Exhibit 99.1
3003 Tasman Drive, Santa Clara, CA 95054 | Contact: | |||||||
www.svb.com | Meghan O'Leary | |||||||
Investor Relations | ||||||||
For release at 1:00 P.M. (Pacific Time) | (408) 654-6364 | |||||||
April 25, 2013 | ||||||||
NASDAQ: SIVB |
SVB FINANCIAL GROUP ANNOUNCES 2013 FIRST QUARTER FINANCIAL RESULTS
SANTA CLARA, Calif. — April 25, 2013 — SVB Financial Group (NASDAQ: SIVB) today announced financial results for the first quarter ended March 31, 2013.
Consolidated net income available to common stockholders for the first quarter of 2013 was $40.9 million, or $0.90 per diluted common share, compared to $50.4 million, or $1.12 per diluted common share, for the fourth quarter of 2012, and $34.8 million, or $0.78 per diluted common share, for the first quarter of 2012.
“Healthy client activity, strong loan volumes, an improved net interest margin, and high credit quality drove our solid performance in the first quarter and further validated our positive outlook for 2013,” said Greg Becker, President and CEO of SVB Financial Group. “SVB's position as the bank of choice for innovation companies allows us to identify and win the highest-potential young companies, while increasing the probability of success for all of our clients, large and small, worldwide. That is our key advantage and it continues to help us deliver strong financial results.”
Highlights of our first quarter 2013 results (compared to fourth quarter 2012, unless otherwise noted) included:
• | Average loan balances of $8.7 billion, an increase of $406 million (or 4.9 percent). Period-end loan balances were $8.8 billion, a decrease of $102 million (or 1.1 percent). |
• | Average total client funds (including both on-balance sheet deposits and off-balance sheet client investment funds) were $41.3 billion, an increase of $1.1 billion (or 2.8 percent). Average deposits decreased by $205 million (or 1.1 percent), while average off-balance sheet client investment funds increased by $1.3 billion (or 6.2 percent). |
• | Net interest income (fully taxable equivalent basis) of $163.6 million, an increase of $2.6 million (or 1.6 percent). |
• | Net interest margin increased by 12 basis points to 3.25 percent. |
• | A provision for loan losses of $5.8 million, compared to $15.0 million. The provision of $5.8 million was primarily driven by net charge-offs of $4.3 million (or 0.20 percent of annualized average gross loans), as well as a nominal increase in the reserve percentage for our performing loans. |
• | Non-GAAP gains on investment securities, net of noncontrolling interests, of $5.1 million, compared to $17.2 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
• | Gains on equity warrant assets of $3.5 million, compared to $7.0 million. |
• | An increase in noninterest expense of $6.0 million (or 4.2 percent), primarily related to seasonal compensation-related expenses of approximately $5.8 million. |
First Quarter 2013 Summary
(Dollars in millions, except share data and ratios) | Three months ended | |||||||||||||||||||
March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | ||||||||||||||||
Income statement: | ||||||||||||||||||||
Diluted earnings per common share | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 1.06 | $ | 0.78 | ||||||||||
Net income available to common stockholders | 40.9 | 50.4 | 42.3 | 47.6 | 34.8 | |||||||||||||||
Net interest income | 163.2 | 160.6 | 154.4 | 151.9 | 150.9 | |||||||||||||||
Provision for loan losses | 5.8 | 15.0 | 6.8 | 8.0 | 14.5 | |||||||||||||||
Noninterest income | 78.6 | 126.7 | 69.1 | 80.4 | 59.3 | |||||||||||||||
Noninterest expense | 149.0 | 143.0 | 135.2 | 135.8 | 132.0 | |||||||||||||||
Non-GAAP net income available to common stockholders (1) | 40.9 | 50.4 | 42.3 | 42.1 | 34.8 | |||||||||||||||
Non-GAAP diluted earnings per common share (1) | 0.90 | 1.12 | 0.94 | 0.94 | 0.78 | |||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests and excluding gains on sales of certain assets (1) | 56.1 | 75.6 | 55.6 | 57.8 | 51.4 | |||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests (1) | 146.2 | 141.2 | 132.4 | 131.8 | 129.2 | |||||||||||||||
Fully taxable equivalent: | ||||||||||||||||||||
Net interest income (2) | $ | 163.6 | $ | 161.0 | $ | 154.9 | $ | 152.4 | $ | 151.4 | ||||||||||
Net interest margin | 3.25 | % | 3.13 | % | 3.12 | % | 3.22 | % | 3.30 | % | ||||||||||
Balance sheet: | ||||||||||||||||||||
Average total assets | $ | 22,314.6 | $ | 22,377.8 | $ | 21,727.2 | $ | 20,890.9 | $ | 20,232.5 | ||||||||||
Average loans, net of unearned income | 8,680.9 | 8,274.9 | 7,907.6 | 7,237.2 | 6,804.3 | |||||||||||||||
Average available-for-sale securities | 10,887.5 | 10,743.8 | 10,569.7 | 10,931.7 | 10,497.7 | |||||||||||||||
Average noninterest-bearing demand deposits | 13,386.5 | 13,843.8 | 12,914.7 | 12,264.0 | 12,026.0 | |||||||||||||||
Average interest-bearing deposits | 5,399.0 | 5,147.0 | 5,345.6 | 5,143.6 | 4,939.8 | |||||||||||||||
Average total deposits | 18,785.5 | 18,990.9 | 18,260.3 | 17,407.6 | 16,965.8 | |||||||||||||||
Average long-term debt | 457.5 | 458.1 | 458.4 | 553.9 | 603.3 | |||||||||||||||
Period-end total assets | 22,796.0 | 22,766.1 | 21,576.9 | 21,289.8 | 20,818.3 | |||||||||||||||
Period-end loans, net of unearned income | 8,844.9 | 8,946.9 | 8,192.4 | 7,789.8 | 7,121.3 | |||||||||||||||
Period-end available-for-sale securities | 10,908.2 | 11,343.2 | 11,047.7 | 10,621.0 | 11,527.5 | |||||||||||||||
Period-end non-marketable securities | 1,215.8 | 1,184.3 | 1,163.8 | 1,132.3 | 1,021.9 | |||||||||||||||
Period-end noninterest-bearing demand deposits | 14,038.6 | 13,875.3 | 12,598.6 | 12,842.3 | 11,837.6 | |||||||||||||||
Period-end interest-bearing deposits | 5,271.3 | 5,301.2 | 5,126.4 | 5,226.6 | 4,879.3 | |||||||||||||||
Period-end total deposits | 19,309.9 | 19,176.5 | 17,725.1 | 18,068.8 | 16,716.9 | |||||||||||||||
Off-balance sheet: | ||||||||||||||||||||
Average total client investment funds | $ | 22,490.0 | $ | 21,175.8 | $ | 20,929.1 | $ | 19,863.9 | $ | 18,883.2 | ||||||||||
Period-end total client investment funds | 22,980.8 | 22,512.8 | 21,058.4 | 20,097.1 | 19,111.7 | |||||||||||||||
Total unfunded credit commitments | 9,170.3 | 8,610.8 | 8,710.2 | 8,752.7 | 7,866.1 | |||||||||||||||
Earnings ratios: | ||||||||||||||||||||
Return on average assets (annualized) (3) | 0.74 | % | 0.90 | % | 0.77 | % | 0.92 | % | 0.69 | % | ||||||||||
Non-GAAP return on average assets (annualized) (1) | 0.74 | 0.90 | 0.77 | 0.81 | 0.69 | |||||||||||||||
Return on average SVBFG stockholders’ equity (annualized) (4) | 8.89 | 10.99 | 9.44 | 11.21 | 8.61 | |||||||||||||||
Non-GAAP return on average SVBFG stockholders’ equity (annualized) (1) | 8.89 | 10.99 | 9.44 | 9.91 | 8.61 | |||||||||||||||
Asset quality ratios: | ||||||||||||||||||||
Allowance for loan losses as a % of total gross loans | 1.26 | % | 1.23 | % | 1.23 | % | 1.25 | % | 1.41 | % | ||||||||||
Allowance for loan losses for performing loans as a % of total gross performing loans | 1.18 | 1.16 | 1.16 | 1.18 | 1.16 | |||||||||||||||
Gross charge-offs as a % of average total gross loans (annualized) | 0.26 | 0.36 | 0.23 | 0.78 | 0.41 | |||||||||||||||
Net charge-offs as a % of average total gross loans (annualized) | 0.20 | 0.28 | 0.17 | 0.59 | 0.21 | |||||||||||||||
Other ratios: | ||||||||||||||||||||
Operating efficiency ratio (5) | 61.52 | % | 49.72 | % | 60.33 | % | 58.31 | % | 62.65 | % | ||||||||||
Non-GAAP operating efficiency ratio (1) | 66.53 | 59.67 | 62.93 | 62.70 | 63.72 | |||||||||||||||
Total risk-based capital ratio | 14.59 | 14.05 | 14.34 | 13.85 | 14.30 | |||||||||||||||
Tangible common equity to tangible assets (1) | 8.26 | 8.04 | 8.27 | 8.06 | 7.87 | |||||||||||||||
Tangible common equity to risk-weighted assets (1) | 13.94 | 13.53 | 13.93 | 13.35 | 13.54 | |||||||||||||||
Period-end loans, net of unearned income, to deposits | 45.80 | 46.66 | 46.22 | 43.11 | 42.60 | |||||||||||||||
Average loans, net of unearned income, to deposits | 46.21 | 43.57 | 43.30 | 41.57 | 40.11 | |||||||||||||||
Book value per common share (6) | $ | 41.85 | $ | 41.02 | $ | 40.10 | $ | 38.63 | $ | 37.19 | ||||||||||
Other statistics: | ||||||||||||||||||||
Average full-time equivalent employees | 1,655 | 1,607 | 1,594 | 1,566 | 1,556 | |||||||||||||||
Period-end full-time equivalent employees | 1,663 | 1,615 | 1,602 | 1,562 | 1,554 |
2
(1) | To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP measures. A reconciliation of non-GAAP calculations to GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.” |
