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 | |||||||
| October 24, 2013 | ||||||||
| NASDAQ: SIVB | ||||||||
SVB FINANCIAL GROUP ANNOUNCES 2013 THIRD QUARTER FINANCIAL RESULTS
SANTA CLARA, Calif. — October 24, 2013 — SVB Financial Group (NASDAQ: SIVB) today announced financial results for the third quarter ended September 30, 2013.
Consolidated net income available to common stockholders for the third quarter of 2013 was $67.6 million, or $1.46 per diluted common share, compared to $48.6 million, or $1.06 per diluted common share, for the second quarter of 2013, and $42.3 million, or $0.94 per diluted common share, for the third quarter of 2012. Consolidated net income for the third quarter of 2013 included pre-tax gains of $31.9 million from the increased valuation of one of our portfolio companies, FireEye, Inc. (“FireEye”), consisting of gains from equity warrant assets of $8.1 million, and gains from nonmarketable and other securities of $29.4 million, net of noncontrolling interests (see non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”) and net of related incentive compensation expense.
“We delivered a very strong quarter marked by outstanding loan growth, high credit quality, exceptional gains on venture capital-related investments, and substantial growth in total client funds,” said Greg Becker, President and CEO of SVB Financial Group. “This is our 30th year of partnering with entrepreneurs and investors in the innovation sector, which continues to grow and thrive, often in direct contrast to the broader economy. We are more convinced than ever we’re serving the right markets with significant opportunities for growth.”
Highlights of our third quarter 2013 results (compared to second quarter 2013, unless otherwise noted) included:
| • | Average loan balances of $9.5 billion, an increase of $524 million (or 5.8 percent). Period-end loan balances were $9.8 billion, an increase of $203 million (or 2.1 percent). |
| • | Average total client funds (including both on-balance sheet deposits and off-balance sheet client investment funds) were $44.5 billion, an increase of $2.7 billion (or 6.5 percent) with average total on-balance sheet deposits increasing by $0.9 billion, or 2.1 percent, and average total off-balance sheet client investment funds increasing by $1.8 billion, or 3.9 percent. |
| • | Net interest income (fully taxable equivalent basis) of $177.5 million, an increase of $7.0 million (or 4.1 percent). |
| • | Net interest margin decreased by 8 basis points to 3.32 percent. |
| • | A provision for loan losses of $10.6 million, compared to $18.6 million. |
| • | Gains on investment securities of $187.9 million, compared to $40.6 million. Non-GAAP gains on investment securities, net of noncontrolling interests, were $36.5 million, compared to $9.5 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
| • | Gains on equity warrant assets of $18.8 million, compared to $7.2 million. |
| • | An increase in noninterest expense of $17.2 million (or 12.0 percent) primarily due to additional incentive compensation expense resulting from the quarter's performance. |
| • | A pre-tax loss of $3.9 million for an impairment on a single direct equity investment and an increase in income tax expense of $2.9 million for a one-time prior period tax adjustment. |
Consolidated net income available to common stockholders for the nine months ended September 30, 2013 was $157.1 million, or $3.43 per diluted common share, compared to $124.7 million, or $2.79 per diluted common share, for the comparable 2012 period. Non-GAAP net income available to common stockholders for the nine months ended September 30, 2012 was $119.1 million, or $2.67 per diluted common share. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.)
Third Quarter 2013 Summary
| (Dollars in millions, except share data and ratios) | Three months ended | Nine months ended | ||||||||||||||||||||||||||
| September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||||||||||||||
| Income statement: | ||||||||||||||||||||||||||||
| Diluted earnings per common share | $ | 1.46 | $ | 1.06 | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 3.43 | $ | 2.79 | ||||||||||||||
| Net income available to common stockholders | 67.6 | 48.6 | 40.9 | 50.4 | 42.3 | 157.1 | 124.7 | |||||||||||||||||||||
| Net interest income | 177.1 | 170.1 | 163.2 | 160.6 | 154.4 | 510.3 | 457.3 | |||||||||||||||||||||
| Provision for loan losses | 10.6 | 18.6 | 5.8 | 15.0 | 6.8 | 35.0 | 29.3 | |||||||||||||||||||||
| Noninterest income | 257.7 | 98.2 | 78.6 | 126.7 | 69.1 | 434.5 | 208.9 | |||||||||||||||||||||
| Noninterest expense | 160.5 | 143.3 | 149.0 | 143.0 | 135.2 | 452.8 | 402.9 | |||||||||||||||||||||
| Non-GAAP net income available to common stockholders (1) | 67.6 | 48.6 | 40.9 | 50.4 | 42.3 | 157.1 | 119.1 | |||||||||||||||||||||
| Non-GAAP diluted earnings per common share (1) | 1.46 | 1.06 | 0.90 | 1.12 | 0.94 | 3.43 | 2.67 | |||||||||||||||||||||
| Non-GAAP noninterest income, net of noncontrolling interests and excluding gains on sales of certain assets (1) | 105.8 | 67.5 | 56.1 | 75.6 | 55.6 | 229.4 | 164.8 | |||||||||||||||||||||
| Non-GAAP noninterest expense, net of noncontrolling interests (1) | 157.2 | 140.4 | 146.2 | 141.2 | 132.4 | 443.8 | 393.5 | |||||||||||||||||||||
| Fully taxable equivalent: | ||||||||||||||||||||||||||||
| Net interest income (2) | $ | 177.5 | $ | 170.5 | $ | 163.6 | $ | 161.0 | $ | 154.9 | $ | 511.6 | $ | 458.8 | ||||||||||||||
| Net interest margin | 3.32 | % | 3.40 | % | 3.25 | % | 3.13 | % | 3.12 | % | 3.32 | % | 3.21 | % | ||||||||||||||
| Balance sheet: | ||||||||||||||||||||||||||||
| Average total assets | $ | 23,072.7 | $ | 22,093.3 | $ | 22,314.6 | $ | 22,377.8 | $ | 21,727.2 | $ | 22,496.1 | $ | 20,953.0 | ||||||||||||||
| Average loans, net of unearned income | 9,545.9 | 9,022.2 | 8,680.9 | 8,274.9 | 7,907.6 | 9,086.2 | 7,318.5 | |||||||||||||||||||||
| Average available-for-sale securities | 10,082.2 | 10,425.8 | 10,887.5 | 10,743.8 | 10,569.7 | 10,462.2 | 10,666.0 | |||||||||||||||||||||
| Average noninterest-bearing demand deposits | 13,665.5 | 13,257.5 | 13,386.5 | 13,843.8 | 12,914.7 | 13,437.5 | 12,403.4 | |||||||||||||||||||||
| Average interest-bearing deposits | 5,894.4 | 5,356.7 | 5,399.0 | 5,147.0 | 5,345.6 | 5,551.9 | 5,143.8 | |||||||||||||||||||||
| Average total deposits | 19,559.9 | 18,614.2 | 18,785.5 | 18,990.9 | 18,260.3 | 18,989.4 | 17,547.2 | |||||||||||||||||||||
| Average long-term debt | 455.8 | 457.0 | 457.5 | 458.1 | 458.4 | 456.7 | 538.2 | |||||||||||||||||||||
| Period-end total assets | 23,740.9 | 22,153.9 | 22,796.0 | 22,766.1 | 21,576.9 | 23,740.9 | 21,576.9 | |||||||||||||||||||||
| Period-end loans, net of unearned income | 9,825.0 | 9,622.2 | 8,844.9 | 8,946.9 | 8,192.4 | 9,825.0 | 8,192.4 | |||||||||||||||||||||
| Period-end available-for-sale securities | 10,209.9 | 10,043.3 | 10,908.2 | 11,343.2 | 11,047.7 | 10,209.9 | 11,047.7 | |||||||||||||||||||||
| Period-end non-marketable securities | 1,425.1 | 1,255.4 | 1,215.8 | 1,184.3 | 1,163.8 | 1,425.1 | 1,163.8 | |||||||||||||||||||||
| Period-end noninterest-bearing demand deposits | 14,105.7 | 13,213.6 | 14,038.6 | 13,875.3 | 12,598.6 | 14,105.7 | 12,598.6 | |||||||||||||||||||||
| Period-end interest-bearing deposits | 5,891.3 | 5,476.5 | 5,271.3 | 5,301.2 | 5,126.4 | 5,891.3 | 5,126.4 | |||||||||||||||||||||
| Period-end total deposits | 19,997.0 | 18,690.1 | 19,309.9 | 19,176.5 | 17,725.1 | 19,997.0 | 17,725.1 | |||||||||||||||||||||
| Off-balance sheet: | ||||||||||||||||||||||||||||
| Average total client investment funds | $ | 24,958.6 | $ | 23,201.0 | $ | 22,490.0 | $ | 21,175.8 | $ | 20,929.1 | $ | 23,549.7 | $ | 19,892.0 | ||||||||||||||
| Period-end total client investment funds | 25,318.3 | 24,001.8 | 22,980.8 | 22,512.8 | 21,058.4 | 25,318.3 | 21,058.4 | |||||||||||||||||||||
| Total unfunded credit commitments | 10,675.6 | 9,785.7 | 9,170.3 | 8,610.8 | 8,710.2 | 10,675.6 | 8,710.2 | |||||||||||||||||||||
| Earnings ratios: | ||||||||||||||||||||||||||||
| Return on average assets (annualized) (3) | 1.16 | % | 0.88 | % | 0.74 | % | 0.90 | % | 0.77 | % | 0.93 | % | 0.79 | % | ||||||||||||||
| Non-GAAP return on average assets (annualized) (1) | 1.16 | 0.88 | 0.74 | 0.90 | 0.77 | 0.93 | 0.76 | |||||||||||||||||||||
| Return on average SVBFG stockholders’ equity (annualized) (4) | 14.05 | 10.12 | 8.89 | 10.99 | 9.44 | 11.06 | 9.77 | |||||||||||||||||||||
| Non-GAAP return on average SVBFG stockholders’ equity (annualized) (1) | 14.05 | 10.12 | 8.89 | 10.99 | 9.44 | 11.06 | 9.33 | |||||||||||||||||||||
| Asset quality ratios: | ||||||||||||||||||||||||||||
