

•The outlook on our clients' performance;

•The potential effects of the COVID-19 pandemic; and

•Descriptions of assumptions underlying or relating to any of the foregoing.

You can identify these and other forward-looking statements by the use of words such as “becoming,” “may,” “will,” “should,” “could,” “would,” “predict,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “assume,” “seek,” “expect,” “plan,” “intend,” and the negative of such words, or comparable terminology. Forward-looking statements are neither historical facts nor assurances of future performance. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we have based these expectations on our current beliefs as well as our assumptions, and such expectations may not prove to be correct. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results of operations and financial performance could differ significantly from those expressed in or implied by our management’s forward-looking statements. Important factors that could cause our actual results and financial condition to differ from the expectations stated in the forward-looking statements include, among others:

•~~Market~~market and economic conditions (including inflation trends, interest rate volatility, the general condition of the capital and equity markets, private equity and venture capital investment, IPO, secondary offering, SPAC fundraising, M&A and other financing activity levels) and the associated impact on us (including effects on client demand for our commercial and investment banking and other financial services, as well as on the valuations of our investments);

•~~The~~disruptions to the financial markets as a result of the current or anticipated impact of military conflict, including the ongoing military conflict between Russia and Ukraine, terrorism and other geopolitical events;

•the COVID-19 pandemic, including COVID-19 variants and ~~its~~their effects on the economic and business environments in which we operate, and ~~its~~the effects of the COVID-19 pandemic on our ~~operations, including, as a result of, prolonged work-from-home arrangements;~~operations;

•~~The~~the impact of changes from the Biden-Harris administration and the U.S. Congress on the economic environment, capital markets and regulatory landscape, including monetary, tax and other trade ~~policies;~~policies, as well as changes in personnel at the bank regulatory agencies;

•~~Changes~~changes in the volume and credit quality of our loans as well as volatility of our levels of nonperforming assets and charge-offs;

•~~The~~the impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios;

•~~The~~the adequacy of our ACL and the need to make provisions for credit losses for any period;

•~~The~~the sufficiency of our capital and liquidity ~~provisions;~~positions;

•~~Changes~~changes in the levels of our loans, deposits and client investment fund balances;

•~~Changes~~changes in the performance or equity valuations of funds or companies in which we have invested or hold derivative instruments or equity warrant assets;

•~~Variations~~variations from our expectations as to factors impacting our cost structure;

•~~Changes~~our ability to attract and retain the appropriate talent to support our growth;

•changes in our assessment of the creditworthiness or liquidity of our clients or unanticipated effects of credit concentration risks which create or exacerbate deterioration of such creditworthiness or liquidity;

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•~~Variations~~variations from our expectations as to factors impacting the timing and level of employee share-based transactions;

•~~The~~the occurrence of fraudulent activity, including breaches of our information security or cyber security-related incidents;

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•~~Business~~business disruptions and interruptions due to natural disasters and other external events;

•~~The~~the impact on our reputation and business from our interactions with business partners, counterparties, service providers and other third parties;

•~~The~~the expansion of our business internationally, and the impact of geopolitical events and international market and economic events on us;

•~~The~~the effectiveness of our risk management framework and quantitative models;

•~~The~~the impact of governmental policy, legal requirements and regulations including ~~among other regulatory requirements,~~ regulations promulgated by the Board of Governors of the Federal Reserve System, ~~(the "Federal Reserve"), including enhanced prudential standards for bank holding companies with between $100 billion~~ and $250 billion in average total consolidated assets (“Category IV firms”) and bank holding companies that (i) exceed $250 billion in average total consolidated assets or (ii) exceed $100 billion in average total consolidated assets and exceed $75 billion in one of three risk-based indicators (“Category III firms”);other regulatory requirements;

•~~Our~~our ability to maintain or increase our market share, including through successfully implementing our business strategy and undertaking new business initiatives, including through the continuing integration of Boston ~~Private;~~Private, the expansion of SVB Private and the growth and expansion of SVB Securities;

•~~Greater~~greater than expected costs or other difficulties related to the continuing integration of our business and that of Boston Private;

•~~Variations~~variations from our expectations as to the amount and timing of business opportunities, growth prospects and cost savings associated with the ~~integration~~acquisition of Boston Private;

•~~The~~the inability to retain existing Boston Private clients and employees following the Boston Private acquisition;

•~~Unfavorable~~unfavorable resolution of legal proceedings or claims, as well as legal or regulatory proceedings or governmental actions;

•~~Variations~~variations from our expectations as to factors impacting our estimate of our full-year effective tax rate;

•~~Changes~~changes in applicable accounting standards and tax laws;

•~~Regulatory~~regulatory or legal changes and their impact on us; and

•~~Other~~other factors as discussed in “Risk Factors” under Part I, Item 1A in our ~~2020~~2021 Form 10-K and under Part II, Item 1A of this report.

The operating and economic environment during the second quarter continued to be impacted by the COVID-19 pandemic and related government orders. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, potential variations of the virus, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.

~~Accordingly, you are cautioned not to place undue reliance on forward-looking statements.~~ We urge investors to consider all of these factors, among others, carefully in evaluating the forward-looking statements contained in this Quarterly Report on Form 10-Q. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this filing are made only as of the date of this filing. We assume no obligation and do not intend to revise or update any forward-looking statements contained in this Quarterly Report on Form 10-Q, except as required by law.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited interim consolidated financial statements and accompanying notes as presented in Part I, Item 1 of this report and in conjunction with our ~~2020~~2021 Form 10-K.

Management’s Overview of ~~Second~~First Quarter ~~2021~~2022 Performance

~~The second quarter was yet another~~Strong execution and higher rates drove robust earnings and profitability in the first quarter of ~~outstanding performance~~2022 even as ~~strong markets~~market volatility slowed client liquidity growth and ~~effective execution continued to drive our extraordinary growth. We delivered excellent performance across our business as we hit a new milestone of $50~~pressured valuations and investment banking income. Net interest income exceeded $1.0 billion in ~~period-end loan balances,~~a single quarter for the first time in our history as a result of strong balance sheet growth and improved yields on fixed income securities. Core fee income remained strong across all categories and was driven by a significant increase in client investment fees as a result of the March 2022 rate hike. Growth in our net interest income and core fee income more than offset the moderation in SVB Securities revenue and warrant and investment gains of $314 million, net of noncontrolling interests, record foreign exchange fees, robust SVB Leerink revenues of $120 million and average client funds of $308 billion. Continuing the trend of recent quarters, our balance sheet growth more than offset pressure from the low rate environment, driving net interest income to a 42 percent increase from the year ago quarter. Additionally, creditgains. Credit quality ~~remains stable as economic conditions~~ continued to ~~improve.~~

~~We continued to invest in our strategic priorities to drive~~be excellent with low net loan charge-offs and support our long-term growth. During the quarter, we expanded SVB Leerink, which has been actively hiring leaders and senior bankers to help enhance capabilities and capacity. On July 1, we closed our acquisition of Boston Private, which will significantly accelerate and scale the growth of our private bank and wealth management strategy. Also on the investment front, we recently announced a joint venture with Nasdaq and a consortium of leading investment banks to create Nasdaq Private Market, an institutional-grade, secondary trading venuedeclining nonperforming loans.

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for private company stock. Lastly, our focus on continuous infrastructure and regulatory investments supports our tremendous growth as we prepare to become a Category III banking organization. Overall, these investments have allowed us to deepen and expand our platform as we continue to enhance the client experience, improve employee enablement, drive revenue growth, enhance risk management and ensure that our growth momentum is not interrupted.

Our exceptional balance sheet growth continued to outpace our forecasts. To support this momentum, we raised $1.5 billion in preferred equity and senior debt, issued $150 million in common equity from the full exercise of the underwriters' over-allotment option related to our first quarter common equity offering and provided a $1.3 billion downstream capital infusion to the bank. These capital measures combined with our strong profitability enable us to sustain our growth momentum and support our capital objectives.

~~Continuing COVID-19 Pandemic Environment~~

The global COVID-19 pandemic has resulted in unprecedented challenges and volatility in economic, market and business conditions. It has caused significant economic and financial disruptions that have adversely affected or otherwise impacted our business, financial condition and results of operations.

In recent months there has been some improvement in the economic environment and resilience in the markets in which we operate. With the seemingly wider availability and distribution of vaccinations and the easing of some restrictions in the U.S. and other parts of the world, we have seen steps towards broader containment. However, there still remains much uncertainty around containment of the pandemic, particularly in light of the recent spread of variants of the virus that have caused the number of cases to increase in the United States and other international locations where we operate. We cannot predict at this time the scope and duration of the pandemic, which will depend on a variety of factors, including but not limited to, the extent and spread of variants of the virus; the availability, adoption and efficacy of vaccines, as well as government and other actions to mitigate the spread of COVID-19, such as stay at home orders, restrictions on business activities, health and safety guidelines, economic relief for individuals and businesses, and monetary policy measures. The economic, market and business conditions impacted by COVID-19 may be slow to recover or may worsen if the pandemic continues for a prolonged period of time. Even if the pandemic subsides, there may be additional variants of the virus or a resurgence of the pandemic, as we have seen domestically and internationally. We continue to be subject to heightened business, operational (including fraud), market, credit and other risks related to the COVID-19 pandemic environment, which may have an adverse effect on our business, financial condition and results of operations. (See “Risk Factors” under Part II, Item 1A of this report)

Reference Rate Reform

~~Following~~The publication of the 2017 announcement by the U.K.’s Financial Conduct Authority that it would no longer compel participating banks to submit rates for LIBOR after 2021, regulators, trade associations and financial industry working groups have identified recommended replacement rates for LIBOR, as well as other Interbank Offered Rates, and have published recommended conventions to allow new and existing products to incorporate fallbacks. The continuation of all British Pound Sterling, Euro, Swiss Franc and Japanese Yen LIBOR settings and one-week and two-month U.S. dollar LIBOR settings ~~on the current basis are due to terminate~~terminated at the end of December 2021, ~~with~~leaving the remaining U.S. dollar LIBOR settings (i.e., overnight, one month, three month, six month and 12 month) in place, which are expected to terminate at the end of June 2023. Therefore, existing contracts referencing all other U.S. dollar LIBOR settings must be remediated no later than June 30, 2023. We hold instruments that may be impacted by the discontinuance of LIBOR, including loans, investments, and derivative products that use LIBOR as a benchmark rate. ~~Our LIBOR exposure is primarily in settings other than 1-week or 2-month U.S. dollar LIBOR.~~

~~We have established a~~Our LIBOR Transition Program ~~to identify and address all LIBOR transition issues, consisting~~consists of dedicated leadership and staff, ~~that~~and continues to engage with relevant business lines and support groups. As part of this program, we continue to identify, assess, and monitor risks associated with the discontinuation of ~~LIBOR. As such, we have implemented a process to assess~~LIBOR, including monitoring the population of loans and contracts that ~~will be~~are impacted ~~by this~~and how LIBOR reference ~~rate reform. As~~rates are reflected in our measurement of ~~March 31, 2021, we ceased issuing new loans denominated~~sensitivity to changes in ~~British Pound Sterling, Euro, or Swiss Franc~~interest rates until publication of LIBOR rates are fully phased out. We completed a review across all business lines and confirmed that ~~reference LIBOR. We plan~~language to ~~no longer offer U.S. dollar LIBOR-based loans effective December 31, 2021.~~

~~We intend~~facilitate a transition to offer SOFR as a replacement index for U.S. dollar LIBOR. SOFR is the ARRC preferred alternative to U.S. dollar LIBOR. It represents a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities and is compliant with IOSCO standards. Furthermore, SOFR is suitable for use across a broad range of financial products, including derivatives and many cash products that historically referenced U.S. dollar LIBOR.

As of June 30, 2021, we had approximately $16.1 billion of loans that reference LIBOR, $118 million fixed-income investment securities that reference LIBOR and $2.8 billion of notional balance exposure for our derivative contracts that reference LIBOR.

We are currently evaluating the use and when we might apply the allowable practical expedients under ASU 2020-04, Reference rate Reform (Topic 848), which became effective on March 12, 2020, as it relates to our loans, investment securities and derivative portfolios.an

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alternative reference rate is included in our existing deals that carry LIBOR exposure. Migration of legacy LIBOR contracts has commenced based on regulatory timelines, with proactive remediation conducted for existing LIBOR facilities that contained currencies tied to LIBOR rates that ceased publication as of December 31, 2021. A communications and training plan supports the delivery of new Alternative Reference Rate (“ARR”) products and assists with the transition away from LIBOR.

We have adopted SOFR as our preferred replacement index for U.S. dollar LIBOR and received Term SOFR licensing from the Chicago Mercantile Exchange in the fourth quarter of 2021. We currently offer products based on Alternative Reference Rates across multiple currencies including the U.S. Dollar, British Pound Sterling, and Euro.

A summary of our performance for the three months ended ~~June 30, 2021~~March 31, 2022 (compared to the three months ended ~~June 30, 2020,~~March 31, 2021, where applicable) is as follows:


BALANCE SHEET						EARNINGS
Assets. ~~$150.7~~$216.1 billion in average total assets (up ~~92.2%~~73.1%). ~~$163.4~~$220.4 billion in period-end total assets (up ~~90.6%~~54.8%). Loans. ~~$49.8~~$67.1 billion in average total loan balances (up ~~36.4%~~44.9%). ~~$50.8~~$68.7 billion in period-end total loan balances (up ~~38.2%~~44.0%). Total Client Funds. (on-balance sheet deposits and off-balance sheet client investment funds). ~~$308.1~~$396.9 billion in average total client fund balances (up ~~73.9%~~51.4%). ~~$329.0~~$397.4 billion in period-end total client fund balances (up ~~72.8%~~38.0%). AFS/HTM Fixed Income Investments. $~~72.3~~125.6 billion in average fixed income investment securities (up ~~179.9%~~134.6%). ~~$83.9~~$124.7 billion in period-end fixed income investment securities (up ~~167.9%~~85.7%).						EPS. Earnings per diluted share of ~~$9.09 (up 105.7%~~$7.92 (down 21.0%). Net Income. Consolidated net income available to common stockholders of ~~$502~~$472 million ~~(up 119.2%~~(down 11.3%). ~~- Net~~-Net interest income of ~~$728 million~~$1.1 billion (up ~~41.9%~~63.9%). -Net interest margin of ~~2.06%~~2.13% (down 7416 bps). -Noninterest income of ~~$761~~$517 million ~~(up 106.2%~~(down 30.5%), non-GAAP core fee income+ of ~~$172~~$230 million (up ~~30.3%~~44.7%) and non-GAAP SVB ~~Leerink~~Securities revenue++ of ~~$120~~$118 million (down ~~24.5%~~28.9%). -Noninterest expense of ~~$653~~$873 million (up ~~36.0%~~37.3%). Return on Average Equity. Return on average equity (annualized) performance of ~~21.7%~~15.28%. Operating Efficiency Ratio. Operating efficiency ratio of ~~43.85% with a non-GAAP core operating efficiency ratio of 56.38%+++~~54.60%.

CAPITAL						CREDIT QUALITY
Capital++++. Active capital management, with all capital ratios considered “well-capitalized” under banking regulations. SVB Financial and Bank capital ratios, respectively, were: ~~- CET~~-CET1 risk-based capital ratio of 12.10% and 14.89%. -Tier 1 risk-based capital ratio of ~~11.93%~~15.88% and ~~13.66%~~14.89%. ~~- Tier 1~~-Total risk-based capital ratio of ~~14.95%~~16.39% and ~~13.66%~~15.41%. ~~- Total risk-based capital ratio of 15.53% and 14.26%.~~ ~~- Tier~~-Tier 1 leverage ratio of ~~7.77%~~7.70% and ~~6.96%~~7.09%.						Credit Quality. Stable credit ~~trends and improving economic environment.~~trends. ~~- ACL~~-ACL for loans of ~~0.78%~~0.61% as a percentage of period-end total loans. ~~- Provision~~-Provision for loans was ~~0.13%~~0.05% as a percentage of period-end total loans (annualized). ~~- Net~~-Net loan charge-offs of ~~0.10%~~0.05% as a percentage of average total loans (annualized).

+ Consists of fee income for deposit services, letters of credit and standby letters of credit, credit cards, client investments, wealth management and trust, foreign exchange and lending-related activities. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under “Results of Operations—Noninterest Income”)

++ Consists of investment banking revenue and commissions. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under “Results of Operations—Noninterest Income”).

~~+++~~ This ratio excludes certain financial line items where performance is typically subject to market or other conditions beyond our control and excludes SVB Leerink revenue and expenses. It is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink, merger-related charges resulting from the acquisition of Boston Private and other non-recurring expenses by total revenue after adjusting for noninterest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets, investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under "Results of Operations-Noninterest Expense").

++++ In March 2020, the federal banking agencies provided transitional relief to banking organizations with respect to the impact of CECL on regulatory capital. Under the 2020 CECL Transition Rule, banking organizations may delay the estimated impact of CECL on regulatory capital for two years, followed by a three-year period to phase out the aggregate capital benefit provided during the initial two-year delay. We have elected to use this five-year transition option. For additional details, see "Capital Resources" within "Consolidated Financial Condition" under Part 1, Item 2 of this report.

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A summary of our performance for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,								Six months ended June 30,									Three months ended March 31,
(Dollars in millions, except per share data, employees and ratios)	(Dollars in millions, except per share data, employees and ratios)	2021			2020			% Change		2021			2020			% Change		(Dollars in millions, except per share data, employees and ratios)	2022			2021			% Change
Income Statement:	Income Statement:																	Income Statement:
Diluted EPS	Diluted EPS	$	9.09		$	4.42		105.7	%	$	19.10		$	6.97		174.0	%	Diluted EPS	$	7.92		$	10.03		(21.0)	%
Net income available to common stockholders	Net income available to common stockholders	502			229			119.2		1,034			361			186.4		Net income available to common stockholders	472			532			(11.3)
Net interest income	Net interest income	728			513			41.9		1,388			1,037			33.8		Net interest income	1,082			660			63.9
Net interest margin	Net interest margin	2.06		%	2.80		%	(74)	bps	2.16		%	2.95		%	(79)	bps	Net interest margin	2.13		%	2.29		%	(16)	bps
Provision for credit losses(1)	Provision for credit losses(1)	35			66			(47.0)	%	54			310			(82.6)	%	Provision for credit losses(1)	11			19			(42.1)	%
Noninterest income	Noninterest income	761			369			106.2		1,505			670			124.6		Noninterest income	517			744			(30.5)
Noninterest expense	Noninterest expense	653			480			36.0		1,289			879			46.6		Noninterest expense	873			636			37.3
Non-GAAP core fee income ~~(1)~~(2)	Non-GAAP core fee income ~~(1)~~(2)	172			132			30.3		331			301			10.0		Non-GAAP core fee income ~~(1)~~(2)	230			159			44.7
Non-GAAP core fee income, plus SVB Leerink revenue (1)		292			291			0.3		617			522			18.2
Non-GAAP noninterest income, net of noncontrolling interests (1)		648			355			82.5		1,367			658			107.8
Non-GAAP noninterest expense, net of noncontrolling interests (2)		653			480			36.0		1,289			879			46.6
Non-GAAP core fee income, plus SVB Securities revenue (2)																		Non-GAAP core fee income, plus SVB Securities revenue (2)	348			325			7.1
Balance Sheet:	Balance Sheet:																	Balance Sheet:
Average AFS securities	Average AFS securities	$	24,358		$	12,784		90.5	%	$	26,292		$	13,175		99.6	%	Average AFS securities	$	26,946		$	28,248		(4.6)	%
Average HTM securities	Average HTM securities	47,914			13,040			267.4		36,667			13,308			175.5		Average HTM securities	98,677			25,295			NM
Average loans, amortized cost	Average loans, amortized cost	49,812			36,512			36.4		48,056			35,086			37.0		Average loans, amortized cost	67,070			46,281			44.9
Average noninterest-bearing demand deposits	Average noninterest-bearing demand deposits	91,530			46,088			98.6		82,432			43,712			88.6		Average noninterest-bearing demand deposits	125,568			73,233			71.5
Average interest-bearing deposits	Average interest-bearing deposits	42,230			21,829			93.5		39,816			21,151			88.2		Average interest-bearing deposits	65,150			37,375			74.3
Average total deposits	Average total deposits	133,760			67,916			96.9		122,248			64,862			88.5		Average total deposits	190,718			110,608			72.4
Earnings Ratios:	Earnings Ratios:																	Earnings Ratios:
Return on average assets (annualized) (3)	Return on average assets (annualized) (3)	1.34		%	1.17		%	14.5	%	1.51		%	0.96		%	57.3	%	Return on average assets (annualized) (3)	0.89		%	1.73		%	(48.6)	%
Return on average SVBFG stockholders’ equity (annualized) (4)	Return on average SVBFG stockholders’ equity (annualized) (4)	21.69			13.36			62.4		24.14			10.84			122.7		Return on average SVBFG stockholders’ equity (annualized) (4)	15.28			27.04			(43.5)
Asset Quality Ratios:	Asset Quality Ratios:																	Asset Quality Ratios:
ACL for loans as a % of total period-end loans	ACL for loans as a % of total period-end loans	0.78		%	1.61		%	(83)	bps	0.78		%	1.61		%	(83)	bps	ACL for loans as a % of total period-end loans	0.61		%	0.82		%	(21)	bps
ACL for performing loans as a % of total performing loans	ACL for performing loans as a % of total performing loans	0.71			1.46			(75)		0.71			1.46			(75)		ACL for performing loans as a % of total performing loans	0.58			0.74			(16)
Gross loan charge-offs as a % of average total loans (annualized)	Gross loan charge-offs as a % of average total loans (annualized)	0.12			0.17			(5)		0.46			0.30			16		Gross loan charge-offs as a % of average total loans (annualized)	0.11			0.83			(72)
Net loan charge-offs as a % of average total loans (annualized)	Net loan charge-offs as a % of average total loans (annualized)	0.10			0.12			(2)		0.43			0.23			20		Net loan charge-offs as a % of average total loans (annualized)	0.05			0.79			(74)
Capital Ratios:	Capital Ratios:																	Capital Ratios:
SVBFG CET 1 risk-based capital ratio		11.93		%	12.63		%	(70)	bps	11.93		%	12.63		%	(70)	bps
SVBFG CET1 risk-based capital ratio																		SVBFG CET1 risk-based capital ratio	12.10		%	12.18		%	(8)	bps
SVBFG tier 1 risk-based capital ratio	SVBFG tier 1 risk-based capital ratio	14.95			13.62			133		14.95			13.62			133		SVBFG tier 1 risk-based capital ratio	15.88			14.01			187
SVBFG total risk-based capital ratio	SVBFG total risk-based capital ratio	15.53			14.77			76		15.53			14.77			76		SVBFG total risk-based capital ratio	16.39			14.62			177
SVBFG tier 1 leverage ratio	SVBFG tier 1 leverage ratio	7.77			8.68			(91)		7.77			8.68			(91)		SVBFG tier 1 leverage ratio	7.70			8.01			(31)
SVBFG tangible common equity to tangible assets (5)	SVBFG tangible common equity to tangible assets (5)	5.76			7.94			(218)		5.76			7.94			(218)		SVBFG tangible common equity to tangible assets (5)	5.38			6.06			(68)
SVBFG tangible common equity to risk-weighted assets (5)	SVBFG tangible common equity to risk-weighted assets (5)	12.02			13.68			(166)		12.02			13.68			(166)		SVBFG tangible common equity to risk-weighted assets (5)	11.30			12.12			(82)
Bank CET 1 risk-based capital ratio		13.66			11.08			258		13.66			11.08			258
Bank CET1 risk-based capital ratio																		Bank CET1 risk-based capital ratio	14.89			12.93			196
Bank tier 1 risk-based capital ratio	Bank tier 1 risk-based capital ratio	13.66			11.08			258		13.66			11.08			258		Bank tier 1 risk-based capital ratio	14.89			12.93			196
Bank total risk-based capital ratio	Bank total risk-based capital ratio	14.26			12.28			198		14.26			12.28			198		Bank total risk-based capital ratio	15.41			13.56			185
Bank tier 1 leverage ratio	Bank tier 1 leverage ratio	6.96			6.91			5		6.96			6.91			5		Bank tier 1 leverage ratio	7.09			7.20			(11)
Bank tangible common equity to tangible assets (5)	Bank tangible common equity to tangible assets (5)	6.47			6.91			(44)		6.47			6.91			(44)		Bank tangible common equity to tangible assets (5)	6.57			6.25			32
Bank tangible common equity to risk-weighted assets (5)	Bank tangible common equity to risk-weighted assets (5)	13.76			12.17			159		13.76			12.17			159		Bank tangible common equity to risk-weighted assets (5)	14.07			12.88			119
Other Ratios:	Other Ratios:																	Other Ratios:
Operating efficiency ratio (6)	Operating efficiency ratio (6)	43.85		%	54.39		%	(19.4)	%	44.56		%	51.48		%	(13.4)	%	Operating efficiency ratio (6)	54.60		%	45.31		%	20.5	%
Non-GAAP core operating efficiency ratio (2)		56.38			55.70			1.2		57.40			51.59			11.3
Total costs of deposits (annualized) (7)	Total costs of deposits (annualized) (7)	0.04			0.03			33.3		0.04			0.13			(69.2)		Total costs of deposits (annualized) (7)	0.05			0.04			25.0
Book value per common share (8)	Book value per common share (8)	$	176.10		$	134.89		30.6		$	176.10		$	134.89		30.6		Book value per common share (8)	$	209.62		$	163.25		28.4
Tangible book value per common share (9)	Tangible book value per common share (9)	172.44			131.32			31.3		172.44			131.32			31.3		Tangible book value per common share (9)	201.07			159.50			26.1
Other Statistics:	Other Statistics:																	Other Statistics:
Average full-time equivalent employees	Average full-time equivalent employees	4,808			3,855			24.7	%	4,705			3,764			25.0	%	Average full-time equivalent employees	6,975			4,601			51.6	%
Period-end full-time equivalent employees	Period-end full-time equivalent employees	4,932			3,984			23.8		4,932			3,984			23.8		Period-end full-time equivalent employees	7,149			4,656			53.5

(1)This metric for the three months ended March 31, 2021 includes the impact of an $80 million charge-off related to fraudulent activity discussed in previous filings.

(2)See “Results of Operations–Noninterest Income” for a description and reconciliation of non-GAAP core fee income and non-GAAP core fee income plus investment banking revenue and commissions.

~~(2)See “Results of Operations–Noninterest Expense” for a description and reconciliation of non-GAAP noninterest expense and non-GAAP core operating efficiency ratio.~~

(3)Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average assets.

(4)Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average SVBFG stockholders’ equity.

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(5)See “Capital Resources–Capital Ratios” for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.

(6)The operating efficiency ratio is calculated by dividing total noninterest expense by total net interest income plus noninterest income.

(7)Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.

(8)Book value per common share is calculated by dividing total SVBFG common stockholders’ equity by total outstanding common shares at period-end.

(9)Tangible book value per common share is calculated by dividing tangible common equity by total outstanding common shares at period-end. Tangible common equity is a non-GAAP measure defined under the section “Capital Resources-Capital Ratios.”

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For more information with respect to our capital ratios, please refer to “Capital Ratios” under “Consolidated Financial Condition-Capital Ratios” below.

Critical Accounting Policies and Estimates

Our accounting policies are fundamental to understanding our financial condition and results of operations. We have identified one policy as being critical because it requires us to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain, and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. We evaluate our estimates and assumptions on an ongoing basis and we base these estimates on historical experiences and various other factors and assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

There have been no significant changes during the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 to the items that we disclosed as our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II, Item 7 of our ~~2020~~2021 Form 10-K.

Recent Accounting Pronouncements

In March 2022, the FASB issued Accounting Standard Update No. 2022-01, Derivatives and Hedging (Topic 815), which allows multiple hedged layers to be designated in a single closed portfolio of financial assets. As a result, an entity can achieve hedge accounting for hedges of a greater proportion of the interest rate risk inherent in the assets included in the closed portfolio, further aligning hedge accounting with our risk management strategies. The update allows for a one-time transfer of certain debt securities from HTM to AFS upon adoption. This update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In March 2022, the FASB issued Accounting Standard Update No. 2022-02, Financial Instruments — Credit Losses (Topic 326), which eliminates the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors made to borrowers experiencing financial difficulty. The update also requires disclosure of current-period gross write-offs by year of origination for financing receivables. The update is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

Results of Operations

Net Interest Income and Margin (Fully Taxable Equivalent Basis)

Net interest income is defined as the difference between: (i) interest earned on loans, fixed income investments in our AFS and HTM securities portfolios and short-term investment securities and (ii) interest paid on funding sources. Net interest margin is defined as annualized net interest income, on a fully taxable equivalent basis, as a percentage of average interest-earning assets. Net interest income and net interest margin are presented on a fully taxable equivalent basis to consistently reflect income from taxable loans and securities and tax-exempt securities based on the applicable federal statutory tax rate.