(2) | Interest income on non-taxable investments is presented on a fully taxable equivalent basis using the federal statutory income tax rate of 35.0 percent. The taxable equivalent adjustments were $0.4 million for the quarter ended March 31, 2013, and $0.5 million for each of the quarters ended December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012. |
(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. |
(5) | Ratio is calculated by dividing noninterest expense by total taxable equivalent net interest income plus noninterest income. |
(6) | Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares. |
Net Interest Income and Margin
Net interest income, on a fully taxable equivalent basis, was $163.6 million for the first quarter of 2013, compared to $161.0 million for the fourth quarter of 2012 and $151.4 million for the first quarter of 2012. The following table provides a summary of changes in interest income and interest expense attributable to both volume and rate from the fourth quarter of 2012 to the first quarter of 2013. Changes that are not solely due to either volume or rate (principally changes in the number of days from quarter to quarter) are allocated in proportion to the percentage changes in average volume and average rate:
Q1'13 compared to Q4'12 | ||||||||||||
Increase (decrease) due to change in | ||||||||||||
(Dollars in thousands) | Volume | Rate | Total | |||||||||
Interest income: | ||||||||||||
Short-term investment securities | $ | (512 | ) | $ | 161 | $ | (351 | ) | ||||
Available-for-sale securities | 395 | 3,323 | 3,718 | |||||||||
Loans | 4,443 | (5,003 | ) | (560 | ) | |||||||
Increase (decrease) in interest income, net | 4,326 | (1,519 | ) | 2,807 | ||||||||
Interest expense: | ||||||||||||
Deposits | 195 | 31 | 226 | |||||||||
Short-term borrowings | 24 | 2 | 26 | |||||||||
Long-term debt | (4 | ) | (8 | ) | (12 | ) | ||||||
Increase in interest expense, net | 215 | 25 | 240 | |||||||||
Increase (decrease) in net interest income | $ | 4,111 | $ | (1,544 | ) | $ | 2,567 |
The increase in net interest income, on a fully taxable equivalent basis, from the fourth quarter of 2012 to the first quarter of 2013, was primarily attributable to the following:
• | An increase in interest income on available-for-sale securities of $3.7 million to $47.0 million for the first quarter of 2013, primarily reflective of a $4.7 million decrease in premium amortization expense. Premium amortization expense decreased to $8.3 million for the first quarter of 2013, compared to $13.1 million for the fourth quarter of 2012, reflective of a decrease in mortgage prepayment levels for fixed-rate mortgage securities. As of March 31, 2013, the remaining unamortized premium balance on our available-for-sale securities portfolio was $106 million, compared to $115 million as of December 31, 2012. |
• | A decrease in interest income on loans of $0.6 million to $123.7 million for the first quarter of 2013. This decrease was reflective of a two day decrease in the number of days during the quarter (compared to the fourth quarter of 2012) reducing interest income by approximately $2.5 million, as well as a decrease from lower overall yields, largely offset by an increase in average balances of $406 million. Overall yields decreased by 20 basis points to 5.78 percent, primarily attributable to a 16 basis points decrease in loan fee yields driven by a $2.5 million decrease in loan prepayment fees. Gross loan yields decreased by 4 basis points to 5.00 percent, reflective of a continued change in the mix of our loans that are indexed to the national Prime rate instead of the SVB Prime rate, as well as our success in growing our later stage client portfolio that is typically benchmarked to three-month LIBOR. |
Net interest margin, on a fully taxable equivalent basis, was 3.25 percent for the first quarter of 2013, compared to 3.13 percent for the fourth quarter of 2012 and 3.30 percent for the first quarter of 2012. The increase in our net interest margin for the first quarter of 2013 was primarily reflective of lower premium amortization expense on available-for-sale securities (9 basis points), as well as a change in the mix of our interest-earning assets (lower average cash, higher average loans and available-for sale securities).
3
For the first quarter of 2013, 72.9 percent, or $6.4 billion, of our average outstanding gross loans were variable-rate loans that adjust at prescribed measurement dates upon a change in prime-lending rates or other variable-rate indices. This compares to 75.2 percent, or $6.4 billion, for the fourth quarter of 2012 and 73.6 percent, or $5.1 billion, for the first quarter of 2012. For the first quarter of 2013, average variable-rate available-for-sale securities were $1.7 billion, or 15.6 percent of our available-for-sale securities portfolio, compared to $1.9 billion, or 17.3 percent in the fourth quarter of 2012. These securities are indexed to and change with movements in the one-month LIBOR rate.
Investment Securities
Our investment securities portfolio consists of both an available-for-sale securities portfolio, which represents interest-earning investment securities, and a non-marketable securities portfolio, which primarily represents investments managed as part of our funds management business.
Available-for-Sale Securities
Our available-for-sale securities portfolio is a fixed income investment portfolio that is managed to optimize portfolio yield over the long-term consistent with our liquidity, credit diversification and asset/liability management strategies.
Average available-for-sale securities increased by $144 million to $10.9 billion for the first quarter of 2013, compared to $10.7 billion for the fourth quarter of 2012 and $10.5 billion for the first quarter of 2012. Period-end available-for-sale securities were $10.9 billion at March 31, 2013, $11.3 billion at December 31, 2012 and $11.5 billion at March 31, 2012. During the first quarter of 2013, we had paydowns of $654 million, partially offset by new investments of $220 million. New investments were concentrated in fixed rate agency-issued mortgage securities, which have weighted-average yields slightly lower than the fixed rate mortgage securities that comprised most of the paydowns during the quarter, reflective of the current low rate environment.
Non-Marketable Securities
Our non-marketable securities portfolio primarily represents investments in venture capital funds, debt funds and private portfolio companies.
Non-marketable securities increased by $32 million to $1.2 billion ($476 million net of noncontrolling interests) at March 31, 2013, compared to $1.2 billion ($476 million net of noncontrolling interests) at December 31, 2012 and $1.0 billion ($360 million net of noncontrolling interests) at March 31, 2012. The increase of $32 million from the fourth quarter of 2012 to the first quarter of 2013 was primarily attributable to additional capital calls for fund investments. Reconciliations of our non-GAAP non-marketable securities, net of noncontrolling interests, are provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”
Loans
Average loans, net of unearned income, were $8.7 billion for the first quarter of 2013, compared to $8.3 billion for the fourth quarter of 2012 and $6.8 billion for the first quarter of 2012. Period-end loans, net of unearned income, were $8.8 billion at March 31, 2013, compared to $8.9 billion at December 31, 2012 and $7.1 billion at March 31, 2012. The increase in average loan balances from the fourth quarter of 2012 to the first quarter of 2013 came primarily from the full quarter effect of sponsor-led buyouts by later stage clients in our software portfolio during the fourth quarter of 2012.
Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million totaled $3.0 billion, $3.1 billion and $2.0 billion at March 31, 2013, December 31, 2012 and March 31, 2012, respectively, which represents 33.4 percent, 34.8 percent and 28.3 percent of total gross loans, respectively. The decrease in our loans equal to or greater than $20 million from December 31, 2012 to March 31, 2013 was driven primarily by a decrease of $386 million from our venture capital/private equity portfolio due to paydowns of capital call lines of credit. This decrease was partially offset by increases of $93 million and $91 million from our hardware and software portfolios, respectively. Further details are provided under the section “Loan Concentrations.”