| Allowance for loan losses as a % of total gross loans | 1.26 | % | 1.23 | % | 1.26 | % | 1.23 | % | 1.23 | % | 1.26 | % | 1.23 | % | ||||||||||||||
| Allowance for loan losses for performing loans as a % of total gross performing loans | 1.13 | 1.13 | 1.18 | 1.16 | 1.16 | 1.13 | 1.16 | |||||||||||||||||||||
| Gross charge-offs as a % of average total gross loans (annualized) | 0.34 | 0.68 | 0.26 | 0.36 | 0.23 | 0.43 | 0.47 | |||||||||||||||||||||
| Net charge-offs as a % of average total gross loans (annualized) | 0.23 | 0.49 | 0.20 | 0.28 | 0.17 | 0.31 | 0.32 | |||||||||||||||||||||
| Other ratios: | ||||||||||||||||||||||||||||
| Operating efficiency ratio (5) | 36.89 | % | 53.32 | % | 61.52 | % | 49.72 | % | 60.33 | % | 47.86 | % | 60.36 | % | ||||||||||||||
| Non-GAAP operating efficiency ratio (1) | 55.50 | 59.01 | 66.53 | 59.67 | 62.93 | 59.89 | 63.11 | |||||||||||||||||||||
| Total risk-based capital ratio | 14.16 | 14.03 | 14.59 | 14.05 | 14.34 | 14.16 | 14.34 | |||||||||||||||||||||
| Tangible common equity to tangible assets (1) | 8.19 | 8.34 | 8.26 | 8.04 | 8.27 | 8.19 | 8.27 | |||||||||||||||||||||
| Tangible common equity to risk-weighted assets (1) | 12.96 | 12.73 | 13.94 | 13.53 | 13.93 | 12.96 | 13.93 | |||||||||||||||||||||
| Period-end loans, net of unearned income, to deposits | 49.13 | 51.48 | 45.80 | 46.66 | 46.22 | 49.13 | 46.22 | |||||||||||||||||||||
| Average loans, net of unearned income, to deposits | 48.80 | 48.47 | 46.21 | 43.57 | 43.30 | 47.85 | 41.71 | |||||||||||||||||||||
| Book value per common share (6) | $ | 42.64 | $ | 40.65 | $ | 41.85 | $ | 41.02 | $ | 40.10 | $ | 42.64 | $ | 40.10 | ||||||||||||||
| Other statistics: | ||||||||||||||||||||||||||||
| Average full-time equivalent employees | 1,675 | 1,657 | 1,655 | 1,607 | 1,594 | 1,662 | 1,572 | |||||||||||||||||||||
| Period-end full-time equivalent employees | 1,683 | 1,657 | 1,663 | 1,615 | 1,602 | 1,683 | 1,602 | |||||||||||||||||||||
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 each of the quarters ended September 30, 2013, June 30, 2013 and March 31, 2013, and $0.5 million for each of the quarters ended December 31, 2012 and September 30, 2012. The taxable equivalent adjustments were $1.3 million and $1.5 million for the nine months ended September 30, 2013 and 2012, respectively. |
| (3) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly and year-to-date average assets. |
| (4) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly and year-to-date 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 $177.5 million for the third quarter of 2013, compared to $170.5 million for the second quarter of 2013 and $154.9 million for the third 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 second to the third 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:
| Q3'13 compared to Q2'13 | ||||||||||||
| Increase (decrease) due to change in | ||||||||||||
| (Dollars in thousands) | Volume | Rate | Total | |||||||||
| Interest income: | ||||||||||||
| Short-term investment securities | $ | 721 | $ | (303 | ) | $ | 418 | |||||
| Available-for-sale securities | (1,027 | ) | (42 | ) | (1,069 | ) | ||||||
| Loans | 8,926 | (1,024 | ) | 7,902 | ||||||||
| Increase (decrease) in interest income, net | 8,620 | (1,369 | ) | 7,251 | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 316 | (4 | ) | 312 | ||||||||
| Short-term borrowings | (2 | ) | (2 | ) | (4 | ) | ||||||
| Long-term debt | (1 | ) | (65 | ) | (66 | ) | ||||||
| Increase (decrease) in interest expense, net | 313 | (71 | ) | 242 | ||||||||
| Increase (decrease) in net interest income | $ | 8,307 | $ | (1,298 | ) | $ | 7,009 | |||||
The increase in net interest income, on a fully taxable equivalent basis, from the second to the third quarter of 2013, was primarily attributable to the following:
| • | An increase in interest income from loans of $7.9 million to $139.7 million for the third quarter of 2013, of which $8.9 million of the increase was driven by an increase in average loan balances of $524 million, offset by a decline in loan yields. Overall loan yield decreased by 5 basis points to 5.81 percent, primarily attributable to an 11 basis point decrease in loan yields excluding loan fees. Loan yields, excluding loan fees, decreased to 4.85 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 growth in our lower-yielding venture capital/private equity loan portfolio. This decrease was offset by a 6 basis point increase in loan fee yield driven by a $1.5 million increase in loan prepayment fees. |
| • | A decrease in interest income from available-for-sale securities of $1.1 million to $44.8 million for the third quarter of 2013 primarily reflective of a $344 million decrease in average balances. Premium amortization expense remained relatively flat at $6.2 million for the third quarter of 2013. As of September 30, 2013, the remaining unamortized premium/discount balance on our available-for-sale securities portfolio was $88 million, compared to $100 million as of June 30, 2013. |
Net interest margin, on a fully taxable equivalent basis, was 3.32 percent for the third quarter of 2013, compared to 3.40 percent for the second quarter of 2013 and 3.12 percent for the third quarter of 2012. The decrease in our net interest margin for the third quarter of 2013 was primarily due to higher levels of cash held at the Federal Reserve earning interest at the federal funds target rate. This increase in cash was a result of strong deposit growth during the quarter.
3
For the third quarter of 2013, 76.9 percent, or $7.5 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 76.6 percent, or $7.1 billion, for the second quarter of 2013, and 75.1 percent, or $6.1 billion, for the third quarter of 2012. For the third quarter of 2013, average variable-rate available-for-sale securities were $1.2 billion, or 12.4 percent, of our available-for-sale securities portfolio. This compares to $1.5 billion, or 14.7 percent, for the second quarter of 2013, and $2.0 billion, or 19.2 percent, for the third 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 and other 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 decreased by $344 million to $10.1 billion for the third quarter of 2013, compared to $10.4 billion for the second quarter of 2013 and $10.6 billion for the third quarter of 2012. Period-end available-for-sale securities were $10.2 billion at September 30, 2013, $10.0 billion at June 30, 2013 and $11.0 billion at September 30, 2012. The increase in period-end balances from the second to the third quarter of 2013 was primarily due to new investments of $686 million, partially offset by paydowns of $542 million. New investments were concentrated in fixed rate agency-issued mortgage securities and U.S. agency debentures. Additionally, the fair value of our available-for-sale securities portfolio increased by $27 million due to decreases in period-end market interest rates. This increase was reflected as a $16 million increase (net of tax) in our accumulated other comprehensive (loss) income within SVBFG stockholders' equity.
Non-Marketable and Other Securities
Our non-marketable and other securities portfolio primarily represents investments in venture capital funds, debt funds and private and public portfolio companies.
Non-marketable and other securities increased by $170 million to $1.4 billion ($470 million net of noncontrolling interests) at September 30, 2013, compared to $1.3 billion ($477 million net of noncontrolling interests) at June 30, 2013 and $1.2 billion ($474 million net of noncontrolling interests) at September 30, 2012. The increase of $170 million from the second quarter of 2013 to the third quarter of 2013 was attributable to valuation gains in our managed direct venture funds, primarily driven by one of our portfolio companies, FireEye, after its initial public offering ("IPO"). Reconciliations of our non-GAAP non-marketable securities, net of noncontrolling interests, are provided under the section “Use of Non-GAAP Financial Measures.”
Loans
Average loans, net of unearned income, were $9.5 billion for the third quarter of 2013, compared to $9.0 billion for the second quarter of 2013 and $7.9 billion for the third quarter of 2012. Period-end loans, net of unearned income, were $9.8 billion at September 30, 2013, compared to $9.6 billion at June 30, 2013 and $8.2 billion at September 30, 2012. The increase in average loan balances of $524 million from the second to the third quarter of 2013 came primarily from our venture capital/private equity and later-stage software portfolios. The increase in period-end loan balances from the second to the third quarter of 2013 came primarily from our software portfolio.
Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million totaled $3.6 billion, $3.6 billion and $2.6 billion at September 30, 2013, June 30, 2013 and September 30, 2012, respectively, which represents 36.0 percent, 36.7 percent and 31.5 percent of total gross loans, 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 | Nine months ended | |||||||||||||||||||
| (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Allowance for loan losses, beginning balance | $ | 119,571 | $ | 112,205 | $ | 98,166 | $ | 110,651 | $ | 89,947 | ||||||||||
| Provision for loan losses | 10,638 | 18,572 | 6,788 | 35,023 | 29,316 | |||||||||||||||
| Gross loan charge-offs | (8,149 | ) | (15,375 | ) | (4,637 | ) | (29,150 | ) | (25,757 | ) | ||||||||||
| Loan recoveries | 2,674 | 4,169 | 1,207 | 8,210 | 8,018 | |||||||||||||||
| Allowance for loan losses, ending balance | $ | 124,734 | $ | 119,571 | $ | 101,524 | $ | 124,734 | $ | 101,524 | ||||||||||
| Provision for loan losses as a percentage of period-end total gross loans (annualized) | 0.43 | % | 0.77 | % | 0.33 | % | 0.47 | % | 0.47 | % | ||||||||||
| Gross loan charge-offs as a percentage of average total gross loans (annualized) | 0.34 | 0.68 | 0.23 | 0.43 | 0.47 | |||||||||||||||
| Net loan charge-offs as a percentage of average total gross loans (annualized) | 0.23 | 0.49 | 0.17 | 0.31 | 0.32 | |||||||||||||||
| Allowance for loan losses as a percentage of period-end total gross loans | 1.26 | 1.23 | 1.23 | 1.26 | 1.23 | |||||||||||||||
| Period-end total gross loans | $ | 9,914,199 | $ | 9,705,464 | $ | 8,266,168 | $ | 9,914,199 | $ | 8,266,168 | ||||||||||
| Average total gross loans | 9,627,912 | 9,100,420 | 7,976,257 | 9,164,538 | 7,380,458 | |||||||||||||||
Our provision for loan losses was $10.6 million for the third quarter of 2013, compared to $18.6 million for the second quarter of 2013. The provision of $10.6 million for the third quarter of 2013 was primarily driven by $5.5 million in net charge-offs, an increase of $3.1 million in the reserve for impaired loans and $2.3 million related to new loans during the quarter.
Gross loan charge-offs of $8.1 million for the third quarter of 2013 were primarily from our hardware and software loan portfolios. Loan recoveries of $2.7 million for the third quarter of 2013 were largely driven by a single recovery from our hardware portfolio.
Our allowance for loan losses as a percentage of total gross loans increased to 1.26 percent at September 30, 2013, compared to 1.23 percent at June 30, 2013. This increase was driven by an increase in reserves for impaired loans. Our allowance for loan losses for total gross performing loans as a percentage of total gross performing loans remained flat at 1.13 percent for September 30, 2013 compared to June 30, 2013, primarily due to the continued strong performance of our performing loan portfolio.
Our impaired loans totaled $38 million at September 30, 2013, compared to $41 million at June 30, 2013. The allowance for loan losses related to impaired loans was $13.5 million at September 30, 2013, compared to $10.4 million at June 30, 2013 contributing an additional 3 basis points to the allowance for loan losses for the third quarter ended 2013 compared to the second quarter ended 2013.
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 $2.7 billion to $44.5 billion for the third quarter of 2013, compared to $41.8 billion for the second quarter of 2013. Our total period-end client funds increased by $2.6 billion to $45.3 billion at September 30, 2013, compared to $42.7 billion at June 30, 2013.
Deposits
Average deposits were $19.6 billion for the third quarter of 2013, compared to $18.6 billion for the second quarter of 2013 and $18.3 billion for the third quarter of 2012. Period-end deposits were $20.0 billion at September 30, 2013, compared to $18.7 billion at June 30, 2013 and $17.7 billion at September 30, 2012. The increases in average and period-end deposits from the second to the third quarter of 2013 were in both noninterest-bearing demand deposits and interest-bearing deposits, primarily as a result of strong levels of early-stage and venture capital/private equity client additions.
5
Off-Balance Sheet Client Investment Funds
Average off-balance sheet client investment funds were $25.0 billion for the third quarter of 2013, compared to $23.2 billion for the second quarter of 2013 and $20.9 billion for the third quarter of 2012. Period-end client investment funds were $25.3 billion at September 30, 2013, compared to $24.0 billion at June 30, 2013 and $21.1 billion at September 30, 2012. The increases in average and period-end total client investment funds from the second to the third quarter of 2013 were primarily due to a large number of financing and public offering rounds for our investment clients. The increases were also attributable to our existing clients’ increased utilization of our off-balance sheet sweep product, which averaged $5.6 billion for the third quarter of 2013, compared to $4.9 billion for the second quarter of 2013.
Noninterest Income
Noninterest income was $257.7 million for the third quarter of 2013, compared to $98.2 million for the second quarter of 2013 and $69.1 million for the third quarter of 2012. Non-GAAP noninterest income, net of noncontrolling interests, was $105.8 million for the third quarter of 2013, compared to $67.5 million for the second quarter of 2013 and $55.6 million for the third quarter of 2012. Non-GAAP core fee income (foreign exchange fees, deposit service charges, credit card fees, client investment fees and letters of credit fees) was $37.2 million for the third quarter of 2013, compared to $36.5 million for the second quarter of 2013 and $34.4 million for the third quarter of 2012. Reconciliations of our non-GAAP noninterest income, non-GAAP core fee income and non-GAAP net gains on investment securities discussed in this section are provided under the section “Use of Non-GAAP Financial Measures.”
The increase of $159.5 million in noninterest income from the second to the third quarter of 2013 was primarily driven by higher gains from our non-marketable and other securities and equity warrant assets largely resulting from the increased valuations related to FireEye, after its IPO, during the third quarter of 2013. Unrealized gains from non-marketable and other securities for any single quarter, including FireEye, are typically driven by valuation changes, and are therefore subject to potential increases or decreases in future periods, depending on market conditions and other factors. The extent to which unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of current lock-up agreements to which these securities, and the timing of actual sales of the securities, are subject. Items impacting the change in noninterest income from the second to the third quarter of 2013 were as follows:
| • | Gains on investment securities of $187.9 million for the third quarter of 2013, compared to $40.6 million for the second quarter of 2013. Net of noncontrolling interests, net gains on investment securities were $36.5 million for the third quarter of 2013 compared to $9.5 million for the second quarter of 2013. The gains, net of noncontrolling interests, of $36.5 million for the third quarter of 2013 were primarily driven by the following: |
| ◦ | Gains of $28.2 million from our managed direct venture funds, primarily related to the increase in valuation and carried interest allocations related to FireEye after its IPO. |
| ◦ | Gains of $3.5 million from our investments in debt funds, primarily related to the increase in gains associated with FireEye in one of our debt fund investments. |
| ◦ | Gains of $3.1 million from our managed funds of funds, primarily related to unrealized valuation increases from three of our funds of funds. |
| ◦ | Gains of $1.5 million from our Strategic and other investments, primarily driven by $4.7 million from distributions of strategic venture capital fund investments, partially offset by a $3.9 million impairment recognized for a single direct equity investment. |
As of September 30, 2013, we held investments, either directly or indirectly through 13 of our managed investment funds, in 455 funds (primarily venture capital funds), 90 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 September 30, 2013 and June 30, 2013, respectively:
6
| Three months ended September 30, 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 on investment securities, net | $ | 34,633 | $ | 147,976 | $ | 3,508 | $ | 219 | $ | 1,526 | $ | 187,862 | ||||||||||||
| Less: income (losses) attributable to noncontrolling interests, including carried interest | 31,551 | 119,810 | (1 | ) | — | — | 151,360 | |||||||||||||||||
| Non-GAAP net gains on investment securities, net of noncontrolling interests | $ | 3,082 | $ | 28,166 | $ | 3,509 | $ | 219 | $ | 1,526 | $ | 36,502 | ||||||||||||
| Three months ended June 30, 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 on investment securities, net | $ | 33,626 | $ | 987 | $ | 1,799 | $ | 775 | $ | 3,374 | $ | 40,561 | ||||||||||||
| Less: income (losses) attributable to noncontrolling interests, including carried interest | 30,021 | 1,047 | (1 | ) | — | — | 31,067 | |||||||||||||||||
| Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests | $ | 3,605 | $ | (60 | ) | $ | 1,800 | $ | 775 | $ | 3,374 | $ | 9,494 | |||||||||||
| • | An increase of $10.2 million in "Other" noninterest income, primarily attributable to net gains of $8.1 million from the revaluation of foreign currency denominated instruments, compared to net losses of $0.6 million for the second quarter of 2013. The net gains of $8.1 million for the third quarter of 2013 were partially offset by net losses of $8.4 million on internal foreign exchange forward contracts used to economically reduce our foreign exchange exposure to these foreign currency denominated instruments, which are included within noninterest income on the line item "gains on derivative instruments, net" as noted below. |
| • | Net gains on derivative instruments were $10.2 million for the third quarter of 2013, compared to $9.0 million for the second quarter of 2013. The following table provides a summary of our net gains on derivative instruments: |
| Three months ended | Nine months ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Net gains on equity warrant assets | $ | 18,780 | $ | 7,190 | $ | 547 | $ | 29,475 | $ | 12,358 | ||||||||||
| Gains on foreign exchange forward contracts, net: | ||||||||||||||||||||
| Gains on client foreign exchange forward contracts, net | 369 | 1,013 | 607 | 2,179 | 3,002 | |||||||||||||||
| (Losses) gains on internal foreign exchange forward contracts, net (1) | (8,423 | ) | 712 | 220 | (1,511 | ) | 1,162 | |||||||||||||
| Total (losses) gains on foreign exchange forward contracts, net | (8,054 | ) | 1,725 | 827 | 668 | 4,164 | ||||||||||||||
| Change in fair value of interest rate swaps | (7 | ) | (33 | ) | 74 | 20 | 571 | |||||||||||||
| Net (losses) gains on other derivatives (2) | (517 | ) | 94 | (337 | ) | 55 | (1,293 | ) | ||||||||||||
| Total gains on derivative instruments, net | $ | 10,202 | $ | 8,976 | $ | 1,111 | $ | 30,218 | $ | 15,800 | ||||||||||
| (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 instruments. |
| (2) | Primarily represents the change in fair value of loan conversion options. |
The increase in net gains on derivative instruments from the second to the third quarter of 2013 was primarily attributable to the following:
| ◦ | Net gains on equity warrant assets of $18.8 million for the third quarter of 2013, compared to $7.2 million for the second quarter of 2013. The net gains of $18.8 million for the third quarter of 2013 included the following: |
• | Net gains of $14.5 million from changes in warrant valuations, compared to net gains of $5.7 million for the second quarter of 2013. The net gains of $14.5 million for the third quarter of 2013 were |
7
primarily driven by IPO and M&A activity, and included $8.1 million from a single warrant client, FireEye.
