SANTA CLARA, Calif.,
Oct. 24, 2019 /PRNewswire/ -- SVB
Financial Group (NASDAQ: SIVB) today announced financial results
for the third quarter ended September 30, 2019.
Consolidated net income available to common stockholders for the
third quarter of 2019 was $267.3
million, or $5.15 per diluted
common share, compared to $318.0
million, or $6.08 per diluted
common share, for the second quarter of 2019 and $274.8 million, or $5.10 per diluted common share, for the third
quarter of 2018. Consolidated net income available to common
stockholders for the nine months ended September 30, 2019 was $874.0 million, or $16.67 per diluted common share, compared to
$707.6 million, or $13.15 per diluted common share, for the
comparable 2018 period. For the third quarter of 2019, a net loss
attributable to SVB Leerink was $1.4
million, or $0.03 per diluted
common share. Net income for the nine months ended September 30, 2019 attributable to SVB Leerink
was $8.2 million, or $0.16 per diluted common share.
"We delivered strong performance in the third quarter, driven by
excellent balance sheet growth, solid core fee income, stable
credit and healthy market gains, all of which reflect the continued
health of and robust liquidity available to our clients," said
Greg Becker, President and CEO of
SVB Financial Group. "While declining short-term rates are
pressuring net interest income and net interest margin for
now, we believe our focus on execution will enable us to drive
continued growth and profitability over the long term, with or
without help from interest rates."
Highlights of our third quarter 2019 results (compared to second
quarter 2019, unless otherwise noted) included:
- Average loan balances of $29.8
billion, an increase of $0.4
billion (or 1.4 percent).
- Period-end loan balances of $31.1
billion, an increase of $1.9
billion (or 6.3 percent).
- Average fixed income investment securities of $25.1 billion, an increase of $2.0 billion (or 8.7 percent).
- Period-end fixed income investment securities of $27.3 billion, an increase of $4.5 billion (or 19.6 percent).
- Average total client funds (on-balance sheet deposits and
off-balance sheet client investment funds) increased $7.4 billion (or 5.2 percent) to $150.1 billion.
- Period-end total client funds increased $8.9 billion (or 6.1 percent) to $156.0 billion.
- Net interest income (fully taxable equivalent basis) of
$523.6 million, a decrease of
$8.7 million (or 1.6 percent).
- Provision for credit losses of $36.5
million, compared to $23.9
million.
- Net loan charge-offs of $32.9
million, or 44 basis points of average total gross loans
(annualized), compared to $16.6
million, or 23 basis points.
- Net gains on investment securities of $29.8 million, compared to $47.7 million. Non-GAAP net gains on investment
securities, net of noncontrolling interests, were $15.2 million, compared to $29.1 million. (See non-GAAP reconciliation under
the section "Use of Non-GAAP Financial Measures.")
- Net gains on equity warrant assets of $37.6 million, compared to $48.3 million.
- Noninterest income of $294.0
million, a decrease of $39.7
million (or 11.9 percent). Non-GAAP core fee income
increased $4.8 million (or 3.1
percent) to $162.2 million. (See
non-GAAP reconciliation under the section "Use of Non-GAAP
Financial Measures.")
- Noninterest expense of $391.3
million, an increase of $7.8
million (or 2.0 percent).
- Effective tax rate of 28.2 percent compared to 27.3
percent.
- GAAP operating efficiency ratio of 48.04 percent, an increase
of 361 basis points. Non-GAAP core operating efficiency ratio of
48.05 percent, an increase of 256 basis points. (See non-GAAP
reconciliation under the section "Use of Non-GAAP Financial
Measures.")
Third Quarter 2019 Summary
(Dollars in millions, except share data,
employees and ratios)
|
|
Three months
ended
|
|
Nine months
ended
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Income
statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
|
$
|
5.15
|
|
|
$
|
6.08
|
|
|
$
|
5.44
|
|
|
$
|
4.96
|
|
|
$
|
5.10
|
|
|
$
|
16.67
|
|
|
$
|
13.15
|
|
Net income available
to common stockholders
|
|
267.3
|
|
|
318.0
|
|
|
288.7
|
|
|
266.3
|
|
|
274.8
|
|
|
874.0
|
|
|
707.6
|
|
Net interest
income
|
|
520.6
|
|
|
529.4
|
|
|
512.9
|
|
|
514.5
|
|
|
493.2
|
|
|
1,562.9
|
|
|
1,379.5
|
|
Provision for credit
losses
|
|
36.5
|
|
|
23.9
|
|
|
28.6
|
|
|
13.6
|
|
|
17.2
|
|
|
89.0
|
|
|
74.2
|
|
Noninterest
income
|
|
294.0
|
|
|
333.8
|
|
|
280.4
|
|
|
186.7
|
|
|
210.1
|
|
|
908.1
|
|
|
558.3
|
|
Noninterest
expense
|
|
391.3
|
|
|
383.5
|
|
|
365.7
|
|
|
307.6
|
|
|
309.4
|
|
|
1,140.5
|
|
|
880.6
|
|
Non-GAAP core fee
income (1)
|
|
162.2
|
|
|
157.3
|
|
|
154.2
|
|
|
146.0
|
|
|
131.7
|
|
|
473.8
|
|
|
369.8
|
|
Non-GAAP core fee
income, including investment banking revenue and commissions
(1)
|
|
213.0
|
|
|
220.5
|
|
|
218.1
|
|
|
146.0
|
|
|
131.7
|
|
|
651.6
|
|
|
369.8
|
|
Non-GAAP noninterest
income, net of noncontrolling interests (1)
|
|
279.4
|
|
|
315.0
|
|
|
277.1
|
|
|
177.9
|
|
|
203.4
|
|
|
871.6
|
|
|
529.1
|
|
Non-GAAP noninterest
expense, net of noncontrolling interests (1)
|
|
391.2
|
|
|
383.4
|
|
|
365.3
|
|
|
307.4
|
|
|
309.3
|
|
|
1,139.8
|
|
|
880.3
|
|
Fully taxable
equivalent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(1) (2)
|
|
$
|
523.6
|
|
|
$
|
532.3
|
|
|
$
|
515.8
|
|
|
$
|
517.4
|
|
|
$
|
496.1
|
|
|
$
|
1,571.7
|
|
|
$
|
1,385.8
|
|
Net interest
margin
|
|
3.34
|
%
|
|
3.68
|
%
|
|
3.81
|
%
|
|
3.69
|
%
|
|
3.62
|
%
|
|
3.60
|
%
|
|
3.53
|
%
|
Balance
sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total
assets
|
|
$
|
65,327.7
|
|
|
$
|
60,700.5
|
|
|
$
|
57,528.4
|
|
|
$
|
57,592.3
|
|
|
$
|
56,465.0
|
|
|
$
|
61,214.1
|
|
|
$
|
54,432.7
|
|
Average loans, net of
unearned income
|
|
29,822.4
|
|
|
29,406.6
|
|
|
28,388.1
|
|
|
27,477.0
|
|
|
26,331.4
|
|
|
29,211.0
|
|
|
25,008.3
|
|
Average
available-for-sale securities
|
|
10,600.4
|
|
|
8,205.3
|
|
|
6,870.2
|
|
|
8,793.7
|
|
|
9,589.9
|
|
|
8,572.3
|
|
|
10,124.7
|
|
Average
held-to-maturity securities
|
|
14,534.5
|
|
|
14,922.6
|
|
|
15,224.0
|
|
|
15,691.1
|
|
|
15,916.7
|
|
|
14,891.2
|
|
|
14,764.2
|
|
Average
noninterest-bearing demand deposits
|
|
39,146.2
|
|
|
38,117.9
|
|
|
38,222.7
|
|
|
40,106.9
|
|
|
40,625.8
|
|
|
38,499.0
|
|
|
39,473.5
|
|
Average
interest-bearing deposits
|
|
18,088.8
|
|
|
14,844.3
|
|
|
11,491.5
|
|
|
8,980.3
|
|
|
8,466.5
|
|
|
14,832.4
|
|
|
8,260.9
|
|
Average total
deposits
|
|
57,235.0
|
|
|
52,962.2
|
|
|
49,714.2
|
|
|
49,087.2
|
|
|
49,092.2
|
|
|
53,331.3
|
|
|
47,734.4
|
|
Average short-term
borrowings
|
|
22.0
|
|
|
189.0
|
|
|
353.4
|
|
|
1,580.0
|
|
|
745.2
|
|
|
186.9
|
|
|
328.4
|
|
Average long-term
debt
|
|
697.1
|
|
|
696.8
|
|
|
696.6
|
|
|
696.3
|
|
|
696.1
|
|
|
696.8
|
|
|
695.8
|
|
Period-end total
assets
|
|
68,231.2
|
|
|
63,773.7
|
|
|
60,160.3
|
|
|
56,928.0
|
|
|
58,139.7
|
|
|
68,231.2
|
|
|
58,139.7
|
|
Period-end loans, net
of unearned income
|
|
31,064.0
|
|
|
29,209.6
|
|
|
28,850.4
|
|
|
28,338.3
|
|
|
27,494.9
|
|
|
31,064.0
|
|
|
27,494.9
|
|
Period-end
available-for-sale securities
|
|
12,866.9
|
|
|
7,940.3
|
|
|
6,755.1
|
|
|
7,790.0
|
|
|
9,087.6
|
|
|
12,866.9
|
|
|
9,087.6
|
|
Period-end
held-to-maturity securities
|
|
14,407.1
|
|
|
14,868.8
|
|
|
15,055.3
|
|
|
15,487.4
|
|
|
15,899.7
|
|
|
14,407.1
|
|
|
15,899.7
|
|
Period-end
non-marketable and other equity securities
|
|
1,150.1
|
|
|
1,079.7
|
|
|
975.0
|
|
|
941.1
|
|
|
896.2
|
|
|
1,150.1
|
|
|
896.2
|
|
Period-end
noninterest-bearing demand deposits
|
|
40,480.6
|
|
|
39,331.5
|
|
|
39,278.7
|
|
|
39,103.4
|
|
|
40,473.8
|
|
|
40,480.6
|
|
|
40,473.8
|
|
Period-end
interest-bearing deposits
|
|
19,062.3
|
|
|
16,279.1
|
|
|
13,048.5
|
|
|
10,225.5
|
|
|
8,122.3
|
|
|
19,062.3
|
|
|
8,122.3
|
|
Period-end total deposits
|
|
59,542.9
|
|
|
55,610.5
|
|
|
52,327.2
|
|
|
49,328.9
|
|
|
48,596.1
|
|
|
59,542.9
|
|
|
48,596.1
|
|
Period-end short-term
borrowings
|
|
18.9
|
|
|
24.3
|
|
|
14.5
|
|
|
631.4
|
|
|
2,631.3
|
|
|
18.9
|
|
|
2,631.3
|
|
Period-end long-term
debt
|
|
697.2
|
|
|
697.0
|
|
|
696.7
|
|
|
696.5
|
|
|
696.2
|
|
|
697.2
|
|
|
696.2
|
|
Off-balance
sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average client
investment funds
|
|
$
|
92,824.9
|
|
|
$
|
89,651.8
|
|
|
$
|
87,414.3
|
|
|
$
|
85,038.8
|
|
|
$
|
79,560.8
|
|
|
$
|
89,963.6
|
|
|
$
|
71,750.0
|
|
Period-end client
investment funds
|
|
96,472.3
|
|
|
91,495.4
|
|
|
88,181.7
|
|
|
85,983.8
|
|
|
82,085.0
|
|
|
96,472.3
|
|
|
82,085.0
|
|
Total unfunded credit
commitments
|
|
22,274.4
|
|
|
20,952.1
|
|
|
20,267.5
|
|
|
18,913.0
|
|
|
18,539.5
|
|
|
22,274.4
|
|
|
18,539.5
|
|
Earnings
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (annualized) (3)
|
|
1.62
|
%
|
|
2.10
|
%
|
|
2.04
|
%
|
|
1.83
|
%
|
|
1.93
|
%
|
|
1.91
|
%
|
|
1.74
|
%
|
Return on average
SVBFG stockholders' equity (annualized) (4)
|
|
18.27
|
|
|
23.29
|
|
|
22.16
|
|
|
20.61
|
|
|
22.46
|
|
|
21.16
|
|
|
20.56
|
|
Asset quality
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses as a % of total gross loans
|
|
0.97
|
%
|
|
1.03
|
%
|
|
1.03
|
%
|
|
0.99
|
%
|
|
1.03
|
%
|
|
0.97
|
%
|
|
1.03
|
%
|
Allowance for loan
losses for performing loans as a % of total gross performing
loans
|
|
0.81
|
|
|
0.85
|
|
|
0.83
|
|
|
0.86
|
|
|
0.86
|
|
|
0.81
|
|
|
0.86
|
|
Gross loan
charge-offs as a % of average total gross loans
(annualized)
|
|
0.49
|
|
|
0.36
|
|
|
0.13
|
|
|
0.28
|
|
|
0.33
|
|
|
0.33
|
|
|
0.26
|
|
Net loan charge-offs
as a % of average total gross loans (annualized)
|
|
0.44
|
|
|
0.23
|
|
|
0.11
|
|
|
0.20
|
|
|
0.30
|
|
|
0.26
|
|
|
0.22
|
|
Other
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
efficiency ratio (5)
|
|
48.04
|
%
|
|
44.43
|
%
|
|
46.10
|
%
|
|
43.87
|
%
|
|
44.00
|
%
|
|
46.15
|
%
|
|
45.44
|
%
|
Non-GAAP core
operating efficiency ratio (1)
|
|
48.05
|
|
|
45.49
|
|
|
44.71
|
|
|
45.42
|
|
|
48.35
|
|
|
46.09
|
|
|
49.06
|
|
Total cost of
deposits (annualized) (6)
|
|
0.38
|
|
|
0.36
|
|
|
0.23
|
|
|
0.09
|
|
|
0.06
|
|
|
0.33
|
|
|
0.05
|
|
SVBFG CET 1
risk-based capital ratio
|
|
12.71
|
|
|
12.92
|
|
|
12.89
|
|
|
13.41
|
|
|
13.28
|
|
|
12.71
|
|
|
13.28
|
|
Bank CET 1 risk-based
capital ratio
|
|
11.48
|
|
|
12.50
|
|
|
12.35
|
|
|
12.41
|
|
|
11.98
|
|
|
11.48
|
|
|
11.98
|
|
SVBFG total
risk-based capital ratio
|
|
13.70
|
|
|
13.97
|
|
|
13.94
|
|
|
14.45
|
|
|
14.34
|
|
|
13.70
|
|
|
14.34
|
|
Bank total risk-based
capital ratio
|
|
12.36
|
|
|
13.44
|
|
|
13.29
|
|
|
13.32
|
|
|
12.91
|
|
|
12.36
|
|
|
12.91
|
|
SVBFG tier 1 leverage
ratio
|
|
8.64
|
|
|
8.82
|
|
|
9.10
|
|
|
9.06
|
|
|
8.99
|
|
|
8.64
|
|
|
8.99
|
|
Bank tier 1 leverage
ratio
|
|
7.48
|
|
|
8.17
|
|
|
8.38
|
|
|
8.10
|
|
|
7.82
|
|
|
7.48
|
|
|
7.82
|
|
Period-end loans, net
of unearned income, to deposits ratio
|
|
52.17
|
|
|
52.53
|
|
|
55.13
|
|
|
57.45
|
|
|
56.58
|
|
|
52.17
|
|
|
56.58
|
|
Average loans, net of
unearned income, to average deposits ratio
|
|
52.11
|
|
|
55.52
|
|
|
57.10
|
|
|
55.98
|
|
|
53.64
|
|
|
54.77
|
|
|
52.39
|
|
Book value per common
share (7)
|
|
$
|
114.26
|
|
|
$
|
107.72
|
|
|
$
|
102.11
|
|
|
$
|
97.29
|
|
|
$
|
92.48
|
|
|
$
|
114.26
|
|
|
$
|
92.48
|
|
Other
statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time
equivalent ("FTE") employees
|
|
3,413
|
|
|
3,287
|
|
|
3,228
|
|
|
2,873
|
|
|
2,778
|
|
|
3,309
|
|
|
2,623
|
|
Period-end full-time
equivalent ("FTE") employees
|
|
3,460
|
|
|
3,314
|
|
|
3,250
|
|
|
2,900
|
|
|
2,836
|
|
|
3,460
|
|
|
2,836
|
|
______________________
|
(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 these non-GAAP measures to the most closely
related GAAP measures 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 21.0 percent.