Analysis of Net Interest Income Changes Due to Volume and Rate (Fully Taxable Equivalent Basis)

Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume change.” Net interest income is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities, referred to as “rate change.” The following table sets forth changes in interest income for each major category of interest-earning assets and interest expense for each major category of interest-bearing liabilities. The table also reflects the amount of simultaneous changes attributable to both volume and rate changes for the periods indicated. For this table, changes that are not solely due to either volume or rate are allocated in proportion to the percentage changes in average volume and average rate.

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		2021 Compared to 2020						2021 Compared to 2020							2022 Compared to 2021
		Three months ended June 30, increase (decrease) due to change in						Six months ended June 30, increase (decrease) due to change in							Three months ended March 31, increase (decrease) due to change in
(Dollars in millions)	(Dollars in millions)	Volume		Rate		Total		Volume		Rate		Total		(Dollars in millions)	Volume		Rate		Total
Interest income:	Interest income:													Interest income:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities	$	1	$	—	$	1	$	4	$	(17)	$	(13)	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities	$	(1)	$	4	$	3
Fixed income investment portfolio (taxable)	Fixed income investment portfolio (taxable)	134		(25)		109		279		(100)		179		Fixed income investment portfolio (taxable)	320		(34)		286
Fixed income investment portfolio (non-taxable)	Fixed income investment portfolio (non-taxable)	10		3		13		29		(6)		23		Fixed income investment portfolio (non-taxable)	21		(3)		18
Loans, amortized cost	Loans, amortized cost	126		(19)		107		242		(87)		155		Loans, amortized cost	177		(37)		140
Increase (decrease) in interest income, net	Increase (decrease) in interest income, net	271		(41)		230		554		(210)		344		Increase (decrease) in interest income, net	517		(70)		447
Interest expense:	Interest expense:													Interest expense:
Interest bearing checking and savings accounts		—		(1)		(1)		1		(1)		—

Money market deposits	Money market deposits	5		1		6		9		(26)		(17)		Money market deposits	8		2		10
Money market deposits in foreign offices		—		—		—		—		—		—

Time deposits	Time deposits	1		—		1		—		—		—		Time deposits	2		—		2
Sweep deposits in foreign offices		—		—		—		—		(4)		(4)
Total increase (decrease) in deposits expense		6		—		6		10		(31)		(21)

Total increase in deposits expense														Total increase in deposits expense	10		2		12
Short-term borrowings	Short-term borrowings	(1)		—		(1)		—		(3)		(3)		Short-term borrowings	1		—		1
2.10% Senior Notes		2		—		2		2		—		2
1.80% Senior Notes		2		—		2		4		—		4
3.125% Senior Notes		3		—		3		6		—		6
3.50% Senior Notes		—		—		—		—		—		—
Long term debt														Long term debt	8		—		8

Total increase (decrease) in borrowings expense		6		—		6		12		(3)		9
Increase (decrease) in interest expense, net		12		—		12		22		(34)		(12)

Total increase in borrowings expense														Total increase in borrowings expense	9		—		9
Increase in interest expense, net														Increase in interest expense, net	19		2		21
Increase (decrease) in net interest income	Increase (decrease) in net interest income	$	259	$	(41)	$	218	$	532	$	(176)	$	356	Increase (decrease) in net interest income	$	498	$	(72)	$	426

Net Interest Income (Fully Taxable Equivalent Basis)

~~Three months ended June 30, 2021 and 2020~~

~~Net interest income~~NII increased by ~~$218~~$426 million to ~~$735 million~~$1.1 billion for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$517~~$665 million for the comparable ~~2020~~2021 period. Overall, our ~~net interest income~~NII increased primarily from increases in average balances of our fixed income investment securities and ~~loans due to increases in average balances.~~loans. The increase in ~~net interest income~~NII was partially offset by lower yields on fixed income investment securities and loans. Upon the completion of the Boston Private acquisition in July 2021, a $104 million fair market value adjustment was made on the acquired loans. that will be amortized into loan interest income over the contractual terms of the underlying loans using the constant effective yield method. The adjustment will be approximately 90 percent amortized by the end of fiscal year 2023. For the three months ended March 31, 2022, $14 million of this premium amortization partially offset the overall increase in NII.

The main factors affecting interest income and interest expense for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to the comparable ~~2020~~2021 period are discussed below:

•Interest income for the three months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$230~~$447 million due primarily to:

◦A ~~$122~~$304 million increase in interest income from our fixed income investment securities due primarily to an increase of ~~$46.4~~$72.1 billion in average fixed income investment ~~securities.~~securities driven by exceptional average deposit growth. The increase in interest income from growth of our average fixed income investment securities was partially offset by declines in yields earned on these investments reflective of the lower ~~interest~~ rate ~~market~~ environment in 2021, and

◦A ~~$107~~$140 million increase in interest income on loans due primarily to ~~$472 million for the three months ended June 30, 2021, compared to $365 million for the comparable 2020 period. The increase was reflective of~~ an increase in average loan balances of ~~$13.3~~$20.8 billion, partially offset by a decrease in overall loan yields of ~~22 basis points~~32 bps to ~~3.80~~3.45 percent from ~~4.02~~3.77 percent. Gross loan yields, excluding loan interest recoveries and loan fees, decreased ~~22 basis points~~12 bps to ~~3.26~~3.15 percent from ~~3.48~~3.27 percent, driven by growth in our ~~higher credit quality~~lower yielding Global Fund Banking ~~portfolio.~~portfolio as well as the addition of lower yielding Boston Private loans.

•Interest expense for the three months ended ~~June 30, 2021~~March 31, 2022 increased by ~~$12~~$21 million due primarily to:

◦A $6$12 million increase in interest expense on deposits due primarily to an increase in average interest-bearing money market deposits balance ~~and~~

~~Table of~~ ~~Contents~~

◦A $6 million increase in interest expense on borrowings due primarily to interest expense on our 3.125% Senior Notes issued in June 2020, our 1.800% Senior Notes issued in February 2021 and our 2.100% Senior Notes issued in May 2021.

~~Six months ended June 30, 2021 and 2020~~

•~~Interest income~~ ~~for the six months ended June 30, 2021 increased by $344 million due primarily to:~~

◦A $202 million increase in interest income from our fixed income investment securities due primarily to an increase of $36.5 billion in average fixed income investment securities. The increase in interest income from growth of our average fixed income investment securities was partially ~~offset by declines in yields earned on these investments reflective of the lower interest rate market environment, and~~

◦A $155 million increase in interest income on loans to $903 million for the six months ended June 30, 2021, compared to $748 million for the comparable 2020 period. The increase was reflective of an increase in average loan balances of $13.0 billion, partially offset by a decrease in overall loan yields of 50 basis points to 3.79 percent from 4.29 percent. Gross loan yields, excluding loan interest recoveries and loan fees, decreased 53 basis points to 3.26 percent from 3.79 percent, driven by ~~growth in our higher credit quality Global Fund Banking portfolio as well as decreases in Federal Funds rates in~~ the ~~first quarter~~addition of ~~2020.~~

•~~Interest expense~~ ~~for the six months ended June 30, 2021 decreased by $12 million due primarily to:~~

◦~~A $21 million decrease in interest expense on~~Boston Private deposits, ~~due primarily to a decrease in interest paid on our interest-bearing money market deposits due to the decreases in market rates, partially offset by~~and

◦A $9 million increase in interest expense on borrowings due primarily to interest expense on our ~~3.125%~~2.100% Senior Notes issued in ~~June 2020,~~May 2021 and our 1.800% Senior Notes issued in ~~February 2021 and our 2.100% Senior Notes issued in May~~October 2021.

Net Interest Margin (Fully Taxable Equivalent Basis)

~~Three months ended June 30, 2021 and 2020~~

•Our net interest margin decreased by ~~74 basis points~~16 bps to ~~2.06~~2.13 percent for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~2.80~~2.29 percent for the comparable ~~2020~~2021 period. The lower margin for the three months ended June 30, 2021 was due primarily to higher growth in our lower-yielding cash and investment securities portfolio relative to the growth in our loan portfolio driven by significant growth in our average deposits, and a decrease in yields on loans reflective of the shift in the loan mix as discussed above. Average loans represented 34.8 percent of average interest earnings assets for the three months ended June 30, 2021, compared to 49.3 percent for the comparable 2020 period.

~~Six months ended June 30, 2021 and 2020~~

•Our net interest margin decreased by 79 basis points to 2.16 percent for the six months ended June 30, 2021, compared to 2.95 percent for the comparable 2020 period. The lower margin for the six months ended June 30, 2021March 31, 2022 was due primarily to higher growth in our lower-yielding cash and investment securities portfolio relative to the growth in our loan portfolio driven by significant growth in our average deposits, as well as a decrease in

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yields on loans ~~reflective of the shift in the loan mix~~ as ~~mentioned~~discussed above. Average loans represented ~~36.8~~32.3 percent of average interest earnings assets for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~49.3~~39.2 percent for the comparable ~~2020~~2021 period.

Average Balances, Yields and Rates Paid (Fully Taxable Equivalent Basis)

The average yield earned on interest-earning assets is the amount of annualized fully taxable equivalent interest income expressed as a percentage of average interest-earning assets. The average rate paid on funding sources is the amount of annualized interest expense expressed as a percentage of average funding sources. The following tables set forth average assets, liabilities, noncontrolling interests, preferred stock, and SVBFG stockholders’ equity, interest income, interest expense, annualized yields and rates, and the composition of our annualized net interest margin for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

6959

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Average Balances, Rates and Yields for the Three Months Ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~


		Three months ended June 30,													Three months ended March 31,
		2021						2020							2022						2021
(Dollars in millions)	(Dollars in millions)	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate		(Dollars in millions)	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:	Interest-earning assets:													Interest-earning assets:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	$	21,069	$	4	0.08	%	$	11,920	$	3	0.08	%	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	$	14,800	$	6	0.16	%	$	18,174	$	3	0.07	%
Investment securities: (2)	Investment securities: (2)													Investment securities: (2)
AFS securities:	AFS securities:													AFS securities:
Taxable	Taxable	24,358		73		1.20		12,784		69		2.18		Taxable	26,946		86		1.30		28,248		125		1.79
HTM securities:	HTM securities:													HTM securities:
Taxable	Taxable	43,352		178		1.65		10,887		73		2.67		Taxable	91,758		425		1.88		21,590		100		1.87
Non-taxable (3)	Non-taxable (3)	4,562		31		2.73		2,153		18		3.42		Non-taxable (3)	6,919		44		2.57		3,705		26		2.90
Total loans, amortized cost (4) (5)	Total loans, amortized cost (4) (5)	49,812		472		3.80		36,512		365		4.02		Total loans, amortized cost (4) (5)	67,070		570		3.45		46,281		430		3.77
Total interest-earning assets	Total interest-earning assets	143,153		758		2.12		74,256		528		2.85		Total interest-earning assets	207,493		1,131		2.21		117,998		684		2.35
Cash and due from banks	Cash and due from banks	2,108						895						Cash and due from banks	3,475						1,547
ACL	ACL	(411)						(561)						ACL	(432)						(484)
Other assets (6)	Other assets (6)	5,867						3,843						Other assets (6)	5,532						5,754
Total assets	Total assets	$	150,717					$	78,433					Total assets	$	216,068					$	124,815
Funding sources:	Funding sources:													Funding sources:
Interest-bearing liabilities:	Interest-bearing liabilities:													Interest-bearing liabilities:
Interest bearing checking and savings accounts	Interest bearing checking and savings accounts	$	3,096	$	1	0.11	%	$	2,175	$	2	0.31	%	Interest bearing checking and savings accounts	$	6,059	$	1	0.07	%	$	3,662	$	1	0.10	%
Money market deposits	Money market deposits	36,452		10		0.11		17,531		4		0.08		Money market deposits	55,163		19		0.14		30,959		9		0.11
Money market deposits in foreign offices	Money market deposits in foreign offices	787		—		0.01		291		—		0.04		Money market deposits in foreign offices	776		—		0.03		873		—		0.06
Time deposits	Time deposits	631		1		0.37		187		—		0.75		Time deposits	2,116		2		0.39		658		—		0.39
Sweep deposits in foreign offices	Sweep deposits in foreign offices	1,264		—		0.01		1,645		—		0.02		Sweep deposits in foreign offices	1,036		—		0.01		1,223		—		0.02
Total interest-bearing deposits	Total interest-bearing deposits	42,230		12		0.11		21,829		6		0.10		Total interest-bearing deposits	65,150		22		0.14		37,375		10		0.11
Short-term borrowings	Short-term borrowings	39		—		0.19		618		1		0.38		Short-term borrowings	3,136		1		0.18		12		—		0.07
2.100% Senior Notes		267		2		2.35		—		—		—
1.800% Senior Notes		494		2		1.92		—		—		—
3.125% Senior Notes		495		4		3.25		142		1		3.29
3.50% Senior Notes		348		3		3.63		348		3		3.64

Long-term debt														Long-term debt	2,570		17		2.55		1,162		9		3.05
Total interest-bearing liabilities	Total interest-bearing liabilities	43,873		23		0.21		22,937		11		0.19		Total interest-bearing liabilities	70,856		40		0.23		38,549		19		0.20
Portion of noninterest-bearing funding sources	Portion of noninterest-bearing funding sources	99,280						51,319						Portion of noninterest-bearing funding sources	136,637						79,449
Total funding sources	Total funding sources	143,153		23		0.06		74,256		11		0.05		Total funding sources	207,493		40		0.08		117,998		19		0.06
Noninterest-bearing funding sources:	Noninterest-bearing funding sources:													Noninterest-bearing funding sources:
Demand deposits	Demand deposits	91,530						46,088						Demand deposits	125,568						73,233
Other liabilities	Other liabilities	4,200						2,024						Other liabilities	3,100						4,021
Preferred stock	Preferred stock	1,610						340						Preferred stock	3,646						817
SVBFG common stockholders’ equity	SVBFG common stockholders’ equity	9,283						6,894						SVBFG common stockholders’ equity	12,530						7,984
Noncontrolling interests	Noncontrolling interests	221						150						Noncontrolling interests	368						211
Portion used to fund interest-earning assets	Portion used to fund interest-earning assets	(99,280)						(51,319)						Portion used to fund interest-earning assets	(136,637)						(79,449)
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	$	150,717					$	78,433					Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	$	216,068					$	124,815
Net interest income and margin	Net interest income and margin			$	735	2.06	%			$	517	2.80	%	Net interest income and margin			$	1,091	2.13	%			$	665	2.29	%
Total deposits	Total deposits	$	133,760					$	67,917					Total deposits	$	190,718					$	110,608
Average SVBFG common stockholders’ equity as a percentage of average assets														Average SVBFG common stockholders’ equity as a percentage of average assets					5.80	%					6.40	%
Reconciliation to reported net interest income:	Reconciliation to reported net interest income:													Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis	Adjustments for taxable equivalent basis			(7)						(4)				Adjustments for taxable equivalent basis			(9)						(5)
Net interest income, as reported	Net interest income, as reported			$	728					$	513			Net interest income, as reported			$	1,082					$	660

(1)Includes average interest-earning deposits in other financial institutions of ~~$1.9~~$5.2 billion and ~~$855 million~~$1.6 billion for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. For the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ balances also include ~~$16.7~~$9.2 billion and ~~$10.0~~$14.8 billion, respectively, deposited at the FRB, earning interest at the Federal Funds target rate.

(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.

(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.

(4)Nonaccrual loans are reflected in the average balances of loans.

(5)Interest income includes loan fees of ~~$68~~$50 million and ~~$50~~$58 million for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

(6)Average investment securities of ~~$3.4~~$2.1 billion and ~~$1.9~~$3.4 billion for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable and other equity securities.

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~~Average Balances, Rates and Yields for the Six months Ended June 30, 2021 and 2020~~

Six months ended June 30,
June 30, 2021 June 30, 2020
(Dollars in millions) Average
Balance Interest
Income/
Expense Yield/
Rate Average
Balance Interest
Income/
Expense Yield/
Rate
Interest-earning assets:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1) $ 19,635 $ 7 0.07 % $ 9,614 $ 20 0.42 %
Investment securities: (2)
AFS securities:
Taxable 26,292 197 1.51 13,175 146 2.23
HTM securities:
Taxable 32,531 278 1.72 11,281 150 2.67
Non-taxable (3) 4,136 57 2.78 2,027 34 3.43
Total loans, amortized cost (4) (5) 48,056 903 3.79 35,086 748 4.29
Total interest-earning assets 130,650 1,442 2.22 71,183 1,098 3.10
Cash and due from banks 1,823 847
ACL (448) (444)
Other assets (6) 5,812 3,834
Total assets $ 137,837 $ 75,420
Funding sources:
Interest-bearing liabilities:
Interest bearing checking and savings accounts $ 3,377 $ 2 0.10 % $ 1,361 $ 2 0.26 %
Money market deposits 33,721 19 0.11 17,572 36 0.42
Money market deposits in foreign offices 830 — 0.04 279 — 0.04
Time deposits 644 1 0.35 175 1 0.89
Sweep deposits in foreign offices 1,244 — 0.02 1,764 4 0.45
Total interest-bearing deposits 39,816 22 0.11 21,151 43 0.41
Short-term borrowings 26 — 0.16 794 3 0.84
2.100% Senior Notes 134 2 2.35 — — —
1.800% Senior Notes 407 4 1.94 — — —
3.125% Senior Notes 495 8 3.27 71 2 3.29
3.50% Senior Notes 348 6 3.65 348 6 3.64
Total interest-bearing liabilities 41,226 42 0.21 22,364 54 0.48
Portion of noninterest-bearing funding sources 89,424 48,819
Total funding sources 130,650 42 0.06 71,183 54 0.15
Noninterest-bearing funding sources:
Demand deposits 82,432 43,712
Other liabilities 4,111 2,151
Preferred stock 1,216 340
SVBFG common stockholders’ equity 8,636 6,703
Noncontrolling interests 216 150
Portion used to fund interest-earning assets (89,424) (48,819)
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity $ 137,837 $ 75,420
Net interest income and margin $ 1,400 2.16 % $ 1,044 2.95 %
Total deposits $ 122,248 $ 64,863
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis (12) (7)
Net interest income, as reported $ 1,388 $ 1,037

~~(1)~~Includes average interest-earning deposits in other financial institutions of $1.8 billion and $898 million for the six months ended June 30, 2021 and 2020, respectively. The balance also includes $15.8 billion and $7.8 billion deposited at the FRB, earning interest at the Federal Funds target rate for the six months ended June 30, 2021 and 2020, respectively.

~~(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.~~

~~(3)Interest income on non-taxable AFS securities is presented on a fully taxable-equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.~~

~~(4)Nonaccrual loans are reflected in the average balances of loans.~~

~~(5)Interest income includes loan fees of $126 million and $86 million for the six months ended June 30, 2021 and 2020, respectively.~~

~~(6)~~Average investment securities of $3.4 billion and $1.7 billion for the six months ended June 30, 2021 and 2020, respectively, were classified as other assets as they were noninterest-earning assets. These investments consisted primarily of non-marketable and other equity securities.

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Provision for Credit Losses

The provision for credit losses is the combination of (i) the provision for loans, (ii) the provision for unfunded credit commitments and (iii) the provision for HTM securities. Our ~~provision~~allowance for credit losses ~~equals~~reflects our best estimate of probable credit losses that are inherent in the portfolios at the balance sheet date.

The following table summarizes our ACL for loans, unfunded credit commitments and HTM securities for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021			2020			2021			2020			(Dollars in millions)	2022			2021
ACL, beginning balance	ACL, beginning balance	$	392		$	549		$	448		$	305		ACL, beginning balance	$	422		$	448
Day one impact of adopting ASC 326		—			—			—			25

Provision for loans(1)	Provision for loans(1)	16			52			50			301			Provision for loans(1)	8			34
Gross loan charge-offs (1)	Gross loan charge-offs (1)	(15)			(15)			(110)			(52)			Gross loan charge-offs (1)	(18)			(95)
Loan recoveries	Loan recoveries	3			4			8			12			Loan recoveries	10			5
Foreign currency translation adjustments	Foreign currency translation adjustments	—			—			—			(1)			Foreign currency translation adjustments	(1)			—
ACL, ending balance	ACL, ending balance	$	396		$	590		$	396		$	590		ACL, ending balance	$	421		$	392
ACL for unfunded credit commitments, beginning balance	ACL for unfunded credit commitments, beginning balance	105			85			121			67			ACL for unfunded credit commitments, beginning balance	171			121
Day one impact of adopting ASC 326		—			—			—			23
Provision (reduction) for unfunded credit commitments	Provision (reduction) for unfunded credit commitments	15			14			(1)			9			Provision (reduction) for unfunded credit commitments	4			(16)

ACL for unfunded credit commitments, ending balance (2)	ACL for unfunded credit commitments, ending balance (2)	$	120		$	99		$	120		$	99		ACL for unfunded credit commitments, ending balance (2)	$	175		$	105
ACL for HTM securities, beginning balance	ACL for HTM securities, beginning balance	1			—			—			—			ACL for HTM securities, beginning balance	7			—

Provision for HTM securities		4			—			5			—
(Reduction) provision for HTM securities														(Reduction) provision for HTM securities	(1)			1
ACL for HTM securities, ending balance (3)	ACL for HTM securities, ending balance (3)	$	5		$	—		$	5		$	—		ACL for HTM securities, ending balance (3)	$	6		$	1
Ratios and other information:	Ratios and other information:													Ratios and other information:
Provision for loans as a percentage of period-end total loans (annualized)		0.13		%	0.57		%	0.20		%	1.65		%
Gross loan charge-offs as a percentage of average total loans (annualized)		0.12			0.17			0.46			0.30
Net loan charge-offs as a percentage of average total loans (annualized)		0.10			0.12			0.43			0.23
Provision for loans as a percentage of period-end total loans (annualized) (1)														Provision for loans as a percentage of period-end total loans (annualized) (1)	0.05		%	0.29		%
Gross loan charge-offs as a percentage of average total loans (annualized) (1)														Gross loan charge-offs as a percentage of average total loans (annualized) (1)	0.11			0.83
Net loan charge-offs as a percentage of average total loans (annualized) (1)														Net loan charge-offs as a percentage of average total loans (annualized) (1)	0.05			0.79
ACL for loans as a percentage of period-end total loans	ACL for loans as a percentage of period-end total loans	0.78			1.61			0.78			1.61			ACL for loans as a percentage of period-end total loans	0.61			0.82
Provision for credit losses	Provision for credit losses	$	35		$	66		$	54		$	310		Provision for credit losses	$	11		$	19
Period-end total loans	Period-end total loans	50,754			36,727			50,754			36,727			Period-end total loans	68,665			47,675
Average total loans	Average total loans	49,812			36,512			48,056			35,086			Average total loans	67,070			46,281
Allowance for loan losses for nonaccrual loans	Allowance for loan losses for nonaccrual loans	38			54			38			54			Allowance for loan losses for nonaccrual loans	20			42
Nonaccrual loans	Nonaccrual loans	79			94			79			94			Nonaccrual loans	70			90

(1)~~Gross loan charge-offs~~Metrics for the ~~six~~three months ended ~~June 30,~~March 31, 2021 includes the impact of an $80 million charge-off related to ~~potentially~~ fraudulent activity as disclosed in previous filings.

(2)The “ACL for unfunded credit commitments” is included as a component of “Other liabilities” on our consolidated balance sheets.

(3)The "ACL for HTM securities" is included as a component of "HTM securities" and presented net in our consolidated financial statements.

Provision for Loans

We had a provision for credit losses for loans of $16 million and $50 million for the three and six months ended June 30, 2021, respectively, compared to a provision of $52 million and $301 million for the three and six months ended June 30, 2020. The provision for loans of $16$8 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a provision of $34 million for the three months ended March 31, 2021. The provision for loans of $8 million for the three months ended March 31, 2022 was driven primarily by a $15 million provision for loan growth ~~in our performing loans portfolio, as well as $4~~and an increase of $16 million for charge-offs not ~~specifically~~previously reserved for at ~~March~~December 31, ~~2021, and $7 million for new nonperforming loans.~~2021. These ~~provisions~~increases were partially offset by $3a $10 million ofreduction for recoveries and a $7$15 million ~~reduction~~decrease in ~~performing~~ reserves ~~as a result of the ongoing improvement of economic scenarios in our forecast models.~~

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for nonaccrual loans.

The provision for ~~credit losses for~~ loans of ~~$52~~$34 million for the three months ended June 30, 2020, was driven primarily by $26 million in additional reserves for our performing loans based on our forecast models of the period's economic environment under the CECL methodology adopted January 1, 2020, including qualitative adjustments to account for unprecedented economic forecast volatility, $24 million for net new nonaccrual loans and $11 million for charge-offs not specifically reserved for at March 31, ~~2020, partially offset by a $5 million decrease related to changes in loan composition within our portfolio segments and $4 million of recoveries.~~

~~The provision for credit losses for loans of $50 million for the six months ended June 30,~~ 2021 was driven primarily by ~~a $33~~$86 million ~~increase for growth~~ in ~~our performing loan portfolioand $90 million of~~ charge-offs not specifically reserved for at December 31, 2020, of which $80 million was related to ~~a single instance of potentially~~the fraudulent activity as disclosed in previous ~~filings.~~filings, and a $18 million increase for loan growth. These increases ~~in the provision~~ were partially offset by $8$5 million of recoveries and a ~~$68~~$62 million reduction in performing reserves as a result of the ongoing improvement of economic scenarios in our forecast models.

The provision for credit losses for loans of $301 million for the six months ended June 30, 2020 was driven primarily by $217 million in additional reserves for our performing loans based on our forecast models of the current economic environment under the CECL methodology adopted January 1, 2020, including the impact of the COVID-19 pandemic, as well as changes in loan composition within our portfolio segments, $36 million in additional reserves for period-end loan growth, $24 million for charge-offs not specifically reserved for at December 31, 2019 and $35 million in net new nonaccrual loans, partially offset by $12 million of recoveries.

Provision for Unfunded Credit Commitments

We recorded a provision for unfunded credit commitments of $15 million and a reduction in provision of $1 million for the three and six months ended June 30, 2021, respectively, compared to a provision of $14 million and $9 million for the three and six months ended June 30, 2020. The provision of $15$4 million for the three months ended ~~June 30, 2021~~March 31, 2022, compared to a reduction of $16 million for the three months ended March 31, 2021. The provision of $4 million for the three months ended March 31, 2022 was driven primarily by a $6 million provision for commitment growth, ~~in our outstanding commitments, as well~~partially offset by a reduction of $2 million due to changes in our unfunded portfolio composition that resulted in a ~~longer~~shorter portfolio lifetime and improved credit quality.

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We recorded a ~~corresponding provision.~~

~~The provision~~reduction of our credit loss estimate for unfunded credit commitments of ~~$14~~$16 million for the three months ended June 30, 2020, was driven primarily by the forecast models of the current economic environment under the CECL methodology adopted January 1, 2020, as well as changes in the unfunded credit commitments composition within our portfolio segments.

March 31, 2021. The reduction ~~in provision for unfunded credit commitments~~ of $1$16 million ~~for the six months ended June 30, 2021,~~ was driven primarily by improved economic scenarios in our forecast models, partially offset by ~~growth in our outstanding commitments and~~ changes in the unfunded credit ~~commitments~~commitments' composition within our portfolio ~~segments~~.

The provision for unfunded credit commitments of $9 million for the six months ended June 30, 2020, was driven primarily by a decrease in the expected future commitments for milestone tranches, which are tied to company performance or additional funding rounds, based on our forecast models of the economic environment, including the impact of the COVID-19 pandemic.segments.

Gross Loan Charge-Offs

Gross loan charge-offs were ~~$15~~$18 million for the three months ended ~~June 30, 2021,~~March 31, 2022, of which $4$16 million was not specifically reserved for at ~~March~~December 31, 2021. Gross loan charge-offs were ~~partly~~primarily driven by aour Investor Dependent portfolios, the largest drivers being one Investor Dependent - Early Stage client and two Investor Dependent - Growth Stage clients which together accounted for $13 million in charge-offs.