4
Credit Quality
The following table provides a summary of our allowance for loan losses:
Three months ended | ||||||||||||
(Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Allowance for loan losses, beginning balance | $ | 110,651 | $ | 101,524 | $ | 89,947 | ||||||
Provision for loan losses | 5,813 | 15,014 | 14,529 | |||||||||
Gross loan charge-offs | (5,626 | ) | (7,562 | ) | (6,990 | ) | ||||||
Loan recoveries | 1,367 | 1,675 | 3,436 | |||||||||
Allowance for loan losses, ending balance | $ | 112,205 | $ | 110,651 | $ | 100,922 | ||||||
Provision for loan losses as a percentage of total gross loans (annualized) | 0.26 | % | 0.66 | % | 0.81 | % | ||||||
Gross loan charge-offs as a percentage of average total gross loans (annualized) | 0.26 | 0.36 | 0.41 | |||||||||
Net loan charge-offs as a percentage of average total gross loans (annualized) | 0.20 | 0.28 | 0.21 | |||||||||
Allowance for loan losses as a percentage of period-end total gross loans | 1.26 | 1.23 | 1.41 | |||||||||
Total gross loans at period-end | $ | 8,922,829 | $ | 9,024,248 | $ | 7,180,779 | ||||||
Average total gross loans | 8,755,699 | 8,347,013 | 6,861,122 |
Our provision for loan losses was $5.8 million for the first quarter of 2013, compared to $15.0 million for the fourth quarter of 2012. The provision of $5.8 million for the first quarter of 2013 was primarily attributable to net charge-offs of $4.3 million, as well as a nominal increase in the reserve percentage for our performing loans. Gross loan charge-offs of $5.6 million for the first quarter of 2013 were primarily from our life science and hardware portfolios.
Our allowance for loan losses as a percentage of total gross loans was 1.26 percent at March 31, 2013, compared to 1.23 percent at December 31, 2012. Our allowance for loan losses for total gross performing loans as a percentage of total gross performing loans increased to 1.18 percent at March 31, 2013, compared to 1.16 percent at December 31, 2012.
Our impaired loans totaled $44 million at March 31, 2013, compared to $38 million at December 31, 2012. The allowance for loan losses related to impaired loans was $7.7 million at March 31, 2013, compared to $6.3 million at December 31, 2012.
Client Funds
Our total client funds consist of both on-balance sheet deposits and off-balance sheet client investment funds. Our total average client funds increased by $1.1 billion to $41.3 billion for the first quarter of 2013, compared to $40.2 billion for the fourth quarter of 2012. Our total period-end client funds increased by $601 million to $42.3 billion at March 31, 2013, compared to $41.7 billion at December 31, 2012.
Deposits
Average deposits were $18.8 billion for the first quarter of 2013, compared to $19.0 billion for the fourth quarter of 2012 and $17.0 billion for the first quarter of 2012. Period-end deposits were $19.3 billion at March 31, 2013, compared to $19.2 billion at December 31, 2012 and $16.7 billion at March 31, 2012.
Off-Balance Sheet Client Investment Funds
Average off-balance sheet client investment funds were $22.5 billion for the first quarter of 2013, compared to $21.2 billion for the fourth quarter of 2012 and $18.9 billion for the first quarter of 2012. Period-end client investment funds were $23.0 billion at March 31, 2013, compared to $22.5 billion at December 31, 2012 and $19.1 billion at March 31, 2012. The increases in average and period-end total client investment funds from the fourth quarter of 2012 to the first quarter of 2013 were primarily due to a strong funding environment for both private and public clients. The increases were also attributable to our existing clients’ increased utilization of our off-balance sheet sweep product, which averaged $4.3 billion for the first quarter of 2013, compared to $3.7 billion for the fourth quarter of 2012.
5
Short-term Borrowings
Period-end short-term borrowings decreased by $159 million to $7.5 million at March 31, 2013, compared to $166 million at December 31, 2012, primarily due to overnight borrowings of $160 million at December 31, 2012. Overnight borrowings are utilized for daily cash management purposes and are a normal part of our liquidity management practices.
Noninterest Income
Noninterest income was $78.6 million for the first quarter of 2013, compared to $126.7 million for the fourth quarter of 2012 and $59.3 million for the first quarter of 2012. Non-GAAP noninterest income, net of noncontrolling interests, was $56.1 million for the first quarter of 2013, compared to $75.6 million for the fourth quarter of 2012 and $51.4 million for the first quarter of 2012. Reconciliations of our non-GAAP noninterest income and non-GAAP net gains on investment securities discussed in this section are provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”
The decrease of $48.1 million in noninterest income from the fourth quarter of 2012 to the first quarter of 2013 was primarily driven by lower gains from our non-marketable fund investments. Unrealized gains from non-marketable fund investments for any single quarter are typically driven by valuation changes, and are therefore subject to potential increases or decreases in future periods. Items impacting the change in noninterest income from the fourth quarter of 2012 to the first quarter of 2013 were as follows:
• | Net gains on investment securities were $27.4 million for the first quarter of 2013, compared to net gains of $68.2 million for the fourth quarter of 2012. Net of noncontrolling interests, net gains on investment securities were $5.1 million for the first quarter of 2013 compared to $17.2 million for the fourth quarter of 2012. The gains, net of noncontrolling interests for the fourth quarter of 2012 included gains of $9.2 million from a single investment in two of our managed funds. The gains, net of noncontrolling interests, of $5.1 million for the first quarter of 2013 were primarily driven by the following: |
◦ | Gains of $2.4 million from our managed funds, primarily related to unrealized valuation increases and carried interest from three of our funds of funds. |
◦ | Gains of $1.8 million from our investments in debt funds, driven by valuation increases from the investments within the funds. |
As of March 31, 2013, we held investments, either directly or indirectly through 13 of our managed investment funds, in 461 funds (primarily venture capital funds), 98 companies and 5 debt funds.
The following tables provide a summary of non-GAAP net gains on investment securities, net of noncontrolling interests for the three months ended March 31, 2013 and December 31, 2012, respectively:
Three months ended March 31, 2013 | ||||||||||||||||||||||||
(Dollars in thousands) | Managed Funds Of Funds | Managed Direct Venture Funds | Debt Funds | Available- For-Sale Securities | Strategic and Other Investments | Total | ||||||||||||||||||
Total gains (losses) on investment securities, net | $ | 22,802 | $ | 1,856 | $ | 1,753 | $ | (45 | ) | $ | 1,072 | $ | 27,438 | |||||||||||
Less: income (losses) attributable to noncontrolling interests, including carried interest | 20,802 | 1,496 | (2 | ) | — | — | 22,296 | |||||||||||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests | $ | 2,000 | $ | 360 | $ | 1,755 | $ | (45 | ) | $ | 1,072 | $ | 5,142 | |||||||||||
Three months ended December 31, 2012 | ||||||||||||||||||||||||
(Dollars in thousands) | Managed Funds Of Funds | Managed Direct Venture Funds | Debt Funds | Available- For-Sale Securities | Strategic and Other Investments | Total | ||||||||||||||||||
Total gains on investment securities, net | $ | 5,290 | $ | 56,251 | $ | 3,558 | $ | 649 | $ | 2,490 | $ | 68,238 | ||||||||||||
Less: income attributable to noncontrolling interests, including carried interest | 4,909 | 46,109 | 6 | — | — | 51,024 | ||||||||||||||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests | $ | 381 | $ | 10,142 | $ | 3,552 | $ | 649 | $ | 2,490 | $ | 17,214 |
6
• | A decrease of $11.7 million in other noninterest income, primarily attributable to net losses of $7.1 million from the revaluation of foreign currency denominated instruments in the first quarter of 2013, compared to net gains of $1.6 million for the fourth quarter of 2012. The losses of $7.1 million for the first quarter of 2013 were largely offset by net gains of $6.2 million on internal foreign exchange forward contracts economically hedging certain off these instruments, which are included within noninterest income on the line item "gains on derivative instruments" as noted below. Additionally, we did not have any loan syndication fee income in the first quarter of 2013, compared to $1.0 million in the fourth quarter of 2012. |
• | Net gains on derivative instruments were $11.0 million for the first quarter of 2013, compared to net gains of $6.3 million for the fourth quarter of 2012. The following table provides a summary of our net gains on derivative instruments: |
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Net gains on equity warrant assets | $ | 3,505 | $ | 7,027 | $ | 6,935 | ||||||
Gains (losses) on foreign exchange forward contracts, net: | ||||||||||||
Gains on client foreign exchange forward contracts, net | 797 | 899 | 1,065 | |||||||||
Gains (losses) on internal foreign exchange forward contracts, net (1) | 6,200 | (1,265 | ) | (2,051 | ) | |||||||
Total gains (losses) on foreign exchange forward contracts, net | 6,997 | (366 | ) | (986 | ) | |||||||
Change in fair value of interest rate swaps | 60 | 32 | 389 | |||||||||
Net gains (losses) on other derivatives (2) | 478 | (373 | ) | (362 | ) | |||||||
Total gains on derivative instruments, net | $ | 11,040 | $ | 6,320 | $ | 5,976 |
(1) | Represents the change in fair value of foreign exchange forward contracts used to economically reduce our foreign exchange exposure related to certain foreign currency denominated loans. |
(2) | Primarily represents the change in fair value of loan conversion options. |
The increase in net gains on derivative instruments from the fourth quarter of 2012 to the first quarter of 2013 was primarily attributable to the following:
◦ | Net gains of $6.2 million on internal foreign exchange forward contracts economically hedging certain of our foreign currency denominated loans for the first quarter of 2013, compared to net losses of $1.3 million for the fourth quarter of 2012. The net gains of $6.2 million for the first quarter of 2013 were primarily attributable to the strengthening of the U.S. Dollar against the Euro and Pound Sterling. These gains were largely offset by net losses of $7.1 million from the revaluation of foreign currency denominated instruments that are included in the line item "Other" within noninterest income as noted above. |