The taxable equivalent adjustments were $3.0 million for the
quarter ended September 30, 2019, $2.9 million for the quarter
ended June 30, 2019, $2.9 million for the quarter ended March 31,
2019, $3.0 million for the quarter ended December 31, 2018 and
$2.9 million for the quarter ended September 30, 2018. The
taxable equivalent adjustments were $8.8 million and $6.2 million
for the nine months ended September 30, 2019 and September 30,
2018, respectively.
|
(3)
|
Ratio represents
annualized consolidated net income available to common stockholders
divided by average assets.
|
(4)
|
Ratio represents
annualized consolidated net income available to common stockholders
divided by average SVB Financial Group ("SVBFG") stockholders'
equity.
|
(5)
|
Ratio is calculated
by dividing noninterest expense by total net interest income plus
noninterest income.
|
(6)
|
Ratio represents
annualized total cost of deposits and is calculated by dividing
interest expense from deposits by average total
deposits.
|
(7)
|
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
$523.6 million for the third quarter
of 2019, compared to $532.3 million
for the second quarter of 2019. The $8.7
million decrease from the second quarter of 2019 to the
third quarter of 2019, was attributable primarily to the
following:
- A decrease in interest income from loans of $19.8 million to $394.2
million for the third quarter of 2019. The decrease was
reflective primarily of $21.7 million
in lower interest income earned on gross loans and $4.7 million related to lower loan fees,
partially offset by a $4.9 million
increase related to $0.4 billion in
average loan growth. Overall loan yields decreased 41 basis points
to 5.24 percent, driven primarily by an 18 basis point decrease in
our gross loan yields reflective primarily of the two 25 basis
point decreases in the Federal Funds rate during the third quarter
of 2019 as well as by lower LIBOR rates, an 11 basis point decrease
due to the continued shift in the mix of our total loan portfolio
into our lower yielding private equity/venture capital loans, a six
basis point decrease due to a decrease in the level of loan
prepayments and a six basis point decrease from the continued
compression on our loan yields due to pricing competition,
- An $8.0 million increase in
interest paid on our interest-bearing deposits due to a
$3.2 billion increase in average
interest-bearing deposits partially offset by decreases in market
rates through the third quarter of 2019, partially offset by
- An increase in interest income from our fixed income investment
securities of $15.5 million to
$163.7 million for the third quarter
of 2019. The increase was reflective primarily of higher average
fixed income securities of $2.0
billion during the third quarter of 2019 due to deposit
growth, and
- An increase of $2.5 million in
interest income from short-term investment securities reflective
primarily of a $1.8 billion increase
in average interest-earning cash balances, partially offset by
decreases in Federal Funds interest rates.
Net interest margin, on a fully taxable equivalent basis, was
3.34 percent for the third quarter of 2019, compared to 3.68
percent for the second quarter of 2019. Our net interest margin
decreased due primarily to a 21 basis point change attributable to
a shift in the mix of interest earning assets resulting in a
decrease in higher yielding loans and an increase in lower yielding
cash and investments as a percentage of total interest earning
assets as well as the increase of $3.2
billion in average interest bearing deposits. Our net
interest margin also saw a seven basis point decrease from a
decline in loan yields reflective of the impact of the two 25 basis
point Federal Funds rate cuts during the third quarter of 2019 as
well as by lower LIBOR rates. Additionally, lower loan yields from
decreased prepayment fees as well as the continued compression on
our loan yields due to pricing competition impacted our net
interest margin by a total of six basis points.
For the third quarter of 2019, approximately 92 percent, or
$27.7 billion, of our average gross
loans were variable-rate loans that adjust at prescribed
measurement dates. Of our variable-rate loans, approximately 65
percent are tied to prime-lending rates and 35 percent are tied to
LIBOR.
Investment Securities
Our investment securities portfolio is comprised of: (i) our
available-for-sale ("AFS") and held-to-maturity ("HTM") securities
portfolios, each consisting of fixed income investments which are
managed to earn an appropriate portfolio yield over the long-term
while maintaining sufficient liquidity and addressing our
asset/liability management objectives; and (ii) our non-marketable
and other equity securities portfolio, which represents primarily
investments managed as part of our funds management business as
well as public equity securities held as a result of equity warrant
assets exercised. Our total average fixed income investment
securities portfolio increased $2.0
billion, or 8.7 percent, to $25.1
billion for the quarter ended September 30, 2019. Our
total period-end fixed income investment securities portfolio
increased $4.5 billion, or 19.6
percent, to $27.3 billion at
September 30, 2019. The weighted-average duration of our fixed
income investment securities portfolio was 3.4 years at
September 30, 2019 and 3.5 years at June 30, 2019. Our period-end non-marketable and
other equity securities portfolio increased $70.3 million to $1.2
billion ($1.0 billion net of
noncontrolling interests) at September 30, 2019.
Available-for-Sale Securities
Average AFS securities were $10.6
billion for the third quarter of 2019 compared to
$8.2 billion for the second quarter
of 2019. Period-end AFS securities were $12.9 billion at September 30, 2019 compared
to $7.9 billion at June 30,
2019. The increases in average and period-end AFS security balances
from the second quarter of 2019 to the third quarter of 2019 were
due to purchases of $5.3 billion of
U.S. Treasury securities and agency mortgage backed securities,
partially offset by $0.4 billion in
portfolio pay downs and maturities. The weighted-average duration
of our AFS securities portfolio was 3.2 years at September 30,
2019 and 2.6 years at June 30, 2019.
Held-to-Maturity Securities
Average HTM securities were $14.5
billion for the third quarter of 2019, compared to
$14.9 billion for the second quarter
of 2019. Period-end HTM securities were $14.4 billion at September 30, 2019 compared
to $14.9 billion at June 30,
2019. The decreases in average and period-end HTM security balances
from the second quarter of 2019 to the third quarter of 2019 were
due primarily to $0.6 billion in
portfolio pay downs and maturities, partially offset by
$0.1 billion in purchases of
municipal bonds. The weighted-average duration of our HTM
securities portfolio was 3.6 years at September 30, 2019 and
4.0 years at June 30, 2019.
Non-Marketable and Other Equity Securities
Our non-marketable and other equity securities portfolio
increased $0.1 billion to
$1.2 billion ($1.0 billion net of noncontrolling interests) at
September 30, 2019, compared to $1.1 billion ($0.9
billion net of noncontrolling interests) at June 30,
2019. The increase was primarily attributable to valuation
increases in our managed fund of funds investments, an increase in
new investments within our qualified housing projects portfolio and
an increase in equity securities from exercised equity warrant
assets. Reconciliations of our non-GAAP non-marketable and other
equity securities, net of noncontrolling interests, are provided
under the section "Use of Non-GAAP Financial Measures."
Loans
Average loans (net of unearned income) increased by $0.4 billion to $29.8
billion for the third quarter of 2019, compared to
$29.4 billion for the second quarter
of 2019. Period-end loans (net of unearned income) increased by
$1.9 billion to $31.1 billion at September 30, 2019,
compared to $29.2 billion at
June 30, 2019. Average and period-end loan growth came
primarily from our private equity/venture capital portfolio as well
as from our private bank portfolio.
Loans (individually or in the aggregate) to any single client,
equal to or greater than $20 million
increased to $16.4 billion or 52.6
percent of total gross loans at September 30, 2019, as
compared to $14.8 billion or 50.5
percent of total gross loans at June 30, 2019. Further
details are provided under the section "Loan Concentrations."
Credit Quality
The following table provides a summary of our allowance for loan
losses and our allowance for unfunded credit commitments:
|
|
Three months
ended
|
|
Nine months
ended
|
(Dollars in
thousands, except ratios)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Allowance for loan
losses, beginning balance
|
|
$
|
301,888
|
|
|
$
|
300,151
|
|
|
$
|
286,709
|
|
|
$
|
280,903
|
|
|
$
|
255,024
|
|
Provision for loan
losses
|
|
35,985
|
|
|
19,148
|
|
|
19,436
|
|
|
80,954
|
|
|
74,088
|
|
Gross loan
charge-offs
|
|
(36,820)
|
|
|
(26,435)
|
|
|
(22,205)
|
|
|
(72,255)
|
|
|
(48,220)
|
|
Loan
recoveries
|
|
3,888
|
|
|
9,820
|
|
|
2,164
|
|
|
15,133
|
|
|
5,878
|
|
Foreign currency
translation adjustments
|
|
(531)
|
|
|
(796)
|
|
|
(391)
|
|
|
(325)
|
|
|
(1,057)
|
|
Allowance for loan
losses, ending balance
|
|
$
|
304,410
|
|
|
$
|
301,888
|
|
|
$
|
285,713
|
|
|
$
|
304,410
|
|
|
$
|
285,713
|
|
Allowance for
unfunded credit commitments, beginning balance
|
|
62,664
|
|
|
57,970
|
|
|
54,104
|
|
|
55,183
|
|
|
51,770
|
|
Provision for
(reduction of) unfunded credit commitments
|
|
551
|
|
|
4,798
|
|
|
(2,262)
|
|
|
8,079
|
|
|
138
|
|
Foreign currency
translation adjustments
|
|
(107)
|
|
|
(104)
|
|
|
(34)
|
|
|
(154)
|
|
|
(100)
|
|
Allowance for
unfunded credit commitments, ending balance (1)
|
|
$
|
63,108
|
|
|
$
|
62,664
|
|
|
$
|
51,808
|
|
|
$
|
63,108
|
|
|
$
|
51,808
|
|
Ratios and other
information:
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses as a percentage of period-end total gross loans
(annualized)
|
|
0.46
|
%
|
|
0.26
|
%
|
|
0.28
|
%
|
|
0.35
|
%
|
|
0.36
|
%
|
Gross loan
charge-offs as a percentage of average total gross loans
(annualized)
|
|
0.49
|
|
|
0.36
|
|
|
0.33
|
|
|
0.33
|
|
|
0.26
|
|
Net loan charge-offs
as a percentage of average total gross loans
(annualized)
|
|
0.44
|
|
|
0.23
|
|
|
0.30
|
|
|
0.26
|
|
|
0.22
|
|
Allowance for loan
losses as a percentage of period-end total gross loans
|
|
0.97
|
|
|
1.03
|
|
|
1.03
|
|
|
0.97
|
|
|
1.03
|
|
Provision for credit
losses
|
|
$
|
36,536
|
|
|
$
|
23,946
|
|
|
$
|
17,174
|
|
|
$
|
89,033
|
|
|
$
|
74,226
|
|
Period-end total
gross loans
|
|
31,229,003
|
|
|
29,370,403
|
|
|
27,668,829
|
|
|
31,229,003
|
|
|
27,668,829
|
|
Average total gross
loans
|
|
29,979,522
|
|
|
29,568,968
|
|
|
26,497,171
|
|
|
29,373,264
|
|
|
25,165,486
|
|
Allowance for loan
losses for nonaccrual loans
|
|
53,728
|
|
|
53,067
|
|
|
49,992
|
|
|
53,728
|
|
|
49,992
|
|
Nonaccrual
loans
|
|
104,045
|
|
|
96,641
|
|
|
115,162
|
|
|
104,045
|
|
|
115,162
|
|
______________________
|
(1)
|
The "allowance for
unfunded credit commitments" is included as a component of "other
liabilities."
|
Our allowance for loan losses increased $2.5 million to $304.4
million due primarily to an increase in our performing loan
reserves of $1.9 million and an
increase in reserves for nonaccrual loans of $0.6 million. The increase in our performing
reserves was due primarily to period-end loan growth of
$1.9 billion, mostly offset by a
decrease in the qualitative component of our performing loan
reserves reflective of the continued shift in the mix in our loan
portfolio to our large, high credit quality private equity/venture
capital loans during the quarter. The $0.6
million increase in the reserves for nonaccrual loans was
driven primarily by one large loan from our software portfolio. As
a percentage of total gross loans, our allowance for loan losses
decreased six basis points to 0.97 percent at September 30,
2019, compared to 1.03 percent at June 30, 2019. The six basis
point decrease was driven primarily by a five basis point decrease
in the qualitative component of our performing loan reserves as a
percentage of gross loans as mentioned above.