Gross loan charge-offs were $95 million for the first quarter of 2021, of which $80 million relates to the fraudulent Global Fund Banking activity as disclosed in previous filings, and an additional $6 million ~~charge-off from one Cash Flow Dependent client.~~that was not specifically reserved for at December 31, 2020. The remaining $9$15 million gross loan charge-offs were driven primarily by our Investor Dependent ~~and Cash Flow Dependent~~ loan ~~portfolios.~~

Gross loan charge-offs were $15 million for the three months ended June 30, 2020, of which $11 million was not specifically reserved for at March 31, 2020. Gross loan charge-offs were partly driven by $5 million charge-offs for our Investor Dependent clients and a $5 million charge-off from one Balance Sheet Dependent client. The remaining charge-offs came primarily from our Cash Flow Dependent risk-based segment.

Gross loan charge-offs were $110 million for the six months ended June 30, 2021, of which $90 million was not specifically reserved for in prior quarters. Gross loan charge-offs not previously reserved for were primarily driven by $80 million related to a single instance of potentially fraudulent activity disclosed in previous filings. The remaining $30 million of gross loan charge-offs came primarily from our Investor Dependent and Cash Flow Dependent loan portfolios.

Gross loan charge-offs were $52 million for the six months ended June 30, 2020, of which $24 million was not specifically reserved for in prior quarters. Gross loan charge-offs were primarily driven by $39 million charge-offs for our Investor Dependent clients and a $5 million charge-off from one Balance Sheet Dependent client. The remaining charge-offs came primarily from our Cash Flow Dependent risk-based segment.portfolio.

See “Consolidated Financial Condition—Credit Quality and Allowance for Credit Losses for Loans and for Unfunded Credit Commitments” below and Note 6 — “Loans and Allowance for Credit Losses: Loans and Unfunded Credit

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Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for further details on our ACL for loans and unfunded credit commitments.

Provision for HTM Securities

We recorded a ~~provision for~~reduction of our credit ~~losses~~loss estimate for HTM securities of ~~$4 million and $5~~$1 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~March 31, 2022. Our provision release for HTM securities for the ~~second~~first quarter of ~~June 30, 2021~~March 31, 2022 was driven primarily by ~~the continued expansion of our corporate~~improved HTM bond ~~portfolio.~~portfolio demographics. Our HTM portfolio as of ~~June 30, 2021~~March 31, 2022 was entirely made up of A2A3 or better rated bonds, all considered investment grade.

We recorded a provision for credit losses for HTM securities of ~~less than~~ $1 million for the three ~~and six~~ months ended ~~June 30, 2020, which~~March 31, 2021. Our provision for HTM securities of $1 million for the first quarter of 2021 was driven primarily by ~~our forecast models~~the purchase of corporate bonds during the ~~economic environment, including the impact~~first quarter of ~~the COVID-19 pandemic.~~2021. Our HTM portfolio as of ~~June 30, 2020~~March 31, 2021 was entirely made up of ~~Aa3~~A1 or better rated bonds, all considered investment grade.

See Note 5 — “Investment Securities" of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for further details on our ACL for HTM securities.

Noninterest Income

For the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, noninterest income was ~~$761~~$517 million ~~and $1.5 billion, respectively,~~ compared to ~~$369 million and $670~~$744 million for the comparable ~~2020 periods.~~2021 period. For the three ~~and six~~ months ended June 30, 2021, non-GAAP noninterest income, net of noncontrolling interests was $648 million and $1.4 billion, respectively, compared to $355 million and $658 million for the comparable 2020 periods. For the three and six months ended June 30, 2021,March 31, 2022, non-GAAP core fee income plus SVB ~~Leerink~~Securities revenue was ~~$292~~$348 million ~~and $617 million, respectively,~~ compared to ~~$291 million and $522~~$325 million for the comparable ~~2020 periods.~~2021 period. For the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, non-GAAP core fee income was ~~$172~~$230 million ~~and $331 million, respectively,~~ compared to ~~$132 million and $301~~$159 million for the comparable ~~2020 periods.~~2021 period. (See reconciliations of non-GAAP measures used below under “Use of Non-GAAP Financial Measures.”)

Use of Non-GAAP Financial Measures

To supplement our unaudited interim consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance (including, but not limited to, non-GAAP core fee income, non-GAAP SVB ~~Leerink~~Securities revenue, non-GAAP core fee income plus non-GAAP SVB ~~Leerink~~Securities revenue, ~~non-GAAP noninterest income,~~ non-GAAP net gains on investment securities, ~~non-GAAP noninterest expense~~net of noncontrolling interests and non-GAAP financial ratios). These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.

We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by (i) excluding items that represent income attributable to investors other than us and our subsidiaries and (ii) providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. However, these non-GAAP financial measures should be considered in addition to, and not as a substitute for or preferable to, financial measures prepared in accordance with GAAP.

Included in net income is income and expense attributable to noncontrolling interests. We recognize, as part of our investment funds management business through SVB Capital and SVB ~~Leerink,~~Securities, the entire income or loss from funds

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consolidated in accordance with ASC Topic 810 as discussed in Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report. We are required under GAAP to consolidate 100% of the results of these entities, even though we may own less than 100% of such entities. The relevant amounts attributable to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests” on our statements of income. Where applicable, the tables below for noninterest income and net gains on investment securities exclude noncontrolling interests.

Core fee income is a non-GAAP financial measure, which represents GAAP noninterest income, but excludes (i) SVB ~~Leerink~~Securities revenue, (ii) certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, and (iii) other noninterest income. Core fee income represents client investment fees, wealth management and trust fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees.

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SVB ~~Leerink~~Securities revenue is a non-GAAP financial measure, which represents noninterest income but excludes (i) Core fee income, and (ii) certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, and other noninterest income. SVB ~~Leerink~~Securities revenue represents investment banking revenue and commissions.

Core fee income plus SVB ~~Leerink~~Securities revenue is a non-GAAP measure, which represents GAAP noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, and other noninterest income. Core fee income plus SVB ~~Leerink~~Securities revenue represents core fee income plus investment banking revenue and commissions.

The following table provides a reconciliation of GAAP noninterest income to non-GAAP ~~noninterest income, net of noncontrolling interests, for the three and six months ended June 30, 2021 and 2020:~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
GAAP noninterest income $ 761 $ 369 106.2 % $ 1,505 $ 670 124.6 %
Less: income attributable to noncontrolling interests, including carried interest allocation 113 14 NM 138 12 NM
Non-GAAP noninterest income, net of noncontrolling interests $ 648 $ 355 82.5 $ 1,367 $ 658 107.8

~~The following table provides a reconciliation of GAAP noninterest income to non-GAAP~~ core fee income for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
GAAP noninterest income	GAAP noninterest income	$	761	$	369	106.2	%	$	1,505	$	670	124.6	%	GAAP noninterest income	$	517	$	744	(30.5)	%
Less: gains on investment securities, net	Less: gains on investment securities, net	305		35		NM		472		81		NM		Less: gains on investment securities, net	85		167		(49.1)
Less: gains on equity warrant assets, net	Less: gains on equity warrant assets, net	122		27		NM		344		40		NM		Less: gains on equity warrant assets, net	63		222		(71.6)
Less: other noninterest income	Less: other noninterest income	42		16		162.5		72		27		166.7		Less: other noninterest income	21		30		(30.0)
Non-GAAP core fee income plus SVB Leerink revenue (1)		$	292	$	291	0.3		$	617	$	522	18.2
Non-GAAP core fee income plus SVB Securities revenue (1)														Non-GAAP core fee income plus SVB Securities revenue (1)	$	348	$	325	7.1
Investment banking revenue	Investment banking revenue	103		142		(27.5)		245		188		30.3		Investment banking revenue	93		142		(34.5)
Commissions	Commissions	17		17		—		41		33		24.2		Commissions	25		24		4.2
Non-GAAP SVB Leerink revenue (2)		$	120	$	159	(24.5)		$	286	$	221	29.4
Non-GAAP SVB Securities revenue (2)														Non-GAAP SVB Securities revenue (2)	$	118	$	166	(28.9)
Non-GAAP core fee income (3)	Non-GAAP core fee income (3)	$	172	$	132	30.3		$	331	$	301	10.0		Non-GAAP core fee income (3)	$	230	$	159	44.7

(1)Non-GAAP core fee income plus SVB ~~Leerink~~Securities revenue represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and other noninterest income. Core fee income plus SVB ~~Leerink~~Securities revenue is non-GAAP core fee income (as defined in footnote (3) below) with the addition of investment banking revenue and commissions.

(2)Non-GAAP SVB ~~Leerink~~Securities revenue represents investment banking revenue and commissions, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and other noninterest income.

(3)Non-GAAP core fee income represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. Non-GAAP core fee income includes client investment fees, wealth management and trust fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees.

Gains on Investment Securities, Net

Net gains on investment securities include gains and losses from our non-marketable and other equity securities, which include public equity securities held as a result of exercised equity warrant assets, as well as gains and losses from sales of our AFS debt securities portfolio, when applicable.

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD-SVB, debt funds, private and public portfolio companies and qualified affordable housing projects. We experience variability in the performance of our non-marketable and other equity securities from period to period, which

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results in net gains or losses on investment securities (both realized and unrealized). This variability is due to a number of factors, including unrealized changes in the values of our investments, changes in the amount of realized gains and losses from distributions, changes in liquidity events and general economic and market conditions. Unrealized gains or losses from non-marketable and other equity securities for any single period are typically driven by valuation changes, and are therefore subject to potential increases or decreases in future periods. Such variability may lead to volatility in the gains or losses from

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investment securities. As such, our results for a particular period are not necessarily indicative of our expected performance in a future period.

The extent to which any unrealized gains or losses will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which these equity securities may be subject to (e.g. lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities, and the timing of such actual sales or distributions, which, to the extent such securities are managed by our managed funds, are subject to our funds' separate discretionary sales/distributions and governance processes.

~~Three months ended June 30, 2021 and 2020~~

For the three months ended June 30, 2021, we had net gains on investment securities of $305 million, compared to $35 million for the comparable 2020 period. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $192 million for the three months ended June 30, 2021, compared to non-GAAP net gains, net of controlling interest of $21 million for the comparable 2020 period.

~~Non-GAAP net gains on investment securities, net of noncontrolling interests, of $192 million for the three months ended June 30, 2021 were driven by the following:~~

•Gains of $110 million from our managed fund of funds portfolio driven by unrealized valuations increases of private and public positions as well as fund distributions driven primarily by realized gains from one public company position, and

•Gains of $16 million from our public equity securities investments, driven primarily by realized gains of $38 million from the sale of Coinbase Global, Inc. ("Coinbase") common stock, offset by valuation decreases of positions held.

~~Six months ended June 30, 2021 and 2020~~

For the six months ended June 30, 2021, we had net gains on investment securities of $472 million, compared to $81 million for the comparable 2020 period. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $334 million for the six months ended June 30, 2021, compared to $68 million for the comparable 2020 period. Non-GAAP net gains, net of noncontrolling interests, of $334 million for the six months ended June 30, 2021 were driven primarily by the following:

•Gains of $128 million from our managed fund of funds portfolio driven by unrealized valuations increases of private and public positions as well as fund distributions driven primarily by realized gains from one public company position,

•Gains of $88 million from our public equity securities investments, driven primarily by realized gains of $43 million from the sale of Big Commerce, Inc. common stock and $38 million from the sale of Coinbase common stock, and

•~~Gains of $56 million from our strategic and other investments driven primarily by net unrealized valuation increases.~~

The following tables provide a reconciliation of GAAP total gains (losses) on investment securities, net, to non-GAAP net gains (losses) on investment securities, net of noncontrolling interests, for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

~~Table of~~ ~~Contents~~


(Dollars in millions)	Managed Funds of Funds		Managed Direct Venture Funds		Managed Credit Funds		Public Equity Securities		Debt Funds		Sales of AFS Debt Securities		Strategic and Other Investments		SVB Securities		Total
Three months ended March 31, 2022
Total gains (losses) on investment securities, net	$	46	$	15	$	6	$	(32)	$	—	$	49	$	2	$	(1)	$	85
Less: income attributable to noncontrolling interests, including carried interest allocation	15		2		1		—		—		—		—		—		18
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests	$	31	$	13	$	5	$	(32)	$	—	$	49	$	2	$	(1)	$	67

Three months ended March 31, 2021
Total gains on investment securities, net	$	31	$	18	$	7	$	76	$	1	$	—	$	30	$	4	$	167
Less: income attributable to noncontrolling interests, including carried interest allocation	13		9		1		—		—		—		—		2		25
Non-GAAP net gains on investment securities, net of noncontrolling interests	$	18	$	9	$	6	$	76	$	1	$	—	$	30	$	2	$	142

(Dollars in millions) Managed
Funds of
Funds Managed
Direct
Venture
Funds Managed Credit Funds Public Equity Securities Debt
Funds Sales of AFS Debt Securities Strategic
and Other
Investments SVB Leerink Total
Three months ended June 30, 2021
Total gains on investment securities, net $ 197 $ 19 $ 6 $ 16 $ 1 $ — $ 22 $ 44 $ 305
Less: income attributable to noncontrolling interests, including carried interest allocation 87 8 1 — — — — 17 113
Non-GAAP net gains on investment securities, net of noncontrolling interests $ 110 $ 11 $ 5 $ 16 $ 1 $ — $ 22 $ 27 $ 192
Three months ended June 30, 2020
Total gains (losses) on investment securities, net $ 14 $ 15 $ — $ 8 $ — $ — $ (5) $ 3 $ 35
Less: income attributable to noncontrolling interests, including carried interest allocation 7 7 — — — — — — 14
Non-GAAP net gains (loss) on investment securities, net of noncontrolling interests $ 7 $ 8 $ — $ 8 $ — $ — $ (5) $ 3 $ 21
Six months ended June 30, 2021
Total gains on investment securities, net $ 228 $ 37 $ 13 $ 88 $ 2 $ — $ 56 $ 48 $ 472
Less: income attributable to noncontrolling interests, including carried interest allocation 100 17 2 — — — — 19 138
Non-GAAP net gains on investment securities, net of noncontrolling interests $ 128 $ 20 $ 11 $ 88 $ 2 $ — $ 56 $ 29 $ 334
Six months ended June 30, 2020
Total gains (losses) on investment securities, net $ 11 $ 13 $ — $ 4 $ — $ 61 $ (9) $ 1 $ 81
Less: income attributable to noncontrolling interests, including carried interest allocation 7 6 — — — — — — 13
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests $ 4 $ 7 $ — $ 4 $ — $ 61 $ (9) $ 1 $ 68
Non-GAAP net gains on investment securities, net of noncontrolling interests, of $67 million for the three months ended March 31, 2022 were driven by the following:

•Gains of $49 million on the sale of the AFS debt securities portfolio, resulting from the sale of $5.1 billion of U.S. Treasury securities and agency-issued MBS and termination of related swaps, and

•Gains of $31 million from our managed fund of funds driven by unrealized valuations increases of private and public positions.

Gains on Equity Warrant Assets, Net

~~Three months ended June 30, 2021 and 2020~~

Net gains on equity warrant assets were $122 million for the three months ended June 30, 2021, compared to net gains of $27 million for the comparable June 30, 2020 period. Net gains on equity warrant assets for the three months ended June 30, 2021 consisted of:

•~~Net gains on warrant exercises of $78 million driven primarily by IPO activity during the quarter, and~~

•~~Net gains of $45 million from warrant valuations increases, driven by our private company portfolio reflective of pricing updates and pending exit activity.~~

~~Six months ended June 30, 2021 and 2020~~

Net gains on equity warrant assets were $344 million for the six months ended June 30, 2021, compared to net gains of $40 million for the comparable June 30, 2020 period. Net gains on equity warrant assets for the six months ended June 30, 2021 consisted of:

•~~Net gains on warrant exercises of $251 million reflective of $116 million in gains related to Coinbase's direct listing, with the remaining gains driven primarily by IPO activity, and~~

•~~Net gains of $94 million from warrant valuations increases, driven by our private company portfolio reflective of pricing updates and pending exit activity.~~

~~Table of~~ ~~Contents~~

A summary of gains on equity warrant assets, net, for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,					Six months ended June 30,						Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change	2021		2020		% Change	(Dollars in millions)	2022		2021		% Change
Equity warrant assets (1):	Equity warrant assets (1):											Equity warrant assets (1):
Gains on exercises, net	Gains on exercises, net	$	78	$	9	NM	$	251	$	33	NM	Gains on exercises, net	$	12	$	160	(92.5)	%
Terminations	Terminations	(1)		—		NM	(1)		(1)		—	Terminations	(1)		—		NM
Changes in fair value, net	Changes in fair value, net	45		18		150.0	94		8		NM	Changes in fair value, net	52		62		(16.1)
Total gains on equity warrant assets, net	Total gains on equity warrant assets, net	$	122	$	27	NM	$	344	$	40	NM	Total gains on equity warrant assets, net	$	63	$	222	(71.6)

(1) At ~~June 30, 2021,~~March 31, 2022, we held warrants in ~~2,718~~2,873 companies, compared to ~~2,419~~2,670 companies at ~~June 30, 2020.~~March 31, 2021. The total fair value of our warrant portfolio was ~~$266~~$323 million at ~~June 30, 2021~~March 31, 2022 and ~~$171~~$244 million at ~~June 30, 2020.~~March 31, 2021. Warrants in 5354 companies each had fair values greater than $1 million and collectively represented ~~$137~~$175 million, or ~~51.7~~54.3 percent, of the fair value of the total warrant portfolio at ~~June 30, 2021.~~March 31, 2022. Warrants in 20 42

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companies each had fair values greater than $1 million and collectively represented ~~$51~~$114 million, or ~~29.6~~46.5 percent, of the fair value of the total warrant portfolio at ~~June 30, 2020.~~March 31, 2021.

Net gains on equity warrant assets for the three months ended March 31, 2022 were driven by $52 million in net valuation increases reflective of private company valuation updates as well as pending SPAC and M&A activity. Net gains on equity warrant assets for the three months ended March 31, 2021 included $115.8 million in valuation gains related to Coinbase Global, Inc.'s ("Coinbase") announcement in the first quarter of 2021 to enter the public markets via a direct listing.

Non-GAAP Core Fee Income


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Non-GAAP core fee income (1):	Non-GAAP core fee income (1):													Non-GAAP core fee income (1):
Client investment fees	Client investment fees	$	15	$	32	(53.1)	%	$	35	$	75	(53.3)	%	Client investment fees	$	35	$	20	75.0	%
Wealth management and trust fees														Wealth management and trust fees	22		—		—
Foreign exchange fees	Foreign exchange fees	67		36		86.1		124		84		47.6		Foreign exchange fees	73		57		28.1
Credit card fees	Credit card fees	31		21		47.6		59		50		18.0		Credit card fees	37		28		32.1
Deposit service charges	Deposit service charges	28		21		33.3		53		45		17.8		Deposit service charges	30		25		20.0
Lending related fees	Lending related fees	18		11		63.6		34		24		41.7		Lending related fees	19		16		18.8
Letters of credit and standby letters of credit fees	Letters of credit and standby letters of credit fees	13		11		18.2		26		23		13.0		Letters of credit and standby letters of credit fees	14		13		7.7
Total non-GAAP core fee income (1)	Total non-GAAP core fee income (1)	$	172	$	132	30.3		$	331	$	301	10.0		Total non-GAAP core fee income (1)	$	230	$	159	44.7
Investment banking revenue	Investment banking revenue	103		142		(27.5)		245		188		30.3		Investment banking revenue	93		142		(34.5)
Commissions	Commissions	17		17		—		41		33		24.2		Commissions	25		24		4.2
Total non-GAAP Leerink revenue (2)		$	120	$	159	(24.5)		$	286	$	221	29.4
Total non-GAAP core fee income plus SVB Leerink revenue (3)		$	292	$	291	0.3		$	617	$	522	18.2
Total non-GAAP Securities revenue (2)														Total non-GAAP Securities revenue (2)	$	118	$	166	(28.9)
Total non-GAAP core fee income plus SVB Securities revenue (3)														Total non-GAAP core fee income plus SVB Securities revenue (3)	$	348	$	325	7.1

(1)This non-GAAP measure represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. See “Use of Non-GAAP Measures” above.

(2)Non-GAAP SVB ~~Leerink~~Securities revenue represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) non-GAAP core fee income, and (iii) other noninterest income. See “Use of Non-GAAP Measures” above.

(3)Non-GAAP core fee income plus SVB ~~Leerink~~Securities revenue represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, and (ii) other noninterest income. See “Use of Non-GAAP Measures” above.

Client Investment Fees

Client investment fees ~~were $15 million and~~was $35 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to ~~$32 million and $75~~$20 million for the comparable ~~June 30, 2020 periods.~~2021 period. The ~~decreases were~~increase was reflective of ~~a reduction in~~improved fee ~~margin~~margins resulting from ~~lower~~higher short-term ~~market~~interest rates ~~offset~~driven by large increases in average off-balance sheet client investment funds. Given our expectations of a continued low rate environment, we generally expect client investment fees in 2021 to be lower than 2020.the March Federal Funds Rate hike.

A summary of client investment fees by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:

~~Table of~~ ~~Contents~~


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Client investment fees by type:
Sweep money market fees	$	24	$	10	140.0	%
Asset management fees	10		9		11.1
Repurchase agreement fees	1		1		—
Total client investment fees	$	35	$	20	75.0

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Client investment fees by type:
Sweep money market fees $ 7 $ 19 (63.2) % $ 18 $ 42 (57.1) %
Asset management fees 8 12 (33.3) 16 21 (23.8)
Repurchase agreement fees — 1 (100.0) 1 12 (91.7)
Total client investment fees $ 15 $ 32 (53.1) $ 35 $ 75 (53.3)

The following table summarizes average client investment funds for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020:~~:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Sweep money market funds	Sweep money market funds	$	82,573	$	47,561	73.6	%	$	74,856	$	45,303	65.2	%	Sweep money market funds	$	109,116	$	67,138	62.5	%
Client investment assets under management (1)		77,733		51,801		50.1		75,106		51,223		46.6
Managed client investment funds (1)														Managed client investment funds (1)	84,467		72,478		16.5
Repurchase agreements	Repurchase agreements	14,021		9,898		41.7		12,992		9,849		31.9		Repurchase agreements	12,557		11,963		5.0
Total average client investment funds (2)	Total average client investment funds (2)	$	174,327	$	109,260	59.6		$	162,954	$	106,375	53.2		Total average client investment funds (2)	$	206,140	$	151,579	36.0

(1)These funds represent investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.

(2)Client investment funds are maintained at third-party financial institutions and are not recorded on our balance sheet.

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The following table summarizes period-end client investment funds at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		% Change		(Dollars in millions)	March 31, 2022		December 31, 2021		% Change
Sweep money market funds	Sweep money market funds	$	90,402	$	59,844	51.1	%	Sweep money market funds	$	102,550	$	109,241	(6.1)	%
Client investment assets under management (1)		78,698		70,671		11.4
Managed client investment funds (1)								Managed client investment funds (1)	83,988		85,475		(1.7)
Repurchase agreements	Repurchase agreements	14,067		10,538		33.5		Repurchase agreements	12,678		15,370		(17.5)
Total period-end client investment funds (2)	Total period-end client investment funds (2)	$	183,167	$	141,053	29.9		Total period-end client investment funds (2)	$	199,216	$	210,086	(5.2)

(1)These funds represent investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.

(2)Client investment funds are maintained at third-party financial institutions and are not recorded on our balance sheet.

Wealth Management and Trust Fees

Wealth management and trust fees was $22 million three months ended March 31, 2022. A summary of wealth management and fees by instrument type for the three months ended March 31, 2022 and 2021 is as follows:


	Three months ended March 31
(Dollars in millions)	2022		2021		% Change
Wealth management and trust fees by type:
Wealth management fees	$	20	$	—	—	%
Trust fees	2		—		—
Total wealth management and trust fees	$	22	$	—	—

The following table summarizes the activity relating to AUM for the three months ended March 31, 2022:


	Three months ended March 31,
(Dollars in millions)	2022
Beginning balance	$	19,646
Net flows	264
Market returns	(902)
Ending balance	$	19,008

Foreign Exchange Fees

Foreign exchange fees ~~were $67 million and $124~~was $73 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to ~~$36 million and $84~~$57 million for the comparable ~~June 30, 2020 periods.~~2021 period. The ~~increases~~increase in foreign exchange fees were driven primarily by increases in spot contract commissions ~~reflective of the~~primarily driven by increased ~~volume of trades~~trading in technology and life science/healthcare industries for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 compared to the ~~2020 period, which had a significant slowdown impact due to the COVID-19 pandemic.~~2021 period.

A summary of foreign exchange fee income by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Foreign exchange fees by instrument type:	Foreign exchange fees by instrument type:													Foreign exchange fees by instrument type:
Spot contract commissions	Spot contract commissions	$	60	$	33	81.8	%	$	115	$	74	55.4	%	Spot contract commissions	$	66	$	55	20.0	%
Forward contract commissions	Forward contract commissions	6		3		100.0		8		10		(20.0)		Forward contract commissions	6		2		200.0
Option premium fees	Option premium fees	1		—		—		1		—		—		Option premium fees	1		—		—
Total foreign exchange fees	Total foreign exchange fees	$	67	$	36	86.1		$	124	$	84	47.6		Total foreign exchange fees	$	73	$	57	28.1

Credit Card Fees

Credit card fees ~~were $31 million and $59~~was $37 million for the three ~~and six~~ months ended~~June 30, 2021,~~ March 31, 2022, compared to ~~$21 million and $50~~$28 million for the comparable ~~2020 periods.~~2021 period. Credit card fees increased due to higher transaction volumes reflective of ~~higher utilization, new~~increased spending and client growth, ~~and relationship expansion.~~

~~Table of~~ ~~Contents~~

as well as higher travel spending, compared to the comparable 2021 period.

A summary of credit card fees by instrument type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Credit card fees by instrument type:
Card interchange fees, net $ 26 $ 15 73.3 % $ 49 $ 37 32.4 %
Merchant service fees 4 5 (20.0) 8 10 (20.0)
Card service fees 1 1 — 2 3 (33.3)
Total credit card fees $ 31 $ 21 47.6 $ 59 $ 50 18.0

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	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Credit card fees by instrument type:
Card interchange fees, net	$	30	$	23	30.4	%
Merchant service fees	5		4		25.0
Card service fees	2		1		100.0
Total credit card fees	$	37	$	28	32.1

Deposit Service Charges

Deposit service charges ~~were $28 million and $53~~was $30 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to ~~$21 million and $45~~$25 million for the comparable ~~2020 periods.~~2021 period. Deposit service charges increased ~~due to the increases in product revenues from strong deposit growth and~~primarily driven by higher ~~transaction volumes.~~volumes of our transaction-based fee products.

Lending Related Fees

Lending related fees were ~~$18 million and $34~~$19 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to ~~$11 million and $24~~$16 million for the comparable ~~2020 periods.~~2021 period. The increase was primarily due to increases in fees earned from unused lines of credit ~~due to strong client liquidity.~~reflective primarily from growth in our unfunded credit commitments from the first quarter of 2021.

A summary of lending related fees by type for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Lending related fees by instrument type:	Lending related fees by instrument type:													Lending related fees by instrument type:
Unused commitment fees	Unused commitment fees	$	15	$	8	87.5	%	$	28	$	17	64.7	%	Unused commitment fees	$	15	$	12	25.0	%
Other	Other	3		3		—		6		7		(14.3)		Other	4		4		—
Total lending related fees	Total lending related fees	$	18	$	11	63.6		$	34	$	24	41.7		Total lending related fees	$	19	$	16	18.8

Letters of Credit and Standby Letters of Credit Fees

Letters of credit and standby letters of credit fees ~~were $13 million and $26~~was $14 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$11~~$13 million ~~and~~ ~~$23 million~~ for the comparable ~~2020~~ ~~periods.~~ 2021 period. The ~~increases were~~increase was driven primarily by an increase in deferred fee income reflective of larger letter of credit issuances.

Investment Banking Revenue

Investment banking revenue was ~~$103~~$93 million ~~and $245 million for the three and six months ended June 30, 2021, compared to $142 million and $188 million for the comparable 2020 periods. The decrease~~ for the three months ended ~~June 30, 2021~~March 31, 2022, compared to $142 million for the comparable ~~2020 period, was reflective of lower completed deal volume in the second quarter of~~ 2021 ~~compared to 2020.~~period. The ~~increase for the six months ended June 30, 2021 compared to the 2020 period~~decrease was attributable to ~~overall exceptional levels~~a decrease in equity capital markets transactions as a result of ~~funding activity in~~ the ~~life science/healthcare~~recent public markets ~~resulting in~~volatility partially offset by an increase in ~~public equity underwriting~~advisory fees.

