EXHIBIT 99.1
[SILICON VALLEY BANCSHARES LOGO]
For immediate release Contact:
November 17, 1999 Lisa Bertolet
5:30 p.m. (PST) Investor Relations
(408) 654-7282
NASDAQ: SIVB Andrea McGhee
Corporate Communications
(408) 654-3078
SILICON VALLEY BANCSHARES ANNOUNCES MID-FOURTH QUARTER
FINANCIAL HIGHLIGHTS
SANTA CLARA, CA--Silicon Valley Bancshares (the "Company"), parent company
of Silicon Valley Bank (the "Bank"), announced today the following financial
highlights for the month ended October 31, 1999. This press release represents a
continuation of the Company's practice of issuing a mid-quarter financial
highlights update.
(Dollars in thousands)
Average Loans, Net of Unearned Income--$1,642,235
Average Interest-Earning Assets--$3,668,738
Average Deposits--$3,551,524
Net Interest Margin--6.5%
Yield on Loans--10.5%
Yield on Interest-Earning Assets--7.9%
Cost of Funds--1.3%
Efficiency Ratio--53.4%
Warrant Income--$14,505
Off-Balance Sheet Client Funds--$3,810,489
The Company currently expects core earnings per share for the fourth quarter
of 1999 to be in the range of $0.62-$0.65 (which excludes the impact of warrant
income). This core earnings per share estimate takes into account the impact of
the proposed offering of 1.25 million shares of the Company's common stock which
the Company hopes to complete during the fourth quarter of 1999.
Based on October 31, 1999 market valuations, the Company had additional
potential pre-tax warrant gains totaling over $29.2 million, of which over $22.9
million related to four clients. The Company is restricted from exercising many
of these warrants until later in the fourth quarter of 1999
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and the first quarter of 2000. Further, based on October 31, 1999 market
valuations, the Company had a potential pre-tax gain on a venture capital fund
investment of over $14.3 million. The Company is restricted from selling this
equity instrument until the first quarter of the year 2000. Additionally, the
Company is precluded from using any type of derivative instrument to secure the
current unrealized gains associated with these equity instruments. Hence, the
amount of income realized by the Company from these equity instruments in future
periods may vary materially from the current unrealized amount due to
fluctuations in the market prices of the underlying common stock of these
companies. Furthermore, the Company may reinvest some or all of the income
realized from the disposition of these equity instruments in pursuing its
business strategies.
Year 2000 Readiness Update: Testing of mission critical service providers
and contingency planning and testing was complete as of June 30, 1999.
Additionally, the Bank completed the implementation of all mission critical
systems into the production environment as of June 30, 1999. This marks the
completion of the Bank's final milestone under regulatory guidelines. However,
the Bank will continue to work through the rest of the year with vendors,
clients and business partners to make a smooth transition into the next
millennium.
The Company will be in a quiet period beginning December 16, 1999 (15
calendar days before quarter end) and will issue a press release announcing the
final 1999 fourth quarter financial results on Thursday, January 20, 2000. The
Company will host a conference call at 7:00 a.m. (PST), on Friday, January 21,
2000, to discuss the 1999 fourth quarter financial results. The conference call
can be accessed by dialing (888) 955-3514 and referencing the passcode "Silicon
Valley Bank." A digitized replay of this conference call will be available
beginning at approximately 10:00 a.m. (PST), on Friday, January 21, 2000,
through 5:00 p.m (PST), on Friday, February 18, 2000, by dialing
(800) 774-9248. An audio replay of this conference call will also be available
on the World Wide Web at www.svb.com beginning Friday, January 21, 2000.
Silicon Valley Bank serves emerging growth and middle-market companies in
targeted niches, focusing on the technology and life sciences industries, while
also identifying and capitalizing on opportunities to serve companies in other
industries whose financial services needs the Bank believes are underserved.
The Bank operates offices throughout the Silicon Valley: Santa Clara, Palo
Alto and 3000 Sand Hill Road, Menlo Park, the center of the venture capital
community in California. Other regional offices within California include:
Irvine, San Diego, San Francisco, St. Helena, Sonoma, Westlake Village, and West
Los Angeles. Office locations outside of California include: Phoenix, Arizona;
Boulder, Colorado; Atlanta, Georgia; Rosemont, Illinois; Wellesley,
Massachusetts; St. Louis Park, Minnesota; Beaverton, Oregon; Radnor,
Pennsylvania; Austin, Texas; Reston, Virginia; and Kirkland, Washington.
FORWARD-LOOKING STATEMENTS
This release includes "forward-looking statements" as that term is used in
the securities laws. All statements regarding the Company's expected financial
position, business and strategies are forward-looking statements. In addition,
in this release, the words "anticipates," "believes," "estimates," "seeks,"
"expects," "plans," "intends" and similar expressions, as they relate to the
Company or its management, are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in these
forward-looking statements are reasonable, and has based these expectations on
the Company's beliefs as well as assumptions it has made, such expectations may
prove to be incorrect. Important factors that could cause actual results to
differ materially from such expectations include, without limitation:
- If a significant number of clients fail to perform under their loans, the
Company's business, profitability and financial condition would be
adversely affected.
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- Because of the credit profile of our loan portfolio, the Company's levels
of nonperforming assets and charge-offs can be volatile, and the Company
may need to make material provisions for loan losses in any period, which
could cause reduced net income or net losses in that period.
- If the amount of capital available to start-up and emerging growth
companies decreases, it could adversely affect the Company's business,
profitability and growth prospects.
- The Company is subject to extensive regulation that could limit or
restrict its activities and impose financial requirements or limitations
on the conduct of its business. The Company is currently party to a
memorandum of understanding with its primary banking regulators which
requires it to increase capital and restricts its ability to declare
dividends and take other actions without regulatory consent.
- The Company's currently existing unrealized warrant and venture capital
fund portfolio gains may never be realized.
- Public offerings and mergers and acquisitions involving the Company's
clients can cause loans to be paid off early, which could adversely affect
its business and profitability. The Company has experienced only modest
loan growth in 1999, primarily as a result of this phenomenon.
- The Company's current level of interest rate spread may decline in the
future. Any material reduction in its interest spread could have a
material impact on its business and profitability.
- Adverse changes in domestic or global economic conditions, especially in
the technology sector, could have a material adverse effect on the
Company's business, growth and profitability.
- If the Company fails to retain its key employees, its growth and
profitability could be adversely affected.
- If the Company fails to address adequately the Year 2000 issue, it could
adversely affect the Company's business and profitability and the Company
could face regulatory enforcement actions.
- The price of the Company's common stock may decrease rapidly and prevent
stockholders from selling their stock at a profit.
For information about factors that could cause the Company's actual results to
differ from the expectations stated in the forward-looking statements, see the
text under the caption "Risk Factors" included in Item 5 of the Company's Report
on Form 8-K dated November 18, 1999. The Company urges investors to consider
these factors carefully in evaluating the forward-looking statements contained
in this release. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by these cautionary statements. The forward-looking
statements included in this release are made only as of the date of this
release. The Company does not intend, and undertakes no obligation, to update
these forward-looking statements.
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