Our provision for credit losses was $36.5
million for the third quarter of 2019, consisting of the
following:
- A provision for loan losses of $36.0
million, driven primarily by $19.1
million for net new nonaccrual loans, $18.3 million for charge-offs not specifically
reserved for and $15.2 million in
additional reserves for period-end loan growth, partially offset by
a decrease of $13.0 million for the
qualitative component of our performing loans as described above
and by recoveries of $3.9 million,
and
- A provision for unfunded credit commitments of $0.5 million, driven primarily by growth in
unfunded credit commitments of $1.3
billion, offset mostly by a decrease related to the
continued shift in the mix of our unfunded credit facilities to our
large, high credit quality private equity/venture capital
clients.
Gross loan charge-offs were $36.8
million for the third quarter of 2019, of which $18.3 million was not specifically reserved for
at June 30, 2019. Gross loan charge-offs were primarily
driven by a $9.4 million charge-off
for one mid-stage life science/healthcare portfolio client and
$7.6 million for one later stage
software client, both of which were previously included in our
nonaccrual loan portfolio. The remaining charge-offs came primarily
from our early-stage and mid-stage clients.
Nonaccrual loans were $104.0
million at September 30, 2019, compared to $96.6 million at June 30, 2019. Our
nonaccrual loan balance increased $7.4
million primarily driven by $53.6
million in new nonaccrual loans, mostly offset by
$23.7 million in charge-offs and
$22.5 million in repayments. New
nonaccrual loans were primarily driven by $37.3 million for one large software client.
Charge-offs were primarily driven by $9.4
million for one mid-stage life sciences/healthcare client
and $6.8 million for one late stage
software client. The $22.5 million in
repayments were primarily driven by our Growth stage clients.
Nonaccrual loans as a percentage of total gross loans remained
relatively flat at 0.34 percent for the third quarter of 2019
compared to 0.33 percent for the second quarter of 2019.
The allowance for loan losses for nonaccrual loans increased
$0.6 million to $53.7 million in the third quarter of 2019. The
increase was due primarily to new nonaccrual loans, mostly offset
by charge-offs and repayments as noted above.
CECL Adoption
Effective January 1, 2020, we will
adopt the new accounting standard update (ASU 2016-13, Financial
Instruments - Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments) ("ASU 2016-13"), which amends the
incurred loss impairment methodology under current GAAP with a
methodology that reflects a current expected credit loss ("CECL")
measurement to estimate the allowance for credit losses over the
contractual life of the financial assets.
During the fourth quarter of 2019, we will continue to finalize
our CECL models and related documentation, processes, validation,
controls and credit loss estimates. However, based on our analyses
to date, utilizing our loan and unfunded credit commitment
portfolio composition at September 30,
2019 and the current economic environment, we currently
estimate the day 1 combined impact of CECL on our allowance for
loan losses and allowance for unfunded credit commitments to be an
increase (on a pre-tax basis) of approximately $25 million to $60
million upon adoption of ASU 2016-13 on January 1, 2020 or approximately 7% to 16% of our
total combined allowance compared to our reported amount at
September 30, 2019. Additionally,
based on the credit quality of our existing debt securities
portfolio, we do not expect a material allowance for our
held-to-maturity and available-for-sale debt security portfolios.
The final amounts will be determined and recognized as a day 1
cumulative adjustment to equity on an after tax basis as of
January 1, 2020.
The actual amount recorded on January 1,
2020 may be different than the current estimates provided
above as the adjustment amounts for our allowance for loan losses
and our allowance for unfunded credit commitments will depend on a
variety of factors as of the date of adoption, including the size
and composition of our loan and unfunded credit commitment
portfolios, the portfolios' credit quality, current and forecasted
economic conditions, and management adjustments. In addition, the
actual adjustment amount to our allowances will be subject to any
necessary changes to our models, methodology, and assumptions, or
other adjustments.
Client Funds
Our total client funds consist of both on-balance sheet deposits
and off-balance sheet client investment funds. Average total client
funds were $150.1 billion for the
third quarter of 2019, compared to $142.6
billion for the second quarter of 2019, an increase of
$7.4 billion, or 5.2 percent.
Period-end total client funds were $156.0
billion at September 30, 2019, compared to $147.1 billion at June 30, 2019, an increase
of $8.9 billion, or 6.1 percent.
Average off-balance sheet client investment funds were
$92.8 billion for the third quarter
of 2019, compared to $89.7 billion
for the second quarter of 2019. Average on-balance sheet deposits
were $57.2 billion for the third
quarter of 2019 and $53.0 billion for
the second quarter of 2019. Period-end off-balance sheet client
investment funds were $96.5 billion
at September 30, 2019, compared to $91.5 billion at June 30, 2019. Period-end
on-balance sheet deposits were $59.5
billion at September 30, 2019, compared to $55.6 billion at June 30, 2019.
The increases in our average and period-end total client funds
from the second quarter of 2019 to the third quarter of 2019 were
reflective of growth in both on-balance sheet deposits and
off-balance sheet client investment funds across all portfolio
segments. The leading contributor was our technology client
portfolio attributable primarily to a healthy equity funding
environment and exit markets for our clients, as well as continued
healthy new client acquisition.
In addition, we saw a continued shift in the mix of our
on-balance sheet deposits with growth in our interest-bearing
deposits reflective of our deposit growth initiatives and continued
strong liquidity of our clients. Average noninterest-bearing demand
deposits as a percentage of total average on-balance sheet deposits
decreased to 68 percent for the third quarter of 2019, compared to
72 percent in the second quarter of 2019, with a corresponding
increase in average interest-bearing deposits to 32 percent,
compared to 28 percent.
Noninterest Income
Noninterest income was $294.0
million for the third quarter of 2019, compared to
$333.8 million for the second quarter
of 2019. Non-GAAP noninterest income, net of noncontrolling
interests was $279.4 million for the
third quarter of 2019, compared to $315.0
million for the second quarter of 2019. (See reconciliations
of non-GAAP measures used under the section "Use of Non-GAAP
Financial Measures.")
The decrease of $39.8 million
($35.6 million net of noncontrolling
interests) in noninterest income from the second quarter of 2019 to
the third quarter of 2019 was attributable primarily to lower net
gains on investment securities and equity warrant assets as well as
lower investment banking revenue, partially offset by an increase
in our core fee income. Items impacting noninterest income for the
third quarter of 2019 were as follows:
Net gains on investment securities
Net gains on investment securities were $29.8 million for the third quarter of 2019,
compared to $47.7 million for the
second quarter of 2019. Net of noncontrolling interests, non-GAAP
net gains on investment securities were $15.2 million for the third quarter of 2019,
compared to net gains of $29.1
million for the second quarter of 2019. Non-GAAP net gains,
net of noncontrolling interests, of $15.2
million for the third quarter of 2019 were driven by the
following:
- Gains of $12.5 million from
managed funds of funds portfolio, related primarily to net
unrealized valuation increases in the private and public company
investments held by the funds in the portfolio,
- Gains of $8.0 million from our
strategic and other investments, comprised primarily of net
unrealized valuation increases in private companies held in our
strategic venture capital funds, and
- Gains of $5.5 million from our
managed direct venture funds, related primarily to net unrealized
valuation increases in investments held by the funds in the
portfolio, partially offset by
- Losses of $11.5 million from our
public equity securities investments, primarily driven by
unrealized losses driven by a decline in value of public equity
securities held.
The following tables provide a summary of non-GAAP net gains
(losses) on investment securities, net of noncontrolling interests,
for the three months ended September 30, 2019 and
June 30, 2019, respectively:
|
|
Three months ended
September 30, 2019
|
(Dollars in
thousands)
|
|
Managed
Funds of
Funds
|
|
Managed
Direct
Venture
Funds
|
|
Public
Equity
Securities
|
|
Sales of
AFS Debt
Securities
|
|
Debt
Funds
|
|
Strategic
and
Other
Investments
|
|
SVB
Leerink
|
|
Total
|
GAAP gains (losses)
on investment securities, net
|
|
$
|
22,223
|
|
|
$
|
9,668
|
|
|
$
|
(11,488)
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
8,035
|
|
|
$
|
1,224
|
|
|
$
|
29,849
|
|
Less: income
attributable to noncontrolling interests, including carried
interest allocation
|
|
9,676
|
|
|
4,138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
826
|
|
|
14,640
|
|
Non-GAAP gains
(losses) on investment securities, net of noncontrolling
interests
|
|
$
|
12,547
|
|
|
$
|
5,530
|
|
|
$
|
(11,488)
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
8,035
|
|
|
$
|
398
|
|
|
$
|
15,209
|
|
|
|
Three months ended
June 30, 2019
|
(Dollars in
thousands)
|
|
Managed
Funds of
Funds
|
|
Managed
Direct
Venture
Funds
|
|
Public
Equity
Securities
|
|
Sales of
AFS Debt
Securities
|
|
Debt
Funds
|
|
Strategic
and
Other
Investments
|
|
SVB
Leerink
|
|
Total
|
GAAP gains (losses)
on investment securities, net
|
|
$
|
32,335
|
|
|
$
|
4,101
|
|
|
$
|
444
|
|
|
$
|
(275)
|
|
|
$
|
1,342
|
|
|
$
|
7,311
|
|
|
$
|
2,440
|
|
|
$
|
47,698
|
|
Less: income
attributable to noncontrolling interests, including carried
interest allocation
|
|
16,852
|
|
|
1,711
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
18,598
|
|
Non-GAAP gains
(losses) on investment securities, net of noncontrolling
interests
|
|
$
|
15,483
|
|
|
$
|
2,390
|
|
|
$
|
444
|
|
|
$
|
(275)
|
|
|
$
|
1,342
|
|
|
$
|
7,311
|
|
|
$
|
2,405
|
|
|
$
|
29,100
|
|
Net gains on equity warrant assets
Net gains on equity warrant assets were $37.6 million for the third quarter of 2019,
compared to $48.3 million for the
second quarter of 2019. Net gains on equity warrant assets for the
third quarter of 2019 were attributable primarily to net gains from
exercises of $30.0 million driven by
healthy gains from IPO activity and $8.0
million of valuation increases in our private company
warrant portfolio driven by healthy funding rounds.
At September 30, 2019, we held warrants in 2,227 companies
with a total fair value of $149.1
million. Warrants in 15 companies each had fair values
greater than $1.0 million and
collectively represented $43.7
million, or 29.3 percent, of the fair value of the total
warrant portfolio at September 30, 2019.
The following table provides a summary of our net gains on
equity warrant assets:
|
|
Three months
ended
|
|
Nine months
ended
|
(Dollars in thousands)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Equity warrant
assets:
|
|
|
|
|
|
|
|
|
|
|
Gains on exercises,
net
|
|
$
|
30,047
|
|
|
$
|
40,226
|
|
|
$
|
18,287
|
|
|
$
|
90,357
|
|
|
$
|
42,808
|
|
Terminations
|
|
(481)
|
|
|
(1,045)
|
|
|
(1,432)
|
|
|
(2,931)
|
|
|
(3,158)
|
|
Changes in fair
value, net
|
|
7,995
|
|
|
9,166
|
|
|
17,286
|
|
|
19,787
|
|
|
32,743
|
|
Total net gains on
equity warrant assets
|
|
$
|
37,561
|
|
|
$
|
48,347
|
|
|
$
|
34,141
|
|
|
$
|
107,213
|
|
|
$
|
72,393
|
|
The gains (or losses) from investment securities from our
nonmarketable and other equity securities portfolio as well as our
equity warrant assets resulting from changes in valuations (fair
values) are currently unrealized, and the extent to which such
gains (or losses) will become realized is subject to a variety of
factors, including among other things, performance of the
underlying portfolio companies, investor demand for IPOs,
fluctuations in the underlying valuation of these companies, levels
of M&A activity, and legal and contractual restrictions on our
ability to sell the underlying securities.