◦ | Net gains on equity warrant assets of $3.5 million for the first quarter of 2013, compared to $7.0 million for the fourth quarter of 2012. The net gains of $3.5 million for the first quarter of 2013 included the following: |
• | Net gains of $2.8 million from changes in warrant valuations from both private and public warrant clients, compared to net gains of $4.7 million for the fourth quarter of 2012. |
• | Net gains of $0.8 million from the exercise of equity warrant assets, compared to net gains of $2.4 million for the fourth quarter of 2012. |
Noninterest Expense
Noninterest expense was $149.0 million for the first quarter of 2013, compared to $143.0 million for the fourth quarter of 2012 and $132.0 million for the first quarter of 2012. The key factors contributing to the increase in noninterest expense from the fourth quarter of 2012 to the first quarter of 2013 were as follows:
• | An increase of $5.1 million in compensation and benefits expense. The following table provides a summary of our compensation and benefits expense: |
7
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Compensation and benefits: | ||||||||||||
Salaries and wages | $ | 39,323 | $ | 37,145 | $ | 38,120 | ||||||
Incentive compensation plan | 19,177 | 23,101 | 15,716 | |||||||||
ESOP | 3,016 | 1,413 | 5,431 | |||||||||
Other employee benefits (1) | 27,188 | 21,899 | 24,470 | |||||||||
Total compensation and benefits | $ | 88,704 | $ | 83,558 | $ | 83,737 | ||||||
Period-end full-time equivalent employees | 1,663 | 1,615 | 1,554 | |||||||||
Average full-time equivalent employees | 1,655 | 1,607 | 1,556 |
(1) | Other employee benefits expense includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), warrant and retention plans, agency fees and other employee-related expenses. |
The key changes in factors affecting compensation and benefits expense from the fourth quarter of 2012 to the first quarter of 2013 were as follows:
◦ | An increase of $5.1 million in additional ESOP contributions and 401(k) employer matching contributions made during the first quarter of 2013 as a result of annual incentive compensation payouts to employees. |
◦ | An increase of $2.2 million in salaries and wages expense, primarily due to an increase in the number of average full-time equivalent employees ("FTE"), which increased by 48 to 1,655 FTEs for the first quarter of 2013, compared to 1,607 FTEs for the fourth quarter of 2012. |
◦ | A decrease of $3.9 million in incentive compensation expense, primarily reflective of higher expenses in the fourth quarter of 2012 due to our stronger than expected financial performance during that period. |
• | A provision for unfunded credit commitments of $2.0 million for the first quarter of 2013, compared to a reduction of provision of $0.8 million for the fourth quarter of 2012. The provision of $2.0 million for the first quarter of 2013 was primarily due to an increase in unfunded credit commitment balances of $560 million. |
The above increases in noninterest expense were partially offset by the following:
• | A decrease of $1.7 million in premises and equipment expense, primarily due to the write-off of $2.3 million of certain assets in the fourth quarter of 2012. |
• | A decrease of $1.8 million in professional services expense, primarily due to higher levels of consulting fees in the fourth quarter of 2012 related to our ongoing business and infrastructure initiatives. |
Non-GAAP noninterest expense, net of noncontrolling interests was $146.2 million for the first quarter of 2013, compared to $141.2 million for the fourth quarter of 2012 and $129.2 million for the first quarter of 2012. Reconciliations of our non-GAAP noninterest expense, net of noncontrolling interests, are provided below under the section “Use of Non-GAAP Financial Measures.”
Income Tax Expense
Our effective tax rate was 39.2 percent for the first quarter of 2013, compared to 36.9 percent for the fourth quarter of 2012 and 40.6 percent for the first quarter of 2012. The lower effective tax rate in the fourth quarter of 2012 reflected certain adjustments for the full year 2012. Our effective tax rate for the full year 2012 was 39.3 percent.
Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and net income attributable to noncontrolling interests.
8
Noncontrolling Interests
Included in net income is income and expense related to noncontrolling interests. The relevant amounts allocated to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests” in our statements of income. The following table provides a summary of net income attributable to noncontrolling interests:
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Net interest income (1) | $ | (24 | ) | $ | 25 | $ | (43 | ) | ||||
Noninterest income (1) | (23,288 | ) | (56,565 | ) | (6,632 | ) | ||||||
Noninterest expense (1) | 2,860 | 1,848 | 2,818 | |||||||||
Carried interest (2) | 798 | 5,451 | (1,286 | ) | ||||||||
Net income attributable to noncontrolling interests | $ | (19,654 | ) | $ | (49,241 | ) | $ | (5,143 | ) |
(1) | Represents noncontrolling interests’ share in net interest income, noninterest income and noninterest expense. |
(2) | Represents the preferred allocation of income earned by the general partners or limited partners of certain consolidated funds. |
Net income attributable to noncontrolling interests was $19.7 million for the first quarter of 2013, compared to $49.2 million for the fourth quarter of 2012 and $5.1 million for the first quarter of 2012. Net income attributable to noncontrolling interests of $19.7 million for the first quarter of 2013 was primarily a result of the following:
• | Net gains on investment securities (including carried interest) attributable to noncontrolling interests of $22.3 million, primarily from gains of $20.8 million from our managed funds of funds. |
• | Noninterest expense of $2.9 million, primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as the general partner. |
SVBFG Stockholders’ Equity
Total SVBFG stockholders’ equity increased by $52 million to $1.9 billion at March 31, 2013, primarily due to net income of $41 million in the first quarter of 2013 and an increase in additional-paid-in capital of $24 million primarily from stock option exercises and ESOP contributions during the first quarter of 2013. These increases were partially offset by a decrease in accumulated other comprehensive income of $13 million primarily due to a decrease in the fair value of our available-for-sale securities portfolio as a result of increases in period-end market interest rates.
9
Outlook for the Year Ending December 31, 2013;
Our outlook for the year ending December 31, 2013 is provided below on a GAAP basis, unless otherwise noted. We have provided our current outlook for the expected full year results of our significant forecasted activities. In general, we do not provide our outlook for certain items (such as gains (losses) from warrants and investment securities) where the timing or financial impact are particularly uncertain and/or subject to market or other conditions beyond our control (such as the level of IPO, M&A or general financing activity), or for potential unusual or non-recurring items. The outlook assumptions presented below are, by their nature, forward-looking statements and are subject to substantial risks and uncertainties, which are discussed below under the caption “Forward-Looking Statements.”
For the year ending December 31, 2013, compared to our 2012 results, our outlook is the following:
Current full year 2013 outlook compared to 2012 results (as of April 25, 2013) | Change in outlook compared to outlook reported as of January 24, 2013 | |
Average loan balances | Increase at a percentage rate in the low twenties | No change from previous outlook |
Average deposit balances | Increase at a percentage rate in the mid single digits | No change from previous outlook |
Net interest income (1) | Increase at a percentage rate in the high single digits | Outlook increased from mid single digits due to lower than expected prepayments on mortgage-backed securities resulting in decreased premium amortization expense |
Net interest margin (1) | Between 3.15% and 3.25% | Outlook increased from between 3.10% and 3.20% due to lower than expected prepayments on mortgage-backed securities resulting in decreased premium amortization expense |
Allowance for loan losses for total gross performing loans as a percentage of total gross performing loans | Comparable to 2012 levels | No change from previous outlook |
Net loan charge-offs | Between 0.30% and 0.50% of average total gross loans | No change from previous outlook |
Nonperforming loans as a percentage of total gross loans | Comparable to 2012 levels | No change from previous outlook |
Fees for deposit services, letters of credit, credit card, client investment, and foreign exchange, in aggregate | Increase at a percentage rate in the low teens | Outlook decreased from mid teens primarily due to lower than expected client investment fees driven by lower yields on certain products |
Noninterest expense (excluding expenses related to noncontrolling interests) (2) | Increase at a percentage rate in the mid single digits | No change from previous outlook |
(1) | Our outlook for net interest income and net interest margin is partly based on management's current forecast of prepayment rates on our mortgage-backed securities in our available-for-sale securities portfolio and their impact on our forecasted premium amortization expense. Such forecasts are subject to change, and actual results may differ, based on market conditions and actual prepayment rates. See also other factors that may cause our outlook to differ from our actual results under the "Forward Looking Statements" section below. |
(2) | Non-GAAP |
10
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, such as forecasts of our future financial results and condition, expectations for our operations and business, and our underlying assumptions of such forecasts and expectations. In this release, including the section “Outlook for the Year Ending December 31, 2013” above, we make forward-looking statements discussing management’s expectations about economic conditions; opportunities in the market; the outlook on our client performance; our financial, credit, and business performance; expense levels; and financial results (and the components of such results) for the year 2013.