• | Net gains of $4.5 million from the exercise of equity warrant assets, compared to net gains of $1.6 million for the second quarter of 2013. |
| ◦ | Net losses of $8.4 million on internal foreign exchange forward contracts used to economically reduce our foreign exchange exposure to foreign currency denominated instruments for the third quarter of 2013, compared to net gains of $0.7 million for the second quarter of 2013. These losses were partially offset by net gains of $8.1 million from the revaluation of foreign currency denominated instruments that are included in the line item "Other" within noninterest income as noted above. |
• | Non-GAAP core fee income was $37.2 million for the third quarter of 2013, compared to $36.5 million for the second quarter of 2013. The following table provides a summary of our non-GAAP core fee income: |
| Three months ended | Nine months ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Non-GAAP core fee income: | ||||||||||||||||||||
| Foreign exchange fees | $ | 12,887 | $ | 12,778 | $ | 12,211 | $ | 39,113 | $ | 36,345 | ||||||||||
| Deposit service charges | 8,902 | 8,907 | 8,369 | 26,602 | 24,834 | |||||||||||||||
| Credit card fees | 8,188 | 7,609 | 6,348 | 23,245 | 18,185 | |||||||||||||||
| Letters of credit and standby letters of credit fees | 3,790 | 3,654 | 3,495 | 10,879 | 10,427 | |||||||||||||||
| Client investment fees | 3,393 | 3,524 | 3,954 | 10,392 | 10,226 | |||||||||||||||
| Total Non-GAAP core fee income | $ | 37,160 | $ | 36,472 | $ | 34,377 | $ | 110,231 | $ | 100,017 | ||||||||||
Non-GAAP core fee income increased $0.7 million from the second to the third quarter of 2013 primarily due to credit card fees resulting from increased interchange volume. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.)
Noninterest Expense
Noninterest expense was $160.5 million for the third quarter of 2013, compared to $143.3 million for the second quarter of 2013 and $135.2 million for the third quarter of 2012. The key factors contributing to the increase in noninterest expense from the second to the third quarter of 2013 were as follows:
| • | An increase of $12.1 million in compensation and benefits expense. The following table provides a summary of our compensation and benefits expense: |
| Three months ended | Nine months ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Compensation and benefits: | ||||||||||||||||||||
| Salaries and wages | $ | 39,926 | $ | 39,209 | $ | 37,769 | $ | 118,458 | $ | 113,391 | ||||||||||
| Incentive compensation plan | 28,723 | 20,420 | 18,760 | 68,320 | 53,259 | |||||||||||||||
| ESOP | 1,876 | 1,240 | 1,425 | 6,132 | 8,911 | |||||||||||||||
| Other employee benefits (1) | 26,344 | 23,873 | 21,308 | 77,405 | 67,823 | |||||||||||||||
| Total compensation and benefits | $ | 96,869 | $ | 84,742 | $ | 79,262 | $ | 270,315 | $ | 243,384 | ||||||||||
| Period-end full-time equivalent employees | 1,683 | 1,657 | 1,602 | 1,683 | 1,602 | |||||||||||||||
| Average full-time equivalent employees | 1,675 | 1,657 | 1,594 | 1,662 | 1,572 | |||||||||||||||
| (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 factors affecting compensation and benefits expense from the second to the third quarter of 2013 were as follows:
8
| ◦ | An increase of $8.3 million in incentive compensation expense, primarily related to our strong performance in the third quarter of 2013 and our current expectation that we will exceed our internal performance targets for 2013. |
| ◦ | An increase of $2.5 million in other employee benefits, primarily related to warrant incentive compensation expense of $1.4 million resulting from the gains recorded for the increase in valuation related to FireEye after its IPO. |
| • | An increase of $2.3 million in professional services expense primarily from increased consulting expenses related to our ongoing business and IT infrastructure initiatives. |
| • | A provision for unfunded credit commitments of $2.8 million for the third quarter of 2013, compared to a provision of $1.3 million for the second quarter of 2013. The provision of $2.8 million for the third quarter of 2013 was primarily due to an increase in unfunded credit commitment balances of $890 million. |
Non-GAAP noninterest expense, net of noncontrolling interests was $157.2 million for the third quarter of 2013, compared to $140.4 million for the second quarter of 2013 and $132.4 million for the third quarter of 2012. Reconciliations of our non-GAAP noninterest expense, net of noncontrolling interests, are provided under the section “Use of Non-GAAP Financial Measures.”
Income Tax Expense
Our effective tax rate was 41.2 percent for the third quarter of 2013, compared to 38.2 percent for the second quarter of 2013 and 40.2 percent for the third quarter of 2012. Our effective tax rate was 39.8 percent for the nine months ended September 30, 2013, compared to 40.2 percent for the comparable 2012 period. The increase in the tax rate from the second quarter to the third quarter of 2013 was primarily attributable to a one-time prior period tax adjustment of $2.9 million recorded in the third quarter of 2013. Excluding the impact of the adjustment, our effective tax rate would have been 38.7 percent for both the third quarter of 2013 and nine months ended September 30, 2013.
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.
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 | Nine months ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Net interest income (1) | $ | (19 | ) | $ | (20 | ) | $ | (50 | ) | $ | (63 | ) | $ | (131 | ) | |||||
| Noninterest income (1) | (169,126 | ) | (31,498 | ) | (14,416 | ) | (223,912 | ) | (32,258 | ) | ||||||||||
| Noninterest expense (1) | 3,290 | 2,867 | 2,723 | 9,017 | 9,488 | |||||||||||||||
| Carried interest (2) | 17,296 | 747 | 892 | 18,841 | (2,568 | ) | ||||||||||||||
| Net income attributable to noncontrolling interests | $ | (148,559 | ) | $ | (27,904 | ) | $ | (10,851 | ) | $ | (196,117 | ) | $ | (25,469 | ) | |||||
| (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 $148.6 million for the third quarter of 2013, compared to $27.9 million for the second quarter of 2013 and $10.9 million for the third quarter of 2012. Net income attributable to noncontrolling interests of $148.6 million for the third quarter of 2013 was primarily a result of the following:
| • | Net gains on investment securities (including carried interest) attributable to noncontrolling interests of $151.4 million, primarily from gains of $119.8 million from our managed direct venture funds. |
| • | Noninterest expense of $3.3 million, primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as the general partner. |
9
SVBFG Stockholders’ Equity
Total SVBFG stockholders’ equity increased by $97 million to $1.9 billion at September 30, 2013, primarily due to net income of $67.6 million in the third quarter of 2013. Increases to accumulated other comprehensive income of $15 million and additional paid-in capital of $14 million also contributed to the increase in stockholders' equity. The increase to accumulated other comprehensive income was driven by a $27 million increase in the fair value of our available-for-sale securities portfolio ($16 million net of tax), which was reflective of a decrease in period-end market interest rates. The increase in additional paid-in capital was primarily driven by amortization of share-based compensation and stock option exercises.
10
Outlook for the Year Ending December 31, 2013 and Preliminary 2014 Outlook for Selected Items
Our outlook for the year ending December 31, 2013 and our preliminary outlook for selected items for the year ending December 31, 2014 are 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 October 24, 2013) | Change in outlook compared to outlook reported as of July 25, 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 low double digits | Outlook increased from high single digits due to higher than expected loan and deposit growth in the third quarter of 2013 |
| Net interest margin (1) | Between 3.25% and 3.35% | No change from previous outlook |
| 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 |
| Core fee income (foreign exchange fees, deposit service charges, credit card fees, client investment fees and letters of credit income) (2) | Increase at a percentage rate in the high single digits | Outlook decreased from low double digits as a result of lower than expected client investment fees due to historically low margins on certain products in the third quarter of 2013 |
| Noninterest expense (excluding expenses related to noncontrolling interests) (2) (3) | Increase at a percentage rate in the low double digits | Outlook increased from mid single digits primarily due to higher than expected incentive compensation expense related to strong warrant and net investment gains in the third quarter of 2013 |
| (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 |
| (3) | Our outlook for noninterest expense is partly based on management's current forecast of performance-based incentive compensation expenses. Such forecasts are subject to change, and actual results may differ, based on our performance relative to our set internal performance targets. |
Preliminary 2014 Outlook for Selected Items
For the year ending December 31, 2014 compared to our full year 2013 expected results, we currently expect the
following: (1) average loan growth in the mid-teens, (2) net loan charge-offs between 0.30% and 0.50% of average total gross loans (assuming no significant deterioration in the overall economy), (3) net interest income growth in the high single digits, (4) core fee income growth from the high single digits to the low double digits, and (5) non-GAAP expense growth (excluding expenses related to noncontrolling interests) in the mid-single digits.
11
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 sections “Outlook for the Year Ending December 31, 2013 and Preliminary 2014 Outlook for Selected Items” 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 certain quarters in, and for the full years 2013 and 2014.
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 years 2013 and 2014 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 October 24, 2013, we will host a conference call at 3:00 p.m. (Pacific Time) to discuss the financial results for the quarter ended September 30, 2013. The conference call can be accessed by dialing (877) 663-9523 or (404) 665-9482, and referencing the conference ID “85895418.” 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, October 24, 2013, through midnight on Tuesday, October 29, 2013, and may be accessed by dialing (855) 859-2056 or (404) 537-3406 and referencing conference ID number “85895418.” A replay of the audio webcast will also be available on www.svb.com for 12 months beginning Thursday, October 24, 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.