Non-GAAP core fee income including investment banking revenue
and commissions
Non-GAAP core fee income (client investment fees, foreign
exchange fees, credit card fees, deposit service charges, lending
related fees and letters of credit and standby letters of credit
fees) increased $4.8 million to
$162.2 million for the third quarter
of 2019, compared to $157.3 million
for the second quarter of 2019. Non-GAAP core fee income including
investment banking revenue and commissions decreased $7.5 million to $213.0
million for the third quarter of 2019, compared to
$220.5 million for the second quarter
of 2019.
The following table provides a summary of our non-GAAP core fee
income:
|
|
Three months
ended
|
|
Nine months
ended
|
(Dollars in thousands)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Non-GAAP core fee
income:
|
|
|
|
|
|
|
|
|
|
|
Client investment
fees
|
|
$
|
46,679
|
|
|
$
|
45,744
|
|
|
$
|
36,265
|
|
|
$
|
136,905
|
|
|
$
|
88,592
|
|
Foreign exchange
fees
|
|
40,309
|
|
|
38,506
|
|
|
32,656
|
|
|
116,863
|
|
|
100,560
|
|
Credit
card fees
|
|
30,158
|
|
|
28,790
|
|
|
24,121
|
|
|
86,431
|
|
|
68,739
|
|
Deposit service
charges
|
|
22,482
|
|
|
22,075
|
|
|
19,588
|
|
|
65,496
|
|
|
56,081
|
|
Lending related
fees
|
|
11,707
|
|
|
11,213
|
|
|
10,675
|
|
|
36,857
|
|
|
30,938
|
|
Letters of credit and
standby letters of credit fees
|
|
10,842
|
|
|
11,009
|
|
|
8,409
|
|
|
31,205
|
|
|
24,938
|
|
Total Non-GAAP core
fee income
|
|
$
|
162,177
|
|
|
$
|
157,337
|
|
|
$
|
131,714
|
|
|
$
|
473,757
|
|
|
$
|
369,848
|
|
Investment banking
revenue
|
|
38,516
|
|
|
48,694
|
|
|
—
|
|
|
137,005
|
|
|
—
|
|
Commissions
|
|
12,275
|
|
|
14,429
|
|
|
—
|
|
|
40,812
|
|
|
—
|
|
Total Non-GAAP core
fee income including investment banking revenue and
commissions
|
|
$
|
212,968
|
|
|
$
|
220,460
|
|
|
$
|
131,714
|
|
|
$
|
651,574
|
|
|
$
|
369,848
|
|
Non-GAAP core fee income increased from the second quarter of
2019 to the third quarter of 2019 reflective of an increase across
a majority of our core fee income areas led primarily by increases
in foreign exchange fees, credit card fees and client investment
fees. Foreign exchange fees increased $1.8
million driven by increased trade volumes due to continued
increase in the number of clients actively managing currency
exposures. Credit card fees increased $1.4
million due primarily to an increase in net interchange
fees. Client investment fees increased $0.9
million driven by higher fees reflective of the increases in
client investment fund balances.
Non-GAAP core fee income including investment banking revenue
and commissions decreased from the second quarter of 2019 to the
third quarter of 2019 primarily due to a decrease in investment
banking revenue attributable to a decrease in the levels of exit
activity in the life science/healthcare IPO market during the third
quarter of 2019 compared to the second quarter of 2019. Investment
banking revenue was $38.5 million,
driven by $31.0 million from public
equity underwriting fees, $5.2
million from M&A transactions and $2.3 million from private placements for the
third quarter of 2019.
Reconciliations of our non-GAAP noninterest income, non-GAAP net
gains on investment securities and non-GAAP core fee income are
provided under the section "Use of Non-GAAP Financial
Measures."
Noninterest Expense
Noninterest expense was $391.3
million for the third quarter of 2019, compared to
$383.5 million for the second quarter
of 2019. The increase of $7.8 million
in noninterest expense consisted primarily of an increase in our
professional services expense partially offset by a decrease in
total compensation and benefits expense in the third quarter of
2019 compared to the second quarter of 2019.
Professional services expense increased $14.4 million, reflective of increased consulting
fees during the third quarter of 2019 associated with increased
project spend to support our global digital banking, and continued
global infrastructure, initiatives.
The following table provides a summary of our compensation and
benefits expense:
|
|
Three months
ended
|
|
Nine months
ended
|
(Dollars in thousands, except
employees)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Compensation and
benefits:
|
|
|
|
|
|
|
|
|
|
|
Salaries and
wages
|
|
$
|
109,473
|
|
|
$
|
105,799
|
|
|
$
|
84,962
|
|
|
$
|
316,472
|
|
|
$
|
234,832
|
|
Incentive compensation
plans
|
|
59,602
|
|
|
71,492
|
|
|
55,531
|
|
|
200,483
|
|
|
150,393
|
|
Employee stock
ownership plan ("ESOP")
|
|
884
|
|
|
1,084
|
|
|
1,844
|
|
|
3,131
|
|
|
4,997
|
|
Other employee
incentives and benefits (1)
|
|
63,881
|
|
|
64,797
|
|
|
53,100
|
|
|
194,987
|
|
|
152,976
|
|
Total compensation
and benefits
|
|
$
|
233,840
|
|
|
$
|
243,172
|
|
|
$
|
195,437
|
|
|
$
|
715,073
|
|
|
$
|
543,198
|
|
Period-end full-time
equivalent employees
|
|
3,460
|
|
|
3,314
|
|
|
2,836
|
|
|
3,460
|
|
|
2,836
|
|
Average full-time
equivalent employees
|
|
3,413
|
|
|
3,287
|
|
|
2,778
|
|
|
3,309
|
|
|
2,623
|
|
______________________
|
(1)
|
Other employee
incentives and benefits expense includes employer payroll taxes,
group health and life insurance, share-based compensation, 401(k),
warrant incentive and retention plans, agency fees and other
employee-related expenses.
|
The $9.3 million decrease in total
compensation and benefits expense consists primarily of the
following:
- A decrease of $11.9 million in
incentive compensation plans expense attributable primarily to a
decrease in our incentive accruals as a result of our 2019
full-year projected financial performance, partially offset by
- An increase of $3.7 million in
salaries and wages, reflective primarily of an increase in the
number of average full-time equivalent employees ("FTE") by 126 to
3,413 FTEs as well as one additional working day of the third
quarter of 2019 as compared to the second quarter of 2019.
Income Tax Expense
Our effective tax rate was 28.2 percent for the third quarter of
2019, compared to 27.3 percent for the second quarter of 2019. 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. The increase in our
effective tax rate was primarily due to a decrease in excess tax
benefits received from stock compensation expense reflective
primarily of a lower number of stock options exercised and
restricted stock units vested during the third quarter as compared
to the second quarter. Our annual share based compensation grants
occur in the second quarter of each year.
Noncontrolling Interests
Included in net income is income and expense related to
noncontrolling interests. The relevant amounts allocated to
investors in our consolidated subsidiaries, other than us, are
reflected under "Net Income Attributable to Noncontrolling
Interests" 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,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Net interest income
(1)
|
|
$
|
(14)
|
|
|
$
|
(16)
|
|
|
$
|
(10)
|
|
|
$
|
(41)
|
|
|
$
|
(29)
|
|
Noninterest income
(1)
|
|
(4,910)
|
|
|
(12,406)
|
|
|
(2,749)
|
|
|
(19,586)
|
|
|
(20,127)
|
|
Noninterest expense
(1)
|
|
145
|
|
|
168
|
|
|
154
|
|
|
692
|
|
|
349
|
|
Carried interest
allocation (2)
|
|
(9,658)
|
|
|
(6,330)
|
|
|
(3,943)
|
|
|
(16,966)
|
|
|
(9,034)
|
|
Net income
attributable to noncontrolling interests
|
|
$
|
(14,437)
|
|
|
$
|
(18,584)
|
|
|
$
|
(6,548)
|
|
|
$
|
(35,901)
|
|
|
$
|
(28,841)
|
|
______________________
|
(1)
|
Represents
noncontrolling interests' share in net interest income, noninterest
income and noninterest expense.
|
(2)
|
Represents the
preferred allocation of income (or change in income) earned by us
as the general partner of certain consolidated funds.
|
Net income attributable to noncontrolling interests was
$14.4 million for the third quarter
of 2019, compared to $18.6 million
for the second quarter of 2019. Net income attributable to
noncontrolling interests of $14.4
million for the third quarter of 2019 was primarily a result
of net gains on investment securities (including carried interest
allocation) from our managed funds of funds and our managed direct
venture funds portfolios, related primarily to net unrealized
valuation increases for private and public company investments held
by the funds in the portfolio.
SVBFG Stockholders' Equity
Total SVBFG stockholders' equity increased by $0.3 billion to $5.9
billion at September 30, 2019, compared to $5.6 billion at June 30, 2019, primarily due
to net income of $267.3 million and
an increase in accumulated other comprehensive income of
$54.9 million. The $54.9 million net increase in accumulated other
comprehensive income was reflective primarily of a $69.7 million ($50.3
million net of tax) increase in the fair value of our AFS
securities portfolio driven by decreases in period-end market
interest rates.
Stock Repurchase Programs
On July 1, 2019, we repurchased
and retired 25,562 shares of our common stock totaling $5.7 million which represented the completion of
our $500 million stock repurchase
program originally announced on November 13,
2018.
On October 24, 2019, our Board of
Directors authorized a new stock repurchase program that enables us
to repurchase up to $350 million of
our outstanding common stock. This program expires on October 29, 2020.
Under the stock repurchase program, we may, from time to time
and on or before the program's expiration date, repurchase shares
of our outstanding common stock in the open market, in
privately-negotiated transactions, or otherwise, subject to
applicable laws and regulations. The extent to which we repurchases
our shares, and the timing of such repurchases, will depend upon a
variety of factors, including market conditions, regulatory
requirements, availability of funds, and other relevant
considerations, as determined by us. We may, in our discretion,
begin, suspend or terminate repurchases at any time prior to the
program's expiration, without any prior notice. Repurchases may
also be made pursuant to a trading plan under
Rule 10b5-1 under the Securities Exchange Act of 1934, as
amended, which would permit shares to be repurchased when we might
otherwise be precluded from doing so because of self-imposed
trading blackout periods or other regulatory restrictions. We
expect to finance repurchases under the program with available cash
balances.
Capital Ratios
Our regulatory risk-based capital ratios for both SVB Financial
Group and Silicon Valley Bank (the "Bank") decreased as of
September 30, 2019, compared to the same ratios as of
June 30, 2019, primarily as a result of a proportionally
higher increase in our risk-weighted assets relative to the
increase in our capital for the third quarter of 2019. The increase
in risk weighed-weighted assets was due primarily to loan growth
and the increase in our fixed income investment securities driven
by deposit growth during the third quarter of 2019. The increase in
capital was due primarily to net income.
The tier 1 leverage ratios for both SVB Financial Group and the
Bank decreased as of September 30, 2019, compared to
June 30, 2019, primarily as a result of a proportionally
higher increase in our average assets relative to our tier 1
capital. The increase in our average assets were due primarily to
increases in our fixed income investment securities, cash and cash
equivalents as well as loan growth. The increase in tier 1 capital
was due primarily to net income.
Overall, decreases to the Bank's risk-based capital ratios were
inclusive of a $336.0 million cash
dividend paid by the Bank to our bank holding company, SVB
Financial Group, during the third quarter of 2019.
All of our reported capital ratios remain above the levels
considered to be "well capitalized" under applicable banking
regulations. See the "SVB Financial and Bank Capital Ratios"
section, at the end of this release, for details.
Outlook for the Year Ending December 31, 2019 and
Preliminary 2020 Outlook for Selected Items
Our outlook for the year ending December 31, 2019 and our
preliminary outlook for selected items for the year ending
December 31, 2020, is provided below
on a GAAP basis, unless otherwise noted. We have provided our
current outlook for the expected full year results of our
significant forecasted activities. Except for the items noted
below, we do not provide an outlook for certain items (such as
gains or losses from warrants and investment securities) where the
timing or financial impact are 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. Also, as a result of our acquisition of SVB
Leerink, we have included guidance for core fee income including
investment banking revenue and commissions and noninterest expense
inclusive of SVB Leerink's expected full year results as part of
the Company. The outlook and the underlying assumptions presented
below are, by their nature, forward-looking statements and are
subject to substantial risks and uncertainties, which are discussed
below under the section "Forward-Looking Statements."