Although management believes that the expectations reflected in our forward-looking statements are reasonable and has based these expectations on our beliefs and assumptions, such expectations are not guarantees and may prove to be incorrect. Actual results could differ significantly. Factors that may cause the outlook for the year 2013 and other forward-looking statements herein to change include, among others, the following: (i) deterioration, weaker than expected, or other changes in the state of the economy or the markets in which we conduct business or are served by us (including the levels of IPOs and M&A activities), (ii) changes in the volume and credit quality of our loans, (iii) the impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios (iv) changes in our deposit levels, (v) changes in the performance or equity valuations of funds or companies in which we have invested or hold derivative instruments or equity warrant assets, (vi) variations from our expectations as to factors impacting our cost structure, (vii) 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, (viii) accounting changes, as required by GAAP, and (ix) regulatory or legal changes or impacts upon us. For additional information about these factors, please refer to our public reports filed with the U.S. Securities and Exchange Commission, including our most recently-filed quarterly or annual report. The forward-looking statements included in this release are made only as of the date of this release. We do not intend, and undertake no obligation, to update these forward-looking statements.
Earnings Conference Call
On April 25, 2013, we will host a conference call at 3:00 p.m. (Pacific Time) to discuss the financial results for the quarter ended March 31, 2013. The conference call can be accessed by dialing (877) 663-9523 or (404) 665-9482, and referencing the conference ID “35962517.” A live webcast of the audio portion of the call can be accessed on the Investor Relations section of our website at www.svb.com. A replay of the conference call will be available beginning at approximately 6:00 p.m. (Pacific Time) on Thursday, April 25, 2013, through midnight on Tuesday, April 30, 2013, and may be accessed by dialing (855) 859-2056 or (404) 537-3406 and referencing conference ID number “35962517.” A replay of the audio webcast will also be available on www.svb.com for 12 months beginning Thursday, April 25, 2013.
About SVB Financial Group
For three decades, SVB Financial Group and its subsidiaries, including Silicon Valley Bank, have been dedicated to helping entrepreneurs succeed. SVB Financial Group is a financial holding company that serves companies in the technology, life science, venture capital, private equity and premium wine industries. Offering diversified financial services through Silicon Valley Bank, SVB Analytics, SVB Capital, and SVB Private Bank, SVB Financial Group provides clients with commercial, investment, international and private banking services. The company also offers funds management, broker-dealer transactions and asset management, as well as the added value of its knowledge and networks worldwide. Headquartered in Santa Clara, California, SVB Financial Group (Nasdaq: SIVB) operates through 28 offices in the U.S. and international operations in China, India, Israel and the United Kingdom. More information on the company can be found at www.svb.com.
Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Private Bank is a division of Silicon Valley Bank. SVB Financial Group is also a member of the Federal Reserve System.
11
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended | ||||||||||||
(Dollars in thousands, except share data) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Interest income: | ||||||||||||
Loans | $ | 123,744 | $ | 124,304 | $ | 109,461 | ||||||
Available-for-sale securities: | ||||||||||||
Taxable | 45,752 | 41,923 | 47,375 | |||||||||
Non-taxable | 799 | 871 | 900 | |||||||||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities | 719 | 1,070 | 1,038 | |||||||||
Total interest income | 171,014 | 168,168 | 158,774 | |||||||||
Interest expense: | ||||||||||||
Deposits | 2,051 | 1,825 | 1,481 | |||||||||
Borrowings | 5,794 | 5,780 | 6,356 | |||||||||
Total interest expense | 7,845 | 7,605 | 7,837 | |||||||||
Net interest income | 163,169 | 160,563 | 150,937 | |||||||||
Provision for loan losses | 5,813 | 15,014 | 14,529 | |||||||||
Net interest income after provision for loan losses | 157,356 | 145,549 | 136,408 | |||||||||
Noninterest income: | ||||||||||||
Gains on investment securities, net | 27,438 | 68,238 | 7,839 | |||||||||
Foreign exchange fees | 13,448 | 12,647 | 12,103 | |||||||||
Gains on derivative instruments, net | 11,040 | 6,320 | 5,976 | |||||||||
Deposit service charges | 8,793 | 8,587 | 8,096 | |||||||||
Credit card fees | 7,448 | 6,624 | 5,668 | |||||||||
Client investment fees | 3,475 | 4,313 | 2,897 | |||||||||
Letters of credit and standby letters of credit fees | 3,435 | 4,723 | 3,636 | |||||||||
Other | 3,527 | 15,236 | 13,078 | |||||||||
Total noninterest income | 78,604 | 126,688 | 59,293 | |||||||||
Noninterest expense: | ||||||||||||
Compensation and benefits | 88,704 | 83,558 | 83,737 | |||||||||
Professional services | 17,160 | 18,965 | 14,607 | |||||||||
Premises and equipment | 10,725 | 12,459 | 7,564 | |||||||||
Business development and travel | 8,272 | 7,666 | 7,746 | |||||||||
Net occupancy | 5,767 | 5,869 | 5,623 | |||||||||
FDIC assessments | 3,382 | 2,894 | 2,498 | |||||||||
Correspondent bank fees | 3,055 | 2,640 | 2,688 | |||||||||
Provision for (reduction of) unfunded credit commitments | 2,014 | (776 | ) | (258 | ) | |||||||
Other | 9,935 | 9,774 | 7,807 | |||||||||
Total noninterest expense | 149,014 | 143,049 | 132,012 | |||||||||
Income before income tax expense | 86,946 | 129,188 | 63,689 | |||||||||
Income tax expense | 26,401 | 29,526 | 23,756 | |||||||||
Net income before noncontrolling interests | 60,545 | 99,662 | 39,933 | |||||||||
Net income attributable to noncontrolling interests | (19,654 | ) | (49,241 | ) | (5,143 | ) | ||||||
Net income available to common stockholders | $ | 40,891 | $ | 50,421 | $ | 34,790 | ||||||
Earnings per common share—basic | $ | 0.91 | $ | 1.13 | $ | 0.79 | ||||||
Earnings per common share—diluted | 0.90 | 1.12 | 0.78 | |||||||||
Weighted average common shares outstanding—basic | 44,801,590 | 44,524,789 | 43,779,800 | |||||||||
Weighted average common shares outstanding—diluted | 45,393,025 | 44,982,031 | 44,460,005 |
12
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except par value and share data) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 1,519,249 | $ | 1,008,983 | $ | 850,624 | ||||||
Available-for-sale securities | 10,908,163 | 11,343,177 | 11,527,541 | |||||||||
Non-marketable securities | 1,215,788 | 1,184,265 | 1,021,941 | |||||||||
Investment securities | 12,123,951 | 12,527,442 | 12,549,482 | |||||||||
Loans, net of unearned income | 8,844,890 | 8,946,933 | 7,121,289 | |||||||||
Allowance for loan losses | (112,205 | ) | (110,651 | ) | (100,922 | ) | ||||||
Net loans | 8,732,685 | 8,836,282 | 7,020,367 | |||||||||
Premises and equipment, net of accumulated depreciation and amortization | 65,713 | 66,545 | 59,320 | |||||||||
Accrued interest receivable and other assets | 354,402 | 326,871 | 338,544 | |||||||||
Total assets | $ | 22,796,000 | $ | 22,766,123 | $ | 20,818,337 | ||||||
Liabilities and total equity: | ||||||||||||
Liabilities: | ||||||||||||
Noninterest-bearing demand deposits | $ | 14,038,587 | $ | 13,875,275 | $ | 11,837,600 | ||||||
Interest-bearing deposits | 5,271,321 | 5,301,177 | 4,879,282 | |||||||||
Total deposits | 19,309,908 | 19,176,452 | 16,716,882 | |||||||||
Short-term borrowings | 7,460 | 166,110 | 849,380 | |||||||||
Other liabilities | 359,380 | 360,566 | 307,537 | |||||||||
Long-term debt | 457,194 | 457,762 | 601,835 | |||||||||