12
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three months ended | Nine months ended | |||||||||||||||||||
| (Dollars in thousands, except share data) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Interest income: | ||||||||||||||||||||
| Loans | $ | 139,687 | $ | 131,785 | $ | 121,446 | $ | 395,216 | $ | 344,842 | ||||||||||
| Available-for-sale securities: | ||||||||||||||||||||
| Taxable | 43,604 | 44,657 | 38,493 | 134,013 | 129,940 | |||||||||||||||
| Non-taxable | 797 | 807 | 894 | 2,403 | 2,693 | |||||||||||||||
| Federal funds sold, securities purchased under agreements to resell and other short-term investment securities | 1,152 | 734 | 1,125 | 2,605 | 3,075 | |||||||||||||||
| Total interest income | 185,240 | 177,983 | 161,958 | 534,237 | 480,550 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 2,397 | 2,085 | 1,740 | 6,533 | 4,835 | |||||||||||||||
| Borrowings | 5,747 | 5,817 | 5,788 | 17,358 | 18,414 | |||||||||||||||
| Total interest expense | 8,144 | 7,902 | 7,528 | 23,891 | 23,249 | |||||||||||||||
| Net interest income | 177,096 | 170,081 | 154,430 | 510,346 | 457,301 | |||||||||||||||
| Provision for loan losses | 10,638 | 18,572 | 6,788 | 35,023 | 29,316 | |||||||||||||||
| Net interest income after provision for loan losses | 166,458 | 151,509 | 147,642 | 475,323 | 427,985 | |||||||||||||||
| Noninterest income: | ||||||||||||||||||||
| Gains on investment securities, net | 187,862 | 40,561 | 20,228 | 255,861 | 53,876 | |||||||||||||||
| Foreign exchange fees | 12,887 | 12,778 | 12,211 | 39,113 | 36,345 | |||||||||||||||
| Gains on derivative instruments, net | 10,202 | 8,976 | 1,111 | 30,218 | 15,800 | |||||||||||||||
| Deposit service charges | 8,902 | 8,907 | 8,369 | 26,602 | 24,834 | |||||||||||||||
| Credit card fees | 8,188 | 7,609 | 6,348 | 23,245 | 18,185 | |||||||||||||||
| Letters of credit and standby letters of credit fees | 3,790 | 3,654 | 3,495 | 10,879 | 10,427 | |||||||||||||||
| Client investment fees | 3,393 | 3,524 | 3,954 | 10,392 | 10,226 | |||||||||||||||
| Other | 22,426 | 12,230 | 13,423 | 38,183 | 39,165 | |||||||||||||||
| Total noninterest income | 257,650 | 98,239 | 69,139 | 434,493 | 208,858 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Compensation and benefits | 96,869 | 84,742 | 79,262 | 270,315 | 243,384 | |||||||||||||||
| Professional services | 18,966 | 16,633 | 17,759 | 52,759 | 48,880 | |||||||||||||||
| Premises and equipment | 12,171 | 11,402 | 11,247 | 34,298 | 28,230 | |||||||||||||||
| Business development and travel | 7,378 | 7,783 | 6,838 | 23,433 | 21,743 | |||||||||||||||
| Net occupancy | 5,898 | 5,795 | 5,666 | 17,460 | 16,667 | |||||||||||||||
| FDIC assessments | 2,913 | 2,853 | 2,836 | 9,148 | 8,065 | |||||||||||||||
| Correspondent bank fees | 2,906 | 3,049 | 3,000 | 9,009 | 8,528 | |||||||||||||||
| Provision for (reduction of) unfunded credit commitments | 2,774 | 1,347 | (400 | ) | 6,136 | 1,264 | ||||||||||||||
| Other | 10,649 | 9,688 | 8,963 | 30,272 | 26,188 | |||||||||||||||
| Total noninterest expense | 160,524 | 143,292 | 135,171 | 452,830 | 402,949 | |||||||||||||||
| Income before income tax expense | 263,584 | 106,456 | 81,610 | 456,986 | 233,894 | |||||||||||||||
| Income tax expense | 47,404 | 29,968 | 28,470 | 103,773 | 83,743 | |||||||||||||||
| Net income before noncontrolling interests | 216,180 | 76,488 | 53,140 | 353,213 | 150,151 | |||||||||||||||
| Net income attributable to noncontrolling interests | (148,559 | ) | (27,904 | ) | (10,851 | ) | (196,117 | ) | (25,469 | ) | ||||||||||
| Net income available to common stockholders | $ | 67,621 | $ | 48,584 | $ | 42,289 | $ | 157,096 | $ | 124,682 | ||||||||||
| Earnings per common share—basic | $ | 1.48 | $ | 1.08 | $ | 0.95 | $ | 3.48 | $ | 2.82 | ||||||||||
| Earnings per common share—diluted | 1.46 | 1.06 | 0.94 | 3.43 | 2.79 | |||||||||||||||
| Weighted average common shares outstanding—basic | 45,580,105 | 45,164,138 | 44,449,243 | 45,179,664 | 44,146,574 | |||||||||||||||
| Weighted average common shares outstanding—diluted | 46,202,409 | 45,684,205 | 44,914,564 | 45,765,307 | 44,692,224 | |||||||||||||||
13
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (Dollars in thousands, except par value and share data) | September 30, 2013 | June 30, 2013 | September 30, 2012 | |||||||||
| Assets: | ||||||||||||
| Cash and cash equivalents | $ | 1,942,744 | $ | 873,251 | $ | 906,680 | ||||||
| Available-for-sale securities | 10,209,917 | 10,043,341 | 11,047,730 | |||||||||
| Non-marketable and other securities | 1,425,138 | 1,255,425 | 1,163,815 | |||||||||
| Investment securities | 11,635,055 | 11,298,766 | 12,211,545 | |||||||||
| Loans, net of unearned income | 9,824,982 | 9,622,172 | 8,192,369 | |||||||||
| Allowance for loan losses | (124,734 | ) | (119,571 | ) | (101,524 | ) | ||||||
| Net loans | 9,700,248 | 9,502,601 | 8,090,845 | |||||||||
| Premises and equipment, net of accumulated depreciation and amortization | 65,385 | 65,644 | 68,270 | |||||||||
| Accrued interest receivable and other assets | 397,432 | 413,639 | 299,594 | |||||||||
| Total assets | $ | 23,740,864 | $ | 22,153,901 | $ | 21,576,934 | ||||||
| Liabilities and total equity: | ||||||||||||
| Liabilities: | ||||||||||||
| Noninterest-bearing demand deposits | $ | 14,105,728 | $ | 13,213,558 | $ | 12,598,639 | ||||||
| Interest-bearing deposits | 5,891,263 | 5,476,516 | 5,126,427 | |||||||||
| Total deposits | 19,996,991 | 18,690,074 | 17,725,066 | |||||||||
| Short-term borrowings | 5,580 | 5,400 | 508,170 | |||||||||
| Other liabilities | 358,905 | 330,394 | 330,038 | |||||||||
| Long-term debt | 455,744 | 455,938 | 458,314 | |||||||||
| Total liabilities | 20,817,220 | 19,481,806 | 19,021,588 | |||||||||
| 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; 45,608,370 shares, 45,460,543 shares and 44,510,524 shares outstanding, respectively | 46 | 45 | 45 | |||||||||
| Additional paid-in capital | 607,463 | 593,328 | 538,454 | |||||||||
| Retained earnings | 1,331,975 | 1,264,354 | 1,124,415 | |||||||||
| Accumulated other comprehensive income (loss) | 5,443 | (9,771 | ) | 122,010 | ||||||||
| Total SVBFG stockholders’ equity | 1,944,927 | 1,847,956 | 1,784,924 | |||||||||
| Noncontrolling interests | 978,717 | 824,139 | 770,422 | |||||||||
| Total equity | 2,923,644 | 2,672,095 | 2,555,346 | |||||||||
| Total liabilities and total equity | $ | 23,740,864 | $ | 22,153,901 | $ | 21,576,934 | ||||||
14
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
| Three months ended | |||||||||||||||||||||||||||||||||
| September 30, 2013 | June 30, 2013 | September 30, 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) | $ | 1,596,003 | $ | 1,152 | 0.29 | % | $ | 693,297 | $ | 734 | 0.42 | % | $ | 1,287,103 | $ | 1,125 | 0.35 | % | |||||||||||||||
| Available-for-sale securities: (2) | |||||||||||||||||||||||||||||||||
| Taxable | 10,000,154 | 43,604 | 1.73 | 10,342,873 | 44,657 | 1.73 | 10,478,071 | 38,493 | 1.46 | ||||||||||||||||||||||||
| Non-taxable (3) | 82,048 | 1,226 | 5.93 | 82,943 | 1,242 | 6.01 | 91,654 | 1,375 | 5.97 | ||||||||||||||||||||||||
| Total loans, net of unearned income (4) (5) | 9,545,941 | 139,687 | 5.81 | 9,022,173 | 131,785 | 5.86 | 7,907,606 | 121,446 | 6.11 | ||||||||||||||||||||||||
| Total interest-earning assets | 21,224,146 | 185,669 | 3.47 | 20,141,286 | 178,418 | 3.55 | 19,764,434 | 162,439 | 3.27 | ||||||||||||||||||||||||
| Cash and due from banks | 253,364 | 299,886 | 309,934 | ||||||||||||||||||||||||||||||
| Allowance for loan losses | (124,254 | ) | (118,635 | ) | (102,506 | ) | |||||||||||||||||||||||||||
| Other assets (6) | 1,719,478 | 1,770,761 | 1,755,335 | ||||||||||||||||||||||||||||||
| Total assets | $ | 23,072,734 | $ | 22,093,298 | $ | 21,727,197 | |||||||||||||||||||||||||||
Funding sources: | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| NOW deposits | $ | 134,545 | $ | 119 | 0.35 | % | $ | 140,725 | $ | 122 | 0.35 | % | $ | 105,302 | $ | 88 | 0.33 | % | |||||||||||||||
| Money market deposits | 3,755,620 | 1,866 | 0.20 | 3,220,618 | 1,552 | 0.19 | 2,790,021 | 1,219 | 0.17 | ||||||||||||||||||||||||
| Money market deposits in foreign offices | 194,870 | 48 | 0.10 | 133,084 | 32 | 0.10 | 118,002 | 29 | 0.10 | ||||||||||||||||||||||||
| Time deposits | 165,632 | 157 | 0.38 | 179,361 | 169 | 0.38 | 157,585 | 130 | 0.33 | ||||||||||||||||||||||||
| Sweep deposits in foreign offices | 1,643,761 | 207 | 0.05 | 1,682,901 | 210 | 0.05 | 2,174,737 | 274 | 0.05 | ||||||||||||||||||||||||