For the full year ending December 31, 2019, compared to our
full year 2018 results, we currently expect the following outlook:
(Note that the outlook below includes: (i) the expected impact of
the July 31, 2019 and September 18, 2019 decreases of the target
Federal Funds rate by the Federal Reserve of 25 basis points each
as well as the decreases in the 1- and 3- month LIBOR rates through
September 30, 2019, and no
assumptions about any further Federal Funds or LIBOR rate changes
during 2019, and (ii) management updates to certain 2019 outlook
metrics we previously disclosed on July 25,
2019.)
|
Current full year
2019 outlook compared to 2018 results (as of October 24,
2019)
|
Change in outlook
compared to outlook reported as of July 25, 2019
|
Average loan
balances
|
Increase at a
percentage rate in the
mid-teens
|
No change from
previous outlook
|
Average deposit
balances
|
Increase at a
percentage rate in the
low teens
|
Outlook
increased to low teens from previous outlook of low double
digits
|
Net interest income
(1)
|
Increase at a
percentage rate in the
low double
digits
|
Outlook
decreased to low double digits from previous outlook of low
teens
|
Net interest margin
(1)
|
Between 3.50% and
3.60%
|
Outlook
decreased to between 3.50% and 3.60% from previous outlook of
between 3.60% and 3.70%
|
Allowance for loan
losses for total gross performing loans as a percentage of total
gross performing loans
|
Comparable to 2018
levels
|
No change from
previous outlook
|
Net loan
charge-offs
|
Between 0.20% and 0.40%
of average total
gross loans
|
No change from
previous outlook
|
Nonperforming loans
as a percentage of total gross loans
|
Between 0.30% and
0.50%
of total gross
loans
|
No change from
previous outlook
|
Core fee income
(client investment fees, foreign exchange fees, credit card fees,
deposit service charges, lending related fees and letters of credit
fees) (2)
|
Increase at a
percentage rate in the
low
twenties
|
No change from
previous outlook
|
Noninterest expense
(excluding expenses related to noncontrolling interests) (3)
(4)
|
Increase at a
percentage rate in the
low teens
|
No change from
previous outlook
|
Effective tax rate
(5)
|
Between 26.0% and
28.0%
|
No change from
previous outlook
|
|
Current full year
2019 outlook compared to 2018 results, including expected results
of SVB Leerink reflective of the completed acquisition on January
4, 2019
|
Change in outlook
compared to outlook reported as of July 25, 2019
|
Core fee income
(client investment fees, foreign exchange fees, credit card fees,
deposit service charges, lending related fees and letters of credit
fees) including investment banking revenue and commissions (2)
(6)
|
Increase at a
percentage rate in the high sixties
|
Outlook
decreased to high sixties from previous outlook of low
seventies
|
Noninterest expense
(excluding expenses related to noncontrolling interests) including
SVB Leerink's noninterest expenses (3) (4) (6)
|
Increase at a
percentage rate in the mid-thirties
|
No change from
previous outlook
|
Preliminary 2020 Outlook for Selected Items
Our preliminary full year 2020 outlook for selected items
provided below is based on various management assumptions,
including: (a) no changes in the Federal Reserve or LIBOR rates,
and (b) no material deterioration in the overall economy. For the
full year ending December 31, 2020,
compared to our full year ending December
31, 2019, expected results, we currently expect the
following:
- average loan balance growth in the low teens,
- average deposit balance growth in the low double digits,
- net interest income(1) growth in the low single
digits,
- net interest margin(1) between 3.20% and 3.30%,
- net loan charge-offs between 0.20% and 0.40% of average total
gross loans,
- core fee income(2) growth in the low teens,
- core fee income including investment banking revenue and
commissions(2)(6) growth in the low teens,
- noninterest expense(3)(4) (excluding expenses
related to noncontrolling interests) growth in the high single
digits, and
- noninterest expense including SVB Leerink's noninterest
expenses(3)(4)(6) growth in the high single digits.
Our 2020 outlook is preliminary and subject to change.
______________________
|
(1)
|
Our outlook for net
interest income and net interest margin is based primarily on
management's current forecast of average deposit and loan balances
and deployment of surplus cash into investment securities. Such
forecasts are subject to change, and actual results may differ,
based on market conditions, actual prepayment rates and other
factors described under the section "Forward-Looking Statements"
below.
|
(2)
|
Core fee income is a
non-GAAP measure, which represents noninterest income, but excludes
certain line items where performance is typically subject to market
or other conditions beyond our control. As we are unable to
quantify such line items that would be required to be included in
the comparable GAAP financial measure for the future period
presented without unreasonable efforts, no reconciliation for the
outlook of non-GAAP core fee income to GAAP noninterest income for
fiscal 2019 is included in this release, as we believe such
reconciliation would imply a degree of precision that would be
confusing or misleading to investors. See "Use of Non-GAAP
Financial Measures" at the end of this release for further
information regarding the calculation and limitations of this
measure.
|
(3)
|
Noninterest expense
(excluding expenses related to noncontrolling interests) is a
non-GAAP measure, which represents noninterest expense, but
excludes expenses attributable to noncontrolling interests. As we
are unable to quantify such line items that would be required to be
included in the comparable GAAP financial measure for the future
period presented without unreasonable efforts, no reconciliation
for the outlook of non-GAAP noninterest expense (excluding expenses
related to noncontrolling interests) to GAAP noninterest expense
for fiscal 2019 is included in this release, as we believe such
reconciliation would imply a degree of precision that would be
confusing or misleading to investors. See "Use of Non-GAAP
Financial Measures" at the end of this release for further
information regarding the calculation and limitations of this
measure.
|
(4)
|
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 internal performance
targets.
|
(5)
|
Our outlook for our
effective tax rate is based on management's current assumptions
with respect to, among other things, the Company's earnings, state
income tax levels, tax deductions and estimated performance-based
compensation activity.
|
(6)
|
Investment banking
revenue, commissions, and noninterest expense consists of revenue
and expenses attributable entirely to SVB Leerink.
|
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 subject to known and unknown risks
and uncertainties, many of which may be beyond our control.
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
addition, forward-looking statements generally can be identified by
the use of such words as "becoming," "may," "will," "should,"
"could," "would," "predict," "potential," "continue," "anticipate,"
"believe," "estimate," "assume," "seek," "expect," "plan,"
"intend," the negative of such words or comparable terminology. In
this release, including our CEO's statement and in the sections
"New Accounting Guidance" and "Outlook for the Year Ending
December 31, 2019 and Preliminary 2020 Outlook for Selected
Items", we make forward-looking statements discussing management's
expectations for 2019 and 2020 about, among other things, economic
conditions; opportunities in the market; the outlook on our
clients' performance; our financial, credit, and business
performance, including potential investment gains; loan growth,
loan mix and loan yields; expense levels; our expected effective
tax rate; accounting impact; and financial results (and the
components of such results), including the performance results of
SVB Leerink for certain quarters in, and for the full years 2019
and 2020.
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, we have based these
expectations on our current beliefs as well as our assumptions, and
such expectations may not prove to be correct. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside our control.
Our actual results of operations and financial performance could
differ significantly from those expressed in or implied by our
management's forward-looking statements. Important factors that
could cause our actual results and financial condition to differ
from the expectations stated in the forward-looking statements
include, among others:
- market and economic conditions (including the general condition
of the capital and equity markets, and IPO, M&A and financing
activity levels) and the associated impact on us (including effects
on client demand for our commercial and investment banking and
other financial services, as well as on the valuations of our
investments);
- changes in the volume and credit quality of our loans as well
as volatility of our levels of nonperforming assets and
charge-offs;
- the impact of changes in interest rates or market levels or
factors affecting or affected by them, especially on our loan and
investment portfolios;
- changes in the levels of our loans, deposits and client
investment fund balances;
- changes in the performance or equity valuations of funds or
companies in which we have invested or hold derivative instruments
or equity warrant assets;
- variations from our expectations as to factors impacting our
cost structure;
- 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;
- variations from our expectations as to factors impacting the
timing and level of employee share-based transactions;
- variations from our expectations as to factors impacting our
estimate of our full-year effective tax rate;
- changes in applicable accounting standards and tax laws;
and
- regulatory or legal changes or their impact on us.
For additional information about these and other factors, please
refer to our public reports filed with the U.S. Securities and
Exchange Commission, including under the caption "Risk Factors" in
our most recent Annual Report filed on Form 10-K. 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 Thursday, October 24, 2019, we
will host a conference call at 3:00 p.m.
(Pacific Time) to discuss the financial results for the
quarter ended September 30, 2019. The
conference call can be accessed by dialing (888) 771-4371 or
(847) 585-4405, and entering the confirmation number
"48814272". 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 5:30 p.m.
(Pacific Time) on Thursday, October 24, 2019, through
9:59 p.m. (Pacific Time) on Sunday,
November 24, 2019, and may be accessed by dialing
(888) 843-7419 or (630) 652-3042 and entering the
passcode "48814272#". A replay of the audio webcast will also be
available on www.svb.com for 12 months beginning on October 24, 2019.
About SVB Financial Group
For more than 35 years, SVB Financial Group (NASDAQ: SIVB) and
its subsidiaries have helped innovative companies and their
investors move bold ideas forward, fast. SVB Financial Group's
businesses, including Silicon Valley Bank, offer commercial,
investment and private banking, asset management, private wealth
management, brokerage and investment services and funds management
services to companies in the technology, life science and
healthcare, private equity and venture capital, and premium wine
industries. Headquartered in Santa Clara,
California, SVB Financial Group operates in centers of
innovation around the world. Learn more at www.svb.com.
SVB Financial Group is the holding company for all business
units and groups © 2019 SVB Financial Group. All rights reserved.
SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, SVB LEERINK, MAKE
NEXT HAPPEN NOW and the chevron device are trademarks of SVB
Financial Group, used under license. Silicon Valley Bank is a
member of the FDIC and the Federal Reserve System. Silicon Valley
Bank is the California bank
subsidiary of SVB Financial Group.
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,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$
|