Total liabilities | 20,133,942 | 20,160,890 | 18,475,634 | |||||||||
SVBFG stockholders’ equity: | ||||||||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; no shares issued and outstanding | — | — | — | |||||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 44,970,402 shares, 44,627,182 shares and 44,087,110 shares outstanding, respectively | 45 | 45 | 44 | |||||||||
Additional paid-in capital | 570,789 | 547,079 | 515,614 | |||||||||
Retained earnings | 1,215,770 | 1,174,878 | 1,034,523 | |||||||||
Accumulated other comprehensive income | 95,615 | 108,553 | 89,309 | |||||||||
Total SVBFG stockholders’ equity | 1,882,219 | 1,830,555 | 1,639,490 | |||||||||
Noncontrolling interests | 779,839 | 774,678 | 703,213 | |||||||||
Total equity | 2,662,058 | 2,605,233 | 2,342,703 | |||||||||
Total liabilities and total equity | $ | 22,796,000 | $ | 22,766,123 | $ | 20,818,337 |
13
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
Three months ended | |||||||||||||||||||||||||||||||||
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Average balance | Interest income/ expense | Yield/ rate | 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) | $ | 822,418 | $ | 719 | 0.35 | % | $ | 1,419,980 | $ | 1,070 | 0.30 | % | $ | 1,171,410 | $ | 1,038 | 0.36 | % | |||||||||||||||
Available-for-sale securities: (2) | |||||||||||||||||||||||||||||||||
Taxable | 10,803,735 | 45,752 | 1.72 | 10,655,623 | 41,923 | 1.57 | 10,405,476 | 47,375 | 1.83 | ||||||||||||||||||||||||
Non-taxable (3) | 83,811 | 1,229 | 5.95 | 88,141 | 1,340 | 6.05 | 92,236 | 1,384 | 6.03 | ||||||||||||||||||||||||
Total loans, net of unearned income (4) (5) | 8,680,917 | 123,744 | 5.78 | 8,274,878 | 124,304 | 5.98 | 6,804,348 | 109,461 | 6.47 | ||||||||||||||||||||||||
Total interest-earning assets | 20,390,881 | 171,444 | 3.41 | 20,438,622 | 168,637 | 3.28 | 18,473,470 | 159,258 | 3.47 | ||||||||||||||||||||||||
Cash and due from banks | 279,179 | 308,065 | 318,574 | ||||||||||||||||||||||||||||||
Allowance for loan losses | (115,486 | ) | (105,862 | ) | (93,840 | ) | |||||||||||||||||||||||||||
Other assets (6) | 1,759,985 | 1,736,952 | 1,534,339 | ||||||||||||||||||||||||||||||
Total assets | $ | 22,314,559 | $ | 22,377,777 | $ | 20,232,543 | |||||||||||||||||||||||||||
Funding sources: | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
NOW deposits | $ | 135,436 | $ | 117 | 0.35 | % | $ | 112,677 | $ | 97 | 0.34 | % | $ | 104,498 | $ | 79 | 0.30 | % | |||||||||||||||
Money market deposits | 3,043,021 | 1,495 | 0.20 | 2,873,675 | 1,357 | 0.19 | 2,470,781 | 930 | 0.15 | ||||||||||||||||||||||||
Money market deposits in foreign offices | 115,659 | 28 | 0.10 | 113,170 | 28 | 0.10 | 152,582 | 37 | 0.10 | ||||||||||||||||||||||||
Time deposits | 172,401 | 173 | 0.41 | 150,737 | 105 | 0.28 | 152,621 | 179 | 0.47 | ||||||||||||||||||||||||
Sweep deposits in foreign offices | 1,932,495 | 238 | 0.05 | 1,896,783 | 238 | 0.05 | 2,059,284 | 256 | 0.05 | ||||||||||||||||||||||||
Total interest-bearing deposits | 5,399,012 | 2,051 | 0.15 | 5,147,042 | 1,825 | 0.14 | 4,939,766 | 1,481 | 0.12 | ||||||||||||||||||||||||
Short-term borrowings | 74,939 | 28 | 0.15 | 8,348 | 2 | 0.10 | 27,415 | 11 | 0.16 | ||||||||||||||||||||||||
5.375% Senior Notes | 348,013 | 4,821 | 5.62 | 347,961 | 4,820 | 5.51 | 347,810 | 4,815 | 5.57 | ||||||||||||||||||||||||
Junior Subordinated Debentures | 55,181 | 832 | 6.11 | 55,225 | 831 | 5.99 | 55,357 | 831 | 6.04 | ||||||||||||||||||||||||
5.70% Senior Notes | — | — | — | — | — | — | 143,485 | 503 | 1.41 | ||||||||||||||||||||||||
6.05% Subordinated Notes | 54,282 | 113 | 0.84 | 54,950 | 127 | 0.92 | 55,252 | 127 | 0.92 | ||||||||||||||||||||||||
Other long-term debt | — | — | — | — | — | — | 1,440 | 69 | 19.27 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 5,931,427 | 7,845 | 0.54 | 5,613,526 | 7,605 | 0.54 | 5,570,525 | 7,837 | 0.57 | ||||||||||||||||||||||||
Portion of noninterest-bearing funding sources | 14,459,454 | 14,825,096 | 12,902,945 | ||||||||||||||||||||||||||||||
Total funding sources | 20,390,881 | 7,845 | 0.16 | 20,438,622 | 7,605 | 0.15 | 18,473,470 | 7,837 | 0.17 | ||||||||||||||||||||||||
Noninterest-bearing funding sources: | |||||||||||||||||||||||||||||||||
Demand deposits | 13,386,501 | 13,843,839 | 12,025,997 | ||||||||||||||||||||||||||||||
Other liabilities | 359,913 | 335,836 | 326,679 | ||||||||||||||||||||||||||||||
SVBFG stockholders’ equity | 1,866,310 | 1,825,592 | 1,624,256 | ||||||||||||||||||||||||||||||
Noncontrolling interests | 770,408 | 758,984 | 685,086 | ||||||||||||||||||||||||||||||
Portion used to fund interest-earning assets | (14,459,454 | ) | (14,825,096 | ) | (12,902,945 | ) | |||||||||||||||||||||||||||
Total liabilities and total equity | $ | 22,314,559 | $ | 22,377,777 | $ | 20,232,543 | |||||||||||||||||||||||||||
Net interest income and margin | $ | 163,599 | 3.25 | % | $ | 161,032 | 3.13 | % | $ | 151,421 | 3.30 | % | |||||||||||||||||||||
Total deposits | $ | 18,785,513 | $ | 18,990,881 | $ | 16,965,763 | |||||||||||||||||||||||||||
Average SVBFG stockholders’ equity as a percentage of average assets | 8.36 | % | 8.16 | % | 8.03 | % | |||||||||||||||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||
Adjustments for taxable equivalent basis | (430 | ) | (469 | ) | (484 | ) | |||||||||||||||||||||||||||
Net interest income, as reported | $ | 163,169 | $ | 160,563 | $ | 150,937 |
(1) | Includes average interest-earning deposits in other financial institutions of $176 million, $170 million and $332 million for the quarters ended March 31, 2013, December 31, 2012 and March 31, 2012, respectively. For the quarters ended March 31, 2013, December 31, 2012 and March 31, 2012, balance also includes $375 million, $1.0 billion and $594 million, respectively, deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate. |
(2) | Yields on available-for-sale securities are based on amortized cost, therefore do not give effect to unrealized changes in fair value that are reflected in other comprehensive income. |
(3) | Interest income on non-taxable available-for-sale securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent for all periods presented. |
(4) | Nonaccrual loans are reflected in the average balances of loans. |
(5) | Interest income includes loan fees of $16.8 million, $19.5 million and $17.1 million for the quarters ended March 31, 2013, December 31, 2012 and March 31, 2012, respectively. |
(6) | Average investment securities of $1.4 billion, $1.4 billion and $1.2 billion for the quarters ended March 31, 2013, December 31, 2012 and March 31, 2012, respectively, were classified as other assets as they are noninterest-earning assets. These investments primarily consisted of non-marketable securities. |
14
Gains on Equity Warrant Assets
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Equity warrant assets (1): | ||||||||||||
Gains on exercises, net | $ | 814 | $ | 2,423 | $ | 2,941 | ||||||
Cancellations and expirations | (104 | ) | (98 | ) | (569 | ) | ||||||
Changes in fair value | 2,795 | 4,702 | 4,563 | |||||||||
Total net gains on equity warrant assets (2) | $ | 3,505 | $ | 7,027 | $ | 6,935 |
(1) | At March 31, 2013, we held warrants in 1,282 companies, compared to 1,270 companies at December 31, 2012 and 1,192 companies at March 31, 2012. |
(2) | Net gains on equity warrant assets are included in the line item “Gains on derivative instruments, net” as part of noninterest income. |
Reconciliation of Basic and Diluted Weighted Average Common Shares Outstanding
Three months ended | |||||||||
(Shares in thousands) | March 31, 2013 | December 31, 2012 | March 31, 2012 | ||||||
Weighted average common shares outstanding—basic | 44,802 | 44,525 | 43,780 | ||||||
Effect of dilutive securities: | |||||||||
Stock options and employee stock purchase plan | 402 | 293 | 501 | ||||||
Restricted stock units | 189 | 164 | 179 | ||||||
Total effect of dilutive securities | 591 | 457 | 680 | ||||||