| Total interest-bearing deposits | 5,894,428 | 2,397 | 0.16 | 5,356,689 | 2,085 | 0.16 | 5,345,647 | 1,740 | 0.13 | ||||||||||||||||||||||||
| Short-term borrowings | 6,316 | 3 | 0.19 | 24,019 | 7 | 0.12 | 26,751 | 12 | 0.18 | ||||||||||||||||||||||||
| 5.375% Senior Notes | 348,119 | 4,789 | 5.46 | 348,066 | 4,859 | 5.60 | 347,910 | 4,818 | 5.51 | ||||||||||||||||||||||||
| Junior Subordinated Debentures | 55,094 | 833 | 6.00 | 55,138 | 832 | 6.05 | 55,269 | 830 | 5.97 | ||||||||||||||||||||||||
| 6.05% Subordinated Notes | 52,551 | 122 | 0.92 | 53,766 | 119 | 0.89 | 55,214 | 128 | 0.92 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 6,356,508 | 8,144 | 0.51 | 5,837,678 | 7,902 | 0.54 | 5,830,791 | 7,528 | 0.51 | ||||||||||||||||||||||||
| Portion of noninterest-bearing funding sources | 14,867,638 | 14,303,608 | 13,933,643 | ||||||||||||||||||||||||||||||
| Total funding sources | 21,224,146 | 8,144 | 0.15 | 20,141,286 | 7,902 | 0.15 | 19,764,434 | 7,528 | 0.15 | ||||||||||||||||||||||||
Noninterest-bearing funding sources: | |||||||||||||||||||||||||||||||||
| Demand deposits | 13,665,460 | 13,257,481 | 12,914,697 | ||||||||||||||||||||||||||||||
| Other liabilities | 298,455 | 290,381 | 452,160 | ||||||||||||||||||||||||||||||
| SVBFG stockholders’ equity | 1,909,462 | 1,924,902 | 1,782,443 | ||||||||||||||||||||||||||||||
| Noncontrolling interests | 842,849 | 782,856 | 747,106 | ||||||||||||||||||||||||||||||
| Portion used to fund interest-earning assets | (14,867,638 | ) | (14,303,608 | ) | (13,933,643 | ) | |||||||||||||||||||||||||||
| Total liabilities and total equity | $ | 23,072,734 | $ | 22,093,298 | $ | 21,727,197 | |||||||||||||||||||||||||||
| Net interest income and margin | $ | 177,525 | 3.32 | % | $ | 170,516 | 3.40 | % | $ | 154,911 | 3.12 | % | |||||||||||||||||||||
| Total deposits | $ | 19,559,888 | $ | 18,614,170 | $ | 18,260,344 | |||||||||||||||||||||||||||
| Average SVBFG stockholders’ equity as a percentage of average assets | 8.28 | % | 8.71 | % | 8.20 | % | |||||||||||||||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||
| Adjustments for taxable equivalent basis | (429 | ) | (435 | ) | (481 | ) | |||||||||||||||||||||||||||
| Net interest income, as reported | $ | 177,096 | $ | 170,081 | $ | 154,430 | |||||||||||||||||||||||||||
| (1) | Includes average interest-earning deposits in other financial institutions of $191 million, $157 million and $211 million for the quarters ended September 30, 2013, June 30, 2013 and September 30, 2012, respectively. For the quarters ended September 30, 2013, June 30, 2013 and September 30, 2012, balance also includes $1.3 billion, $404 million and $887 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 $23.0 million, $20.3 million and $19.0 million for the quarters ended September 30, 2013, June 30, 2013 and September 30, 2012, respectively. |
| (6) | Average investment securities of $1.3 billion, $1.4 billion and $1.4 billion for the quarters ended September 30, 2013, June 30, 2013 and September 30, 2012, respectively, were classified as other assets as they are noninterest-earning assets. These investments primarily consisted of non-marketable securities. |
15
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
| Nine months ended | ||||||||||||||||||||||
| September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | ||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
| Federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1) | $ | 1,040,073 | $ | 2,605 | 0.33 | % | $ | 1,115,192 | $ | 3,075 | 0.37 | % | ||||||||||
| Investment securities: (2) | ||||||||||||||||||||||
| Taxable | 10,379,311 | 134,013 | 1.73 | 10,574,021 | 129,940 | 1.64 | ||||||||||||||||
| Non-taxable (3) | 82,927 | 3,697 | 5.96 | 92,002 | 4,143 | 6.02 | ||||||||||||||||
| Total loans, net of unearned income (4) (5) | 9,086,179 | 395,216 | 5.82 | 7,318,537 | 344,842 | 6.29 | ||||||||||||||||
| Total interest-earning assets | 20,588,490 | 535,531 | 3.48 | 19,099,752 | 482,000 | 3.37 | ||||||||||||||||
| Cash and due from banks | 277,382 | 301,507 | ||||||||||||||||||||
| Allowance for loan losses | (119,491 | ) | (100,795 | ) | ||||||||||||||||||
| Other assets (6) | 1,749,711 | 1,652,577 | ||||||||||||||||||||
| Total assets | $ | 22,496,092 | $ | 20,953,041 | ||||||||||||||||||
Funding sources: | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| NOW deposits | $ | 136,899 | $ | 358 | 0.35 | % | $ | 102,502 | $ | 246 | 0.32 | % | ||||||||||
| Money market deposits | 3,342,363 | 4,913 | 0.20 | 2,646,272 | 3,212 | 0.16 | ||||||||||||||||
| Money market deposits in foreign offices | 148,161 | 108 | 0.10 | 130,257 | 96 | 0.10 | ||||||||||||||||
| Time deposits | 172,439 | 499 | 0.39 | 156,321 | 491 | 0.42 | ||||||||||||||||
| Sweep deposits in foreign offices | 1,751,995 | 655 | 0.05 | 2,108,404 | 790 | 0.05 | ||||||||||||||||
| Total interest-bearing deposits | 5,551,857 | 6,533 | 0.16 | 5,143,756 | 4,835 | 0.13 | ||||||||||||||||
| Short-term borrowings | 34,840 | 74 | 0.28 | 91,772 | 133 | 0.20 | ||||||||||||||||
| 5.375% senior notes | 348,067 | 14,433 | 5.54 | 347,860 | 14,449 | 5.55 | ||||||||||||||||
| Junior subordinated debentures | 55,137 | 2,497 | 6.05 | 55,313 | 2,493 | 6.02 | ||||||||||||||||
| 5.70% Senior Notes | — | — | — | 79,312 | 863 | 1.45 | ||||||||||||||||
| 6.05% Subordinated Notes | 53,527 | 354 | 0.88 | 55,122 | 382 | 0.93 | ||||||||||||||||
| Other long-term debt | — | — | — | 642 | 94 | 19.14 | ||||||||||||||||
| Total interest-bearing liabilities | 6,043,428 | 23,891 | 0.53 | 5,773,777 | 23,249 | 0.54 | ||||||||||||||||
| Portion of noninterest-bearing funding sources | 14,545,062 | 13,325,975 | ||||||||||||||||||||
| Total funding sources | 20,588,490 | 23,891 | 0.16 | 19,099,752 | 23,249 | 0.16 | ||||||||||||||||
Noninterest-bearing funding sources: | ||||||||||||||||||||||
| Demand deposits | 13,437,503 | 12,403,438 | ||||||||||||||||||||
| Other liabilities | 316,024 | 355,571 | ||||||||||||||||||||
| SVBFG stockholders’ equity | 1,899,783 | 1,704,957 | ||||||||||||||||||||
| Noncontrolling interests | 799,354 | 715,298 | ||||||||||||||||||||
| Portion used to fund interest-earning assets | (14,545,062 | ) | (13,325,975 | ) | ||||||||||||||||||
| Total liabilities and total equity | $ | 22,496,092 | $ | 20,953,041 | ||||||||||||||||||
| Net interest income and margin | $ | 511,640 | 3.32 | % | $ | 458,751 | 3.21 | % | ||||||||||||||
| Total deposits | $ | 18,989,360 | $ | 17,547,194 | ||||||||||||||||||
| Average SVBFG stockholders’ equity as a percentage of average assets | 8.44 | % | 8.14 | % | ||||||||||||||||||
Reconciliation to reported net interest income: | ||||||||||||||||||||||
| Adjustments for taxable equivalent basis | (1,294 | ) | (1,450 | ) | ||||||||||||||||||
| Net interest income, as reported | $ | 510,346 | $ | 457,301 | ||||||||||||||||||
| (1) | Includes average interest-earning deposits in other financial institutions of $175 million and $277 million for the nine months ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013 and 2012, balance also includes $687 million and $626 million, respectively, deposited at the Federal Reserve Bank, 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 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 $60.0 million and $56.6 million for the nine months ended September 30, 2013 and 2012, respectively. |
| (6) | Average investment securities of $1.3 billion for both of the nine months ended September 30, 2013 and 2012, were classified as other assets as they are noninterest-earning assets. These investments primarily consisted of non-marketable securities. |
16
Gains on Equity Warrant Assets
| Three months ended | Nine months ended | |||||||||||||||||||
| (Dollars in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Equity warrant assets (1): | ||||||||||||||||||||
| Gains on exercises, net | $ | 4,458 | $ | 1,611 | $ | 2,417 | $ | 6,883 | $ | 7,577 | ||||||||||
| Cancellations and expirations | (149 | ) | (118 | ) | (252 | ) | (371 | ) | (1,424 | ) | ||||||||||
| Changes in fair value | 14,471 | 5,697 | (1,618 | ) | 22,963 | 6,205 | ||||||||||||||
| Total net gains on equity warrant assets (2) | $ | 18,780 | $ | 7,190 | $ | 547 | $ | 29,475 | $ | 12,358 | ||||||||||
| (1) | At September 30, 2013, we held warrants in 1,309 companies, compared to 1,302 companies at June 30, 2013 and 1,248 companies at September 30, 2012. The total value of our warrant portfolio was $92 million at September 30, 2013, compared to $77 million at June 30, 2013 and $70 million at September 30, 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 | Nine months ended | ||||||||||||||