394,246
|
|
|
$
|
414,077
|
|
|
$
|
352,353
|
|
|
$
|
1,202,467
|
|
|
$
|
979,724
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
149,656
|
|
|
134,395
|
|
|
142,075
|
|
|
410,768
|
|
|
403,702
|
|
Non-taxable
|
|
11,123
|
|
|
10,931
|
|
|
10,748
|
|
|
32,991
|
|
|
23,506
|
|
Federal funds sold,
securities purchased under agreements to resell and
other short-term investment securities
|
|
28,867
|
|
|
26,364
|
|
|
8,137
|
|
|
74,447
|
|
|
20,080
|
|
Total interest
income
|
|
583,892
|
|
|
585,767
|
|
|
513,313
|
|
|
1,720,673
|
|
|
1,427,012
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
55,106
|
|
|
47,150
|
|
|
8,042
|
|
|
130,163
|
|
|
18,409
|
|
Borrowings
|
|
8,142
|
|
|
9,214
|
|
|
12,049
|
|
|
27,577
|
|
|
29,075
|
|
Total interest
expense
|
|
63,248
|
|
|
56,364
|
|
|
20,091
|
|
|
157,740
|
|
|
47,484
|
|
Net interest
income
|
|
520,644
|
|
|
529,403
|
|
|
493,222
|
|
|
1,562,933
|
|
|
1,379,528
|
|
Provision for credit
losses
|
|
36,536
|
|
|
23,946
|
|
|
17,174
|
|
|
89,033
|
|
|
74,226
|
|
Net interest income
after provision for credit losses
|
|
484,108
|
|
|
505,457
|
|
|
476,048
|
|
|
1,473,900
|
|
|
1,305,302
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
Gains on investment
securities, net
|
|
29,849
|
|
|
47,698
|
|
|
32,193
|
|
|
106,575
|
|
|
77,365
|
|
Gains on equity
warrant assets, net
|
|
37,561
|
|
|
48,347
|
|
|
34,141
|
|
|
107,213
|
|
|
72,393
|
|
Client investment
fees
|
|
46,679
|
|
|
45,744
|
|
|
36,265
|
|
|
136,905
|
|
|
88,592
|
|
Foreign exchange
fees
|
|
40,309
|
|
|
38,506
|
|
|
32,656
|
|
|
116,863
|
|
|
100,560
|
|
Credit card
fees
|
|
30,158
|
|
|
28,790
|
|
|
24,121
|
|
|
86,431
|
|
|
68,739
|
|
Deposit service
charges
|
|
22,482
|
|
|
22,075
|
|
|
19,588
|
|
|
65,496
|
|
|
56,081
|
|
Lending related
fees
|
|
11,707
|
|
|
11,213
|
|
|
10,675
|
|
|
36,857
|
|
|
30,938
|
|
Letters of credit and
standby letters of credit fees
|
|
10,842
|
|
|
11,009
|
|
|
8,409
|
|
|
31,205
|
|
|
24,938
|
|
Investment banking
revenue
|
|
38,516
|
|
|
48,694
|
|
|
—
|
|
|
137,005
|
|
|
—
|
|
Commissions
|
|
12,275
|
|
|
14,429
|
|
|
—
|
|
|
40,812
|
|
|
—
|
|
Other
|
|
13,631
|
|
|
17,245
|
|
|
12,022
|
|
|
42,773
|
|
|
38,671
|
|
Total noninterest
income
|
|
294,009
|
|
|
333,750
|
|
|
210,070
|
|
|
908,135
|
|
|
558,277
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
233,840
|
|
|
243,172
|
|
|
195,437
|
|
|
715,073
|
|
|
543,198
|
|
Professional
services
|
|
55,202
|
|
|
40,830
|
|
|
36,542
|
|
|
133,018
|
|
|
112,080
|
|
Premises and
equipment
|
|
26,775
|
|
|
23,911
|
|
|
19,858
|
|
|
72,386
|
|
|
57,576
|
|
Net
occupancy
|
|
16,981
|
|
|
16,687
|
|
|
13,694
|
|
|
49,716
|
|
|
40,598
|
|
Business development
and travel
|
|
19,539
|
|
|
17,022
|
|
|
12,712
|
|
|
51,915
|
|
|
35,998
|
|
FDIC and state
assessments
|
|
4,881
|
|
|
4,483
|
|
|
9,550
|
|
|
13,343
|
|
|
29,306
|
|
Other
|
|
34,106
|
|
|
37,417
|
|
|
21,652
|
|
|
105,059
|
|
|
61,845
|
|
Total noninterest
expense
|
|
391,324
|
|
|
383,522
|
|
|
309,445
|
|
|
1,140,510
|
|
|
880,601
|
|
Income before income
tax expense
|
|
386,793
|
|
|
455,685
|
|
|
376,673
|
|
|
1,241,525
|
|
|
982,978
|
|
Income tax
expense
|
|
105,075
|
|
|
119,114
|
|
|
95,308
|
|
|
331,624
|
|
|
246,561
|
|
Net income before
noncontrolling interests
|
|
281,718
|
|
|
336,571
|
|
|
281,365
|
|
|
909,901
|
|
|
736,417
|
|
Net income
attributable to noncontrolling interests
|
|
(14,437)
|
|
|
(18,584)
|
|
|
(6,548)
|
|
|
(35,901)
|
|
|
(28,841)
|
|
Net income
available to common stockholders
|
|
$
|
267,281
|
|
|
$
|
317,987
|
|
|
$
|
274,817
|
|
|
$
|
874,000
|
|
|
$
|
707,576
|
|
Earnings per common
share—basic
|
|
$
|
5.19
|
|
|
$
|
6.12
|
|
|
$
|
5.16
|
|
|
$
|
16.80
|
|
|
$
|
13.33
|
|
Earnings per common
share—diluted
|
|
5.15
|
|
|
6.08
|
|
|
5.10
|
|
|
16.67
|
|
|
13.15
|
|
Weighted average
common shares outstanding—basic
|
|
51,544,807
|
|
|
51,954,761
|
|
|
53,235,090
|
|
|
52,025,112
|
|
|
53,062,082
|
|
Weighted average
common shares outstanding—diluted
|
|
51,858,470
|
|
|
52,336,178
|
|
|
53,918,973
|
|
|
52,430,806
|
|
|
53,799,827
|
|
SVB FINANCIAL
GROUP AND SUBSIDIARIES
INTERIM
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
(Dollars in thousands, except par value
and share data)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
6,946,196
|
|
|
$
|
9,020,925
|
|
|
$
|
3,819,141
|
|
Available-for-sale
securities, at fair value (cost $12,699,542, $7,842,667 and
$9,236,301, respectively)
|
|
12,866,857
|
|
|
7,940,322
|
|
|
9,087,609
|
|
Held-to-maturity
securities, at cost (fair value $14,698,802, $15,064,962 and
$15,372,238, respectively)
|
|
14,407,078
|
|
|
14,868,761
|
|
|
15,899,726
|
|
Non-marketable and
other equity securities
|
|
1,150,094
|
|
|
1,079,749
|
|
|
896,249
|
|
Investment
securities
|
|
28,424,029
|
|
|
23,888,832
|
|
|
25,883,584
|
|
Loans, net of
unearned income
|
|
31,063,994
|
|
|
29,209,573
|
|
|
27,494,915
|
|
Allowance for loan
losses
|
|
(304,410)
|
|
|
(301,888)
|
|
|
(285,713)
|
|
Net loans
|
|
30,759,584
|
|
|
28,907,685
|
|
|
27,209,202
|
|
Premises and
equipment, net of accumulated depreciation and
amortization
|
|
146,713
|
|
|
141,888
|
|
|
121,890
|
|
Goodwill
|
|
137,823
|
|
|
137,823
|
|
|
—
|
|
Other intangible
assets, net
|
|
52,288
|
|
|
55,158
|
|
|
—
|
|
Lease right-of-use
assets
|
|
178,532
|
|
|
156,347
|
|
|
—
|
|
Accrued interest
receivable and other assets
|
|
1,586,068
|
|
|
1,465,081
|
|
|
1,105,917
|
|
Total
assets
|
|
$
|
68,231,233
|
|
|
$
|
63,773,739
|
|
|
$
|
58,139,734
|
|
Liabilities and
total equity:
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Noninterest-bearing
demand deposits
|
|
$
|
40,480,610
|
|
|
$
|
39,331,489
|
|
|
$
|
40,473,774
|
|
Interest-bearing
deposits
|
|
19,062,264
|
|
|
16,279,051
|
|
|
8,122,337
|
|
Total
deposits
|
|
59,542,874
|
|
|
55,610,540
|
|
|
48,596,111
|
|
Short-term
borrowings
|
|
18,898
|
|
|
24,252
|
|
|
2,631,252
|
|
Lease
liabilities
|
|
192,543
|
|
|
195,326
|
|
|
—
|
|
Other
liabilities
|
|
1,731,222
|
|
|
1,540,476
|
|
|
1,146,109
|
|
Long-term
debt
|
|
697,227
|
|
|
696,970
|
|
|
696,217
|
|
Total
liabilities
|
|
62,182,764
|
|
|
58,067,564
|
|
|
53,069,689
|
|
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; 51,555,831 shares,
51,561,719 shares and 53,250,255 shares issued and outstanding,
respectively
|
|
52
|
|
|
52
|
|
|
53
|
|
Additional paid-in
capital
|
|
1,441,730
|
|
|
1,421,565
|
|
|
1,360,030
|
|
Retained
earnings
|
|
4,312,745
|
|
|
4,051,194
|
|
|
3,672,696
|
|
Accumulated other
comprehensive income (loss)
|
|
136,153
|
|
|
81,232
|
|
|
(108,410)
|
|
Total SVBFG
stockholders' equity
|
|
5,890,680
|
|
|
5,554,043
|
|
|
4,924,369
|
|
Noncontrolling
interests
|
|
157,789
|
|
|
152,132
|
|
|
145,676
|
|
Total
equity
|
|
6,048,469
|
|
|
5,706,175
|
|
|
5,070,045
|
|
Total liabilities
and total equity
|
|
$
|
68,231,233
|
|
|
$
|
63,773,739
|
|
|
$
|
58,139,734
|
|
SVB FINANCIAL
GROUP AND SUBSIDIARIES
INTERIM AVERAGE
BALANCES, RATES AND YIELDS
(Unaudited)
|
|
|
|
Three months ended
|
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
(Dollars in thousands, except yield/rate
and ratios)
|
|
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)
|
|
$
|
7,193,195
|
|
|
$
|
28,867
|
|
|
1.59
|
%
|
|
$
|
5,405,899
|
|
|
$
|
26,364
|
|
|
1.96
|
%
|
|
$
|
2,548,271
|
|
|
$
|
8,137
|
|
|
1.27
|
%
|
Investment
securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
10,600,449
|
|
|
62,121
|
|
|
2.32
|
|
|
8,205,333
|
|
|
45,347
|
|
|
2.22
|
|
|
9,589,917
|
|
|
46,684
|
|
|
1.93
|
|
Held-to-maturity
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
12,922,438
|
|
|
87,535
|
|
|
2.69
|
|
|
13,350,533
|
|
|
89,048
|
|
|
2.68
|
|
|
14,385,027
|
|
|
95,391
|
|
|
2.63
|
|
Non-taxable
(3)
|
|
1,612,067
|
|
|
14,080
|
|
|
3.47
|
|
|
1,572,056
|
|
|
13,836
|
|
|
3.53
|
|
|
1,531,663
|
|
|
13,606
|
|
|
3.52
|
|
Total loans, net of
unearned income (4) (5)
|
|
29,822,426
|
|
|
394,246
|
|
|
5.24
|
|
|
29,406,620
|
|
|
414,077
|
|
|
5.65
|
|
|
26,331,377
|
|
|
352,353
|
|
|
5.31
|
|
Total
interest-earning assets
|
|
62,150,575
|
|
|
586,849
|
|
|
3.74
|
|
|
57,940,441
|
|
|
588,672
|
|
|
4.07
|
|
|
54,386,255
|
|
|
516,171
|
|
|
3.77
|
|
Cash and due from
banks
|
|
590,391
|
|
|
|
|
|
|
542,345
|
|
|
|
|
|
|
553,132
|
|
|
|
|
|
Allowance for loan
losses
|
|
(308,609)
|
|
|
|
|
|
|
(311,709)
|
|
|
|
|
|
|
(296,177)
|
|
|
|
|
|
Other assets
(6)
|
|
2,895,391
|
|
|
|
|
|
|
2,529,409
|
|
|
|
|
|
|
1,821,827
|
|
|
|
|
|
Total
assets
|
|
$
|
65,327,748
|
|
|
|
|
|
|
$
|
60,700,486
|
|
|
|
|
|
|
$
|
56,465,037
|
|
|
|
|
|
Funding
sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
checking and savings accounts
|
|
$
|
470,601
|
|
|
$
|
102
|
|
|
0.09
|
%
|
|
$
|
459,972
|
|
|
$
|
100
|
|
|
0.09
|
%
|
|
$
|
572,242
|
|
|
$
|
116
|
|
|
0.08
|
%
|
Money market
deposits
|
|
15,805,507
|
|
|
49,169
|
|
|
1.23
|
|
|
12,669,422
|
|
|
41,249
|
|
|
1.31
|
|
|
6,704,337
|
|
|
7,782
|
|
|
0.46
|
|
Money market deposits
in foreign offices
|
|
115,590
|
|
|
12
|
|
|
0.04
|
|
|
162,586
|
|
|
16
|
|
|
0.04
|
|
|
218,734
|
|
|
22
|
|
|
0.04
|
|
Time
deposits
|
|
157,218
|
|
|
590
|
|
|
1.49
|
|
|
75,721
|
|
|
171
|
|
|
0.91
|
|
|
74,597
|
|
|
35
|
|
|
0.19
|
|
Sweep deposits in
foreign offices
|
|
1,539,869
|
|
|
5,233
|
|
|
1.35
|
|
|
1,476,614
|
|
|
5,614
|
|
|
1.52
|
|
|
896,558
|
|
|
87
|
|
|
0.04
|
|
Total
interest-bearing deposits
|
|
18,088,785
|
|
|
55,106
|
|
|
1.21
|
|
|
14,844,315
|
|
|
47,150
|
|
|
1.27
|
|
|
8,466,468
|
|
|
8,042
|
|
|
0.38
|
|
Short-term
borrowings
|
|
22,045
|
|
|
119
|
|
|
2.14
|
|
|
188,998
|
|
|
1,195
|
|
|
2.54
|
|
|
745,156
|
|
|
4,039
|
|
|
2.15
|
|
3.50% Senior
Notes
|
|
347,841
|
|
|
3,150
|
|
|
3.59
|
|
|
347,755
|
|
|
3,149
|
|
|
3.63
|
|
|
347,499
|
|
|
3,147
|
|
|
3.59
|
|
5.375% Senior
Notes
|
|
349,216
|
|
|
4,873
|
|
|
5.54
|
|
|
349,048
|
|
|
4,870
|
|
|
5.60
|
|
|
348,557
|
|
|
4,863
|
|
|
5.54
|
|
Total
interest-bearing liabilities
|
|
18,807,887
|
|
|
63,248
|
|
|
1.33
|
|
|
15,730,116
|
|
|
56,364
|
|
|
1.44
|
|
|
9,907,680
|
|
|
20,091
|
|
|
0.80
|
|
Portion of
noninterest-bearing funding sources
|
|
43,342,688
|
|
|
|
|
|
|
42,210,325
|
|
|
|
|
|
|
44,478,575
|
|
|
|
|
|
Total funding
sources
|
|
62,150,575
|
|
|
63,248
|
|
|
0.40
|
|
|
57,940,441
|
|
|
56,364
|
|
|
0.39
|
|
|
54,386,255
|
|
|
20,091
|
|
|
0.15
|
|
Noninterest-bearing
funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
39,146,184
|
|
|
|
|
|
|
38,117,893
|
|
|
|
|
|
|
40,625,772
|
|
|
|
|
|
Other
liabilities
|
|
1,417,659
|
|
|
|
|
|
|
1,232,464
|
|
|
|
|
|
|
932,544
|
|
|
|
|
|
SVBFG stockholders'
equity
|
|
5,802,907
|
|
|
|
|
|
|
5,477,148
|
|
|
|
|
|
|
4,854,440
|
|
|
|
|
|
Noncontrolling
interests
|
|
153,111
|
|
|
|
|
|
|
142,865
|
|
|
|
|
|
|
144,601
|
|
|
|
|
|
Portion used to fund
interest-earning assets
|
|
(43,342,688)
|
|
|
|
|
|
|
(42,210,325)
|
|
|
|
|
|
|
(44,478,575)
|
|
|
|
|
|
Total liabilities and
total equity
|
|
$
|
65,327,748
|
|
|
|
|
|
|
$
|
60,700,486
|
|
|
|
|
|
|
$
|
56,465,037
|
|
|
|
|
|
Net interest income
and margin
|
|
|
|
$
|
523,601
|
|
|
3.34
|
%
|
|
|
|
$
|
532,308
|
|
|
3.68
|
%
|
|
|
|
$
|
496,080
|
|
|
3.62
|
%
|
Total
deposits
|
|
$
|
57,234,969
|
|
|
|
|
|
|
$
|
52,962,208
|
|
|
|
|
|
|
$
|
49,092,240
|
|
|
|
|
|
Average SVBFG
stockholders' equity as a percentage of average assets
|
|
|
|
|
|
8.88
|
%
|
|
|
|
|
|
9.02
|
%
|
|
|
|
|
|
8.60
|
%
|
Reconciliation to
reported net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
taxable equivalent basis
|
|
|
|
(2,957)
|
|
|
|
|
|
|
(2,905)
|
|
|
|
|
|
|
(2,858)
|
|
|
|
Net interest income,
as reported
|
|
|
|
$
|
520,644
|
|
|
|
|
|
|
$
|
529,403
|
|
|
|
|
|
|
$
|
493,222
|
|
|
|
______________________
|
(1)
|
Includes average
interest-earning deposits in other financial institutions of $1.1
billion, $0.9 billion and $0.7 billion; and $5.1 billion, $3.7
billion and $1.4 billion deposited at the Federal Reserve Bank,
earning interest at the Federal Funds target rate, for the quarters
ended September 30, 2019, June 30, 2019 and
September 30, 2018, respectively.
|
(2)
|
Yields on
interest-earning investment securities do not give effect to
changes in fair value that are reflected in other comprehensive
income or loss.