A summary of investment banking revenue by type for the ~~six~~three and three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Investment banking revenue:
Underwriting fees $ 84 $ 131 (35.9) $ 209 $ 162 29.0 %
Advisory fees 9 9 — 13 24 (45.8)
Private placements and other 10 2 NM 23 2 NM
Total investment banking revenue $ 103 $ 142 (27.5) $ 245 $ 188 30.3

~~Table of~~ ~~Contents~~


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Investment banking revenue:
Underwriting fees	$	32	$	125	(74.4)
Advisory fees	54		4		NM
Private placements and other	7		13		(46.2)
Total investment banking revenue	$	93	$	142	(34.5)

Commissions

Commissions for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 were ~~$17 million and $41~~$25 million, compared to ~~$17 million and $33~~$24 million for the comparable ~~2020 periods.~~2021 period. Commissions include commissions received from clients for the execution of agency-based brokerage transactions in listed and over-the-counter equities. ~~Commissions were relatively flat when comparing~~The Company also earns subscription fees for market intelligence services that are recognized over the ~~three months ended June 30, 2021 to~~period in which they are delivered. Fees received before the ~~comparable~~subscription period ~~for 2020, reflective of trading activity.~~ends is initially recorded as deferred revenue (a contract liability) in other liabilities in our consolidated balance sheet. The slight increase ~~for six months ended June 30, 2021 compared to the comparable period for 2020,~~in commissions was driven by ~~higher trade volume~~subscription fees, which were new to core fee income due to the acquisition of MoffettNathanson in December 2021, partially offset by a decrease in fees from brokerage transactions due to a slowdown in trading activity as ~~well as strategic hires made in~~a result of the ~~third quarter~~recent public markets volatility.

Table of ~~2020 to drive growth in derivatives and convertible revenue.~~Contents

Other

Other noninterest income for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 was ~~$42 million and $72~~$21 million, compared to ~~$16 million and $27~~$30 million for the comparable ~~2020 periods.~~2021 period. The ~~increases for three and six months ended June 30, 2021 compared to the 2020 periods, were driven~~decrease was primarily ~~by higher fund management fees~~ due to ~~additional funds managed, an increase~~a loss on total return swaps in ~~foreign exchange trading exposure as well as higher performance fees received from certain funds reflective primarily of the liquidation of equity interests in BigCommerce Holdings, Inc.~~derivatives.

Noninterest Expense

A summary of noninterest expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Compensation and benefits	Compensation and benefits	$	425	$	320	32.8	%	$	870	$	575	51.3	%	Compensation and benefits	$	584	$	445	31.2	%
Professional services	Professional services	97		64		51.6		178		103		72.8		Professional services	106		81		30.9
Premises and equipment	Premises and equipment	37		28		32.1		70		55		27.3		Premises and equipment	58		33		75.8
Net occupancy	Net occupancy	17		19		(10.5)		35		37		(5.4)		Net occupancy	23		18		27.8
Business development and travel	Business development and travel	3		3		—		7		17		(58.8)		Business development and travel	14		4		NM
FDIC and state assessments	FDIC and state assessments	10		7		42.9		20		12		66.7		FDIC and state assessments	16		10		60.0
Merger-related charges	Merger-related charges	19		—		—		19		—		—		Merger-related charges	16		—		—
Other	Other	45		39		15.4		90		80		12.5		Other	56		45		24.4
Total noninterest expense	Total noninterest expense	$	653	$	480	36.0		$	1,289	$	879	46.6		Total noninterest expense	$	873	$	636	37.3

Included in noninterest expense is expense attributable to noncontrolling interests. See below for a description and reconciliation of non-GAAP noninterest expense and non-GAAP core operating efficiency ratio, both of which exclude noncontrolling interests.

~~Non-GAAP Noninterest Expense~~

We use and report non-GAAP noninterest expense, non-GAAP taxable equivalent revenue and non-GAAP core operating efficiency ratio, which excludes noncontrolling interests, SVB Leerink, merger-related charges and other non-recurring expenses. We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by: (i) excluding certain items that represent expenses attributable to investors other than us and our subsidiaries, or certain items that do not occur every reporting period; or (ii) providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or preferable to, financial measures prepared in accordance with GAAP.

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~~The table below provides a summary of non-GAAP noninterest expense and non-GAAP core operating efficiency ratio for the three and six months ended June 30, 2021 and 2020:~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
GAAP noninterest expense $ 653 $ 480 36.0 % $ 1,289 $ 879 46.6 %
Less: expense attributable to SVB Leerink 99 109 (9.2) 235 171 37.4
Less: Merger-related charges 19 — — 19 — —
Non-GAAP noninterest expense, net of SVB Leerink and other non-recurring expenses $ 535 $ 371 44.2 $ 1,035 $ 708 46.2
GAAP net interest income $ 728 $ 513 41.9 $ 1,388 $ 1,037 33.8
Adjustments for taxable equivalent basis 7 4 75.0 12 7 71.4
Non-GAAP taxable equivalent net interest income $ 735 $ 517 42.2 $ 1,400 $ 1,044 34.1
GAAP noninterest income $ 761 $ 369 106.2 $ 1,505 $ 670 124.6
Less: income attributable to noncontrolling interests, including carried interest allocation 113 14 NM 138 12 NM
Non-GAAP noninterest income, net of noncontrolling interests 648 355 82.5 1,367 658 107.8
Less: non-GAAP net gains on investment securities, net of noncontrolling interests 192 21 NM 334 69 NM
Less: net gains on equity warrant assets 122 27 NM 344 40 NM
Less: investment banking revenue 103 142 (27.5) 245 188 30.3
Less: commissions 17 17 — 41 33 24.2
Non-GAAP noninterest income, net of noncontrolling interests and net of net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions $ 214 $ 148 44.6 $ 403 $ 328 22.9
GAAP total revenue $ 1,489 $ 882 68.8 $ 2,893 $ 1,707 69.5
Non-GAAP taxable equivalent revenue, net of noncontrolling interests and SVB Leerink, net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions $ 949 $ 665 42.7 $ 1,803 $ 1,372 31.4
Operating efficiency ratio 43.85 % 54.39 % (19.4) 44.56 % 51.48 % (13.4)
Non-GAAP core operating efficiency ratio (1) 56.38 55.70 1.2 57.40 51.59 11.3

(1) The non-GAAP core operating efficiency ratio is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink, merger-related charges and other non-recurring expenses by total revenue after adjusting for net interest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis.

Our GAAP operating efficiency ratio for the three and six months ended June 30, 2021 improved from the comparable 2020 periods, primarily as a result of (i) an increase in net interest income due to our fixed income investment securities and loans as a result of higher average balances and (ii) an increase in noninterest income due to higher net gains on investment securities and equity warrant assets, partially offset by an increase in noninterest expense due to higher compensation and benefits expense and professional services expense.

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Compensation and Benefits Expense

The following table provides a summary of our compensation and benefits expense for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		% Change		2021		2020		% Change		(Dollars in millions)	2022		2021		% Change
Compensation and benefits:	Compensation and benefits:													Compensation and benefits:
Salaries and wages	Salaries and wages	$	146	$	124	17.7	%	$	309	$	240	28.8	%	Salaries and wages	$	236	$	163	44.8	%
Incentive compensation plans	Incentive compensation plans	162		121		33.9		312		187		66.8		Incentive compensation plans	194		150		29.3
Other employee incentives and benefits (1)	Other employee incentives and benefits (1)	117		75		56.0		249		148		68.2		Other employee incentives and benefits (1)	154		132		16.7
Total compensation and benefits	Total compensation and benefits	$	425	$	320	32.8		$	870	$	575	51.3		Total compensation and benefits	$	584	$	445	31.2
Period-end full-time equivalent employees		4,932		3,984		23.8		4,932		3,984		23.8
Average full-time equivalent employees		4,808		3,855		24.7		4,705		3,764		25.0
Period-end full-time employees														Period-end full-time employees	7,149		4,656		53.5
Average full-time employees														Average full-time employees	6,975		4,601		51.6

(1)Other employee incentives and benefits includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), ESOP, warrant and other incentive ~~and~~plans, retention plans, agency fees and other employee-related expenses.

Compensation and benefits expense was ~~$425 million and $870~~$584 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$320 million and $575~~$445 million for the comparable ~~June 30, 2020 periods.~~2021 period. The key factors affecting changes in compensation and benefits expense were as follows:

•An increase of ~~$22~~$73 million ~~and $69 million in~~ salaries and wages ~~reflective~~expense due primarily ~~of the~~to an increase in ~~the number~~FTEs, as we continue to invest in our revenue-generating lines of ~~average FTE driven by strong hiring for in-sourcing, product development~~business and ~~revenue growth,~~support functions as well as the impact of annual ~~pay raises,~~merit increases during the first quarter of 2022,

•An increase of ~~$41 million and $125~~$44 million in incentive compensation plans expense related primarily to ~~higher incentive compensation plan accruals as a result of an improved financial outlook and~~ an increase in the number of ~~average FTEs,~~plan participants along with higher targets due to annual merit increases and promotions, and

•An increase of ~~$42 million and $101~~$22 million in other employee incentives and benefits driven primarily by an increase in ~~the warrant incentive plan~~stock compensation expenses due to ~~strong warrant gains during the first half of 2021, an increase in~~higher grant volume and new retirement provisions and increased seasonal expenses relating to additional 401(k) matching contributions and employer-related payroll taxes ~~and other employee benefits reflective of~~driven by our increased headcount, ~~and an increase in share-based~~partially offset by lower warrant incentive compensation ~~expense~~ due to ~~an increase in equity awards granted since June 30, 2020.~~public warrant valuation changes.

Our variable compensation plans consist primarily of our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, Deferred Compensation Plan, 401(k) and ESOP Plan, SVB ~~Leerink~~Securities Incentive Compensation Plan, ~~and~~ SVB ~~Leerink~~Securities Retention Award, EHOP, 2006 Incentive Plan and ESPP (see descriptions in our ~~2020~~2021 Form 10-K). Total costs incurred under these plans were $~~191 million~~ ~~and~~ ~~$393~~222 million for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022, compared to $~~133 million and $218~~202 million for the comparable ~~June 30, 2020 periods.~~2021 period. These amounts are included in total compensation and benefits expense discussed above.

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Professional Services

Professional services expense was ~~$97 million and $178~~$106 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$64 million and $103~~$81 million for the comparable ~~June 30, 2020 periods.~~2021 period. The increase was driven ~~primarily~~ by higher consulting fees ~~related to~~associated with our ~~continued investments in our infrastructure,~~ initiatives related to our regulatory programs as well as continued investments in our infrastructure and operating projects to support our presence both domestically and internationally.

Premises and Equipment

Premises and equipment expense was ~~$37 million and $70~~$58 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$28 million and $55~~$33 million for the comparable ~~June 30, 2020~~2021 period. The ~~increases were~~increase was primarily related to ~~increased depreciation~~higher software support and ~~computer~~ maintenance ~~expenses.~~fees driven by premises and equipment held by Boston Private as well as an increase in software project depreciation.

Net Occupancy

Net occupancy expense was ~~$17 million and $35~~$23 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$19 million and $37~~$18 million for the comparable ~~June 30, 2020 periods.~~2021 period. The ~~decreases were~~increase was primarily driven by ~~our decision to vacate certain leased office spaces in~~ the ~~fourth quarter~~acquisition of ~~2020.~~

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Boston Private.

Business Development and Travel

Business development and travel ~~expense~~ was ~~$3 million and $7~~$14 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$3 million and $17~~$4 million for the comparable ~~June 30, 2020 periods.~~2021 period. The ~~decrease~~increase was primarily due to the continued ~~impact~~easing of ~~the~~ COVID-19 ~~pandemic~~restrictions on ~~domestic~~in-person meetings and ~~international~~ travel.

FDIC and State Assessments

FDIC and state assessments expense was ~~$10 million and $20~~$16 million for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$7 million and $12~~$10 million for the comparable ~~June 30, 2020 periods.~~2021 period. The ~~increases were~~increase was due primarily to the increase in our average ~~assets~~.deposits as well as the acquisition of Boston Private deposits.

Merger-Related Charges

Merger-related charges ~~were $19 million~~was a new noninterest expense line item for the second quarter of 2021 ~~and consisted~~as a result of the Boston Private acquisition. A summary of merger-related charges, which includes direct acquisition costs for the three months ended March 31, 2022 are as follows:


		Three months ended
(Dollars in millions)	March 31, 2022
Personnel-related		$	1
Occupancy and facilities		3
Professional services		6
Systems integration and related charges		6
Total merger-related charges		$	16

Other Noninterest Expense

Other noninterest expense was $56 million for the three months ended March 31, 2022, compared to $45 million for the comparable 2021 period. This increase was driven by expenses primarily ~~of professional services and systems integration expenses~~ related to increased lending, deposit and other client-related processing costs as well as higher advertising and promotional expenses.

Operating Efficiency Ratio

Our operating efficiency ratio increased to 54.60 percent for the ~~acquisition~~three months ended March 31, 2022, compared to 45.31 percent for the comparable 2021 period. This increase was driven by lower noninterest income from market-driven revenue reflective of ~~Boston Private~~.the current public market volatility, partially offset by higher net interest income, and higher noninterest expense as we continue to invest and support long-term growth.

Net Income Attributable to Noncontrolling Interests

Included in net income is income and expense attributable to noncontrolling interests. The relevant amounts allocated to investors in our consolidated subsidiaries, other than us, are reflected under “net income attributable to noncontrolling interests” on our statements of income.

In the table below, noninterest income consists primarily of net investment gains and losses from our consolidated funds. ~~Noninterest expense is primarily related to management fees paid by our managed funds to SVB Financial’s subsidiaries as the managed funds’ general partners.~~ A summary of net income attributable to noncontrolling interests for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows:

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Net interest income (1) $ — $ — — $ — $ — —
Noninterest income (1) (36) (6) NM (52) (3) NM
Noninterest expense (1) — — — — — —
Carried interest allocation (2) (77) (8) NM (86) (9) NM
Net income attributable to noncontrolling interests $ (113) $ (14) NM $ (138) $ (12) NM

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	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Noninterest income (1)	$	(1)	$	(16)	(93.8)
Carried interest allocation (2)	(17)		(9)		88.9
Net income attributable to noncontrolling interests	$	(18)	$	(25)	(28.0)

(1)Represents noncontrolling interests’ share in ~~net interest income,~~ noninterest income or ~~loss and noninterest expense.~~loss.

(2)Represents the preferred allocation of income (or change in income) earned by us as the general partner of certain consolidated funds.

~~Three months ended June 30, 2021 and 2020~~

Net income attributable to noncontrolling interests was ~~$113~~$18 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to net income of ~~$14~~$25 million for the comparable ~~2020~~2021 period. Net income attributable to noncontrolling interests ~~of $113 million~~ for the three months ended ~~June 30, 2021~~March 31, 2022 was driven primarily by net gains on investment securities (including carried interest allocation) from unrealized valuation increases of our managed funds of funds portfolio and our ~~managed direct venture funds portfolios reflective of the overall market performance during the second quarter of 2021. See “Results of Operations—Noninterest Income—Gains on Investment~~SVB Securities ~~Net.”~~

~~Six months ended June 30, 2021 and 2020~~

Net income attributable to noncontrolling interests was $138 million for the six months ended June 30, 2021, compared to net income of $12 million for the comparable 2020 period. Net income attributable to noncontrolling interests of $138 million for the six months ended June 30, 2021 was driven primarily by net gains on investment securities (including carried interest allocation) from our managed funds of funds and our managed direct venture funds portfolios reflective of the overall market performance for the six months ended June 30, 2021.funds. See “Results of Operations—Noninterest Income—Gains on Investment Securities, Net.”

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Income Taxes

Our effective ~~income~~ tax rate was ~~25.1 percent and 25.5~~26.1 percent for the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~27.3 percent and 27.1~~25.9 percent for the comparable ~~2020 periods.~~2021 period. The ~~decreases~~increase in our effective tax rate ~~were driven~~for the three months ended March 31, 2022 was primarily bydue to an increase in ~~the recognition of excess~~state tax ~~benefits from share-based compensation which is reflective of the annual vesting of our restricted stock units as well as an increase in our stock price.~~ rates.Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and the net income attributable to noncontrolling interests.

Operating Segment Results

We have four segments for which we report our financial information: ~~Global Commercial~~Silicon Valley Bank, SVB Private, ~~Bank,~~ SVB Capital and SVB ~~Leerink.~~

Securities. We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reporting segments. Please refer to Note 1210 — “Segment Reporting” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.

The following is our reportable segment information for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

~~Global Commercial~~Silicon Valley Bank

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Net interest income $ 715 $ 485 47.4 % $ 1,334 $ 949 40.6 %
Provision for credit losses (11) (44) (75.0) (56) (238) (76.5)
Noninterest income 174 133 30.8 333 300 11.0
Noninterest expense (307) (241) 27.4 (585) (466) 25.5
Income before income tax expense $ 571 $ 333 71.5 $ 1,026 $ 545 88.3
Total average loans, amortized cost $ 42,727 $ 30,472 40.2 $ 41,016 $ 29,805 37.6
Total average assets 131,885 67,936 94.1 120,470 64,871 85.7
Total average deposits 128,918 65,091 98.1 117,655 62,153 89.3

~~Three months ended June 30, 2021 and 2020~~


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Net interest income	$	854	$	611	39.8	%
Provision for credit losses	(7)		(45)		(84.4)
Noninterest income	212		159		33.3
Noninterest expense	(397)		(276)		43.8
Income before income tax expense	$	662	$	449	47.4
Total average loans, amortized cost	$	52,234	$	38,221	36.7
Total average assets	177,944		107,859		65.0
Total average deposits	175,424		106,016		65.5

Income before income tax expense from ~~our GCB~~Silicon Valley Bank increased to ~~$571~~$662 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$333~~$449 million for the comparable ~~2020~~2021 period. The key components of ~~GCB's~~Silicon Valley Bank's performance for the three months ended ~~June 30, 2021~~March 31, 2022 compared to the comparable ~~2020~~2021 period are discussed below.

Net interest income from ~~GCB~~Silicon Valley Bank increased by ~~$230~~$243 million for the three months ended ~~June 30, 2021,~~March 31, 2022, due primarily to an increase in loan interest income resulting primarily from higher average loan balances, partially offset by a decrease in loan yields. Gross loan yields, ~~as a result of the shift~~excluding loan interest recoveries and loan fees, decreased driven by growth in ~~the loan mix. In addition, strong deposit growth provided a higher earnings credit and a low rate environment produced a~~our lower ~~earnings charge for funded loans creating a benefit of a higher net FTP earnings credit.~~yielding Global Fund Banking portfolio.

~~The~~A provision ~~for~~of credit losses ~~decreased to $11~~of $7 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$44~~a provision of credit losses of $45 million for the comparable ~~2020~~2021 period. The provision of ~~$11~~$7 millionfor the three months ended March 31, 2022was driven primarily by an increase in provision for loan growth and higher charge-offs not specifically reserved for at December 31, 2021, partially offset by recoveries and lower net new nonaccrual loans.

The provision for credit losses of $45 million for the three months ended ~~June 30,~~March 31, 2021was driven primarily by ~~a $13 million~~an increase ~~related to loan growth, $9 million~~ in ~~net new nonaccrual loans and $4 million for~~ charge-offs not specifically reserved for at ~~March~~December 31, ~~2021,~~2020 and an increase in provision related to loan growth, partially offset by a ~~$9 million~~ reduction in reserves for our performing loans based on our forecast models of the economic environment, lower net new nonaccrual loans and ~~$3 million~~recoveries.

Table of ~~recoveries.~~Contents

~~The provision for credit losses of $44~~

Noninterest income increased by $53 million for the three months ended June 30, 2020 was driven primarily by $26 million in additional reserves for our performing loans based on our forecast models of the current economic environment under the CECL methodology adopted January 1, 2020, $22 million for net new nonaccrual loans and $11 million for charge-offs not specifically reserved for at March 31, ~~2020, partially offset by a $10 million decrease related to changes in loan composition within our portfolio segments and $4 million of recoveries.~~

~~Noninterest income increased by $41 million for the three months ended June 30, 2021~~2022 related primarily to an overall increase in our non-GAAP core fee ~~income (higher foreign exchange fees, credit card fees, lending related fees and deposit service charges, partially offset by lower client investment fees).~~income. The overall increase was due primarily to higher client investment fees driven by improved fee margins resulting from higher short-term interest rates driven by the March Federal Funds Rate hike, higher foreign

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exchange fees primarily due to increases in spot contract commissions primarily driven by increased trading in technology and life science/healthcare industries, and credit card ~~and deposit~~fees driven by higher transaction volumes ~~an increase in unused commitment fees~~reflective of increased spending and ~~an increase in average~~ client ~~fund balances, partially offset by~~growth, as well as higher travel spending compared to the ~~impact~~first quarter of ~~the federal funds rate decreases on client investment fee yields.~~2021.

Noninterest expense increased by ~~$66~~$121 million for the three months ended ~~June 30, 2021,~~March 31, 2022, due primarily to compensation and benefits expense, ~~other noninterest~~professional services expense and premises and equipment expense. Compensation and benefits expense increased ~~$56 million~~ as a result of higher incentive compensation expense and higher salaries and wages expenses. Incentive compensation expense ~~increased due primarily to an increase in our 2021 full-year projected financial performance. The increase in GCB~~and salaries and wages was due primarily to an increase in the average number of FTEs at GCB, which increased to 3,328 FTEs for the three months ended June 30, 2021, from 2,822 FTEs for the comparable 2020 period. Other noninterest expense increased primarily due to an increase in ~~FDIC~~FTEs as we continue to invest in our business as well as the impact of annual merit increases and ~~state assessments~~promotions. Professional services expense ~~driven by~~increased due to higher ~~average assets.~~consulting fees related to new project initiatives that align with our continued growth during the quarter. Premises and equipment expense increased due to ~~increased depreciation~~higher software support and ~~computer~~ maintenance ~~expenses.~~

~~Six months ended June 30, 2021 and 2020~~

~~Net interest income from our GCB increased by $385 million for the six months ended June 30, 2021, due primarily to~~fees as well as an increase in loan interest income resulting mainly from higher average loan balances, partially offset by a decrease in loan yields as a result of growth in our higher credit quality Global Fund Banking portfolio as well as rate decreases. In addition, strong deposit growth provided a higher earnings credit and a low rate environment produced a lower earnings charge for funded loans, creating a benefit of a higher net FTP earnings credit.

GCB had a provision for credit losses of $56 million for the six months ended June 30, 2021, compared to a provision of $238 million for the comparable 2020 period. The provision of $56 million for the six months ended~~June 30, 2021~~was driven primarily by $90 million for charge-offs not specifically reserved for at December 31, 2020, of which $80 million was related to the single instance of potentially fraudulent activity discussed in prior filings, a $30 million increase related to loan growth and $3 million in net new nonaccrual loans, partially offset by a $56 million reduction in reserves for our performing loans based on our forecast models of the economic environment and $8 million of recoveries.

The provision of $238 million for the six months ended June 30, 2020 was reflective primarily of $167 million in additional reserves for our performing loans based on our forecast models of the current economic environment under the CECL methodology adopted January 1, 2020, including the impact of the COVID-19 pandemic, as well as changes in loan composition within our portfolio segments, $27 million in additional reserves for period-end loan growth, $24 million for charge-offs not specifically reserved for at December 31, 2019 and $33 million in net new nonaccrual loans, partially offset by $12 million of recoveries.

Noninterest income increased by $33 million for the six months ended June 30, 2021, related primarily to an overall increase in our non-GAAP core fee income, due primarily to higher foreign exchange fees, lending related fees, credit card fees and deposit service charges, partially offset by lower client investment fees. The overall increase was due primarily to higher foreign exchange, credit card and deposit transaction volumes, an increase in unused commitment fees and an increase in average client fund balances, partially offset by the impact of the federal funds rate decreases on client investment fee yields.

Noninterest expense increased by $119 million for the six months ended June 30, 2021, due primarily to compensation and benefits expense, other noninterest expense and premises and equipment expense. Compensation and benefits expense increased $102 million as a result of higher incentive compensation expense and higher salaries and wages expenses. Incentive compensation expense increased due primarily to an increase in our 2021 full-year projected financial performance. The increase in GCB salaries and wages was due primarily to an increase in the average number of FTEs at GCB, which increased to 3,275 FTEs for the six months ended June 30, 2021, from 2,757 FTEs for the comparable 2020 period.Other noninterest expense increased due to an increase in FDIC and state assessments expense driven by higher average assets. Premises and equipment expense increased due to increased depreciation and computer maintenance expenses.

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software depreciation.

SVB Private ~~Bank~~

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Net interest income $ 29 $ 19 52.6 % $ 56 $ 34 64.7 %
(Provision for) reduction of credit losses (5) (4) 25.0 4 (59) (106.8)
Noninterest income 1 1 — 2 1 100.0
Noninterest expense (15) (10) 50.0 (28) (20) 40.0
Income (loss) before income tax expense $ 10 $ 6 66.7 $ 34 $ (44) (177.3)
Total average loans, amortized cost $ 5,154 $ 4,036 27.7 $ 5,066 $ 3,946 28.4
Total average assets 5,199 4,072 27.7 5,114 3,982 28.4
Total average deposits 3,977 2,120 87.6 3,636 2,021 79.9

~~Three months ended June 30, 2021 and 2020~~


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change
Net interest income	$	81	$	35	131.4	%
(Provision for) reduction of credit losses	(1)		9		(111.1)
Noninterest income	25		1		NM
Noninterest expense	(94)		(15)		NM
(Loss) income before income tax expense	$	11	$	30	(63.3)
Total average loans, amortized cost	$	14,298	$	6,043	136.6
Total average assets	15,987		6,097		162.2
Total average deposits	14,416		3,545		NM

Net interest income from our SVB Private ~~Bank~~ increased by ~~$10~~$46 million ~~for~~from the ~~three months ended June 30,~~comparable 2021 ~~due primarily to the increase in~~first quarter, as average loans ~~for~~increased driven primarily by the ~~three months ended June 30, 2021 as compared to the June 30, 2020 comparable period,~~acquisition of Boston Private and strong organic loan growth. This increase was partially offset by decreases in loan yields as a result of ~~overall market rate decreases.~~purchase accounting amortization of fair value mark ups on the acquired Boston Private loans.

The provision for credit losses of $5$1 million for the three months ended ~~June 30, 2021~~March 31, 2022 was ~~reflective~~ primarily ~~of an increase in reserves for our performing loans based on our forecast models of the economic environment and~~due to loan ~~growth partially offset by net new nonaccrual loans.~~growth.

Noninterest ~~expense~~income increased by $5$24 million for the three months ended ~~June 30,~~March 31, 2022 primarily due to wealth management and trust fees which is a new financial statement line item for the third quarter of 2021 as a result of the Boston Private acquisition.

Noninterest expense increased by $79 million for the three months ended March 31, 2022, related primarily to compensation and benefits expense. Compensation and benefits expense increased ~~$4 million~~ as a result of ~~higher incentive compensation and salaries and wages expenses due primarily to an increase in our 2021 full-year projected financial performance and~~ an increase in average number of ~~FTEs.~~

~~Six months ended June 30, 2021 and 2020~~

~~Net interest income from our SVB Private Bank increased by $22 million for the six months ended June 30, 2021~~FTEs primarily due ~~primarily~~ to the ~~increase in average loans for the six months ended June 30, 2021 as compared to the June 30, 2020 comparable period, partially offset by decreases in loan yields as a result~~acquisition of ~~overall market rate decreases.~~Boston Private.

The reduction of credit losses of $4 million for the six months ended June 30, 2021 was reflective primarily of a reduction in reserves for our performing loans based on our forecast models of the economic environment partially, offset by loan growth.

Noninterest expense increased by $8 million for the six months ended June 30, 2021, related primarily to compensation and benefits expense. Compensation and benefits expense increased $7 million as a result of higher incentive compensation and salaries and wages expenses due primarily to an increase in our 2021 full-year projected financial performance and an increase in average number of FTEs.

SVB Capital

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Net interest income $ — $ — — $ — $ — —
Noninterest income 175 21 NM 244 26 NM
Noninterest expense (18) (8) 125.0 (34) (17) 100.0
Income before income tax expense $ 157 $ 13 NM $ 210 $ 9 NM
Total average assets $ 613 $ 430 42.6 $ 595 $ 439 35.5


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change

Noninterest income	$	65	$	69	(5.8)
Noninterest expense	(20)		(16)		25.0
Income before income tax expense	$	45	$	53	(15.1)
Total average assets	$	892	$	577	54.6

SVB Capital’s components of noninterest income primarily include net gains and losses on non-marketable and other equity securities, carried interest and fund management fees. All components of income before income tax expense discussed below are net of noncontrolling interests.