Weighted average common shares outstanding—diluted | 45,393 | 44,982 | 44,460 |
Capital Ratios
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||
SVB Financial Group: | |||||||||
Total risk-based capital ratio | 14.59 | % | 14.05 | % | 14.30 | % | |||
Tier 1 risk-based capital ratio | 13.30 | 12.79 | 12.91 | ||||||
Tier 1 leverage ratio | 8.39 | 8.06 | 8.04 | ||||||
Tangible common equity to tangible assets ratio (1) | 8.26 | 8.04 | 7.87 | ||||||
Tangible common equity to risk-weighted assets ratio (1) | 13.94 | 13.53 | 13.54 | ||||||
Silicon Valley Bank: | |||||||||
Total risk-based capital ratio | 13.01 | % | 12.53 | % | 12.59 | % | |||
Tier 1 risk-based capital ratio | 11.70 | 11.24 | 11.16 | ||||||
Tier 1 leverage ratio | 7.35 | 7.06 | 6.94 | ||||||
Tangible common equity to tangible assets ratio (1) | 7.62 | 7.41 | 7.16 | ||||||
Tangible common equity to risk-weighted assets ratio (1) | 12.45 | 12.08 | 11.94 |
(1) | These are non-GAAP calculations. A reconciliation of non-GAAP calculations to GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.” |
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Loan Concentrations
(Dollars in thousands, except ratios and client data) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software | $ | 1,216,843 | $ | 1,125,767 | $ | 568,580 | ||||||
Hardware | 545,643 | 452,836 | 427,989 | |||||||||
Venture capital/private equity | 584,508 | 970,973 | 478,677 | |||||||||
Life science | 341,897 | 352,189 | 288,848 | |||||||||
Premium wine (1) | 22,667 | 6,500 | 6,200 | |||||||||
Other | 120,012 | 117,199 | 119,370 | |||||||||
Total commercial loans | 2,831,570 | 3,025,464 | 1,889,664 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine (1) | 108,845 | 73,816 | 75,382 | |||||||||
Consumer loans (2) | — | — | 19,744 | |||||||||
Total real estate secured loans | 108,845 | 73,816 | 95,126 | |||||||||
Consumer loans (2) | 42,000 | 45,000 | 45,750 | |||||||||
Total loans individually equal to or greater than $20 million | $ | 2,982,415 | $ | 3,144,280 | $ | 2,030,540 | ||||||
Loans (individually or in the aggregate) to any single client, less than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software | $ | 2,274,120 | $ | 2,168,132 | $ | 1,967,782 | ||||||
Hardware | 678,216 | 676,648 | 636,753 | |||||||||
Venture capital/private equity | 751,053 | 778,930 | 655,954 | |||||||||
Life science | 686,378 | 724,603 | 583,496 | |||||||||
Premium wine | 117,772 | 138,437 | 115,079 | |||||||||
Other | 234,941 | 201,389 | 233,334 | |||||||||
Total commercial loans | 4,742,480 | 4,688,139 | 4,192,398 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine | 357,102 | 340,531 | 286,147 | |||||||||
Consumer loans | 713,607 | 685,493 | 522,658 | |||||||||
Total real estate secured loans | 1,070,709 | 1,026,024 | 808,805 | |||||||||
Construction loans | 58,726 | 65,726 | 30,040 | |||||||||
Consumer loans | 68,499 | 100,079 | 118,996 | |||||||||
Total loans individually less than $20 million | $ | 5,940,414 | $ | 5,879,968 | $ | 5,150,239 | ||||||
Total gross loans | $ | 8,922,829 | $ | 9,024,248 | $ | 7,180,779 | ||||||
Loans individually equal to or greater than $20 million as a percentage of total gross loans | 33.4 | % | 34.8 | % | 28.3 | % | ||||||
Total clients with loans individually equal to or greater than $20 million | 99 | 102 | 67 | |||||||||
Loans individually equal to or greater than $20 million on nonaccrual status | $ | — | $ | — | $ | 21,965 |
(1) | Premium wine clients can have loan balances included in both commercial loans and real estate secured loans, the combination of which are equal to or greater than $20 million. |
(2) | Consumer loan clients can have loan balances included in both real estate secured loans and other consumer loans, the combination of which are equal to or greater than $20 million. |
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Credit Quality
Period end balances at | ||||||||||||
(Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Nonperforming and past due loans: | ||||||||||||
Loans past due 90 days or more still accruing interest | $ | 36 | $ | 19 | $ | — | ||||||
Impaired loans | 44,346 | 38,279 | 41,697 | |||||||||
Nonperforming loans as a percentage of total gross loans | 0.50 | % | 0.42 | % | 0.58 | % | ||||||
Nonperforming loans as a percentage of total assets | 0.19 | 0.17 | 0.20 | |||||||||
Allowance for loan losses | $ | 112,205 | $ | 110,651 | $ | 100,922 | ||||||
As a percentage of total gross loans | 1.26 | % | 1.23 | % | 1.41 | % | ||||||
As a percentage of total gross nonperforming loans | 253.02 | 289.06 | 242.04 | |||||||||
Allowance for loan losses for impaired loans | $ | 7,728 | $ | 6,261 | $ | 18,369 | ||||||
As a percentage of total gross loans | 0.09 | % | 0.07 | % | 0.26 | % | ||||||
As a percentage of total gross nonperforming loans | 17.43 | 16.36 | 44.05 | |||||||||
Allowance for loan losses for total gross performing loans | $ | 104,477 | $ | 104,390 | $ | 82,553 | ||||||
As a percentage of total gross loans | 1.17 | % | 1.16 | % | 1.15 | % | ||||||
As a percentage of total gross performing loans | 1.18 | 1.16 | 1.16 | |||||||||
Total gross loans | $ | 8,922,829 | $ | 9,024,248 | $ | 7,180,779 | ||||||
Total gross performing loans | 8,878,483 | 8,985,969 | 7,139,082 | |||||||||
Reserve for unfunded credit commitments (1) | 24,300 | 22,299 | 21,553 | |||||||||
As a percentage of total unfunded credit commitments | 0.26 | % | 0.26 | % | 0.27 | % | ||||||
Total unfunded credit commitments (2) | $ | 9,170,337 | $ | 8,610,791 | $ | 7,866,137 |
(1) | The “reserve for unfunded credit commitments” is included as a component of “other liabilities.” |
(2) | Includes unfunded loan commitments and letters of credit |
Average Off-Balance Sheet Client Investment Funds (1)
Three months ended | ||||||||||||
(Dollars in millions) | March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Client directed investment assets | $ | 6,898 | $ | 7,123 | $ | 7,556 | ||||||
Client investment assets under management | 11,309 | 10,385 | 9,986 | |||||||||
Sweep money market funds | 4,283 | 3,668 | 1,341 | |||||||||
Total average client investment funds | $ | 22,490 | $ | 21,176 | $ | 18,883 |
Period-end Off-Balance Sheet Client Investment Funds (1)
Period end balances at | ||||||||||||||||||||
(Dollars in millions) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
Client directed investment assets | $ | 6,943 | $ | 7,604 | $ | 7,363 | $ | 7,003 | $ | 7,147 | ||||||||||
Client investment assets under management | 11,571 | 10,824 | 10,291 | 10,399 | 10,190 | |||||||||||||||
Sweep money market funds | 4,467 | 4,085 | 3,404 | 2,695 | 1,775 | |||||||||||||||
Total period-end client investment funds | $ | 22,981 | $ | 22,513 | $ | 21,058 | $ | 20,097 | $ | 19,112 |
(1) | Off-Balance sheet client investment funds are maintained at third party financial institutions. |
Use of Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures (non-GAAP net income, non-GAAP EPS, non-GAAP noninterest income, non-GAAP net gains on investment securities, non-GAAP non-marketable securities, non-GAAP noninterest expense and non-GAAP financial ratios) of financial performance. 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
17
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 that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures (as applicable), provide meaningful supplemental information regarding our performance by: (i) excluding amounts attributable to noncontrolling interests for which we effectively do not receive the economic benefit or cost of, where indicated, 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. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, net income or other financial measures prepared in accordance with GAAP. In the financial tables below, we have provided a reconciliation of, where applicable, the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release, or a reconciliation of the non-GAAP calculation of the financial measure.