|
(3)
|
Interest income on
non-taxable investment securities is presented on a fully taxable
equivalent basis using the federal statutory tax rate of 21.0
percent for all periods presented.
|
(4)
|
Nonaccrual loans are
reflected in the average balances of loans.
|
(5)
|
Interest income
includes loan fees of $39.4 million, $44.1 million and $33.1
million for the quarters ended September 30,
2019, June 30, 2019 and September 30, 2018,
respectively.
|
(6)
|
Average investment
securities of $1.2 billion, $1.0 billion and $761 million for the
quarters ended September 30, 2019, June 30, 2019 and
September 30, 2018, respectively, were classified as other
assets as they are noninterest-earning assets. These investments
consist primarily of non-marketable and other equity
securities.
|
SVB FINANCIAL
GROUP AND SUBSIDIARIES
INTERIM AVERAGE
BALANCES, RATES AND YIELDS
(Unaudited)
|
|
|
|
Nine months
ended
|
|
|
September 30,
2019
|
|
September 30,
2018
|
(Dollars in thousands, except yield/rate
and ratios)
|
|
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)
|
|
$
|
5,696,501
|
|
|
$
|
74,447
|
|
|
1.75
|
%
|
|
$
|
2,535,749
|
|
|
$
|
20,080
|
|
|
1.06
|
%
|
Investment
securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
8,572,314
|
|
|
142,891
|
|
|
2.23
|
|
|
10,124,707
|
|
|
141,266
|
|
|
1.87
|
|
Held-to-maturity
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
13,305,424
|
|
|
267,877
|
|
|
2.69
|
|
|
13,597,340
|
|
|
262,436
|
|
|
2.58
|
|
Non-taxable
(3)
|
|
1,585,734
|
|
|
41,760
|
|
|
3.52
|
|
|
1,166,875
|
|
|
29,755
|
|
|
3.41
|
|
Total loans, net of
unearned income (4) (5)
|
|
29,210,960
|
|
|
1,202,467
|
|
|
5.50
|
|
|
25,008,277
|
|
|
979,724
|
|
|
5.24
|
|
Total
interest-earning assets
|
|
58,370,933
|
|
|
1,729,442
|
|
|
3.96
|
|
|
52,432,948
|
|
|
1,433,261
|
|
|
3.65
|
|
Cash and due from
banks
|
|
553,523
|
|
|
|
|
|
|
496,658
|
|
|
|
|
|
Allowance for loan
losses
|
|
(303,154)
|
|
|
|
|
|
|
(280,102)
|
|
|
|
|
|
Other assets
(6)
|
|
2,592,830
|
|
|
|
|
|
|
1,783,148
|
|
|
|
|
|
Total
assets
|
|
$
|
61,214,132
|
|
|
|
|
|
|
$
|
54,432,652
|
|
|
|
|
|
Funding
sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing
checking and savings accounts
|
|
$
|
491,663
|
|
|
$
|
318
|
|
|
0.09
|
%
|
|
$
|
578,313
|
|
|
$
|
338
|
|
|
0.08
|
%
|
Money market
deposits
|
|
12,540,843
|
|
|
112,249
|
|
|
1.20
|
|
|
6,437,372
|
|
|
17,658
|
|
|
0.37
|
|
Money market deposits
in foreign offices
|
|
142,053
|
|
|
43
|
|
|
0.04
|
|
|
206,924
|
|
|
61
|
|
|
0.04
|
|
Time
deposits
|
|
94,934
|
|
|
790
|
|
|
1.11
|
|
|
59,561
|
|
|
71
|
|
|
0.16
|
|
Sweep deposits in
foreign offices
|
|
1,562,880
|
|
|
16,763
|
|
|
1.43
|
|
|
978,724
|
|
|
281
|
|
|
0.04
|
|
Total
interest-bearing deposits
|
|
14,832,373
|
|
|
130,163
|
|
|
1.17
|
|
|
8,260,894
|
|
|
18,409
|
|
|
0.30
|
|
Short-term
borrowings
|
|
186,930
|
|
|
3,519
|
|
|
2.52
|
|
|
328,425
|
|
|
5,053
|
|
|
2.06
|
|
3.50% Senior
Notes
|
|
347,756
|
|
|
9,447
|
|
|
3.63
|
|
|
347,416
|
|
|
9,438
|
|
|
3.63
|
|
5.375% Senior
Notes
|
|
349,050
|
|
|
14,611
|
|
|
5.60
|
|
|
348,400
|
|
|
14,584
|
|
|
5.60
|
|
Total
interest-bearing liabilities
|
|
15,716,109
|
|
|
157,740
|
|
|
1.34
|
|
|
9,285,135
|
|
|
47,484
|
|
|
0.68
|
|
Portion of
noninterest-bearing funding sources
|
|
42,654,824
|
|
|
|
|
|
|
43,147,813
|
|
|
|
|
|
Total funding
sources
|
|
58,370,933
|
|
|
157,740
|
|
|
0.36
|
|
|
52,432,948
|
|
|
47,484
|
|
|
0.12
|
|
Noninterest-bearing
funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
|
38,498,971
|
|
|
|
|
|
|
39,473,468
|
|
|
|
|
|
Other
liabilities
|
|
1,327,040
|
|
|
|
|
|
|
930,985
|
|
|
|
|
|
SVBFG stockholders'
equity
|
|
5,523,196
|
|
|
|
|
|
|
4,602,027
|
|
|
|
|
|
Noncontrolling
interests
|
|
148,816
|
|
|
|
|
|
|
141,037
|
|
|
|
|
|
Portion used to fund
interest-earning assets
|
|
(42,654,824)
|
|
|
|
|
|
|
(43,147,813)
|
|
|
|
|
|
Total liabilities and
total equity
|
|
$
|
61,214,132
|
|
|
|
|
|
|
$
|
54,432,652
|
|
|
|
|
|
Net interest income
and margin
|
|
|
|
$
|
1,571,702
|
|
|
3.60
|
%
|
|
|
|
$
|
1,385,777
|
|
|
3.53
|
%
|
Total
deposits
|
|
$
|
53,331,344
|
|
|
|
|
|
|
$
|
47,734,362
|
|
|
|
|
|
Average SVBFG
stockholders' equity as a percentage of average assets
|
|
|
|
|
|
9.02
|
%
|
|
|
|
|
|
8.45
|
%
|
Reconciliation to
reported net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
taxable equivalent basis
|
|
|
|
(8,769)
|
|
|
|
|
|
|
(6,249)
|
|
|
|
Net interest income,
as reported
|
|
|
|
$
|
1,562,933
|
|
|
|
|
|
|
$
|
1,379,528
|
|
|
|
______________________
|
(1)
|
Includes average
interest-earning deposits in other financial institutions of $0.9
billion for both the nine months ended September 30, 2019 and
2018. The balance also includes $3.9 billion and $1.4 billion
deposited at the Federal Reserve Bank, earning interest at the
Federal Funds target rate for the nine months ended
September 30, 2019 and 2018, respectively.
|
(2)
|
Yields on
interest-earning investment securities do not give effect to
changes in fair value that are reflected in other comprehensive
income or loss.
|
(3)
|
Interest income on
non-taxable investment securities is presented on a fully taxable
equivalent basis using the federal statutory tax rate of 21.0
percent for all periods presented.
|
(4)
|
Nonaccrual loans are
reflected in the average balances of loans.
|
(5)
|
Interest income
includes loan fees of $120.2 million and $100.8 million for the
nine months ended September 30, 2019 and 2018,
respectively.
|
(6)
|
Average investment
securities of $1.1 billion and $774 million for the nine months
ended September 30, 2019 and 2018, respectively, were
classified as other assets as they are noninterest-earning assets.
These investments consisted primarily of non-marketable and other
equity securities.
|
Reconciliation of
Basic and Diluted Weighted Average Common Shares
Outstanding
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
(Shares in
thousands)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Weighted average
common shares outstanding—basic
|
|
51,545
|
|
|
51,955
|
|
|
53,235
|
|
|
52,025
|
|
|
53,062
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
Stock options and
employee stock purchase plan
|
|
203
|
|
|
235
|
|
|
383
|
|
|
238
|
|
|
404
|
|
Restricted stock
units
|
|
110
|
|
|
146
|
|
|
301
|
|
|
168
|
|
|
334
|
|
Total effect of
dilutive securities
|
|
313
|
|
|
381
|
|
|
684
|
|
|
406
|
|
|
738
|
|
Weighted average
common shares outstanding—diluted
|
|
51,858
|
|
|
52,336
|
|
|
53,919
|
|
|
52,431
|
|
|
53,800
|
|
SVB Financial and
Bank Capital Ratios
|
|
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
SVB
Financial:
|
|
|
|
|
|
|
CET 1 risk-based
capital ratio
|
|
12.71
|
%
|
|
12.92
|
%
|
|
13.28
|
%
|
Tier 1 risk-based
capital ratio
|
|
12.86
|
|
|
13.08
|
|
|
13.45
|
|
Total risk-based
capital ratio
|
|
13.70
|
|
|
13.97
|
|
|
14.34
|
|
Tier 1 leverage
ratio
|
|
8.64
|
|
|
8.82
|
|
|
8.99
|
|
Tangible common
equity to tangible assets ratio (1)
|
|
8.38
|
|
|
8.43
|
|
|
8.47
|
|
Tangible common
equity to risk-weighted assets ratio (1)
|
|
13.04
|
|
|
13.13
|
|
|
13.00
|
|
Silicon Valley
Bank:
|
|
|
|
|
|
|
CET 1 risk-based
capital ratio
|
|
11.48
|
%
|
|
12.50
|
%
|
|
11.98
|
%
|
Tier 1 risk-based
capital ratio
|
|
11.48
|
|
|
12.50
|
|
|
11.98
|
|
Total risk-based
capital ratio
|
|
12.36
|
|
|
13.44
|
|
|
12.91
|
|
Tier 1 leverage
ratio
|
|
7.48
|
|
|
8.17
|
|
|
7.82
|
|
Tangible common
equity to tangible assets ratio (1)
|
|
7.36
|
|
|
7.91
|
|
|
7.44
|
|
Tangible common
equity to risk-weighted assets ratio (1)
|
|
11.82
|
|
|
12.72
|
|
|
11.70
|
|
______________________
|
(1)
|
These are non-GAAP
measures. A reconciliation of non-GAAP measures to GAAP is provided
at the end of this release under the section "Use of Non-GAAP
Financial Measures."
|
Loan
Concentrations
|
|
(Dollars in
thousands, except ratios and client data)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
Loans
(individually or in the aggregate) to any single client, equal to
or greater than $20 million
|
|
|
|
|
|
|
Commercial
loans:
|
|
|
|
|
|
|
Software/internet
|
|
$
|
2,320,065
|
|
|
$
|
2,137,296
|
|
|
$
|
2,337,757
|
|
Hardware
|
|
668,093
|
|
|
707,571
|
|
|
671,773
|
|
Private
equity/venture capital
|
|
11,894,626
|
|
|
10,528,120
|
|
|
9,528,896
|
|
Life
science/healthcare
|
|
1,062,852
|
|
|
994,340
|
|
|
932,958
|
|
Premium wine
(1)
|
|
60,680
|
|
|
79,474
|
|
|
88,019
|
|
Other
|
|
56,856
|
|
|
48,285
|
|
|
55,986
|
|
Total commercial
loans
|
|
16,063,172
|
|
|
14,495,086
|
|
|
13,615,389
|
|
Real estate secured
loans:
|
|
|
|
|
|
|
Premium wine
(1)
|
|
139,218
|
|
|
151,695
|
|
|
106,136
|
|
Consumer
(2)
|
|
32,750
|
|
|
—
|
|
|
—
|
|
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
Total real estate
secured loans
|
|
171,968
|
|
|
151,695
|
|
|
106,136
|
|
Construction
loans
|
|
44,040
|
|
|
21,145
|
|
|
—
|
|
Consumer loans
(2)
|
|
148,261
|
|
|
166,133
|
|
|
207,016
|
|
Total loans
individually equal to or greater than $20 million
|
|
$
|
16,427,441
|
|
|
$
|
14,834,059
|
|
|
$
|
13,928,541
|
|
Loans
(individually or in the aggregate) to any single client, less than
$20 million
|
|
|
|
|
|
|
Commercial
loans:
|
|
|
|
|
|
|
Software/internet
|
|
$
|
3,747,602
|
|
|
$
|
3,907,054
|
|
|
$
|
3,979,558
|
|
Hardware
|
|
699,799
|
|
|
629,627
|
|
|
646,712
|
|
Private
equity/venture capital
|
|
4,415,459
|
|
|
4,160,218
|
|
|
3,840,139
|
|
Life
science/healthcare
|
|
1,384,341
|
|
|
1,453,423
|
|
|
1,444,512
|
|
Premium
wine
|
|
174,104
|
|
|
156,654
|
|
|
139,480
|
|
Other
|
|
343,631
|
|
|
390,952
|
|
|
221,949
|
|
Total commercial
loans
|
|
10,764,936
|
|
|
10,697,928
|
|
|
10,272,350
|
|
Real estate secured
loans:
|
|
|
|
|
|
|
Premium
wine
|
|
611,086
|
|
|
602,316
|
|
|
580,631
|
|
Consumer
|
|
2,979,296
|
|
|
2,805,321
|
|
|
2,553,651
|
|
Other
|
|
39,455
|
|
|
39,816
|
|
|
41,076
|
|
Total real estate
secured loans
|
|
3,629,837
|
|
|
3,447,453
|
|
|
3,175,358
|
|
Construction
loans
|
|
73,613
|
|
|
92,855
|
|
|
81,903
|
|
Consumer
loans
|
|
333,176
|
|
|
298,108
|
|
|
210,677
|
|
Total loans
individually less than $20 million
|
|
$
|
14,801,562
|
|
|
$
|
14,536,344
|
|
|
$
|
13,740,288
|
|
Total gross
loans
|
|
$
|
31,229,003
|
|
|
$
|
29,370,403
|
|
|
$
|
27,668,829
|
|
Loans individually
equal to or greater than $20 million as a percentage of total gross
loans
|
|
52.6
|
%
|
|
50.5
|
%
|
|
50.3
|
%
|
Total clients with
loans individually equal to or greater than $20 million
|
|
388
|
|
|
362
|
|
|
347
|
|
Loans individually
equal to or greater than $20 million on nonaccrual
status
|
|
$
|
37,294
|
|
|
$
|
—
|
|
|
$
|
27,872
|
|
______________________
|
(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.