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We experience variability in the performance of SVB Capital from quarter to quarter due to a number of factors, including changes in the values of our funds’ underlying investments, changes in the amount of distributions and general economic and market conditions. Such variability may lead to volatility in the gains and losses from investment securities and cause our results to differ from period to period. The performance of these securities may be impacted by the effects of the COVID-19 pandemic.

~~Three months ended June 30, 2021 and 2020~~

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SVB Capital had noninterest income of ~~$175~~$65 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$21~~$69 million for the comparable ~~June 30, 2020~~2021 period. The ~~increase~~decrease in noninterest income was due primarily to ~~an increase~~a decrease in net gains on investment securities for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to the comparable ~~June 30, 2020~~2021 period. SVB Capital’s components of noninterest income primarily include the following:

•Net gains on investment securities, net of ~~$143~~noncontrolling interests, of $49 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$12~~$54 million for the comparable ~~June 30, 2020~~2021 period. The net gains on investment securities, net of ~~$143~~noncontrolling interests, of $49 million were driven primarily by unrealized ~~net~~ valuation ~~increases of~~gains from private and public ~~positions as well as fund distributions driven primarily~~companies held by ~~realized gains from one public company position.~~

~~Six months ended June 30, 2021 and 2020~~

~~SVB Capital had noninterest income~~our managed funds of $244 million for the six months ended June 30, 2021, compared to $26 million for the comparable June 30, 2020 period. The increase in noninterest income was due primarily to an increase in net gains on investment securities for the six months ended June 30, 2021, compared to the comparable June 30, 2020 period. SVB Capital’s components of noninterest income primarily include the following:

•Net gains on investment securities of $197 million for the six months ended June 30, 2021, compared to $6 million for the comparable June 30, 2020 period. The net gains on investment securities of $197 million were driven primarily by unrealized net valuation increases of private and public positions as well as fund distributions driven primarily by realized gains from one public company position.

funds.

SVB ~~Leerink~~Securities

Three months ended June 30, Six months ended June 30,
(Dollars in millions) 2021 2020 % Change 2021 2020 % Change
Net interest income $ — $ — — $ — $ — —
Noninterest income 149 164 (9.1) 319 226 41.2
Noninterest expense (98) (109) (10.1) (235) (171) 37.4
Income before income tax expense $ 51 $ 55 (7.3) $ 84 $ 55 52.7
Total average assets $ 729 $ 455 60.2 $ 748 $ 469 59.5


	Three months ended March 31,
(Dollars in millions)	2022		2021		% Change

Noninterest income	$	121	$	170	(28.8)
Noninterest expense	(134)		(136)		(1.5)
(Loss) income before income tax expense	$	(13)	$	34��	(138.2)
Total average assets	$	993	$	767	29.5

SVB ~~Leerink’s~~Securities’ components of noninterest income primarily include investment banking revenue, commissions and net gains and losses on non-marketable and other equity securities, carried interest and fund management fees. All components of income before income tax expense discussed below are net of noncontrolling interests.

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~~Three months ended June 30, 2021 and 2020~~

SVB ~~Leerink~~Securities had noninterest income of ~~$149~~$121 millionfor the three months ended March 31, 2022, compared to $170 million for the comparable March 31, 2021 period. The $49 million decrease in noninterest income was due primarily to a decrease in equity capital markets transactions as a result of the recent public markets volatility partially offset by an increase in advisory fees.

SVB Securities had noninterest expense of $134 million for the three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$164~~$136 million for the comparable ~~June 30, 2020~~2021 period. The $15 million decrease in noninterest income was primarily due to a $39 million decrease in investment banking revenue attributable to lower completed deal volume in the second quarter of 2021 compared to 2020, partially offset by a $23 million increase in investment gains driven by a net valuation increase on equity fund investments.

~~SVB Leerink had noninterest expense of $98 million for the three months ended June 30, 2021, compared to $109 million for the comparable 2020 period. The $11~~$2 million decrease in noninterest expense was driven primarily ~~driven~~ by ~~a decrease of $9 million in compensation and benefit expense due to~~ a decrease in incentive compensation plan expense driven by ~~(i) a decrease in revenue as compared to~~lower deal activity during the ~~second~~first quarter of ~~2020 and (ii) a $3 million decrease in other noninterest expense due to a decrease in corporate finance expense primarily due to lower equity deals as compared to the second quarter of 2020.~~

~~Six months ended June 30, 2021 and 2020~~

SVB Leerink had noninterest income of $319 million for the six months ended June 30, 2021, compared to $226 million for the comparable June 30, 2020 period. The $93 million increase in noninterest income was primarily due to a $57 million increase in investment banking revenue attributable to exceptional levels of funding activity in the life science/healthcare secondary markets resulting in an increase in public equity underwriting fees and a $26 million increase in investment gains driven2022, offset by ~~a net valuation increase on equity fund investments.~~

SVB Leerink had noninterest expense of $235 million for the six months ended June 30, 2021, compared to $171 million for the comparable 2020 period. The $64 million increase was primarily driven by an increase of $60 million in compensation and benefit expense driven primarily by an increase in incentive compensation expense as a result of a strong performance for the six months ended June 30, 2021, as compared to the same period in 2020 and an increase in salaries and wages expense due to strategic hires ~~subsequent to~~throughout the ~~second quarter of 2020.~~prior year.

Consolidated Financial Condition

Our total assets, and total liabilities and stockholders' equity, were ~~$163.4~~$220.4 billion at ~~June 30, 2021~~March 31, 2022 compared to ~~$115.5~~$211.5 billion at December 31, ~~2020,~~2021, an increase of ~~$47.9~~$8.9 billion, or ~~41.5~~4.2 percent. Refer below to a summary of the individual components driving the changes in total assets, total liabilities and stockholders' equity.

Cash and Cash Equivalents

Cash and cash equivalents totaled ~~$24.0~~$20.6 billion at ~~June 30, 2021,~~March 31, 2022, an increase of ~~$6.3~~$6.0 billion, or ~~35.6~~41.0 percent, compared to ~~$17.7~~$14.6 billion at December 31, ~~2020.~~2021. The increase was driven by the ~~significant~~ growth in deposits of ~~$43.8~~$8.9 billion. As of ~~June 30,~~March 31, 2022, $13.2 billion of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate and interest-earning deposits in other financial institutions were $5.1 billion. As of December 31, 2021, ~~$16.4~~$5.7 billion of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate and interest-earning deposits in other financial institutions were $5.8 billion. As of December 31, 2020, $13.7 billion of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate and interest-earning deposits in other financial institutions were $3.0 billion.

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Investment Securities

Investment securities totaled ~~$85.8~~$127.3 billion at ~~June 30, 2021, an increase~~March 31, 2022, a decrease of ~~$36.5 billion,~~$656 million, or ~~74.0~~0.5 percent, compared to ~~$49.3~~$128.0 billion at December 31, ~~2020.~~2021. Our investment securities portfolio is comprised of: (i) an AFS securities portfolio and a HTM securities portfolio, both of which represent interest earning fixed income investment securities; and (ii) a non-marketable and other equity securities portfolio, which represents primarily investments managed as part of our funds management business, investments in qualified affordable housing projects, as well as public equity securities held as a result of equity warrant assets exercised.

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AFS Securities

Period-end AFS securities were ~~$23.9~~$26.0 billion at ~~June 30, 2021,~~March 31, 2022, compared to ~~$30.9~~$27.2 billion at December 31, ~~2020,~~2021, a decrease of ~~$7.0~~$1.2 billion, or ~~22.8~~4.5 percent. The ~~$7.0 billion~~ decrease in period-end AFS securities balances from December 31, ~~2020~~2021 to ~~June 30, 2021,~~March 31, 2022, was driven ~~primarily~~ by a ~~$5.8~~$1.0 billion ~~re-designation~~decrease in the fair value of our AFS securities ~~to HTM securities,~~portfolio, reflective of higher interest rates, as well as paydowns and maturities of ~~$2.9~~AFS securities of $462 million during the quarter. In addition, asset liability management repositioning drove a $5.1 billion sale of AFS securities and ~~a decrease in fair value~~termination of $567 million due to the increase in interest rates, partially offset by purchases of $2.3 billion. Securities classified as AFS are carried at fair value with changes in fair value recorded as unrealized gains or lossesrelated swaps, resulting in a ~~separate component~~net pre-tax realized gain of ~~stockholders' equity.~~$49 million, with reinvestment of proceeds from the sale at higher yields.

The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on fixed income securities, carried at fair value, classified as AFS as of ~~June 30, 2021.~~March 31, 2022. The weighted average yield is computed using the amortized cost of fixed income investment securities, which are reported at fair value. For U.S. Treasury securities, U.S. agency debentures and foreign government debt securities, the expected maturity is the actual contractual maturity of the notes. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as AFS typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments. The weighted average yield on mortgage-backed securities is based on prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments.


		June 30, 2021																					March 31, 2022
		Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years					Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years
(Dollars in millions)	(Dollars in millions)	Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		(Dollars in millions)	Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield		Carrying Value		Weighted Average Yield
U.S. Treasury securities	U.S. Treasury securities	$	6,235	1.35	%	$	41	2.08	%	$	6,037	1.33	%	$	157	1.72	%	$	—	—	%	U.S. Treasury securities	$	16,639	1.29	%	$	25	0.10	%	$	16,614	1.29	%	$	—	—	%	$	—	—	%
U.S. agency debentures	U.S. agency debentures	81		1.49		—		—		—		—		81		1.49		—		—		U.S. agency debentures	151		2.07		41		0.75		35		2.41		75		2.56		—		—
Foreign government debt securities	Foreign government debt securities	15		(0.65)		15		(0.65)		—		—		—		—		—		—		Foreign government debt securities	59		(0.81)		59		(0.81)		—		—		—		—		—		—
Residential MBS:	Residential MBS:																					Residential MBS:
Agency-issued MBS	Agency-issued MBS	11,562		1.51		—		—		—		—		—		—		11,562		1.51		Agency-issued MBS	6,846		1.31		—		—		—		—		—		—		6,846		1.31
Agency-issued CMO—fixed rate	Agency-issued CMO—fixed rate	4,424		1.24		—		—		—		—		—		—		4,424		1.24		Agency-issued CMO—fixed rate	860		1.37		—		—		—		—		—		—		860		1.37

Agency-issued CMBS	Agency-issued CMBS	1,559		1.75		—		—		—		—		1,559		1.75		—		—		Agency-issued CMBS	1,436		1.76		—		—		105		1.21		1,331		1.81		—		—
Total	Total	$	23,876	1.43		$	56	1.32		$	6,037	1.33		$	1,797	1.73		$	15,986	1.44		Total	$	25,991	1.32		$	125	(0.12)		$	16,754	1.29		$	1,406	1.85		$	7,706	1.31

HTM Securities

Period-end HTM securities were ~~$60.0~~$98.7 billion at ~~June 30, 2021,~~March 31, 2022, compared to ~~$16.6~~$98.2 billion at December 31, ~~2020,~~2021, an increase of ~~$43.4 billion,~~$512 million, or ~~261.6~~0.5 percent. The ~~$43.4 billion~~$512 million increase in period-end HTM ~~security~~securities balances from December 31, ~~2020~~2021 to ~~June 30, 2021~~March 31, 2022 was driven by purchases of ~~$42.9~~$4.6 billion, ~~and the re-designation of $5.7 billion of AFS securities to HTM securities,~~ partially offset by ~~$5.2~~$4.0 billion in paydowns and maturities. The securities were re-designated for capital management purposes and consisted primarily of agency-issued CMBS and CMO securities with unrealized losses totaling $78 million, which are recorded in AOCI.

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Securities classified as HTM are accounted for at cost with no adjustments for changes in fair value. For securities re-designated as HTM from AFS, the net unrealized gains or losses at the date of transfer will continue to be reported as a separate component of shareholders' equity and amortized over the life of the securities in a manner consistent with the amortization of a premium or discount.

The following table summarizes the remaining contractual principal maturities net of ACL and fully taxable equivalent yields on fixed income investment securities classified as HTM as of ~~June 30, 2021.~~March 31, 2022. Interest income on certain municipal bonds and notes (non-taxable investments) are presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent. The weighted average yield is computed using the amortized cost of fixed income investment securities. For U.S. agency debentures, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for MBS may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. MBS classified as HTM typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower interest rate environments. The ~~weighted average~~expected yield on mortgage-backed securities is based on prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments.

June 30, 2021
Total One Year
or Less After One Year to
Five Years After Five Years to
Ten Years After
Ten Years
(Dollars in millions) Amortized Cost Weighted-
Average
Yield Amortized Cost Weighted-
Average
Yield Amortized Cost Weighted-
Average
Yield Amortized Cost Weighted-
Average
Yield Amortized Cost Weighted-
Average
Yield
U.S. agency debentures $ 552 2.30 % $ 4 2.76 % $ 141 2.55 % $ 407 2.21 % $ — — %
Residential MBS:
Agency-issued MBS 36,724 1.60 3 1.57 9 2.23 449 2.47 36,263 1.59
Agency-issued CMO—fixed rate 4,474 1.23 — — 5 1.76 404 1.62 4,065 1.19
Agency-issued CMO—variable rate 117 0.74 — — — — — — 117 0.74
Agency-issued CMBS 12,492 1.69 — — — — 535 1.98 11,957 1.67
Municipal bonds and notes 5,265 2.33 61 3.00 113 2.46 833 2.29 4,258 2.36
Corporate bonds 373 1.93 — — — — 373 1.93 — —
Total $ 59,997 1.71 $ 68 2.92 $ 268 2.49 $ 3,001 2.48 $ 56,660 1.68

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	March 31, 2022
	Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years
(Dollars in millions)	Net Carry Value		Weighted Average Yield		Net Carry Value		Weighted Average Yield		Net Carry Value		Weighted Average Yield		Net Carry Value		Weighted Average Yield		Net Carry Value		Weighted Average Yield
U.S. agency debentures	$	536	1.97	%	$	4	2.34	%	$	109	2.50	%	$	423	1.83	%	$	—	—	%
Residential MBS:
Agency-issued MBS	63,517		1.54		—		1.49		6		2.34		1,181		1.37		62,330		1.54
Agency-issued CMO—fixed rate	11,231		1.18		—		—		31		1.62		266		1.62		10,934		1.16
Agency-issued CMO—variable rate	93		0.74		—		—		—		—		—		—		93		0.74
Agency-issued CMBS	15,141		1.64		32		0.36		178		0.82		970		1.93		13,961		1.63
Municipal bonds and notes	7,483		2.82		37		2.60		187		2.44		1,231		2.74		6,028		2.85
Corporate bonds	706		1.86		—		—		52		1.70		654		1.87		—		—
Total	$	98,707	1.61		$	73	1.60		$	563	1.82		$	4,725	2.12		$	93,346	1.59

Portfolio duration is a standard measure used to approximate changes in the market value of fixed income instruments due to a change in market interest rates. The measure is an estimate based on the level of current market interest rates, expectations for changes in the path of forward rates and the effect of forward rates on mortgage prepayment speed assumptions. As such, portfolio duration will fluctuate with changes in market interest rates. Changes in portfolio duration are also impacted by changes in the mix of longer versus shorter term-to-maturity securities. The estimated weighted-average duration of our fixed income investment securities portfolio was ~~4.5~~4.9 and ~~3.7~~4.0 years at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The weighted-average duration of our total fixed income securities portfolio including the impact of our fair value swaps was ~~3.9~~4.8 years at ~~June 30, 2021. We are focused on shortening AFS portfolio duration to approximately two years to mitigate OCI risk while buying three- to five-year duration HTM securities to support portfolio yields.~~March 31, 2022. The weighted-average duration of our AFS securities portfolio was ~~4.2~~3.7 years at ~~June 30, 2021~~March 31, 2022 and ~~3.7~~3.5 years at December 31, ~~2020.~~2021. The weighted-average duration of our AFS securities portfolio including the impact of our fair value swaps was ~~2.4~~3.1 years at ~~June 30, 2021.~~March 31, 2022. The weighted-average duration of our HTM securities portfolio was ~~4.6~~5.2 years at ~~June 30, 2021~~March 31, 2022 and ~~3.7~~4.1 years at December 31, ~~2020.~~ 2021.We continue to invest excess on-balance sheet liquidity in high-quality securities (agency MBS/CMO/CMBS, municipal and corporate securities)~~, primarily classified as HTM.~~

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Non-Marketable and Other Equity Securities

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD-SVB, debt funds, private and public portfolio companies, including public equity securities held as a result of equity warrant assets exercised, and qualified affordable housing projects. Included in our non-marketable and other equity securities carried under fair value accounting are amounts that are attributable to noncontrolling interests. We are required under GAAP to consolidate 100% of these investments that we are deemed to control, even though we may own less than 100% of such entities. See below for a summary of the carrying value (as reported) of non-marketable and other equity securities compared to the amounts attributable to SVBFG.

Period-end non-marketable and other equity securities were ~~$1.9~~$2.6 billion ($~~1.6~~2.2 billion net of noncontrolling interest) at ~~June 30, 2021~~March 31, 2022 compared to ~~$1.8~~$2.5 billion ($~~1.6~~2.2 billion net of noncontrolling interest) at December 31, ~~2020,~~2021, an increase of ~~$141~~$62 million, or ~~7.8~~2.4 percent. The following table summarizes the carrying value (as reported) of non-marketable and other equity securities compared to the amounts attributable to SVBFG (which generally represents the carrying value times our ownership percentage) at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		(Dollars in millions)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Non-marketable and other equity securities:	Non-marketable and other equity securities:									Non-marketable and other equity securities:
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):									Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments (1)	Consolidated venture capital and private equity fund investments (1)	$	108	$	29	$	89	$	23	Consolidated venture capital and private equity fund investments (1)	$	196	$	102	$	130	$	36
Unconsolidated venture capital and private equity fund investments (2)	Unconsolidated venture capital and private equity fund investments (2)	187		187		185		185		Unconsolidated venture capital and private equity fund investments (2)	210		210		208		208
Other investments without a readily determinable fair value (3)	Other investments without a readily determinable fair value (3)	79		79		61		61		Other investments without a readily determinable fair value (3)	169		169		164		164
Other equity securities in public companies (fair value accounting (4)	Other equity securities in public companies (fair value accounting (4)	107		107		281		281		Other equity securities in public companies (fair value accounting (4)	55		55		117		117
Non-marketable securities (equity method accounting) (5):	Non-marketable securities (equity method accounting) (5):									Non-marketable securities (equity method accounting) (5):
Venture capital and private equity fund investments	Venture capital and private equity fund investments	544		326		362		215		Venture capital and private equity fund investments	721		426		671		397
Debt funds	Debt funds	7		7		5		5		Debt funds	5		5		5		5
Other investments	Other investments	215		215		203		203		Other investments	292		292		294		294
Investments in qualified affordable housing projects, net	Investments in qualified affordable housing projects, net	696		696		616		616		Investments in qualified affordable housing projects, net	957		957		954		954
Total non-marketable and other equity securities	Total non-marketable and other equity securities	$	1,943	$	1,646	$	1,802	$	1,589	Total non-marketable and other equity securities	$	2,605	$	2,216	$	2,543	$	2,175

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(1)The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

June 30, 2021 December 31, 2020
(Dollars in millions) Carrying value (as reported) Amount attributable to SVBFG Carrying value (as reported) Amount attributable to SVBFG
Strategic Investors Fund, LP $ 5 $ 1 $ 5 $ 1
Capital Preferred Return Fund, LP 51 11 50 11
Growth Partners, LP 52 17 34 11
Total consolidated venture capital and private equity fund investments $ 108 $ 29 $ 89 $ 23


	March 31, 2022				December 31, 2021
(Dollars in millions)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Strategic Investors Fund, LP	$	3	$	—	$	2	$	—
Capital Preferred Return Fund, LP	61		13		61		13
Growth Partners, LP	65		22		67		23
Redwood Evergreen Fund, LP	67		67		—		—

Total consolidated venture capital and private equity fund investments	$	196	$	102	$	130	$	36

(2)The carrying value represents investments in ~~157~~150 and ~~162~~150 funds (primarily venture capital funds) at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, where our ownership interest is typically less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships' operating activities and financial policies. Our unconsolidated venture capital and private equity fund investments are carried at fair value based on the fund investments' net asset values per share as obtained from the general partners of the funds. For each fund investment, we adjust the net asset value per share for differences between our measurement date and the date of the fund ~~investment��s~~investment’s net asset value by using the most recently available financial information from the investee general partner, for example ~~March~~December 31st for our ~~June 30~~March 31thst consolidated financial statements, adjusted for any

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contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

(3)Investments classified as "Other investments without a readily determinable fair value" include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted. For further details on the carrying value of these investments refer to Note 5 — “Investment Securities" of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

(5)The following table shows the carrying value and our ownership percentage of each investment at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (equity method accounting):


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		(Dollars in millions)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Venture capital and private equity fund investments:	Venture capital and private equity fund investments:									Venture capital and private equity fund investments:
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	$	4	$	4	$	4	$	3	Strategic Investors Fund II, LP	$	3	$	3	$	3	$	3
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	28		23		16		13		Strategic Investors Fund III, LP	22		18		25		21
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	36		30		25		21		Strategic Investors Fund IV, LP	34		28		36		30
Strategic Investors Fund V, LP	Strategic Investors Fund V, LP	87		46		67		35		Strategic Investors Fund V, LP	90		48		87		45
CP II, LP (1)	CP II, LP (1)	8		5		8		5		CP II, LP (1)	2		1		2		1
Other venture capital and private equity fund investments	Other venture capital and private equity fund investments	381		218		242		138		Other venture capital and private equity fund investments	570		328		518		298
Total venture capital and private equity fund investments	Total venture capital and private equity fund investments	$	544	$	326	$	362	$	215	Total venture capital and private equity fund investments	$	721	$	426	$	671	$	398
Debt funds:	Debt funds:									Debt funds:
Gold Hill Capital 2008, LP (2)	Gold Hill Capital 2008, LP (2)	$	5	$	5	$	4	$	4	Gold Hill Capital 2008, LP (2)	$	4	$	4	$	4	$	4
Other debt funds	Other debt funds	2		2		1		1		Other debt funds	1		1		1		1
Total debt funds	Total debt funds	$	7	$	7	$	5	$	5	Total debt funds	$	5	$	5	$	5	$	5
Other investments:	Other investments:									Other investments:
SPD Silicon Valley Bank Co., Ltd.	SPD Silicon Valley Bank Co., Ltd.	$	115	$	115	$	115	$	115	SPD Silicon Valley Bank Co., Ltd.	$	156	$	156	$	154	$	154
Other investments	Other investments	100		100		88		88		Other investments	136		136		140		140
Total other investments	Total other investments	$	215	$	215	$	203	$	203	Total other investments	$	292	$	292	$	294	$	294

(1)Our ownership includes direct ownership interest of 1.3 percent and indirect ownership interest of 3.8 percent through our investments in Strategic Investors Fund II, LP.

(2)Our ownership includes direct ownership interest of 11.5 percent in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0 percent.

Volcker Rule

The Volcker Rule prohibits, subject to certain exceptions, a banking entity, such as the Company, from sponsoring, investing in, or having certain relationships with covered funds. Under the currently effective regulations implementing the Volcker Rule, covered funds are defined to include many venture capital and private equity funds.

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In June 2017, we received notice that the Federal Reserve approved the Company’s application for an extension of the permitted conformance period for the Company’s investments in “illiquid” covered funds (“Restricted Volcker Investments”). The approval extends the deadline by which the Company must sell, divest, restructure or otherwise conform such investments to the provisions of the Volcker Rule by the earlier of (i) July 21, 2022, or (ii) the date by which each fund matures by its terms or is otherwise conformed to the Volcker Rule.

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There have been various amendments to the Volcker Rule in recent years. In particular, certain amendments that became effective October 1, 2020, provide for, among other things, the adoption of new exclusions from the definition of “covered fund” for venture capital funds and credit funds that meet certain criteria. As a result of these amendments, we believe that none of the Restricted Volcker Investments will be required to be disposed of or will otherwise conform to the Volcker Rule requirements. We expect that all of our Restricted Volcker Investments will (i) qualify for these new exclusions; (ii) otherwise be excluded from the definition of "covered fund"; or (iii) be subject to a liquidation or dissolution process (For more information about the Volcker Rule, see “Business—Supervision and Regulation” under Part 1, Item 1 of our ~~2020~~2021 Form 10-K.)

Loans

Loans at amortized cost basis increased by ~~$5.6~~$2.4 billion to ~~$50.8~~$68.7 billion at ~~June 30, 2021,~~March 31, 2022, compared to ~~$45.2~~$66.3 billion at December 31, ~~2020.~~2021. Unearned income was ~~$248~~$207 million at ~~June 30, 2021~~March 31, 2022 and ~~$226~~$250 million at December 31, ~~2020.~~2021. The increase in period-end loans was driven primarily by ~~growth in~~ our Global Fund Banking ~~and Private Bank as well as~~portfolio, with continued growth in ~~the~~our Technology and Life Science/Healthcare and Private Bank loan portfolios. ~~This growth was partially offset by a decrease in our SBA loans driven by an acceleration of forgiveness of these loans during the second quarter.~~

The breakdown of total loans and loans as a percentage of total loans by ~~risk-based segment~~class of financing receivable is as follows:


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(Dollars in millions)	(Dollars in millions)	Amount		Percentage		Amount		Percentage		(Dollars in millions)	Amount		Percentage		Amount		Percentage
Global fund banking	Global fund banking	$	30,630	60.3	%	$	25,543	56.5	%	Global fund banking	$	39,344	57.3	%	$	37,958	57.3	%
Investor dependent:	Investor dependent:									Investor dependent:
Early stage	Early stage	1,565		3.1		1,486		3.3		Early stage	1,707		2.5		1,593		2.4
Mid stage		1,708		3.4		1,565		3.5
Later stage		2,055		4.0		1,921		4.2
Growth stage										Growth stage	4,032		5.9		3,951		5.9
Total investor dependent	Total investor dependent	5,328		10.5		4,972		11.0		Total investor dependent	5,739		8.4		5,544		8.3
Cash flow dependent:
Sponsor led buyout		1,917		3.8		1,989		4.4
Cash flow dependent- SLBO										Cash flow dependent- SLBO	1,826		2.6		1,798		2.7
Innovation C&I										Innovation C&I	7,260		10.6		6,673		10.1
Private bank										Private bank	9,235		13.4		8,743		13.2
CRE										CRE	2,595		3.8		2,670		4.0
Premium wine										Premium wine	997		1.4		985		1.5
Other C&I										Other C&I	1,175		1.7		1,257		1.9
Other	Other	2,926		5.8		2,945		6.5		Other	319		0.5		317		0.5
Total cash flow dependent		4,843		9.6		4,934		10.9
Private bank		5,297		10.4		4,901		10.9
Balance sheet dependent		2,804		5.5		2,191		4.8
Premium wine		1,002		2.0		1,053		2.3
Other		7		—		28		0.1
SBA loans		843		1.7		1,559		3.5
PPP										PPP	175		0.3		331		0.5
Total loans	Total loans	$	50,754	100.0	%	$	45,181	100.0	%	Total loans	$	68,665	100.0	%	$	66,276	100.0	%

For additional details on our loan classes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Loans” under Part II, Item 7 of our 2021 Form 10-K.

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Loan Concentration

The following table provides a summary of total loans by size and ~~risk-based segment.~~class of financing receivable. The breakout below is based on total client balances (individually or in the aggregate) as of ~~June 30, 2021 to any single client:~~March 31, 2022:


		June 30, 2021													March 31, 2022
(Dollars in millions)	(Dollars in millions)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		(Dollars in millions)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Global fund banking	Global fund banking	$	1,065	$	1,355	$	3,314	$	2,709	$	22,193	$	30,636	Global fund banking	$	1,117	$	1,555	$	3,385	$	3,457	$	29,835	$	39,349
Investor dependent:	Investor dependent:													Investor dependent:
Early stage	Early stage	1,686		268		107		22		—		2,083		Early stage	1,317		334		144		—		—		1,795
Mid stage		714		523		345		101		128		1,811
Later stage		270		570		664		321		270		2,095
Total investor dependent		2,670		1,361		1,116		444		398		5,989
Cash flow dependent:
Sponsor led buyout		18		72		463		432		940		1,925
Other		282		129		578		431		1,621		3,041
Total cash flow dependent		300		201		1,041		863		2,561		4,966
Growth stage														Growth stage	858		1,109		1,084		363		626		4,040
Total Investor Dependent														Total Investor Dependent	$	2,175	$	1,443	$	1,228	$	363	$	626	$	5,835
Cash flow dependent - SLBO														Cash flow dependent - SLBO	6		29		235		530		1,026		1,826
Innovation C&I														Innovation C&I	433		412		979		887		4,580		7,291
Private bank	Private bank	3,725		615		511		160		287		5,298		Private bank	6,862		1,106		875		186		206		9,235
Balance sheet dependent		231		253		492		351		1,499		2,826
CRE														CRE	816		658		777		274		70		2,595
Premium wine	Premium wine	239		271		251		121		142		1,024		Premium wine	213		289		229		140		134		1,005
Other C&I														Other C&I	366		173		230		278		166		1,213
Other	Other	—		5		10		—		—		15		Other	89		94		113		20		—		316
Total loans (1)	Total loans (1)	$	8,230	$	4,061	$	6,735	$	4,648	$	27,080	$	50,754	Total loans (1)	$	12,077	$	5,759	$	8,051	$	6,135	$	36,643	$	68,665

(1)Included in total loans at amortized cost is approximately ~~$843~~$175 million in PPP loans. The PPP loans consist of loans across all of our ~~risk-based segments.~~classes of financing receivables.