| (Shares in thousands) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||
| Weighted average common shares outstanding—basic | 45,580 | 45,164 | 44,449 | 45,180 | 44,147 | ||||||||||
| Effect of dilutive securities: | |||||||||||||||
| Stock options and employee stock purchase plan | 430 | 380 | 346 | 405 | 402 | ||||||||||
| Restricted stock units | 193 | 140 | 120 | 180 | 143 | ||||||||||
| Total effect of dilutive securities | 623 | 520 | 466 | 585 | 545 | ||||||||||
| Weighted average common shares outstanding—diluted | 46,203 | 45,684 | 44,915 | 45,765 | 44,692 | ||||||||||
Capital Ratios
| September 30, 2013 | June 30, 2013 | September 30, 2012 | |||||||
| SVB Financial Group: | |||||||||
| Total risk-based capital ratio | 14.16 | % | 14.03 | % | 14.34 | % | |||
| Tier 1 risk-based capital ratio | 12.96 | 12.84 | 13.07 | ||||||
| Tier 1 leverage ratio | 8.75 | 8.78 | 8.02 | ||||||
| Tangible common equity to tangible assets ratio (1) | 8.19 | 8.34 | 8.27 | ||||||
| Tangible common equity to risk-weighted assets ratio (1) | 12.96 | 12.73 | 13.93 | ||||||
| Silicon Valley Bank: | |||||||||
| Total risk-based capital ratio | 12.31 | % | 12.42 | % | 12.70 | % | |||
| Tier 1 risk-based capital ratio | 11.08 | 11.20 | 11.41 | ||||||
| Tier 1 leverage ratio | 7.46 | 7.66 | 7.00 | ||||||
| Tangible common equity to tangible assets ratio (1) | 7.34 | 7.60 | 7.61 | ||||||
| Tangible common equity to risk-weighted assets ratio (1) | 11.17 | 11.18 | 12.40 | ||||||
| (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.” |
17
Loan Concentrations
| (Dollars in thousands, except ratios and client data) | September 30, 2013 | June 30, 2013 | September 30, 2012 | |||||||||
| Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million | ||||||||||||
| Commercial loans: | ||||||||||||
| Software | $ | 1,303,875 | $ | 1,288,687 | $ | 929,588 | ||||||
| Hardware | 488,227 | 554,123 | 453,485 | |||||||||
| Venture capital/private equity | 1,075,606 | 1,066,473 | 684,469 | |||||||||
| Life science | 369,486 | 326,562 | 352,708 | |||||||||
| Premium wine (1) | 22,725 | 19,971 | 6,000 | |||||||||
| Other | 117,604 | 107,293 | 57,019 | |||||||||
| Total commercial loans | 3,377,523 | 3,363,109 | 2,483,269 | |||||||||
| Real estate secured loans: | ||||||||||||
| Premium wine (1) | 107,037 | 108,101 | 74,343 | |||||||||
| Consumer and other (2) | 43,733 | 43,933 | — | |||||||||
| Total real estate secured loans | 150,770 | 152,034 | 74,343 | |||||||||
| Consumer loans (2) | 43,126 | 43,072 | 45,000 | |||||||||
| Total loans individually equal to or greater than $20 million | $ | 3,571,419 | $ | 3,558,215 | $ | 2,602,612 | ||||||
| Loans (individually or in the aggregate) to any single client, less than $20 million | ||||||||||||
| Commercial loans: | ||||||||||||
| Software | $ | 2,434,267 | $ | 2,305,267 | $ | 2,053,832 | ||||||
| Hardware | 665,167 | 663,489 | 751,574 | |||||||||
| Venture capital/private equity | 877,555 | 852,258 | 723,877 | |||||||||
| Life science | 738,575 | 769,019 | 685,619 | |||||||||
| Premium wine | 128,113 | 124,019 | 129,194 | |||||||||
| Other | 172,793 | 205,325 | 256,158 | |||||||||
| Total commercial loans | 5,016,470 | 4,919,377 | 4,600,254 | |||||||||
| Real estate secured loans: | ||||||||||||
| Premium wine | 386,742 | 358,964 | 306,212 | |||||||||
| Consumer and other | 816,239 | 758,310 | 609,525 | |||||||||
| Total real estate secured loans | 1,202,981 | 1,117,274 | 915,737 | |||||||||
| Construction loans | 72,572 | 66,774 | 48,505 | |||||||||
| Consumer loans | 50,757 | 43,824 | 99,060 | |||||||||
| Total loans individually less than $20 million | $ | 6,342,780 | $ | 6,147,249 | $ | 5,663,556 | ||||||
| Total gross loans | $ | 9,914,199 | $ | 9,705,464 | $ | 8,266,168 | ||||||
| Loans individually equal to or greater than $20 million as a percentage of total gross loans | 36.0 | % | 36.7 | % | 31.5 | % | ||||||
| Total clients with loans individually equal to or greater than $20 million | 112 | 112 | 85 | |||||||||
| Loans individually equal to or greater than $20 million on nonaccrual status | $ | — | $ | — | $ | — | ||||||
| (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. |
18
Credit Quality
| Period-end balances at | ||||||||||||
| (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | September 30, 2012 | |||||||||
| Nonperforming and past due loans: | ||||||||||||
| Loans past due 90 days or more still accruing interest | $ | 24 | $ | 1,861 | $ | 5,000 | ||||||
| Impaired loans | 38,048 | 41,159 | 39,397 | |||||||||
| Nonperforming loans as a percentage of total gross loans | 0.38 | % | 0.42 | % | 0.48 | % | ||||||
| Nonperforming loans as a percentage of total assets | 0.16 | 0.19 | 0.18 | |||||||||
| Allowance for loan losses | $ | 124,734 | $ | 119,571 | $ | 101,524 | ||||||
| As a percentage of total gross loans | 1.26 | % | 1.23 | % | 1.23 | % | ||||||
| As a percentage of total gross nonperforming loans | 327.83 | 290.51 | 257.69 | |||||||||
| Allowance for loan losses for impaired loans | $ | 13,469 | $ | 10,353 | $ | 6,003 | ||||||
| As a percentage of total gross loans | 0.14 | % | 0.11 | % | 0.07 | % | ||||||
| As a percentage of total gross nonperforming loans | 35.40 | 25.15 | 15.24 | |||||||||
| Allowance for loan losses for total gross performing loans | $ | 111,265 | $ | 109,218 | $ | 95,521 | ||||||
| As a percentage of total gross loans | 1.12 | % | 1.13 | % | 1.16 | % | ||||||
| As a percentage of total gross performing loans | 1.13 | 1.13 | 1.16 | |||||||||
| Total gross loans | $ | 9,914,199 | $ | 9,705,464 | $ | 8,266,168 | ||||||
| Total gross performing loans | 9,876,151 | 9,664,305 | 8,226,771 | |||||||||
| Reserve for unfunded credit commitments (1) | 28,456 | 25,647 | 23,075 | |||||||||
| As a percentage of total unfunded credit commitments | 0.27 | % | 0.26 | % | 0.26 | % | ||||||
| Total unfunded credit commitments (2) | $ | 10,675,569 | $ | 9,785,736 | $ | 8,710,228 | ||||||
| (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 | Nine months ended | |||||||||||||||||||
| (Dollars in millions) | September 30, 2013 | June 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
| Client directed investment assets | $ | 7,412 | $ | 6,847 | $ | 7,528 | $ | 7,052 | $ | 7,406 | ||||||||||
| Client investment assets under management | 11,925 | 11,498 | 10,283 | 11,577 | 10,247 | |||||||||||||||
| Sweep money market funds | 5,621 | 4,856 | 3,118 | 4,920 | 2,239 | |||||||||||||||
| Total average client investment funds | $ | 24,959 | $ | 23,201 | $ | 20,929 | $ | 23,549 | $ | 19,892 | ||||||||||
Period-end Off-Balance Sheet Client Investment Funds (1)
| Period-end balances at | ||||||||||||||||||||
| (Dollars in millions) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | |||||||||||||||
| Client directed investment assets | $ | 7,319 | $ | 6,978 | $ | 6,943 | $ | 7,604 | $ | 7,363 | ||||||||||
| Client investment assets under management | 12,045 | 11,770 | 11,571 | 10,824 | 10,291 | |||||||||||||||
| Sweep money market funds | 5,954 | 5,254 | 4,467 | 4,085 | 3,404 | |||||||||||||||
| Total period-end client investment funds | $ | 25,318 | $ | 24,002 | $ | 22,981 | $ | 22,513 | $ | 21,058 | ||||||||||
| (1) | Off-Balance sheet client investment funds are maintained at third party financial institutions. |
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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 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 sale 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 and measures 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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| • | Non-GAAP core fee income — This measure represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control. We do not provide our outlook for the expected full year results for these excluded items, which include gains on investment securities, net, gains on derivative instruments, net, and other noninterest income items. |
| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP net income and earnings per share (Dollars in thousands, except share amounts) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| Net income available to common stockholders | $ | 67,621 | $ | 48,584 | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 157,096 | $ | 124,682 | ||||||||||||||
| 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 | $ | 67,621 | $ | 48,584 | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 157,096 | $ | 119,148 | ||||||||||||||