In particular, in this press release, we use certain non-GAAP measures that exclude the following from net income and certain other financial line items in certain periods:
• | Income and expense attributable to noncontrolling interests — As part of our funds management business, we recognize the entire income or loss from certain funds where we own less than 100 percent. We are required under GAAP to consolidate 100 percent of the results of the funds that we are deemed to control or in which we have a majority ownership. The relevant amounts attributable to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests.” Our net income available to common stockholders includes only the portion of income or loss related to our ownership interest. |
• | Gains of $5.0 million from the sales of certain available-for-sale securities in the second quarter of 2012. |
• | Gains of $4.2 million from the sale of certain assets related to our equity management services business in the second quarter of 2012. |
In addition, in this press release, we use certain non-GAAP financial ratios that are not required by GAAP or exclude certain financial items from their calculations that are otherwise required under GAAP, including:
• | Tangible common equity to tangible assets ratio; tangible common equity to risk-weighted assets ratio — These ratios are not required by GAAP or applicable bank regulatory requirements, and are used by management to evaluate the adequacy of our capital levels. Our ratios are calculated by dividing total SVBFG stockholders’ equity, by total assets or total risk-weighted assets, as applicable, after reducing amounts by acquired intangibles. The manner in which this ratio is calculated varies among companies. Accordingly, our ratios are not necessarily comparable to similar measures of other companies. |
• | Non-GAAP return on average assets ratio; Non-GAAP return on average SVBFG stockholders’ equity ratio — These ratios exclude certain financial items that are otherwise required under GAAP. Our ratios are calculated by dividing non-GAAP net income available to common stockholders (annualized) by average assets or average SVBFG stockholders’ equity, as applicable. |
• | Non-GAAP operating efficiency ratio — This ratio excludes certain financial items that are otherwise required under GAAP. It is calculated by dividing noninterest expense by total taxable equivalent income, after reducing both amounts by taxable equivalent income and expense attributable to noncontrolling interests and the gains noted above for applicable periods. |
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Three months ended | ||||||||||||||||||||
Non-GAAP net income and earnings per share (Dollars in thousands, except share amounts) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
Net income available to common stockholders | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 47,603 | $ | 34,790 | ||||||||||
Less: gains on sales of certain available-for-sale securities (1) | — | — | — | (4,955 | ) | — | ||||||||||||||
Tax impact of gains on sales of available-for-sale securities | — | — | — | 1,974 | — | |||||||||||||||
Less: net gains on the sale of certain assets related to our equity management services business (2) | — | — | — | (4,243 | ) | — | ||||||||||||||
Tax impact of net gains on the sale of certain assets related to our equity management services business | — | — | — | 1,690 | — | |||||||||||||||
Non-GAAP net income available to common stockholders | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 42,069 | $ | 34,790 | ||||||||||
GAAP earnings per common share — diluted | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 1.06 | $ | 0.78 | ||||||||||
Less: gains on sales of certain available-for-sale securities (1) | — | — | — | (0.11 | ) | — | ||||||||||||||
Tax impact of gains on sales of available-for-sale securities | — | — | — | 0.05 | — | |||||||||||||||
Less: net gains on the sale of certain assets related to our equity management services business (2) | — | — | — | (0.10 | ) | — | ||||||||||||||
Tax impact of net gains on the sale of certain assets related to our equity management services business | — | — | — | 0.04 | — | |||||||||||||||
Non-GAAP earnings per common share — diluted | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 0.94 | $ | 0.78 | ||||||||||
Weighted average diluted common shares outstanding | 45,393,025 | 44,982,031 | 44,914,564 | 44,711,895 | 44,460,005 |
(1) | Gains on the sales of $316 million in certain available-for-sale securities in the second quarter of 2012. |
(2) | Net gains of $4.2 million from the sale of certain assets related to our equity management services business in the second quarter of 2012. |
Three months ended | ||||||||||||||||||||
Non-GAAP return on average assets and average SVBFG stockholders’ equity (Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
Non-GAAP net income available to common stockholders | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 42,069 | $ | 34,790 | ||||||||||
Average assets | $ | 22,314,559 | $ | 22,377,777 | $ | 21,727,197 | $ | 20,890,876 | $ | 20,232,543 | ||||||||||
Average SVBFG stockholders’ equity | $ | 1,866,310 | $ | 1,825,592 | $ | 1,782,443 | $ | 1,707,321 | $ | 1,624,256 | ||||||||||
Non-GAAP return on average assets (annualized) | 0.74 | % | 0.90 | % | 0.77 | % | 0.81 | % | 0.69 | % | ||||||||||
Non-GAAP return on average SVBFG stockholders’ equity (annualized) | 8.89 | 10.99 | 9.44 | 9.91 | 8.61 |
Three months ended | ||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
GAAP noninterest income | $ | 78,604 | $ | 126,688 | $ | 69,139 | $ | 80,426 | $ | 59,293 | ||||||||||
Less: income attributable to noncontrolling interests, including carried interest | 22,490 | 51,114 | 13,524 | 13,384 | 7,918 | |||||||||||||||
Noninterest income, net of noncontrolling interests | 56,114 | 75,574 | 55,615 | 67,042 | 51,375 | |||||||||||||||
Less: gains on sales of certain available-for-sale securities | — | — | — | 4,955 | — | |||||||||||||||
Less: net gains on the sale of certain assets related to our equity management services business | — | — | — | 4,243 | — | |||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests and excluding gains on sales of certain assets | $ | 56,114 | $ | 75,574 | $ | 55,615 | $ | 57,844 | $ | 51,375 |
Three months ended | ||||||||||||||||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests (Dollars in thousands) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
GAAP net gains on investment securities | $ | 27,438 | $ | 68,238 | $ | 20,228 | $ | 25,809 | $ | 7,839 | ||||||||||
Less: income attributable to noncontrolling interests, including carried interest | 22,296 | 51,024 | 12,776 | 14,502 | 7,338 | |||||||||||||||
Net gains on investment securities, net of noncontrolling interests | 5,142 | 17,214 | 7,452 | 11,307 | 501 | |||||||||||||||
Less: gains on sales of certain available-for-sale securities | — | — | — | 4,955 | — | |||||||||||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests and excluding gains on sales of certain available-for-sale securities | $ | 5,142 | $ | 17,214 | $ | 7,452 | $ | 6,352 | $ | 501 |
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Three months ended | ||||||||||||||||||||
Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
GAAP noninterest expense | $ | 149,014 | $ | 143,049 | $ | 135,171 | $ | 135,766 | $ | 132,012 | ||||||||||
Less: amounts attributable to noncontrolling interests | 2,860 | 1,848 | 2,723 | 3,947 | 2,818 | |||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests | $ | 146,154 | $ | 141,201 | $ | 132,448 | $ | 131,819 | $ | 129,194 | ||||||||||
GAAP taxable equivalent net interest income | $ | 163,599 | $ | 161,032 | $ | 154,911 | $ | 152,419 | $ | 151,421 | ||||||||||
Less: income attributable to noncontrolling interests | 24 | (25 | ) | 50 | 38 | 43 | ||||||||||||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests | 163,575 | 161,057 | 154,861 | 152,381 | 151,378 | |||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests | 56,114 | 75,574 | 55,615 | 57,844 | 51,375 | |||||||||||||||
Non-GAAP taxable equivalent revenue, net of noncontrolling interests | $ | 219,689 | $ | 236,631 | $ | 210,476 | $ | 210,225 | $ | 202,753 | ||||||||||
Non-GAAP operating efficiency ratio | 66.53 | % | 59.67 | % | 62.93 | % | 62.70 | % | 63.72 | % |
Non-GAAP non-marketable securities, net of noncontrolling interests (Dollars in thousands) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
GAAP non-marketable securities | $ | 1,215,788 | $ | 1,184,265 | $ | 1,163,815 | $ | 1,132,312 | $ | 1,021,941 | ||||||||||
Less: noncontrolling interests in non-marketable securities | 739,933 | 708,157 | 689,492 | 671,813 | 661,750 | |||||||||||||||
Non-GAAP non-marketable securities, net of noncontrolling interests | $ | 475,855 | $ | 476,108 | $ | 474,323 | $ | 460,499 | $ | 360,191 |
SVB Financial Group tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
GAAP SVBFG stockholders’ equity | $ | 1,882,219 | $ | 1,830,555 | $ | 1,784,924 | $ | 1,715,360 | $ | 1,639,490 | ||||||||||
Less: intangible assets | — | — | — | — | 559 | |||||||||||||||
Tangible common equity | $ | 1,882,219 | $ | 1,830,555 | $ | 1,784,924 | $ | 1,715,360 | $ | 1,638,931 | ||||||||||
GAAP total assets | $ | 22,796,000 | $ | 22,766,123 | $ | 21,576,934 | $ | 21,289,772 | $ | 20,818,337 | ||||||||||
Less: intangible assets | — | — | — | — | 559 | |||||||||||||||
Tangible assets | $ | 22,796,000 | $ | 22,766,123 | $ | 21,576,934 | $ | 21,289,772 | $ | 20,817,778 | ||||||||||
Risk-weighted assets | $ | 13,501,072 | $ | 13,532,984 | $ | 12,812,798 | $ | 12,850,191 | $ | 12,102,502 | ||||||||||
Tangible common equity to tangible assets | 8.26 | % | 8.04 | % | 8.27 | % | 8.06 | % | 7.87 | % | ||||||||||
Tangible common equity to risk-weighted assets | 13.94 | 13.53 | 13.93 | 13.35 | 13.54 |
Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | |||||||||||||||
Tangible common equity | $ | 1,637,365 | $ | 1,591,643 | $ | 1,547,061 | $ | 1,479,817 | $ | 1,403,570 | ||||||||||
Tangible assets | $ | 21,487,859 | $ | 21,471,111 | $ | 20,325,446 | $ | 20,027,219 | $ | 19,596,848 | ||||||||||
Risk-weighted assets | $ | 13,147,423 | $ | 13,177,887 | $ | 12,478,371 | $ | 12,482,417 | $ | 11,752,897 | ||||||||||
Tangible common equity to tangible assets | 7.62 | % | 7.41 | % | 7.61 | % | 7.39 | % | 7.16 | % | ||||||||||
Tangible common equity to risk-weighted assets | 12.45 | 12.08 | 12.40 | 11.86 | 11.94 |
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