At ~~June 30, 2021,~~March 31, 2022, loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$31.7~~$42.8 billion, ~~or 62.5 percent~~ of our total loan portfolio. These loans represented ~~615~~775 clients, and of these loans, ~~$43~~$21 million were on nonaccrual status as of ~~June 30, 2021.~~March 31, 2022.

The following table provides a summary of loans by size and ~~risk-based segment.~~class of financing receivable. The breakout below is based on total client balances (individually or in the aggregate) as of December 31, ~~2020:~~2021:


		December 31, 2020													December 31, 2021
(Dollars in millions)	(Dollars in millions)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		(Dollars in millions)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Global fund banking	Global fund banking	$	1,052	$	1,360	$	2,637	$	2,777	$	17,723	$	25,549	Global fund banking	$	996	$	1,494	$	2,905	$	3,163	$	29,405	$	37,963
Investor dependent:	Investor dependent:													Investor dependent:
Early stage	Early stage	1,896		221		101		28		—		2,246		Early stage	1,392		219		124		—		—		1,735
Mid stage		814		493		278		95		133		1,813
Later stage		282		597		693		270		174		2,016
Growth stage														Growth stage	855		1,068		1,122		374		551		3,970
Total investor dependent	Total investor dependent	2,992		1,311		1,072		393		307		6,075		Total investor dependent	2,247		1,287		1,246		374		551		5,705
Cash flow dependent:
Sponsor led buyout		18		67		546		654		714		1,999
Other		401		228		536		650		1,486		3,301
Total cash flow dependent		419		295		1,082		1,304		2,200		5,300
Cash flow dependent - SLBO														Cash flow dependent - SLBO	7		31		287		508		965		1,798
Innovation C&I														Innovation C&I	462		432		920		912		4,018		6,744
Private bank	Private bank	3,505		597		319		95		385		4,901		Private bank	6,674		950		735		217		167		8,743
Balance sheet dependent		231		333		461		289		926		2,240

CRE														CRE	823		652		869		246		80		2,670
Premium wine	Premium wine	242		273		300		121		145		1,081		Premium wine	215		267		269		124		120		995
Other C&I														Other C&I	444		169		262		217		249		1,341
Other	Other	—		19		16		—		—		35		Other	93		123		101		—		—		317
Total loans (1)	Total loans (1)	$	8,441	$	4,188	$	5,887	$	4,979	$	21,686	$	45,181	Total loans (1)	$	11,961	$	5,405	$	7,594	$	5,761	$	35,555	$	66,276

(1)Included in total loans at amortized cost is approximately ~~$1.6 billion~~$331 million in PPP loans. The PPP loans consist of loans from all ~~risk-based segments.~~

classes of financing receivables.

At December 31, ~~2020,~~2021, loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$26.7~~$41.3 billion, or ~~59.0~~62 percent of our total loan portfolio. These loans represented ~~544~~768 clients, and of these loans, ~~$65~~$21 million were on nonaccrual status as of December 31, ~~2020.~~2021.

State Concentrations

Approximately 29 percent of our outstanding total loan balances as of March 31, 2022 were to borrowers based in California, compared to 30 percent as of December 31, 2021. Borrowers in New York increased to 11 percent at March 31, 2022, compared to 10 percent as of December 31, 2021, and borrowers in Massachusetts represented approximately 12 percent of total loan balances at both March 31, 2022 and December 31, 2021. Other than California, New York, and

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~~Our three main market segments include (i) Global Fund Banking, (ii) technology and life science/healthcare and (iii) SVB Private Bank.~~

~~(i) Global Fund Banking~~

~~Our Global Fund Banking~~Massachusetts, there are no additional states with loan ~~portfolio includes financial services~~balances greater than or equal to ~~clients in the private equity/venture capital community. Our lending to private equity/venture capital firms and funds represented 60.3~~10 percent of total loans ~~at June 30,~~as of March 31, 2022.

See generally “Risk Factors–Credit Risks” set forth under Part I, Item 1A in our 2021 Form 10-K and ~~56.5 percent at December 31, 2020. The vast majority~~"Risk Factors" under Part II, Item 1A of this portfolio consists of capital call lines of credit, the repayment of which is dependent on the payment of capital calls by the underlying limited partner investors in the funds managed by these firms. These facilities are generally governed by meaningful financial covenants oriented towards ensuring that the funds' remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are typically secured by an assignment of the general partner's right to call capital from the fund's limited partner investors.report.

~~(ii) Technology and Life Science/Healthcare~~

Our technology and life science/healthcare loan portfolios include loans to clients at the various stages of their life cycles. The risk-based segments for our technology and life science/healthcare market segments are classified as investor dependent, cash flow dependent or balance sheet dependent for reporting purposes.

Investor dependent loans represented 10.5 percent of total loans at June 30, 2021 and 11.0 percent at December 31, 2020. These loans are made to companies in both our Accelerator (early-stage) and Growth practices (mid-stage and later-stage).

Cash flow dependent loans, which include sponsor led buyout lending, represented 9.6 percent of total loans at June 30, 2021 and 10.9 percent at December 31, 2020. Sponsor led buyout loans represented 3.8 percent of total loans at June 30, 2021 and 4.4 percent at December 31, 2020.

Balance sheet dependent loans, which include asset-based loans, represented 5.5 percent of total loans at June 30, 2021 and 4.8 percent at December 31, 2020. Working capital lines and accounts receivable financing, both part of our asset-based lending, each represented one percent and half a percent of total loans, respectively, at both June 30, 2021 and December 31, 2020.

~~(iii) SVB Private Bank~~

Our SVB Private Bank clients are primarily executive leaders and senior investment professionals in the innovation economy. Our lending to SVB Private Bank clients represented 10.4 percent of total loans at June 30, 2021 and 10.9 percent at December 31, 2020. Many of our Private Bank products are secured by real estate, which represented 83.3 percent of this portfolio at June 30, 2021; these products include mortgage loans, owner occupied commercial mortgage loans, home equity lines of credit and other secured lending products such as real estate secured loans to eligible employees through our EHOP. The remaining balance of our Private Bank portfolio consists of restricted and private stock loans, capital call lines of credit, lines of credit against liquid assets and other secured and unsecured lending products.

Paycheck Protection Program

We accepted applications under the PPP administered by the SBA under the CARES ~~Act, as amended by the Economic Aid~~ Act and originated loans to qualified small businesses until the loan origination phase of the PPP ended on June 30, 2021, set forth under the PPP Extension Act of 2021. Under the terms of the program, loans funded through the PPP are eligible to be forgiven if certain requirements are met, including using the funds for certain costs relating to payroll, healthcare and qualifying mortgage interest, rent and utility payments. Eligible expenses also include covered operations expenditures, covered property damage costs, covered supplier costs and covered worker protection expenditures. To the extent not forgiven, loans are subject to certain terms including, among others, the following: maximum two-year term for loans issued before June 5, 2020 (unless borrower and lender agree otherwise); a maximum five-year term for loans issued on or after June 5, 2020; an interest rate of 1.0%; deferral of loan payments until a loan forgiveness decision is rendered or until 10 months after the end of a borrower’s forgiveness covered period; and no requirement for any collateral or personal guarantees. PPP borrowers are not required to pay any fees to the government or the lender, and the loans may be repaid by the borrower at any time. The SBA, however, will pay lenders a processing fee based on the size of the PPP loan, ranging from 1% to 5% of the loan for loans made before the enactment of the Economic Aid Act, and thereafter, a processing fee of (1) the lesser of 50% of the loan or $2,500 for loans of not more than $50,000, (2) 5% of the loan for loans above $50,000 but not more than $350,000, and (3) 3% of the loan for loans above $350,000 (and, in case of the first draw PPP loans only, a fee of 1% for the loans at or above $2,000,000). Additional loans were issuable up until June 30, 2021, pursuant to the PPP Extension Act of 2021, and qualifying PPP borrowers were able to

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~~apply for second draw loans in an amount of up to $2 million.~~ We continued to participate in the forgiveness stage of the PPP inthrough the ~~second~~first quarter of ~~2021, including the second draw loan and the forgiveness stages of the program.~~2022.

As of ~~June 30, 2021,~~March 31, 2022, we have outstanding PPP loans in the amount of ~~$843~~$175 million, as approved by the ~~SBA.~~SBA, compared to $331 million at December 31, 2021. This funded amount reflects repayments received as of such date.

Loan Deferral Programs

In April 2020, we implemented three loan payment deferral programs targeted to assist borrowers who were the most impacted by the COVID-19 pandemic. These programs included relief for venture-backed, private bank and wine borrowers who met certain criteria. The three-month private bank and wine deferral programs ended, and payments resumed, in the third quarter of 2020. The six-month venture debt and private bank deferral programs ended, and payments resumed, in the fourth quarter of 2020 for a majority of participants. As of ~~June 30,~~March 31, 2022, no loan modifications remained active under these programs. As of December 31, 2021, loans modified under these programs had outstanding balances of ~~$227~~$10 million, ~~all~~which consisted entirely of ~~which is for~~ venture-backed ~~borrowers. These amounts reflect repayments received as of June 30, 2021.~~borrowers who lengthened their existing interest-only payment period under the deferral program.

For ~~loans modified under these~~additional details on our PPP and loan deferral programs, ~~in accordance with the provisions~~see “Management’s Discussion and Analysis of ~~Section 4013~~Financial Condition and Results of the CARES Act, we elected to not apply TDR classification to borrowers who were current as of December 31, 2019. In addition, for loans modified under these programs that did not meet the CARES Act criteria, we applied the guidance in an interagency statement issued by bank regulatory agencies. Using this guidance, we may find that borrowers are not experiencing financial difficulty that may otherwise result in a TDR classification, in accordance with ASC Subtopic 310-40, if loan modifications are performed in response to the COVID-19 pandemic, provide short-term loan payment deferrals (e.g. six months in duration) and are granted to borrowers who were current as of the implementation date of the loan modification program. We evaluated all loans modified under these programs against the CARES Act and interagency guidance, as applicable, and determined the loan modifications would not be considered TDRs. We did not defer interest income recognition during periods of payment deferral, nor did any qualifying modification trigger nonaccrual status.

~~State Concentrations~~

Approximately 27 percent of our outstanding total loan balances as of June 30, 2021 were to borrowers based in California compared to 26 percent as of December 31, 2020. Additionally, as of June 30, 2021, borrowers in New York increased to 11 percent compared to 10 percent as of December 31, 2020. Borrowers in Massachusetts decreased to 9 percent at June 30, 2021, compared to 10 percent as of December 31, 2020. Other than California and New York, as of June 30, 2021 there are no states with loan balances greater than or equal to 10 percent.

~~See generally “Risk Factors–Credit Risks” set forth under Part I, Item 1A in our 2020 Form 10-K and "Risk Factors"~~Operations - Loans” under Part II, Item 1A7 of ~~this report.~~

our 2021 Form 10-K.

Credit Quality Indicators

Our total criticized loans and nonaccrual loans represented 23 percent of our total loans as of ~~June 30, 2021~~both March 31, 2022 and ~~3 percent at~~ December 31, ~~2020.~~2021. Criticized and nonaccrual loans to early-stage clients represented ~~18 and 15~~13 percent of our total criticized and nonaccrual loan balances at ~~June 30, 2021~~both March 31, 2022 and December 31, ~~2020, respectively.~~2021. Loans to early-stage investor dependent clients represent a relatively small percentage of our overall portfolio at 32 percent of total loans at ~~both June 30, 2021~~March 31, 2022 and 2 percent at December 31, ~~2020.~~2021. It is common for an early-stage client’s remaining liquidity to fall temporarily below the threshold for a pass-rated credit during its capital-raising period for a new round of funding. Based on our experience, for most early-stage clients, this situation typically lasts one to two quarters and generally resolves itself with a subsequent round of venture funding, though there are exceptions, from time to time. As a result, we expect that each of our early-stage clients will reside in our criticized portfolio during a portion of their life cycle.

WeAs of March 31, 2022, we have identified the following risks to credit quality: (i) increased COVID-19 exposure from CRE loans and (ii) larger Growth Stage and Innovation C&I loan sizes.

(i) Increased COVID-19 exposure from CRE loans - Commercial real estate is generally more impacted by restrictions to reduce the spread of COVID-19 and transitions to hybrid work environments. This risk is mitigated by the reserves held for this loan class and our limited overall exposure, with commercial real estate representing only 4 percent of total loans at March 31, 2022.

(ii) Larger Growth Stage and Innovation C&I loan sizes - The growth of our balance sheet and our clients continues to increase the number of large loans, which may introduce greater volatility in credit metrics.

Additionally, we have identified the following factors that could have a positive impact on credit quality: (i) recovering business activity, (ii) strong positioning of Technology and Life Science/Healthcare clients and (iii) an improved risk profile of our loan portfolio.

(i) Recovering business activity - As COVID-19 restrictions ease, borrowers continue to ~~monitor our loan portfolio for~~benefit from resuming business activities.

(ii) Strong positioning of Technology and Life Science/Healthcare clients - Record venture capital investment over the ~~impact of the COVID-19 pandemic. Vaccine distributions~~past two years has extended clients' runway, and ~~re-openings have contributed to an improved economic environment, although~~ we continue to ~~watch~~see significant dry powder available in the ~~emergence~~market.

(iii) Improved risk profile of ~~COVID-19 variants and continued spread. Our~~loan portfolio - As described above, our Investor Dependent - Early Stage class, which historically has been the most vulnerable loan class with the most losses, is now only 2 percent of total loans. Furthermore, 71 percent of total loans are now in our Global Fund Banking and Private Bank ~~portfolios continue to~~classes, which have ~~strong credit performance, which is consistent with the historically~~ low credit ~~losses we have typically experienced. Wine clients' sales have improved with re-openings, but we are cautious of the potential for fires and crop~~ loss as a result of the current drought and historic high temperatures in the western United States. We have seen robust venture capital investment activity in the technology and life science/healthcare sectors, supporting ongoing improvement of the credit quality of our clients in those spaces.experience.

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Additionally, we have minimal direct exposure to Russia and Ukraine and accordingly we do not currently expect any material impact to our credit quality from the ongoing conflict.However, a continuation of the conflict or a deterioration in global economic or political conditions may influence U.S. economic conditions, which in turn could have an impact on credit quality.

We continue to monitor the current environment to evaluate the impact of the above on our portfolio's credit quality and to identify the emergence of additional factors.

Credit Quality, Allowance for Credit Losses and Nonperforming Assets

Nonperforming assets consist of loans on nonaccrual status, loans past due 90 days or more still accruing interest and OREO and other foreclosed assets. We measure all loans placed on nonaccrual status for impairment based on the fair value of the underlying collateral or the net present value of the expected cash flows. The table below sets forth certain data and ratios between nonperforming loans, nonperforming assets and the ACL for loans and unfunded credit commitments:


(Dollars in millions)	(Dollars in millions)	June 30, 2021			December 31, 2020			(Dollars in millions)	March 31, 2022			December 31, 2021
Nonperforming, past due, and restructured loans:	Nonperforming, past due, and restructured loans:							Nonperforming, past due, and restructured loans:
Nonaccrual loans	Nonaccrual loans	$	79		$	104		Nonaccrual loans	$	70		$	84
Loans past due 90 days or more still accruing interest	Loans past due 90 days or more still accruing interest	3			—			Loans past due 90 days or more still accruing interest	2			7
Total nonperforming loans	Total nonperforming loans	82			104			Total nonperforming loans	72			91
OREO and other foreclosed assets	OREO and other foreclosed assets	1			1			OREO and other foreclosed assets	1			1
Total nonperforming assets	Total nonperforming assets	$	83		$	105		Total nonperforming assets	$	73		$	92
Performing TDRs	Performing TDRs	$	3		$	5		Performing TDRs	$	36		$	40
Nonaccrual loans as a percentage of total loans								Nonaccrual loans as a percentage of total loans	0.10		%	0.13		%
Nonperforming loans as a percentage of total loans	Nonperforming loans as a percentage of total loans	0.16		%	0.23		%	Nonperforming loans as a percentage of total loans	0.10		%	0.14
Nonperforming assets as a percentage of total assets	Nonperforming assets as a percentage of total assets	0.05			0.09			Nonperforming assets as a percentage of total assets	0.03			0.04
ACL for loans		$	396		$	448
ACL for loans (1)								ACL for loans (1)	$	421		$	422
As a percentage of total loans	As a percentage of total loans	0.78		%	0.99		%	As a percentage of total loans	0.61		%	0.64		%
As a percentage of total nonperforming loans	As a percentage of total nonperforming loans	482.93			429.54			As a percentage of total nonperforming loans	584.72			463.74
ACL for nonaccrual loans		$	38		$	54
ACL for nonaccrual loans (1)								ACL for nonaccrual loans (1)	$	20		$	35
As a percentage of total loans	As a percentage of total loans	0.07		%	0.12		%	As a percentage of total loans	0.03		%	0.05		%
As a percentage of total nonperforming loans	As a percentage of total nonperforming loans	46.34			51.83			As a percentage of total nonperforming loans	27.78			38.46
ACL for total performing loans		$	358		$	394
ACL for total performing loans (1)								ACL for total performing loans (1)	$	401		$	387
As a percentage of total loans	As a percentage of total loans	0.71		%	0.87		%	As a percentage of total loans	0.58		%	0.58		%
As a percentage of total performing loans	As a percentage of total performing loans	0.71			0.87			As a percentage of total performing loans	0.58			0.58
Total loans	Total loans	$	50,754		$	45,181		Total loans	$	68,665		$	66,276
Total performing loans	Total performing loans	50,672			45,077			Total performing loans	68,593			66,185
ACL for unfunded credit commitments (1)		120			121
ACL for unfunded credit commitments (2)								ACL for unfunded credit commitments (2)	175			171
As a percentage of total unfunded credit commitments	As a percentage of total unfunded credit commitments	0.33		%	0.38		%	As a percentage of total unfunded credit commitments	0.39		%	0.39		%
Total unfunded credit commitments (2)		$	36,385		$	31,982
Total unfunded credit commitments (3)								Total unfunded credit commitments (3)	$	44,685		$	44,016

(1)The "ACL for loans" at December 31, 2021 includes an initial allowance of $66 million related to acquired Boston Private loans, of which $2 million was related to nonaccrual loans. See “Provision for Credit Losses” for a detailed discussion of the changes to the allowance.

(2)The “ACL for unfunded credit commitments” is included as a component of other liabilities and any provision is included in the “provision for credit losses” in the statement of income. At December 31, 2021, this includes an initial allowance of $2 million related to acquired Boston Private commitments. See “Provision for Credit Losses” for a detailed discussion of the changes to the allowance.

~~(2)~~(3)Includes unfunded loan commitments and letters of credit.

To determine the ACL for performing loans as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we utilized three scenarios, on a weighted basis, from Moody's Analytics ~~June 2021~~March 2022 and December ~~2020~~2021 forecasts, respectively, in our expected lifetime loss estimate. The baseline scenario, which carries the highest weighting of 40 percent in both periods, reflected an unemployment rate of ~~5.8~~3.9 percent and a housing price index growth rate of 8.5 percent as of ~~June 30, 2021, as a result of business re-openings and the effect of government aid programs during the first half of 2021,~~March 31, 2022, compared to ~~6.7~~4.3 percent and 5.9 percent as of December 31, ~~2020.~~2021, respectively. The baseline ~~scenario also included a~~scenario's GDP growth rate ~~of 10.9 percent and 4.0~~dropped to 0.7 percent as of ~~June 30, 2021 and~~March 31, 2022, compared to 6.8 percent at December 31, ~~2020, respectively,~~2021, reflecting ~~ongoing expected economic recovery as~~ the impact of ~~the COVID-19 pandemic generally appears to be subsiding.~~current geopolitical conditions and increased energy prices. In addition to the baseline, we also utilized a more favorable (Moody's S1, Upside) and less favorable (Moody's S3, Downside) economic forecast scenario, each weighted at 30 percent at both ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics scenarios, we addressed the risk through management's qualitative adjustments to our ACL for performing loans.

Our ACL for loans as a percentage of total loans decreased 213 basis points to ~~0.78~~0.61 percent at ~~June 30, 2021,~~March 31, 2022, compared to ~~0.99~~0.64 percent at December 31, ~~2020.~~2021. The 213 basis points decrease was due primarily to a 162 basis point decrease for our ~~performing loans reserve as a percentage of total loans and a 5 basis point decrease for our nonaccrual individually assessed loans.~~

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nonaccrual individually assessed loans as a percentage of total loans. The decreases were due primarily to repayments and credit upgrades within our nonaccrual loans portfolio. These reductions were partially offset by additional reserves for nonaccrual loans, driven primarily by our Investor Dependent and Private Bank portfolios. For a detailed discussion of changes in the current period's reserve, see "Provision for Credit Losses."

Our ACL for performing loans was ~~$358~~$401 million at ~~June 30, 2021,~~March 31, 2022, compared to ~~$394~~$387 million at December 31, ~~2020.~~2021. The ~~$36~~$14 million ~~decrease~~increase was driven primarily by loan growth. For a detailed discussion of changes in the ~~improved economic scenarios in our forecast models, reflective of the ongoing improvement of the economic outlooks as the impact of the COVID-19 pandemic generally appears to be subsiding.~~current period's allowance, see "Provision for Credit Losses."

The following table presents a summary of changes in nonaccrual loans for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Balance, beginning of period	Balance, beginning of period	$	90	$	51	$	104	$	103	Balance, beginning of period	$	84	$	104
Additions	Additions	9		66		14		102		Additions	5		5
Paydowns and other reductions	Paydowns and other reductions	(9)		(18)		(18)		(81)		Paydowns and other reductions	(16)		(9)
Charge-offs	Charge-offs	(11)		(5)		(21)		(30)		Charge-offs	(3)		(10)
Balance, end of period	Balance, end of period	$	79	$	94	$	79	$	94	Balance, end of period	$	70	$	90

Our nonaccrual loan balance decreased by ~~$25~~$14 million to ~~$79~~$70 million at ~~June 30, 2021,~~March 31, 2022, compared to ~~$104~~$84 million at December 31, ~~2020.~~2021. The decrease was ~~driven~~due primarily ~~by $18~~to $16 million in repayments and ~~$21 million in charge-offs,~~credit upgrades, which were partially offset by $5 million of new nonaccrual loans. Of the $16 million in reductions, $9 million was driven by clients in our Technology and Life Science/Healthcare portfolios, including $2 million from one Investor Dependent - Early Stage client. The $5 million of new nonaccrual loans ~~of $14 million. Repayments were~~was driven primarily by clients in our Investor Dependent ~~loan portfolio, as were new nonaccrual loans.~~- Early Stage portfolio. As of ~~June 30, 2021,~~March 31, 2022, we have specifically reserved ~~$38~~$20 million for our nonaccrual loans.

Average nonaccrual loans for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 were ~~$84 million and $107~~$75 million compared to ~~$77 million and $70~~$130 million for the three ~~and six~~ months ended ~~June 30, 2020.~~March 31, 2021. The ~~$7 million increase~~decrease in average nonaccrual loans for the three months ended ~~June 30, 2021~~March 31, 2022 compared to ~~June 30, 2020~~March 31, 2021 was driven primarily by ~~fewer repayments in 2021 than in 2020. If the~~lower nonaccrual loans had not been nonperforming, less than $1 million in interest income would have been recorded for the three months ended June 30, 2021 and June 30, 2020, and $2 million in interest income would have been recorded for the six months ended June 30, 2021 and $1 million for the six months ended June 30, 2020.balances overall.

Accrued Interest Receivable and Other Assets

A summary of accrued interest receivable and other assets at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 is as follows:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		% Change		(Dollars in millions)	March 31, 2022		December 31, 2021		% Change
Derivative assets (1)	Derivative assets (1)	$	524	$	488	7.4	%	Derivative assets (1)	$	560	$	565	(0.9)	%
Foreign exchange spot contract assets, gross	Foreign exchange spot contract assets, gross	1,324		2,108		(37.2)		Foreign exchange spot contract assets, gross	878		119		NM
Accrued interest receivable	Accrued interest receivable	342		245		39.6		Accrued interest receivable	480		470		2.1
FHLB and Federal Reserve Bank stock	FHLB and Federal Reserve Bank stock	83		61		36.1		FHLB and Federal Reserve Bank stock	304		107		184.1
Net deferred tax assets	Net deferred tax assets	2		1		100.0		Net deferred tax assets	274		24		NM
Accounts receivable	Accounts receivable	29		37		(21.6)		Accounts receivable	53		54		(1.9)
Other assets	Other assets	346		266		30.1		Other assets	539		589		(8.5)
Total accrued interest receivable and other assets	Total accrued interest receivable and other assets	$	2,650	$	3,206	(17.3)		Total accrued interest receivable and other assets	$	3,088	$	1,928	60.2

(1)See ~~"Derivatives"~~“Derivatives” section ~~below.~~

above.

Foreign Exchange Spot Contract Assets

Foreign exchange spot contract assets represent unsettled client trades at the end of the period. The ~~decrease~~increase of ~~$784~~$759 million was due primarily to trade enhancements made during the second quarter of 2021, which consisted of executing rollover trades for our clients using foreign exchange swap products versus our historical foreign exchange spot products.

~~Accrued Interest Receivable~~

~~The~~a increase ~~of $97 million in accrued interest receivable is primarily due to increases~~ in the ~~period-end~~number of unsettled spot trades with large notional balances ~~of our HTM investment securities portfolio and loans~~ at ~~June 30, 2021~~March 31, 2022 as compared to December 31, ~~2020.~~2021.

FHLB and Federal Reserve Bank stock

The increase of $197 million in FHLB and Federal Reserve Bank stock is primarily due to purchases of additional shares as required by the Federal Reserve.

Net Deferred Tax Assets

Net deferred tax assets increased $250 million primarily due to an increase in unrealized losses on AFS securities attributable to an increase in market rates.

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~~Other Assets~~

~~Other assets includes various asset amounts for other operational transactions. The increase of $80 million was primarily due to~~a $40 million increase in current taxes receivable, due to higher estimated tax payments during the second quarter, a $19 million increase in capitalized cloud computing costs, reflective of investments in systems and technology to support our revenue growth and related initiatives, and an $8 million increase in prepaid expenses.

Derivatives

Derivative instruments are recorded as a component of other assets and other liabilities on the balance sheet. The following table provides a summary of derivative assets and liabilities at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


(Dollars in millions)	(Dollars in millions)	June 30, 2021		December 31, 2020		% Change		(Dollars in millions)	March 31, 2022		December 31, 2021		% Change
Assets:	Assets:							Assets:
Equity warrant assets	Equity warrant assets	$	266	$	203	31.0	%	Equity warrant assets	$	323	$	277	16.6	%
Foreign exchange forward and option contracts		177		217		(18.4)
Contingent conversion rights								Contingent conversion rights	7		—		100.0
Foreign exchange forward, swap and option contracts								Foreign exchange forward, swap and option contracts	179		171		4.7
Client interest rate derivatives	Client interest rate derivatives	65		68		(4.4)		Client interest rate derivatives	51		99		(48.5)
Interest rate swaps	Interest rate swaps	16		—		—		Interest rate swaps	—		18		(100.0)
Total derivative assets	Total derivative assets	$	524	$	488	7.4		Total derivative assets	$	560	$	565	(0.9)
Liabilities:	Liabilities:							Liabilities:
Foreign exchange forward and option contracts		$	157	$	210	(25.2)
Foreign exchange forward, swap and option contracts								Foreign exchange forward, swap and option contracts	$	167	$	137	21.9
Total return swaps								Total return swaps	8		—		100.0
Client interest rate derivatives	Client interest rate derivatives	59		27		118.5		Client interest rate derivatives	109		101		7.9
Interest rate swaps		2		—		—

Total derivative liabilities	Total derivative liabilities	$	218	$	237	(8.0)		Total derivative liabilities	$	284	$	238	19.3

Equity Warrant Assets

In connection with negotiating credit facilities and certain other services, we often obtain rights to acquire stock in the form of equity warrant assets in primarily private, venture-backed companies in the technology and life science/healthcare industries. At ~~June 30, 2021,~~March 31, 2022, we held warrants in ~~2,718~~2,873 companies, compared to ~~2,602~~2,831 companies at December 31, ~~2020.~~2021. Warrants in 5354 companies each had fair values greater than $1 million and collectively represented ~~$137~~$175 million, or ~~51.7~~54.3 percent, of the fair value of the total warrant portfolio at ~~June 30, 2021.~~March 31, 2022. The change in fair value of equity warrant assets is recorded in "Gains on equity warrant assets, net" in noninterest income, a component of consolidated net income.