| GAAP earnings per common share — diluted | $ | 1.46 | $ | 1.06 | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 3.43 | $ | 2.79 | ||||||||||||||
| 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 | $ | 1.46 | $ | 1.06 | $ | 0.90 | $ | 1.12 | $ | 0.94 | $ | 3.43 | $ | 2.67 | ||||||||||||||
| Weighted average diluted common shares outstanding | 46,202,409 | 45,684,205 | 45,393,025 | 44,982,031 | 44,914,564 | 45,765,307 | 44,692,224 | |||||||||||||||||||||
| (1) | Gains on the sale of $316 million in certain available-for-sale securities in the second quarter of 2012. |
| (2) | Gains from the sale of certain assets related to our equity management services business in the second quarter of 2012. |
| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP return on average assets and average SVBFG stockholders’ equity (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| Non-GAAP net income available to common stockholders | $ | 67,621 | $ | 48,584 | $ | 40,891 | $ | 50,421 | $ | 42,289 | $ | 157,096 | $ | 119,148 | ||||||||||||||
| Average assets | $ | 23,072,734 | $ | 22,093,298 | $ | 22,314,559 | $ | 22,377,777 | $ | 21,727,197 | $ | 22,496,092 | $ | 20,953,041 | ||||||||||||||
| Average SVBFG stockholders’ equity | $ | 1,909,462 | $ | 1,924,902 | $ | 1,866,310 | $ | 1,825,592 | $ | 1,782,443 | 1,899,783 | 1,704,957 | ||||||||||||||||
| Non-GAAP return on average assets (annualized) | 1.16 | % | 0.88 | % | 0.74 | % | 0.90 | % | 0.77 | % | 0.85 | % | 0.76 | % | ||||||||||||||
| Non-GAAP return on average SVBFG stockholders’ equity (annualized) | 14.05 | 10.12 | 8.89 | 10.99 | 9.44 | 9.51 | 9.33 | % | ||||||||||||||||||||
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| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| GAAP noninterest income | $ | 257,650 | $ | 98,239 | $ | 78,604 | $ | 126,688 | $ | 69,139 | $ | 434,493 | $ | 208,858 | ||||||||||||||
| Less: income attributable to noncontrolling interests, including carried interest | 151,830 | 30,751 | 22,490 | 51,114 | 13,524 | 205,071 | 34,826 | |||||||||||||||||||||
| Noninterest income, net of noncontrolling interests | 105,820 | 67,488 | 56,114 | 75,574 | 55,615 | 229,422 | 174,032 | |||||||||||||||||||||
| 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 | $ | 105,820 | $ | 67,488 | $ | 56,114 | $ | 75,574 | $ | 55,615 | $ | 229,422 | $ | 164,834 | ||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP core fee income (Dollars in thousands) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| GAAP noninterest income | $ | 257,650 | $ | 98,239 | $ | 78,604 | $ | 126,688 | $ | 69,139 | $ | 434,493 | $ | 208,858 | ||||||||||||||
| Less: gains on investment securities, net | 187,862 | 40,561 | 27,438 | 68,238 | 20,228 | 255,861 | 53,876 | |||||||||||||||||||||
| Less: gains on derivative instruments, net | 10,202 | 8,976 | 11,040 | 6,320 | 1,111 | 30,218 | 15,800 | |||||||||||||||||||||
| Less: other noninterest income | 22,426 | 12,230 | 3,527 | 15,236 | 13,423 | 38,183 | 39,165 | |||||||||||||||||||||
| Non-GAAP core fee income | $ | 37,160 | $ | 36,472 | $ | 36,599 | $ | 36,894 | $ | 34,377 | $ | 110,231 | $ | 100,017 | ||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP net gains on investment securities, net of noncontrolling interests (Dollars in thousands) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| GAAP net gains on investment securities (1) | $ | 187,862 | $ | 40,561 | $ | 27,438 | $ | 68,238 | $ | 20,228 | $ | 255,861 | $ | 53,876 | ||||||||||||||
| Less: income attributable to noncontrolling interests, including carried interest (2) | 151,360 | 31,067 | 22,296 | 51,024 | 12,776 | 204,723 | 34,616 | |||||||||||||||||||||
| Net gains on investment securities, net of noncontrolling interests (3) | 36,502 | 9,494 | 5,142 | 17,214 | 7,452 | 51,138 | 19,260 | |||||||||||||||||||||
| 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 | $ | 36,502 | $ | 9,494 | $ | 5,142 | $ | 17,214 | $ | 7,452 | $ | 51,138 | $ | 14,305 | ||||||||||||||
(1) | Includes $141.4 million in gains resulting from the increased valuation and carried interest of FireEye, after its IPO, during the third quarter of 2013. |
| (2) | Includes $112.0 million in gains resulting from the increased valuation and carried interest of FireEye, after its IPO, during the third quarter of 2013. |
| (3) | Includes $29.4 million in gains resulting from the increased valuation and carried interest of FireEye, after its IPO, during the third quarter of 2013. |
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| Three months ended | Nine months ended | |||||||||||||||||||||||||||
| Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||||||||
| GAAP noninterest expense | $ | 160,524 | $ | 143,292 | $ | 149,014 | $ | 143,049 | $ | 135,171 | $ | 452,830 | $ | 402,949 | ||||||||||||||
| Less: amounts attributable to noncontrolling interests | 3,290 | 2,867 | 2,860 | 1,848 | 2,723 | 9,017 | 9,488 | |||||||||||||||||||||
| Non-GAAP noninterest expense, net of noncontrolling interests | $ | 157,234 | $ | 140,425 | $ | 146,154 | $ | 141,201 | $ | 132,448 | $ | 443,813 | $ | 393,461 | ||||||||||||||
| GAAP taxable equivalent net interest income | $ | 177,525 | $ | 170,516 | $ | 163,599 | $ | 161,032 | $ | 154,911 | $ | 511,640 | $ | 458,751 | ||||||||||||||
| Less: income (losses) attributable to noncontrolling interests | 19 | 20 | 24 | (25 | ) | 50 | 63 | 131 | ||||||||||||||||||||
| Non-GAAP taxable equivalent net interest income, net of noncontrolling interests | 177,506 | 170,496 | 163,575 | 161,057 | 154,861 | 511,577 | 458,620 | |||||||||||||||||||||
| Non-GAAP noninterest income, net of noncontrolling interests | 105,820 | 67,488 | 56,114 | 75,574 | 55,615 | 229,422 | 164,834 | |||||||||||||||||||||
| Non-GAAP taxable equivalent revenue, net of noncontrolling interests | $ | 283,326 | $ | 237,984 | $ | 219,689 | $ | 236,631 | $ | 210,476 | $ | 740,999 | $ | 623,454 | ||||||||||||||
| Non-GAAP operating efficiency ratio | 55.50 | % | 59.01 | % | 66.53 | % | 59.67 | % | 62.93 | % | 59.89 | % | 63.11 | % | ||||||||||||||
| Non-GAAP non-marketable and other securities, net of noncontrolling interests (Dollars in thousands) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | |||||||||||||||
| GAAP non-marketable and other securities | $ | 1,425,138 | $ | 1,255,425 | $ | 1,215,788 | $ | 1,184,265 | $ | 1,163,815 | ||||||||||
| Less: noncontrolling interests in non-marketable and other securities | 955,209 | 778,191 | 739,933 | 708,157 | 689,492 | |||||||||||||||
| Non-GAAP non-marketable and other securities, net of noncontrolling interests | $ | 469,929 | $ | 477,234 | $ | 475,855 | $ | 476,108 | $ | 474,323 | ||||||||||
| SVB Financial Group tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | |||||||||||||||
| GAAP SVBFG stockholders’ equity | $ | 1,944,927 | $ | 1,847,956 | $ | 1,882,219 | $ | 1,830,555 | $ | 1,784,924 | ||||||||||
| Less: intangible assets | — | — | — | — | — | |||||||||||||||
| Tangible common equity | $ | 1,944,927 | $ | 1,847,956 | $ | 1,882,219 | $ | 1,830,555 | $ | 1,784,924 | ||||||||||
| GAAP total assets | $ | 23,740,864 | $ | 22,153,901 | $ | 22,796,000 | $ | 22,766,123 | $ | 21,576,934 | ||||||||||
| Less: intangible assets | — | — | — | — | — | |||||||||||||||
| Tangible assets | $ | 23,740,864 | $ | 22,153,901 | $ | 22,796,000 | $ | 22,766,123 | $ | 21,576,934 | ||||||||||
| Risk-weighted assets | $ | 15,004,072 | $ | 14,519,635 | $ | 13,501,072 | $ | 13,532,984 | $ | 12,812,798 | ||||||||||
| Tangible common equity to tangible assets | 8.19 | % | 8.34 | % | 8.26 | % | 8.04 | % | 8.27 | % | ||||||||||
| Tangible common equity to risk-weighted assets | 12.96 | 12.73 | 13.94 | 13.53 | 13.93 | |||||||||||||||
| Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | September 30, 2013 | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | |||||||||||||||
| Tangible common equity | $ | 1,640,387 | $ | 1,585,117 | $ | 1,637,365 | $ | 1,591,643 | $ | 1,547,061 | ||||||||||
| Tangible assets | $ | 22,337,190 | $ | 20,867,463 | $ | 21,487,859 | $ | 21,471,111 | $ | 20,325,446 | ||||||||||
| Risk-weighted assets | $ | 14,679,608 | $ | 14,174,370 | $ | 13,147,423 | $ | 13,177,887 | $ | 12,478,371 | ||||||||||
| Tangible common equity to tangible assets | 7.34 | % | 7.60 | % | 7.62 | % | 7.41 | % | 7.61 | % | ||||||||||
| Tangible common equity to risk-weighted assets | 11.17 | 11.18 | 12.45 | 12.08 | 12.40 | |||||||||||||||
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