The following table provides a summary of transactions and valuation changes for equity warrant assets for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021
Balance, beginning of period	Balance, beginning of period	$	244	$	153	$	203	$	165	Balance, beginning of period	$	277	$	203
New equity warrant assets	New equity warrant assets	6		7		13		12		New equity warrant assets	6		7
Non-cash changes in fair value, net	Non-cash changes in fair value, net	45		18		94		8		Non-cash changes in fair value, net	52		62
Exercised equity warrant assets	Exercised equity warrant assets	(28)		(7)		(43)		(13)		Exercised equity warrant assets	(11)		(28)
Terminated equity warrant assets	Terminated equity warrant assets	(1)		—		(1)		(1)		Terminated equity warrant assets	(1)		—
Balance, end of period	Balance, end of period	$	266	$	171	$	266	$	171	Balance, end of period	$	323	$	244

Foreign Exchange Forward, Swaps and Foreign Currency Option Contracts

We enter into foreign exchange forward and swap contracts and foreign currency option contracts with clients involved in foreign activities, either as the purchaser or seller, depending upon the clients’ needs. For each forward, swap or option contract entered into with our clients, we enter into an opposite way forward, swap or option contract with a correspondent bank, which mitigates the risk of fluctuations in currency rates. We also enter into forward contracts with correspondent banks to economically reduce our foreign exchange exposure related to certain foreign currency denominated instruments. Net gains and losses on the revaluation of foreign currency denominated instruments are recorded in the line item “Other” as part of noninterest income, a component of consolidated net income. We have not experienced nonperformance by any of our counterparties and therefore have not incurred any related losses.Further, we anticipate performance by all counterparties.Our net

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exposure for foreign exchange forward and swaps and foreign currency option contracts, net of cash collateral, was ~~$32~~$5 million at ~~June 30, 2021~~March 31, 2022 and ~~$31 million~~zero at December 31, ~~2020.~~2021. For additional information on our foreign exchange forward and swap contracts and foreign currency option contracts, see Note 98 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

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Client Interest Rate Derivatives

We sell interest rate contracts to clients who wish to mitigate their interest rate exposure. We economically reduce the interest rate risk from this business by entering into opposite way contracts with correspondent banks. Our net exposure for client interest rate derivative contracts, net of cash collateral, was ~~$24 million~~zero at ~~June 30, 2021~~March 31, 2022 and ~~$67~~$47 million at December 31, ~~2020.~~2021. For additional information on our client interest rate derivatives, see Note 98 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Interest Rate Swaps

To manage interest rate risk on our AFS securities portfolio, we enter into pay-fixed, receive-floating interest rate swap contracts to hedge against exposure to changes in the fair value of the securities resulting from changes in interest rates. We designate these interest rate swap contracts as fair value hedges that qualify for hedge accounting under ASC 815 and record them in other assets and other liabilities. We had zero net exposure for interest rate swaps at March 31, 2022. Our net exposure for interest rate swaps was ~~$14~~$5 million at ~~June 30,~~December 31, 2021. Refer to Note 98 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional information.

Deposits

Deposits were ~~$145.8~~$198.1 billion at ~~June 30, 2021,~~March 31, 2022, an increase of ~~$43.8~~$8.9 billion, or ~~43.0~~4.7 percent, compared to ~~$102.0~~$189.2 billion at December 31, ~~2020.~~2021. The increase in deposits was driven by ~~growth across all portfolios with the primary contributors coming from~~ our Technology portfolio and ~~Life Science/Healthcare portfolios driven by~~reflective of strong ~~public~~early-stage investment and ~~private fundraising,~~client acquisition as well as ~~from our Global Fund Banking portfolio.~~

At June 30, 2021, the aggregate balance of time deposit accounts individually equal to or greater than $100,000 totaled $643 million, compared to $686 million at December 31, 2020. At June 30, 2021, $639 million of the time deposit accounts individually equal to or greater than $100,000 were scheduled to mature within one year. No material portion of our deposits has been obtained from a single depositor and the loss of any one depositor would not materially affect our business. Approximately 13 percent and 12 percent of our total deposits at June 30, 2021 and December 31, 2020, respectively, were from our clients in Asia.flexible liquidity solutions that shifted off-balance sheet client funds on-balance sheet.

Long-Term Debt

Our long-term debt was ~~$1.8~~$2.6 billion at ~~June 30, 2021~~March 31, 2022 and ~~$844 million at~~ December 31, ~~2020. The increase in our~~2021. As of March 31, 2022, long-term debt was comprised of our 3.50% Senior Notes due ~~to the issuance of~~2025, 3.125% Senior Notes due 2030, 1.800% Senior Notes due 2031, 2.100% Senior Notes ~~during the second quarter of 2021.~~

~~As of June 30, 2021, long-term debt included our 3.500% Senior Notes, 3.125% Senior Notes,~~due 2028, 1.800% Senior Notes due 2026 and ~~2.100%~~junior subordinated debentures.

On April 29, 2022, SVB Financial Group issued $350 million of 4.345% Senior ~~Notes. For more information~~Fixed Rate/Floating Rate Notes due on ~~our long-term debt, see~~April 2028 and $450 million of 4.570% Senior Fixed Rate/Floating Rate Notes due on April 2033. Refer to Note 816 — ~~“Short-Term Borrowings and Long-Term Debt”~~“Subsequent Events” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this ~~report.~~report for additional information.

~~Other Liabilities~~

~~A summary of other liabilities at June 30, 2021 and December 31, 2020 is as follows:~~

(Dollars in millions) June 30, 2021 December 31, 2020 % Change
Foreign exchange spot contract liabilities, gross $ 1,626 $ 2,165 (24.9) %
Accrued compensation 408 545 (25.1)
Allowance for unfunded credit commitments 120 121 (0.8)
Derivative liabilities (1) 218 237 (8.0)
Net deferred tax liabilities 22 173 (87.3)
Other liabilities 1,055 731 44.3
Total other liabilities $ 3,449 $ 3,972 (13.2)

~~(1)See “Derivatives” section above.~~

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~~Foreign Exchange Spot Contract Liabilities~~

Foreign exchange spot contract liabilities represent unsettled client trades at the end of the period. The decrease of $539 million was due primarily to operational improvements implemented during the second quarter of 2021 to execute rollover trades for our clients, using foreign exchange swap products versus our historical foreign exchange spot products.

~~Accrued Compensation~~

Accrued compensation includes amounts for our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, ESOP, SVB Leerink Incentive Compensation Plan, SVB Leerink Retention Award and other compensation arrangements. The decrease of $137 million was primarily result of the payout of our 2020 incentive compensation plans during the first quarter of 2021, partially offset by the accrual for the six months ending June 30, 2021.

~~Allowance for Unfunded Credit Commitments~~

Allowance for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit. The decrease of $1 million was due primarily to a reduction of our credit loss estimate for unfunded credit commitments driven primarily by improved economic scenarios in our forecast models.

~~Net Deferred Tax Liabilities~~

Net deferred tax liabilities decreased $151 million due primarily to a decrease in pre-tax unrealized gains recorded to other comprehensive income from the decrease in the fair value of our AFS securities portfolio and the recognition of tax gains on convertible debt, offset partially by timing differences related to fund investments.

Other Liabilities

~~Other~~A summary of other liabilities ~~includes various accrued liability amounts for other operational transactions.~~at March 31, 2022 and December 31, 2021 is as follows:


(Dollars in millions)	March 31, 2022		December 31, 2021		% Change
Foreign exchange spot contract liabilities, gross	$	1,062	$	160	NM
Accrued compensation	336		896		(62.5)
Allowance for unfunded credit commitments	175		171		2.3
Derivative liabilities (1)	284		238		19.3

Other liabilities	960		1,122		(14.4)
Total other liabilities	$	2,817	$	2,587	8.9

(1)See “Derivatives” section above.

Foreign Exchange Spot Contract Liabilities

Foreign exchange spot contract liabilities represent unsettled client trades at the end of the period. The increase of ~~$324~~$902 million was ~~driven~~due primarily ~~by $271 million~~to a increase in the number of unsettled ~~fixed income investment securities purchases~~spot trades with large notional balances at March 31, 2022 as compared to December 31, 2021.

Accrued Compensation

Accrued compensation includes amounts for our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, ESOP, SVB Securities Incentive Compensation Plan, SVB Securities Retention Award and ~~an $45~~other compensation arrangements. The decrease of $560 million ~~increase in investments payable related to investments in qualified affordable housing projects.~~was primarily a result of the payout of our 2021 incentive compensation plans during the first quarter of 2022.

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Noncontrolling Interests

Noncontrolling interests totaled ~~$300~~$380 million and ~~$213~~$373 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The ~~$87~~$7 million increase was due primarily to net income attributable to noncontrolling interests of ~~$138~~$18 million, partially offset by ~~$51~~$11 million in distributions for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

Capital Resources

We maintain an adequate capital base to support anticipated asset growth, operating needs, and credit and other business risks, and to provide for SVB Financial and the Bank to be in compliance with applicable regulatory capital guidelines, including the joint agency rules implementing the "Basel III" capital rules (the "Capital Rules"). Our primary sources of new capital include retained earnings and proceeds from the sale and issuance of our capital stock or other securities. Under the oversight of the Finance Committee of our Board of Directors, management engages in regular capital planning processes in an effort to optimize the use of the capital available to us and to appropriately plan for our future capital needs. The capital plan considers capital needs for the foreseeable future and allocates capital to both existing and future business activities. Expected future use or activities for which capital may be set aside include balance sheet growth and associated relative increases in market or credit exposure, investment activity, potential product and business expansions, acquisitions and strategic or infrastructure investments. In addition, we conduct capital stress tests as part of our annual capital planning process. The capital stress tests allow us to assess the impact of adverse changes in the economy and interest rates on our capital adequacy position.

SVBFG Stockholders’ Equity

SVBFG stockholders’ equity totaled ~~$11.7~~$16.0 billion ~~at June 30, 2021, an increase of $3.4 billion, or 41.9 percent,~~ at March 31, 2022, a decreaseof $256 million, or 1.6 percent, compared to ~~$8.2~~$16.2 billion at December 31, ~~2020.~~2021. The decrease was primarily driven by other comprehensive income as unrealized losses recorded on AFS securities increased due to an increase in market rates. The decrease from unrealized losses on AFS was ~~driven primarily by a $1.1 billion issuance of common stock, a $1.7 billion issuance of preferred stock and $1.1 billion of net income,~~ partially offset by ~~the decrease in AOCI of $481 million. The decrease in AOCI was driven primarily by a $554 million (or $400 million net of tax) decrease~~an increase in the fair value of ~~our AFS securities portfolio reflective of increases in market interest rates.~~hedging instruments.

Funds generated through retained earnings are a significant source of capital and liquidity and are expected to continue to be so in the future.

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~~Common Stock~~

On March 22, 2021, to support the continued growth of our balance sheet, we issued and sold 2,000,000 shares of common stock at a price of $500.00 per share. We received net proceeds of $972 million after deducting underwriting discounts and commissions. On April 14, 2021, we issued and sold an additional 300,000 shares of common stock under the full exercise of the underwriter's over-allotment option resulting in additional net proceeds of approximately $146 million after deducting discounts and commissions.

~~Preferred Stock~~

On February 2, 2021, SVB Financial Group issued 750,000 depositary shares each representing a 1/100th ownership interest in a share of Series B Preferred Stock with a $0.001 par value and a liquidation preference of $100,000 per share, or $1,000 per depositary share. The Series B Preferred Stock is perpetual and has no stated maturity. Dividends are approved by the Board of Directors and, if declared, are payable quarterly, in arrears, at a rate per annum equal to (i) 4.10 percent from the original issue date to, but excluding, February 15, 2031 and (ii) for the February 15, 2031 dividend date and during each subsequent ten year period, the ten-year treasury rate (calculated three business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for ten-year maturities) plus 3.064 percent. As of June 30, 2021, our Series B Preferred Stock had a carrying value of $739 million and a liquidation preference of $750 million.

On May 13, 2021, SVB Financial Group issued 1,000,000 depositary shares each representing a 1/100th ownership interest in a share of Series C Preferred Stock with a $0.001 par value and a liquidation preference of $100,000 per share, or $1,000 per depositary share. The Series C Preferred Stock is perpetual and has no stated maturity. Dividends, if approved and declared by the Board of Directors, are payable quarterly, in arrears, at a rate per annum equal to (i) ~~4.000 percent~~ ~~from the original issue date to, but excluding, May 15, 2026, and~~ (ii) for the May 15, 2026 dividend date and during each subsequent five years period, the five-year treasury rate (calculated three business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities) plus 3.202 percent. ~~As of June 30, 2021, 1,000,000 depositary shares were issued and outstanding, had a carrying value of $985 million and a liquidation preference of $1.0 billion.~~

Capital Ratios

Both SVB Financial and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies. The following table represents the capital components for SVB Financial and the Bank used in calculating CET1, Tier 1 capital and total capital as of March 31, 2022 and December 31, 2021:


	SVB Financial				Bank
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
Common stock plus related surplus, net of treasury stock	$	5,180	$	5,157	$	9,276	$	9,265
Retained earnings	7,914		7,442		6,051		5,537
AOCI	(760)		(9)		(756)		(7)
CET1 capital before adjustments and deductions	12,334		12,590		14,571		14,795
Less: Goodwill (net of associated deferred tax liabilities)	369		369		200		200
Intangibles (net of associated deferred tax liabilities)	128		133		68		70
AOCI opt-out election related adjustments	(764)		(18)		(760)		(17)
Add: CECL transition provision	60		80		60		80
Total adjustments and deductions from CET1 capital	(327)		404		(552)		173
CET1 Capital	12,661		12,186		15,123		14,622
Add: Qualifying Preferred stock	3,646		3,646		—		—
Minority interest	380		373		—		—
Less: Additional tier 1 capital deductions	67		—		—		—
Additional tier 1 capital	3,959		4,019		—		—
Tier 1 Capital	16,620		16,205		15,123		14,622
Allowance for credit losses included in Tier 2 capital	602		600		602		600
CECL transition provision for allowance for credit losses	(69)		(93)		(69)		(93)
Tier 2 Capital	533		507		533		507
Total capital	$	17,153	$	16,712	$	15,656	$	15,129
Total risk-weighted assets	$	104,678	$	100,812	$	101,600	$	98,214
Average quarterly total assets (1)	$	215,968	$	204,380	$	213,458	$	201,880

(1)Average quarterly total assets as defined by the Federal Reserve less: (i) goodwill net of associated deferred tax liabilities, (ii) disallowed intangible assets net of associated deferred tax liabilities and deferred tax assets and (iii) other deductions from assets for leverage capital purposes.

Regulatory capital ratios for SVB Financial and the Bank exceeded minimum federal regulatory guidelines under the Capital Rules as well as for a "well capitalized" bank holding company and insured depository institution, respectively, as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. Capital ratios for SVB Financial and the Bank, compared to the minimum capital ratios, are set forth below:


		June 30, 2021		December 31, 2020		Required Minimum (1)		Well Capitalized Minimum			March 31, 2022		December 31, 2021		Required Minimum		Required Minimum + Capital Conservation Buffer (1)		Well Capitalized Minimum
SVB Financial:	SVB Financial:									SVB Financial:
CET 1 risk-based capital ratio (2)(3)		11.93	%	11.04	%	7.0	%	N/A
CET1 risk-based capital ratio (2)(3)										CET1 risk-based capital ratio (2)(3)	12.10	%	12.09	%	4.5	%	7.0	%	N/A
Tier 1 risk-based capital ratio (3)	Tier 1 risk-based capital ratio (3)	14.95		11.89		8.5		6.0		Tier 1 risk-based capital ratio (3)	15.88		16.08		6.0		8.5		6.0
Total risk-based capital ratio (3)	Total risk-based capital ratio (3)	15.53		12.64		10.5		10.0		Total risk-based capital ratio (3)	16.39		16.58		8.0		10.5		10.0
Tier 1 leverage ratio (2)(3)	Tier 1 leverage ratio (2)(3)	7.77		7.45		4.0		N/A		Tier 1 leverage ratio (2)(3)	7.70		7.93		4.0		N/A		N/A
Tangible common equity to tangible assets ratio (4)(5)	Tangible common equity to tangible assets ratio (4)(5)	5.76		6.66		N/A		N/A		Tangible common equity to tangible assets ratio (4)(5)	5.38		5.73		N/A		N/A		N/A
Tangible common equity to risk-weighted assets ratio (4)(5)	Tangible common equity to risk-weighted assets ratio (4)(5)	12.02		11.87		N/A		N/A		Tangible common equity to risk-weighted assets ratio (4)(5)	11.30		11.98		N/A		N/A		N/A
Bank:	Bank:									Bank:
CET 1 risk-based capital ratio (3)		13.66	%	10.70	%	7.0	%	6.5	%
CET1 risk-based capital ratio (3)										CET1 risk-based capital ratio (3)	14.89	%	14.89	%	4.5	%	7.0	%	6.5	%
Tier 1 risk-based capital ratio (3)	Tier 1 risk-based capital ratio (3)	13.66		10.70		8.5		8.0		Tier 1 risk-based capital ratio (3)	14.89		14.89		6.0		8.5		8.0
Total risk-based capital ratio (3)	Total risk-based capital ratio (3)	14.26		11.49		10.5		10.0		Total risk-based capital ratio (3)	15.41		15.40		8.0		10.5		10.0
Tier 1 leverage ratio (3)	Tier 1 leverage ratio (3)	6.96		6.43		4.0		5.0		Tier 1 leverage ratio (3)	7.09		7.24		4.0		N/A		5.0
Tangible common equity to tangible assets ratio (4)(5)	Tangible common equity to tangible assets ratio (4)(5)	6.47		6.24		N/A		N/A		Tangible common equity to tangible assets ratio (4)(5)	6.57		7.09		N/A		N/A		N/A
Tangible common equity to risk-weighted assets ratio (4)(5)	Tangible common equity to risk-weighted assets ratio (4)(5)	13.76		11.58		N/A		N/A		Tangible common equity to risk-weighted assets ratio (4)(5)	14.07		15.06		N/A		N/A		N/A

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(1)Percentages represent the minimum capital ratios plus, as applicable, the fully phased-in 2.5% CET1 capital conservation buffer under the Capital Rules.

(2)"Well Capitalized Minimum" ~~CET 1~~CET1 risk-based capital and Tier 1 leverage ratios are not formally defined under applicable banking regulations for bank holding companies.

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(3)Capital ratios include regulatory capital phase-in of the ACL under the ~~2020~~2021 CECL Transition Rule.

(4)See below for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.

(5)The Federal Reserve has not issued any minimum guidelines for the tangible common equity to tangible assets ratio or the tangible common equity to risk-weighted assets ratio, however, we believe these ratios provide meaningful supplemental information regarding our capital levels and are therefore provided above.

~~Our~~As of March 31, 2022, Tier 1 and total risk-based capital ratios for SVB Financial decreased reflective of increases in risk-weighted assets outpacing increases in regulatory capital. The increase in risk-weighted assets was driven primarily by the shift in our balance sheet growth from cash into our investment securities and loans portfolio. The increase in regulatory capital was driven primarily by net income, partially offset by Tier 1 capital deductions, including deductions from covered funds under the Volcker rule and preferred stock dividends.

The decrease in our Tier 1 leverage ratios ~~increased~~for SVB Financial and the Bank are reflective of the growth in our average assets outpacing our growth in regulatory capital. The increase in regulatory capital for the Bank was driven primarily by net income. The increase in average assets for both SVB Financial and ~~Silicon Valley~~the Bank ~~as of June 30, 2021, compared to December 31, 2020. The increase in capital ratios~~ was driven primarily by ~~increases~~growth in our ~~capital, partially offset by increases in our risk-weighted~~investment securities and average assets. The increase in capital for SVB Financial was driven by the issuance of common and preferred stock and net income. The increase in capital for Silicon Valley Bank was driven by a $3.3 billion downstream capital infusion from our bank holding company during the six months ended June 30, 2021. The increase in average assets was driven by increases in our fixed income investments and loanloans portfolios. ~~All of our reported capital ratios remain above the levels considered to be “well capitalized” under applicable banking regulations.~~

The tangible common equity, or tangible book value, to tangible assets ratio and the tangible common equity to risk-weighted assets ratios are not required by GAAP or applicable bank regulatory requirements. However, we believe these ratios provide meaningful supplemental information regarding our capital levels. Our management uses, and believes that investors benefit from referring to, these ratios in evaluating the adequacy of the Company’s capital levels; however, these financial measures should be considered in addition to, not as a substitute for or preferable to, comparable financial measures prepared in accordance with GAAP. These ratios are calculated by dividing total SVBFG stockholders' equity, by total period-end assets and risk-weighted assets, after reducing both amounts by acquired intangibles, if any. The manner in which this ratio is calculated varies among companies. Accordingly, our ratio is not necessarily comparable to similar measures of other companies.

The following table provides a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for SVB Financial and the Bank for the periods ended ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:


		SVB Financial						Bank							SVB Financial						Bank
(Dollars in millions)	(Dollars in millions)	June 30, 2021			December 31, 2020			June 30, 2021			December 31, 2020			(Dollars in millions)	March 31, 2022			December 31, 2021			March 31, 2022			December 31, 2021
GAAP SVBFG stockholders’ equity		$	11,667		$	8,220		$	10,428		$	7,069
GAAP stockholders’ equity														GAAP stockholders’ equity	$	15,980		$	16,236		$	14,571		$	14,795
Less: preferred stock	Less: preferred stock	2,064			340			—			—			Less: preferred stock	3,646			3,646			—			—
Less: intangible assets	Less: intangible assets	200			204			—			—			Less: intangible assets	529			535			295			—
Plus: net deferred taxes on intangible assets														Plus: net deferred taxes on intangible assets	26			26			23			—
Tangible common equity	Tangible common equity	$	9,403		$	7,676		$	10,428		$	7,069		Tangible common equity	$	11,831		$	12,081		$	14,299		$	14,795
GAAP total assets	GAAP total assets	$	163,399		$	115,511		$	161,197		$	113,303		GAAP total assets	$	220,355		$	211,478		$	217,802		$	208,576
Less: intangible assets	Less: intangible assets	200			204			—			—			Less: intangible assets	529			535			295			—
Plus: net deferred taxes on intangible assets														Plus: net deferred taxes on intangible assets	26			26			23			—
Tangible assets	Tangible assets	$	163,199		$	115,307		$	161,197		$	113,303		Tangible assets	$	219,852		$	210,969		$	217,530		$	208,576
Risk-weighted assets	Risk-weighted assets	$	78,231		$	64,681		$	75,795		$	61,023		Risk-weighted assets	$	104,678		$	100,812		$	101,600		$	98,214
Non-GAAP tangible common equity to tangible assets	Non-GAAP tangible common equity to tangible assets	5.76		%	6.66		%	6.47		%	6.24		%	Non-GAAP tangible common equity to tangible assets	5.38		%	5.73		%	6.57		%	7.09		%
Non-GAAP tangible common equity to risk-weighted assets	Non-GAAP tangible common equity to risk-weighted assets	12.02			11.87			13.76			11.58			Non-GAAP tangible common equity to risk-weighted assets	11.30			11.98			14.07			15.06

Off-Balance Sheet Arrangements

In the normal course of business, we use financial instruments with off-balance sheet risk to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commercial and standby letters of credit and commitments to invest in venture capital and private equity fund investments. These instruments involve, to varying degrees, elements of credit risk. Credit risk is defined as the possibility of sustaining a loss because other parties to the financial instrument fail to perform in accordance with the terms of the contract. For details of our commitments to extend credit, and commercial and standby letters of credit, please refer to Note 1311 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Commitments to Invest in Venture Capital and Private Equity Funds

Subject to applicable regulatory requirements, including the Volcker Rule, we make commitments to invest in venture capital and private equity funds, which in turn make investments generally in, or in some cases make loans to, privately-held

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companies. Commitments to invest in these funds are generally made for a 10-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from

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calling 100% of committed capital in one year, it is customary for these funds to generally call most of the capital commitments over 5 to 7 years; however, in certain cases, the funds may not call 100% of committed capital over the life of the fund. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate.

For further details on our commitments to invest in venture capital and private equity funds, refer to Note 1311 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Liquidity

The objective of liquidity management is to ensure that funds are available in a timely manner to meet our financial obligations, including, the availability of funds for both anticipated and unanticipated funding uses as necessary, paying creditors, meeting depositors’ needs, accommodating loan demand and growth, funding investments, repurchasing securities and other operating or capital needs, without incurring undue cost or risk, or causing a disruption to normal operating conditions.

We regularly assess the amount and likelihood of projected funding requirements through a range of business-as-usual and potential stress scenarios based on a review of factors such as historical deposit volatility and funding patterns, present and forecasted market and economic conditions, individual client funding needs and existing and planned business activities. Our ALCO, which is a management committee, provides oversight to the liquidity management process and recommends policy guidelines for the approval of the Finance Committee and Risk Committee of our Board of Directors, and courses of action to address our actual and projected liquidity needs. Additionally, we routinely conduct liquidity stress testing as part of our liquidity management practices.

~~Historically,~~Our client deposits ~~have~~base is, and historically has been our primary source of ~~liquidity.~~liquidity funding. Our deposit levels and cost of deposits may fluctuate from time to time due to a variety of factors, including market conditions, prevailing interest rates, changes in client deposit behaviors, availability of insurance protection, and our offering of deposit products. We may also offer more investment alternatives for our off-balance sheet products which may impact deposit levels. At ~~June 30, 2021,~~March 31, 2022, our period-end total deposit balances were ~~$145.8~~$198.1 billion, compared to ~~$102.0~~$189.2 billion at December 31, ~~2020.~~2021.

We maintain a liquidity risk management and monitoring process designed to ensure appropriate liquidity to meet expected and contingent funding needs under both normal and stress environments, subject to the regular supervisory review process. Our liquidity requirements can also be met through the use of our portfolio of liquid assets. Our definition of liquid assets includes cash and cash equivalents in excess of the minimum levels necessary to carry out normal business operations, short-term investment securities maturing within one year, AFS securities eligible and available for financing or pledging purposes with a maturity in excess of one year and anticipated near-term cash flows from investments.

We have certain facilities in place to enable us to access short-term borrowings on a secured and unsecured basis. Our secured facilities include collateral pledged to the FHLB of San Francisco and the discount window at the FRB (using both fixed income securities and loans as collateral). Our unsecured facility consists of our uncommitted federal funds lines. As of ~~June 30, 2021,~~March 31, 2022, collateral pledged to the FHLB of San Francisco was comprised primarily of fixed income investment securities and loans and had a carrying value of ~~$7.1~~$8.4 billion, of which ~~$5.9~~$7.0 billion was available to support additional borrowings. As of ~~June 30, 2021,~~March 31, 2022, collateral pledged to the discount window at the FRB was comprised of fixed income investment securities and had a carrying value of ~~$0.9 billion,~~$515 million, all of which was unused and available to support additional borrowings. Our total unused and available borrowing capacity for our uncommitted federal funds lines totaled ~~$1.9~~$2.0 billion at ~~June 30, 2021.~~March 31, 2022. Our total unused and available secured borrowing capacity under our master repurchase agreements with various financial institutions totaled ~~$4.0~~$8.0 billion at ~~June 30, 2021.~~March 31, 2022.

In connection with our participation in the PPP under the CARES Act as discussed, we considered participating in the Federal Reserve’s PPPLF. The PPPLF was established to allow participating institutions to facilitate lending under the PPP and extends credit to eligible PPP loan originators on a non-recourse basis, taking PPP loans as collateral at face value. Ultimately, we were able to extend credit to PPP borrowers without relying on the PPPLF. Additionally, interim final capital rules issued by federal bank regulatory agencies have neutralized the regulatory capital effects of participating in the PPP, in that loans outstanding are assessed a zero percent risk weight for regulatory capital purposes.

As a banking organization, our liquidity is subject to supervision by our banking regulators. Because we are a Category IV firm with less than $250 billion in average total consolidated assets, less than $50 billion in average weighted short-term wholesale funding and less than $75 billion in cross-jurisdictional activity, we currently are not subject to the Federal Reserve’s LCR or ~~net stable funding ratio~~ NSFR requirements, either on a full or reduced basis. It is possible that, as a result of further growth, we may exceed one or more of those thresholds and therefore become subject to LCR and NSFR requirements or other heightened liquidity requirements in the future, ~~as a result of further growth,~~ which would require us to maintain high-quality liquid assets in accordance with specific quantitative requirements and increase the use of long-term debt as a funding source. In addition, if we were to exceed $75

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billion in cross-jurisdictional activity, as a Category II firm, we could no longer opt out of excluding AOCI in calculating regulatory capital ratios and would become subject to the advance approaches framework as well as more stringent liquidity reporting requirements.

On a stand-alone basis, SVB Financial’s primary liquidity channels include dividends from the Bank, its portfolio of liquid assets, and its ability to raise debt and capital. The ability of the Bank to pay dividends is subject to certain regulations described in “Business—Supervision and Regulation—Restriction on Dividends” under Part I, Item 1 of our ~~2020~~2021 Form 10-K.

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Consolidated Summary of Cash Flows

Below is a summary of our average cash position and statement of cash flows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021. For further details, see our “Interim Consolidated Statements of Cash Flows (Unaudited)” under Part I, Item 1 of this report.


		Six months ended June 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2021			2020			(Dollars in millions)	2022			2021
Average cash and cash equivalents	Average cash and cash equivalents	$	21,458		$	10,460		Average cash and cash equivalents	$	18,275		$	19,721
Percentage of total average assets	Percentage of total average assets	15.6		%	13.9		%	Percentage of total average assets	8.5		%	15.8		%
Net cash provided by operating activities	Net cash provided by operating activities	$	695		$	745		Net cash provided by operating activities	$	359		$	214
Net cash used for investing activities	Net cash used for investing activities	(42,041)			(6,533)			Net cash used for investing activities	(3,200)			(21,010)
Net cash provided by financing activities	Net cash provided by financing activities	47,630			13,208			Net cash provided by financing activities	8,828			24,376
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	$	6,284		$	7,420		Net increase in cash and cash equivalents	$	5,987		$	3,580

Average cash and cash equivalents ~~increased~~decreased by ~~$11.0~~$1.4 billion, or ~~105.1~~7.3 percent, to ~~$21.5~~$18.3 billion for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$10.5~~$19.7 billion for the comparable ~~2020~~2021 period.

Cash provided by operating activities was ~~$695~~$359 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, reflective primarily of net income before noncontrolling interests ~~and dividends~~ of ~~$1.2 billion, partially offset by changes in other assets and liabilities of $318~~$533 million and ~~$177 million from~~ adjustments to reconcile net income to net ~~cash.~~cash of $189 million, partially offset by $363 million changes in other assets and liabilities.

Cash used for investing activities of ~~$42.0~~$3.2 billion for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was driven by ~~$45.0~~$10.3 billion in purchases of fixed income investment securities and a ~~$5.6~~$2.3 billion increase in loan balances, partially offset by ~~$8.1~~the sale of $5.1 billion of our AFS portfolio and $4.4 billion in proceeds from maturities and principal pay downs from our fixed income investment securities ~~portfolio and $568 million in proceeds from sales and distributions of capital from our nonmarketable and other equity securities.~~portfolio.

Cash provided by financing activities was ~~$47.6~~$8.8 billion for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, reflective primarily of a ~~$43.9~~$8.9 billion increase in ~~deposits, $2.8 billion in capital raised by our preferred and common stock issuances, and $990 million increase from the issuance of long-term debt.~~deposits.

Cash and cash equivalents were ~~$24.0~~$20.6 billion and ~~$14.2~~$21.3 billion, respectively, at ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk Management

Market risk is defined as the risk of adverse fluctuations in the market value of financial instruments due to changes in market interest rates. Interest rate risk is our primary market risk and can result from timing and volume differences in the repricing of our rate-sensitive assets and liabilities, widening or tightening of credit spreads, changes in the general level of market interest rates and changes in the shape and level of the benchmark interest rates. Additionally, changes in interest rates can influence the rate of principal prepayments on mortgage securities, which affects the rate of amortization of purchase premiums and discounts. Other market risks include foreign currency exchange risk and equity price risk (including the effect of competition on product pricing). These risks and related impacts are important market considerations but are inherently difficult to assess through simulation results. Consequently, simulations used to analyze the sensitivity of net interest income to changes in interest rates will differ from actual results due to differences in the timing and frequency of rate resets, the magnitude of changes in market rates, the impact of competition, fluctuating business conditions and the impact of strategies taken by management to mitigate these risks.

Interest rate risk is managed by our ALCO. ALCO reviews the sensitivity of the market valuation on earning assets and funding liabilities and modeled 12-month projections of net interest income from changes in interest rates, structural changes in investment and funding portfolios, loan and deposit activity and market conditions. Relevant metrics and guidelines, which are approved by the Finance Committee of our Board of Directors and are included in our Interest Rate Risk Policy, are monitored on an ongoing basis.

Interest rate risk is managed primarily through strategies involving our fixed income securities portfolio, available funding channels and capital market activities. In addition, our policies permit the use of off-balance sheet derivatives, such as interest rate swaps, to assist with managing interest rate risk.

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We utilize a simulation model to perform sensitivity analysis on the economic value of equity and net interest income under a variety of interest rate scenarios, balance sheet forecasts and business strategies. The simulation model provides a

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dynamic assessment of interest rate sensitivity which is embedded within our balance sheet. Rate sensitivity measures the potential variability in economic value and net interest income relating solely to changes in market interest rates over time. We review our interest rate risk position and sensitivity to market interest rates regularly.

Model Simulation and Sensitivity Analysis

A specific application of our simulation model involves measurement of the impact of changes in market interest rates on the EVE. EVE is defined as the market value of assets, less the market value of liabilities. Another application of the simulation model measures the impact of changes in market interest rates on NII assuming a static balance sheet, in both size and composition, as of the period-end reporting date. In the NII simulation, the level of market interest rates and the size and composition of the balance sheet are held constant over the simulation horizon. Simulated cash flows during the scenario horizon are assumed to be replaced as they occur, which maintains the balance sheet at its current size and composition. Yield and spread assumptions on cash and investment balances reflect current market rates and the shape of the yield curve. Yield and spread assumptions on loans reflect recent market impacts on product pricing. Similarly, we make certain deposit balance decay rate assumptions on demand deposits and interest-bearing deposits, which are replenished to hold the level and mix of funding liabilities constant. Changes in market interest rates that affect net interest income are principally short-term interest rates and include the following benchmark indexes: (i) the National Prime Rate, (ii) 1-month and 3-month LIBOR and (iii) the Federal Funds target rate. Changes in these short-term rates impact interest earned on our variable rate loans and balances held as cash and cash equivalents. Additionally, simulated changes in deposit pricing relative to changes in market rates, commonly referred to as deposit beta, generally follow overall changes in short-term interest rates, although actual changes may lag in terms of timing and magnitude.

Both EVE and NII measures rely upon the use of models to simulate cash flow behavior for loans and deposits. These models were developed internally and are based on historical balance and rate observations. Investment portfolio cash flow is based on a combination of third-party prepayment models and internally managed prepayment vectors depending on security type. As part of our ongoing governance structure, each of these models and assumptions are periodically reviewed and recalibrated as needed to ensure that they are representative of our understanding of existing behaviors.

Simulation results presented include ~~an "asymmetric"~~a beta assumption that is applied in the NII and EVE simulation models for interest-bearing deposits. This reflects management expectations ~~that~~about deposit repricing ~~behavior in a falling rate environment would be different than repricing behavior in a rising rate environment.~~behavior. This model assumes ~~the~~approximately 60 percent beta as an overall through a rate-cycle beta for interest-bearing ~~deposits in a falling rate environment would be approximately 60 percent.~~deposits. That is, overall changes in interest-bearing deposit rates would be approximately 60 percent of the change in short-term market rates. ~~The deposit beta assumption for an increasing rate environment is 50 percent.~~ These repricing assumptions are reflected as changes in interest expense on interest-bearing deposit balances.

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The following table presents our EVE and NII sensitivity exposure related to an instantaneous and sustained parallel shift in market interest rates of 100 and 200 bps at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


(Dollars in millions)	(Dollars in millions)	Estimated		Estimated Increase/(Decrease) in EVE				Estimated		Estimated Increase/(Decrease) in NII				(Dollars in millions)	Estimated		Estimated Increase/(Decrease) in EVE				Estimated		Estimated Increase/(Decrease) in NII
		EVE		Amount		Percent		NII		Amount		Percent			EVE		Amount		Percent		NII		Amount		Percent
June 30, 2021:
March 31, 2022:														March 31, 2022:
+200	+200	$	11,920	$	(3,521)	(22.8)	%	$	4,153	$	1,046	33.7	%	+200	$	12,380	$	(5,401)	(30.4)	%	$	5,777	$	1,004	21.0	%
+100	+100	13,754		(1,687)		(10.9)		3,612		505		16.3		+100	14,863		(2,918)		(16.4)		5,262		489		10.2
—	—	15,441		—		—		3,107		—		—		—	17,781		—		—		4,773		—		—
-100	-100	16,300		859		5.6		2,997		(110)		(3.5)		-100	20,621		2,840		16.0		4,378		(395)		(8.3)
-200	-200	16,207		766		5.0		2,979		(128)		(4.1)		-200	22,392		4,611		25.9		4,287		(486)		(10.2)

December 31, 2020:
December 31, 2021:														December 31, 2021:
+200	+200	$	9,500	$	(1,724)	(15.4)	%	$	3,063	$	691	29.1	%	+200	$	14,950	$	(5,722)	(27.7)	%	$	5,258	$	981	22.9	%
+100	+100	10,558		(666)		(5.9)		2,729		357		15.1		+100	17,799		(2,873)		(13.9)		4,745		468		10.9
—	—	11,224		—		—		2,372		—		—		—	20,672		—		—		4,277		—		—
-100	-100	11,582		358		3.2		2,310		(62)		(2.6)		-100	21,904		1,232		6.0		4,002		(275)		(6.4)
-200	-200	11,534		310		2.8		2,306		(66)		(2.8)		-200	21,308		636		3.1		3,911		(366)		(8.6)

Economic Value of Equity

The estimated EVE in the preceding table is based on a combination of valuation methodologies including a discounted cash flow analysis and a multi-path lattice-based valuation. Both methodologies use publicly available market interest rates to determine discounting factors on projected cash flows. The model simulations and calculations are highly ~~assumption-dependent~~assumption-

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dependent and will change regularly as the composition of earning assets and funding liabilities change (including the impact of changes in the value of interest rate derivatives, if any), as interest rate environments evolve, and as we change our assumptions in response to relevant market conditions, competition or business circumstances. These calculations do not reflect forecast changes in our balance sheet or changes we may make to reduce our EVE exposure as a part of our overall interest rate risk management strategy. As noted above, the underlying models and assumptions are subject to regular performance testing and recalibration, and as such we are reviewing how the underlying assumptions on our deposit model impact deposit decay, curtailment, and pricing behavior. The model changes are expected to be deployed in the second quarter of 2022 and we expect these to change our EVE profile to show reduction in risk in the +100 and +200bps instantaneous parallel shift scenarios and increasing risk in the -100 and -200 bps instantaneous parallel shift scenarios.

As with any method of measuring interest rate risk, certain limitations are inherent in the method of analysis presented in the preceding table. We are exposed to yield curve risk, prepayment risk, basis risk and yield spread compression, which cannot be fully modeled and expressed using the above methodology. Accordingly, the results in the preceding table should not be relied upon as a precise indicator of actual results in the event of changing market interest rates. Additionally, the resulting EVE and NII estimates are not intended to represent and should not be construed to represent our estimate of the underlying EVE or forecast of NII.

Our base EVE as of ~~June 30, 2021 increased $4.2~~March 31, 2022 decreased $2.9 billion from December 31, ~~2020,~~2021, driven by overall balance sheet ~~growth~~mix as well as ~~a steepening of the yield curve~~higher rates during the first ~~half~~quarter of ~~2021.~~2022. For the period ended ~~June 30, 2021,~~March 31, 2022, compared to December 31, ~~2020,~~2021, cash balances increased by ~~$6.3~~$6.0 billion, fixed income investments in our AFS portfolio decreased by ~~$7.0~~$1.2 billion, ~~and increased by $43.4 billion in our~~while HTM portfolio ~~while loan~~ balances increased by ~~$5.6 billion.~~$512 million. Loan balances increased by $2.4 billion, year-to-date. Funding for these assets came primarily from growth of ~~$43.9~~$8.9 billion in total deposits, which consisted of a ~~$34.8~~$2.1 billion and ~~$9.1~~$6.8 billion increase in ~~noninterest-bearing~~non-interest bearing and ~~interest-bearing~~interest bearing accounts, respectively. The mix of ~~noninterest-bearing and interest-bearing deposits~~non-interest bearing to total deposits ~~increased~~decreased slightly by 4two bps to 65 percent at ~~June 30, 2021,~~March 31, 2022, compared to December 31, ~~2020.~~2021.

Rapid deposit growth has exceeded the pace of our loan growth, and as a result, a significant amount of excess deposits not used to fund loan growth have contributed to the growth of our cash and investments balances. Much of the investment portfolio is held in fixed rate MBS and CMO's which generally have a higher market value sensitivity than variable rate loans or cash. Thus, under an upward rate shock scenario, the market value of investments changes more than the market value of deposits resulting in a negative EVE sensitivity in those scenarios.

In March 2021 we purchased interest rate swaps to offset some of the additional EVE sensitivity that has resulted from rapid balance sheet growth. As of June 30, 2021, the estimated change in EVE in an up 100 bps rate shock would be -13.7 percent without any hedging applied. The addition of pay fixed swaps reduces this exposure to -10.9 percent in the same scenario. The EVE exposures shown in the table above include the impact of our hedging activity.

Due to low rates at the short end of the yield curve, EVE sensitivity measures in the -100 and -200 bps rate shock scenarios do not represent the full magnitude of rate shocks at certain points on the curve because we assume that U.S. rates are floored at zero. As a result, the June 30, 2021 EVE sensitivity of the -100 and -200 bps rate shock scenarios are similar.

~~108~~

~~Table of~~ ~~Contents~~

~~Ongoing balance sheet growth and a steepening yield curve were the primary contributing factors to the overall change in EVE sensitivity.~~

12-Month Net Interest Income Simulation

NII sensitivity is measured as the percentage change in projected 12-month net interest income earned in +/-100 and +/-200 basis point interest rate shock scenarios compared to a base scenario where balances and interest rates are held constant over the forecast horizon. At June 30, 2021, NII sensitivity was 16.3 percent in the +100 bps interest rate scenario, compared to 15.1 percent at December 31, 2020. Our NII sensitivity in the +200 bps interest rate shock scenario was 33.7 percent compared to 29.1 percent at December 31, 2020. NII sensitivity in the -100 bps scenario of negative 3.5 percent was higher at June 30, 2021, compared to a negative 2.6 percent at December 31, 2020. The -200 bps scenario currently indicates a higher percentage change in NII of negative 4.1 percent at June 30, 2021, compared to negative 2.8 percent at December 31, 2020. However, as noted above, the -100 and -200 bps scenarios are not complete rate shocks in this rate environment, since rates are assumed to be floored at zero. The June 30, 2021 NII sensitivity percentages are inclusive of the realized income or expense associated with interest rate swaps that were unwound reflective of the macro hedging process initiated in 2019 to reduce the impact of decreasing rates on NII as well as unrealized income associated with more recent hedging activity that has been undertaken to reduce EVE exposure. The changes in NII sensitivity are primarily the result of the changes in balance sheet composition described previously, combined with the impact of hedges in the respective parallel rate shock scenarios.

Our base case static 12-month NII forecast at ~~June 30, 2021~~March 31, 2022 increased compared to December 31, ~~2020~~2021 by ~~$735~~$496 million, driven primarily by ~~the growth in the~~ balance sheet ~~that has taken place year-to-date. Specifically, a large portion~~growth and the impact of ~~asset growth has been deployed in the fixed income investment securities portfolio as noted above. As of June 30, 2021, we also held a relatively high cash position which we expect~~higher rates compared to ~~be invested in the near future.~~December 31, 2021.

A majority of our loans are indexed to Prime and LIBOR. In the upward parallel simulated rate shock scenarios, interest income on assets that are tied to variable rate indexes, primarily our variable rate loans, are expected to benefit our base 12-month NII projections. The opposite is true for downward rate shock scenarios.

The 12-month NII simulations include repricing assumptions on our interest-bearing deposit products which we set at our discretion based on client needs and our overall funding mix. Repricing of interest-bearing deposits impacts estimated interest expense.

For the interest rate scenarios, the simulation model incorporates embedded rate floors on loans, where present, which prevents model benchmark rates from moving below zero percent in the down rate scenarios. The embedded rate floors are also a factor in the up-rate scenarios to the extent a simulated increase in rates is needed before floored rates are cleared. In addition, we assume deposit balance decay rates based on a historical deposit study of our clients. These assumptions may change in future periods based on changes in client behavior and at management's discretion. Actual changes in our deposit pricing strategies may differ from our current model assumptions and may have an impact on our actual sensitivity overall.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, among other things, processes, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of our most recently completed fiscal quarter, pursuant to Exchange Act Rule 13a-15(b). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II–OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note 1614 — “Legal Matters” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors set forth in our ~~2020~~2021 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~110~~

~~Table of~~ ~~Contents~~

ITEM 6. EXHIBITS

Exhibit Number Exhibit Description Incorporated by Reference Filed Herewith
Form File No. Exhibit Filing Date
3.1
Certificate of Designations of the Registrant with respect to the Series C Preferred Stock, dated May 12, 2021, filed with the Secretary of State of Delaware and effective May 12, 2021
8-K 001-39154 3.1 May 13, 2021
31.1
Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer
X
31.2
Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer
X
32.1
Section 1350 Certifications
X
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase Document X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X
104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X

Exhibit Number

Exhibit Description

Incorporated by Reference

Filed Herewith

Form

File No.

Exhibit

Filing Date

31.1

Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer

31.2

Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer

32.1

Section 1350 Certifications

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Note: Other instruments defining the rights of holders of the Company’s long-term debt are omitted pursuant to Section(b)(4)(iii) of Item 601 of Regulation S-K. The Company hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.

~~111~~91

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						SVB Financial Group

Date: ~~August~~May 6, ~~2021~~2022						/s/ DANIEL BECK
						Daniel Beck
						Chief Financial Officer
						(Principal Financial Officer)

						SVB Financial Group

Date: ~~August~~May 6, ~~2021~~2022						/s/ KAREN HON
						Karen Hon
						Chief Accounting Officer
						(Principal Accounting Officer)

~~112~~92


	Preferred Stock		Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total SVBFG Stockholders’ Equity		Noncontrolling Interests		Total Equity
(Dollars in millions, except share data)			Shares	Amount
Balance at March 31, 2020	$	340	51,490,342	$	0	$	1,489	$	4,613	$	592	$	7,034	$	148	$	7,182
Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	—		250,372	—		14		—		—		14		—		14

Net income	—		—	—		—		234		—		234		14		248
Capital calls and distributions, net	—		—	—		—		—		—		—		(13)		(13)
Other comprehensive income, net of tax	—		—	—		—		—		22		22		—		22



Share-based compensation, net	—		—	—		20		—		—		20		—		20
Dividends on preferred stock	—		—	—		—		(5)		—		(5)		—		(5)

Balance at June 30, 2020	$	340	51,740,714	$	0	$	1,523	$	4,842	$	614	$	7,319	$	149	$	7,468
Balance at March 31, 2021	$	1,079	54,001,797	$	0	$	2,591	$	6,204	$	21	$	9,895	$	226	$	10,121
Common stock issued under employee benefit plans and ESOP, net of restricted stock cancellations	—		228,510	—		(5)		—		—		(5)		—		(5)
Issuance of Common Stock	—		300,000	0		146		—		—		146		—		146
Issuance of Preferred Stock	985		—	—		—		—		—		985		—		985
Net income	—		—	—		—		515		—		515		113		628
Capital calls and distributions, net	—		—	—		—		—		—		—		(39)		(39)
Other comprehensive income, net of tax	—		—	—		—		—		121		121		—		121



Share-based compensation, net	—		—	—		28		—		—		28		—		28

Dividends on preferred stock	—		—	—		—		(13)		—		(13)		—		(13)
Other, net	—		—	—		(5)		—		—		(5)		—		(5)
Balance at June 30, 2021	$	2,064	54,530,307	$	0	$	2,755	$	6,706	$	142	$	11,667	$	300	$	11,967


	June 30, 2021
	Less than 12 months				12 months or longer (1)				Total
(Dollars in millions)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses
AFS securities:
U.S. Treasury securities	$	2,218	$	(5)	$	0	$	0	$	2,218	$	(5)
U.S. agency debentures	81		(3)		0		0		81		(3)

Residential MBS:
Agency-issued MBS	8,268		(124)		0		0		8,268		(124)
Agency-issued CMO —fixed rate	2,832		(89)		76		(1)		2,908		(90)

Agency-issued CMBS	651		(8)		0		0		651		(8)
Total AFS securities (1)	$	14,050	$	(229)	$	76	$	(1)	$	14,126	$	(230)


	Term Loans by Origination Year
June 30, 2021 (Dollars in millions)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:
Risk rating:
Pass	$	567	$	165	$	42	$	55	$	20	$	7	$	29,766	$	1	$	0	$	30,623
Criticized	0		0		0		0		0		0		5		2		0		7
Nonperforming	0		0		0		0		0		0		0		0		0		0
Total global fund banking	$	567	$	165	$	42	$	55	$	20	$	7	$	29,771	$	3	$	0	$	30,630
Investor dependent:
Early stage:
Risk rating:
Pass	$	392	$	520	$	237	$	53	$	10	$	0	$	144	$	1	$	0	$	1,357
Criticized	8		93		51		14		2		5		24		0		0		197
Nonperforming	0		1		5		4		0		0		1		0		0		11
Total early stage	$	400	$	614	$	293	$	71	$	12	$	5	$	169	$	1	$	0	$	1,565
Mid stage:
Risk rating:
Pass	$	505	$	654	$	215	$	106	$	16	$	2	$	100	$	5	$	0	$	1,603
Criticized	8		49		9		13		3		0		18		0		0		100
Nonperforming	0		0		2		3		0		0		0		0		0		5
Total mid stage	$	513	$	703	$	226	$	122	$	19	$	2	$	118	$	5	$	0	$	1,708
Later stage:
Risk rating:
Pass	$	576	$	829	$	290	$	63	$	10	$	2	$	195	$	0	$	0	$	1,965
Criticized	6		29		16		3		2		0		13		0		0		69
Nonperforming	0		15		0		0		0		0		6		0		0		21
Total later stage	$	582	$	873	$	306	$	66	$	12	$	2	$	214	$	0	$	0	$	2,055
Total investor dependent	$	1,495	$	2,190	$	825	$	259	$	43	$	9	$	501	$	6	$	0	$	5,328
Cash flow dependent:
Sponsor led buyout:
Risk rating:
Pass	$	588	$	548	$	341	$	141	$	120	$	4	$	44	$	0	$	0	$	1,786
Criticized	0		14		15		40		10		13		5		0		0		97
Nonperforming	0		0		12		10		7		0		5		0		0		34
Total sponsor led buyout	$	588	$	562	$	368	$	191	$	137	$	17	$	54	$	0	$	0	$	1,917
Other
Risk rating:
Pass	$	540	$	720	$	332	$	137	$	108	$	0	$	868	$	0	$	0	$	2,705


Three months ended June 30, 2021	Beginning Balance March 31, 2021		Charge-offs		Recoveries		Provision (Reduction) for Credit Losses		Ending Balance June 30, 2021
(Dollars in millions)
Global fund banking	$	60	$	0	$	0	$	6	$	66
Investor dependent:
Early stage	62		(5)		2		(4)		55
Growth stage	106		(1)		1		(3)		103

Total investor dependent	168		(6)		3		(7)		158
Cash flow and balance sheet dependent	112		(7)		0		14		119
Private bank	44		(2)		0		5		47
Premium wine and other	8		0		0		(2)		6

Total ACL	$	392	$	(15)	$	3	$	16	$	396


Three months ended June 30, 2020	Beginning Balance March 31, 2020		Charge-offs		Recoveries		Provision (Reduction) for Credit Losses		Ending Balance June 30, 2020
(Dollars in millions)
Global fund banking	$	57	$	0	$	0	$	(3)	$	54
Investor dependent:
Early stage	127		(2)		3		20		148
Growth stage	149		(4)		1		(2)		144
Total investor dependent	276		(6)		4		18		292
Cash flow and balance sheet dependent	104		(8)		0		27		123
Private bank	88		(1)		0		4		91
Premium wine and other	24		0		0		2		26
SBA loans	0		0		0		4		4
Total ACL	$	549	$	(15)	$	4	$	52	$	590


Six months ended June 30, 2020	Beginning Balance December 31, 2019		Impact of adopting ASC 326		Charge-offs		Recoveries		Provision for Credit Losses		Foreign Currency Translation Adjustments		Ending Balance June 30, 2020
(Dollars in millions)
Global fund banking	$	107	$	(70)	$	0	$	0	$	17	$	0	$	54
Investor dependent:
Early stage	26		40		(12)		4		91		(1)		148
Growth stage	56		32		(27)		5		79		(1)		144

Total investor dependent	82		72		(39)		9		170		(2)		292
Cash flow and balance sheet dependent	81		(1)		(11)		3		51		0		123
Private bank	22		12		(2)		0		59		0		91
Premium wine and other	13		12		0		0		0		1		26
SBA loans	0		0		0		0		4		0		4
Total ACL	$	305	$	25	$	(52)	$	12	$	301	$	(1)	$	590


Years ended December 31, (Dollars in millions)	Other Intangible Assets
2021 (excluding the six months ended June 30, 2021)	$	4
2022	8
2023	8
2024	8
2025	7
2026 and thereafter	22
Total future amortization expense	$	57


				Carrying Value
(Dollars in millions)	Maturity	Principal value at June 30, 2021		June 30, 2021		December 31, 2020
Short-term borrowings:



Other short-term borrowings	(1)	$	34	$	34	$	21
Total short-term borrowings				$	34	$	21
Long-term debt:
3.50% Senior Notes	January 29, 2025	$	350	$	349	$	349
3.125% Senior Notes	June 5, 2030	500		495		495
1.800% Senior Notes	February 2, 2031	500		494		0
2.100% Senior Notes	May 15, 2028	500		496		0
Total long-term debt				$	1,834	$	844


(Dollars in millions)	Beginning Balance		Total Net Gains Included in Net Income (1)		Sales/Exits		Issuances		Transfers out of Level 3		Ending Balance
Three months ended June 30, 2021

Equity warrant assets	$	233	$	121	$	(104)	$	7	$	0	$	257

Three months ended June 30, 2020



Equity warrant assets	150		24		(15)		6		0		165

Six months ended June 30, 2021



Equity warrant assets	192		341		(285)		13		(4)		257

Six months ended June 30, 2020



Equity warrant assets	161		39		(46)		11		0		165


		Page Number
Forward-Looking Statements		53
Management's Overview of Performance		54
Critical Accounting Policies and Estimates		57
Results of Operations		57
	Net Interest Income and Margin	57
	Average Balances, Yields and Rates Paid	59
	Provision for Credit Losses	61
	Noninterest Income	62
	Noninterest Expense	68
	Net Income Attributable to Noncontrolling Interests	69
	Income Taxes	70
Operating Segment Results		70
Consolidated Financial Condition		72
	Cash and Cash Equivalents	72
	Investment Securities	72
	Loans	76
	Accrued Interest Receivable and Other Assets	80
	Deposits	82
	Long-Term Debt	82
	Other Liabilities	82
	Noncontrolling Interests	83
Capital Resources		83
	SVBFG Stockholders' Equity	83
	Capital Ratios	84
	Off-Balance Sheet Arrangements	85
	Commitments to Invest in Venture Capital and Private Equity Funds	85
	Liquidity	86