|
Credit
Quality
|
|
(Dollars in thousands, except
ratios)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
Gross nonaccrual,
past due, and restructured loans:
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
104,045
|
|
|
$
|
96,641
|
|
|
$
|
115,162
|
|
Loans past due 90
days or more still accruing interest
|
|
864
|
|
|
111
|
|
|
163
|
|
Total
nonperforming loans
|
|
104,909
|
|
|
96,752
|
|
|
115,325
|
|
OREO and other
foreclosed assets
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
nonperforming assets
|
|
$
|
104,909
|
|
|
$
|
96,752
|
|
|
$
|
115,325
|
|
Nonperforming loans
as a percentage of total gross loans
|
|
0.34
|
%
|
|
0.33
|
%
|
|
0.42
|
%
|
Nonperforming assets
as a percentage of total assets
|
|
0.15
|
|
|
0.15
|
|
|
0.20
|
|
Allowance for loan
losses
|
|
$
|
304,410
|
|
|
$
|
301,888
|
|
|
$
|
285,713
|
|
As a percentage of
total gross loans
|
|
0.97
|
%
|
|
1.03
|
%
|
|
1.03
|
%
|
As a percentage of
total gross nonperforming loans
|
|
290.17
|
|
|
312.02
|
|
|
247.75
|
|
Allowance for loan
losses for nonaccrual loans
|
|
$
|
53,728
|
|
|
$
|
53,067
|
|
|
$
|
49,992
|
|
As a percentage of
total gross loans
|
|
0.17
|
%
|
|
0.18
|
%
|
|
0.18
|
%
|
As a percentage of
total gross nonperforming loans
|
|
51.21
|
|
|
54.85
|
|
|
43.35
|
|
Allowance for loan
losses for total gross performing loans
|
|
$
|
250,682
|
|
|
$
|
248,821
|
|
|
$
|
235,721
|
|
As a percentage of
total gross loans
|
|
0.80
|
%
|
|
0.85
|
%
|
|
0.85
|
%
|
As a percentage of
total gross performing loans
|
|
0.81
|
|
|
0.85
|
|
|
0.86
|
|
Total gross
loans
|
|
$
|
31,229,003
|
|
|
$
|
29,370,403
|
|
|
$
|
27,668,829
|
|
Total gross
performing loans
|
|
31,124,094
|
|
|
29,273,651
|
|
|
27,553,504
|
|
Allowance for
unfunded credit commitments (1)
|
|
63,108
|
|
|
62,664
|
|
|
51,808
|
|
As a percentage of
total unfunded credit commitments
|
|
0.28
|
%
|
|
0.30
|
%
|
|
0.28
|
%
|
Total unfunded
credit commitments (2)
|
|
$
|
22,274,418
|
|
|
$
|
20,952,069
|
|
|
$
|
18,539,514
|
|
______________________
|
(1)
|
The "allowance 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,
2019
|
|
June 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
Sweep money market
funds
|
|
$
|
40,321
|
|
|
$
|
40,017
|
|
|
$
|
34,556
|
|
|
$
|
40,048
|
|
|
$
|
30,284
|
|
Client investment
assets under management (2)
|
|
42,834
|
|
|
40,825
|
|
|
36,541
|
|
|
40,969
|
|
|
33,561
|
|
Repurchase
agreements
|
|
9,670
|
|
|
8,810
|
|
|
8,464
|
|
|
8,947
|
|
|
7,905
|
|
Total average client
investment funds
|
|
$
|
92,825
|
|
|
$
|
89,652
|
|
|
$
|
79,561
|
|
|
$
|
89,964
|
|
|
$
|
71,750
|
|
Period-end
Off-Balance Sheet Client Investment
Funds(1)
|
|
|
|
Period-end
balances at
|
(Dollars in
millions)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
Sweep money market
funds
|
|
$
|
42,022
|
|
|
$
|
40,008
|
|
|
$
|
40,686
|
|
|
$
|
38,348
|
|
|
$
|
36,067
|
|
Client investment
assets under management (2)
|
|
44,886
|
|
|
41,614
|
|
|
39,376
|
|
|
39,214
|
|
|
37,649
|
|
Repurchase
agreements
|
|
9,564
|
|
|
9,873
|
|
|
8,120
|
|
|
8,422
|
|
|
8,369
|
|
Total period-end
client investment funds
|
|
$
|
96,472
|
|
|
$
|
91,495
|
|
|
$
|
88,182
|
|
|
$
|
85,984
|
|
|
$
|
82,085
|
|
______________________
|
(1)
|
Off-Balance sheet
client investment funds are maintained at third-party financial
institutions.
|
(2)
|
These funds represent
investments in third-party money market mutual funds and fixed
income securities managed by SVB Asset Management.
|
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 (including, but not limited to, non-GAAP core fee
income, non-GAAP core fee income including investment banking
revenue and commissions, non-GAAP noninterest income, non-GAAP net
gains on investment securities, non-GAAP non-marketable and other
equity securities, non-GAAP noninterest expense and non-GAAP
financial ratios) of financial performance. These supplemental
performance measures may vary from, and may not be comparable to,
similarly titled measures by other companies in our industry.
Non-GAAP financial measures are not in accordance with, or an
alternative for, GAAP. Generally, a non-GAAP financial measure is a
numerical measure of a company's performance that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. A non-GAAP financial measure may also be a
financial metric that is not required by GAAP or other applicable
requirement.
We believe 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. We believe these
measures are frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in our
industry. 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.
Additionally, from time to time, we may make reference to the
non-GAAP financial metric of Core EPS in our earnings call and
other investor presentations. Non-GAAP Core EPS consists of our net
income available to common stockholders less gains or losses on
investment securities and equity warrant assets, net of tax,
divided by our diluted weighted average common shares outstanding.
Our management believes this measure to be a useful assessment of
our performance as it relates to our core business because it
excludes certain financial items where performance is typically
subject to market or other conditions beyond our control. A
reconciliation of Core EPS to the closest corresponding GAAP
measure is not available with respect to future goals due to our
inability to provide a quantitative reconciliation to such
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 certain SVB Capital funds. 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/certain financial line items
include only the portion of income or loss related to our ownership
interest.
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 calculations that are
otherwise required under GAAP, including:
- Non-GAAP core fee income including investment banking revenue
and commissions — 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 net gains or losses on investment securities,
net gains or losses on equity warrant assets and other noninterest
income items.
- 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,
as well as our investment banking revenue and commissions, and
includes client investment fees, foreign exchange fees, credit card
fees, deposit service charges, lending related fees and letters of
credit and standby letters of credit fees. We do not provide our
outlook for the expected full year results for these excluded
items, which include net gains or losses on investment securities,
net gains or losses on equity warrant assets, investment banking
revenue, commissions and other noninterest income items.
- Non-GAAP core operating efficiency ratio — This ratio excludes
income and expenses related to SVB Leerink and certain financial
items where performance is typically subject to market or other
conditions beyond our control. It is calculated by dividing
noninterest expense after adjusting for noninterest expense
attributable to SVB Leerink by total revenue after adjusting for
net interest income attributable to SVB Leerink, net gains or
losses on investment securities and equity warrant assets,
investment banking revenue and commissions. Additionally,
noninterest expense and total revenue are adjusted for income or
losses and expenses attributable to noncontrolling interests and
adjustments to net interest income for a taxable equivalent basis.
This ratio is used by management to evaluate the operating
efficiency of our core banking business.
- 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. Risk-based capital guidelines require a minimum level of
capital as a percentage of risk-weighted assets. Risk-weighted
assets are calculated by assigning assets and off-balance sheet
items to broad risk categories. 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, if any.
|
|
Three months
ended
|
|
Nine months
ended
|
Non-GAAP core fee
income including investment banking revenue and commissions and
non-GAAP core fee income (Dollars in thousands)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
GAAP noninterest
income
|
|
$
|
294,009
|
|
|
$
|
333,750
|
|
|
$
|
280,376
|
|
|
$
|
186,707
|
|
|
$
|
210,070
|
|
|
$
|
908,135
|
|
|
$
|
558,277
|
|
Less: gains on
investment securities, net
|
|
29,849
|
|
|
47,698
|
|
|
29,028
|
|
|
10,729
|
|
|
32,193
|
|
|
106,575
|
|
|
77,365
|
|
Less: net gains on
equity warrant assets
|
|
37,561
|
|
|
48,347
|
|
|
21,305
|
|
|
16,749
|
|
|
34,141
|
|
|
107,213
|
|
|
72,393
|
|
Less: other
noninterest income
|
|
13,631
|
|
|
17,245
|
|
|
11,897
|
|
|
13,187
|
|
|
12,022
|
|
|
42,773
|
|
|
38,671
|
|
Non-GAAP core fee
income including investment banking revenue and
commissions
|
|
$
|
212,968
|
|
|
$
|
220,460
|
|
|
$
|
218,146
|
|
|
$
|
146,042
|
|
|
$
|
131,714
|
|
|
$
|
651,574
|
|
|
$
|
369,848
|
|
Less: investment
banking revenue
|
|
38,516
|
|
|
48,694
|
|
|
49,795
|
|
|
—
|
|
|
—
|
|
|
137,005
|
|
|
—
|
|
Less:
commissions
|
|
12,275
|
|
|
14,429
|
|
|
14,108
|
|
|
—
|
|
|
—
|
|
|
40,812
|
|
|
—
|
|
Non-GAAP core fee
income
|
|
$
|
162,177
|
|
|
$
|
157,337
|
|
|
$
|
154,243
|
|
|
$
|
146,042
|
|
|
$
|
131,714
|
|
|
$
|
473,757
|
|
|
$
|
369,848
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
Non-GAAP net gains
on investment securities, net of noncontrolling interests (Dollars
in thousands)
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
GAAP net gains on
investment securities
|
|
$
|
29,849
|
|
|
$
|
47,698
|
|
|
$
|
29,028
|
|
|
$
|
10,729
|
|
|
$
|
32,193
|
|
|
$
|
106,575
|
|
|
$
|
77,365
|
|
Less: income
attributable to noncontrolling interests, including carried
interest allocation
|
|
14,640
|
|
|
18,598
|
|
|
3,436
|
|
|
8,965
|
|
|
6,641
|
|
|
36,674
|
|
|
29,218
|
|
Non-GAAP net gains on
investment securities, net of noncontrolling interests
|
|
$
|
15,209
|
|
|
$
|
29,100
|
|
|
$
|
25,592
|
|
|
$
|
1,764
|
|
|
$
|
25,552
|
|
|
$
|
69,901
|
|
|
$
|
48,147
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
Non-GAAP core
operating efficiency ratio (Dollars in thousands, except
ratios)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
GAAP noninterest
expense
|
|
$
|
391,324
|
|
|
$
|
383,522
|
|
|
$
|
365,664
|
|
|
$
|
307,592
|
|
|
$
|
309,445
|
|
|
$
|
1,140,510
|
|
|
$
|
880,601
|
|
Less: expense
attributable to noncontrolling interests
|
|
145
|
|
|
168
|
|
|
379
|
|
|
173
|
|
|
154
|
|
|
692
|
|
|
349
|
|
Non-GAAP noninterest
expense, net of noncontrolling interests
|
|
391,179
|
|
|
383,354
|
|
|
365,285
|
|
|
307,419
|
|
|
309,291
|
|
|
1,139,818
|
|
|
880,252
|
|
Less: expense
attributable to SVB Leerink
|
|
55,200
|
|
|
61,935
|
|
|
60,540
|
|
|
—
|
|
|
—
|
|
|
177,675
|
|
|
—
|
|
Non-GAAP noninterest
expense, net of noncontrolling interests and SVB Leerink
|
|
$
|
335,979
|
|
|
$
|
321,419
|
|
|
$
|
304,745
|
|
|
$
|
307,419
|
|
|
$
|
309,291
|
|
|
$
|
962,143
|
|
|
$
|
880,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net interest
income
|
|
$
|
520,644
|
|
|
$
|
529,403
|
|
|
$
|
512,886
|
|
|
$
|
514,460
|
|
|
$
|
493,222
|
|
|
$
|
1,562,933
|
|
|
$
|
1,379,528
|
|
Adjustments for
taxable equivalent basis
|
|
2,957
|
|
|
2,905
|
|
|
2,907
|
|
|
2,952
|
|
|
2,858
|
|
|
8,769
|
|
|
6,249
|
|
Non-GAAP taxable
equivalent net interest income
|
|
523,601
|
|
|
532,308
|
|
|
515,793
|
|
|
517,412
|
|
|
496,080
|
|
|
1,571,702
|
|
|
1,385,777
|
|
Less: income
attributable to noncontrolling interests
|
|
14
|
|
|
16
|
|
|
11
|
|
|
1
|
|
|
10
|
|
|
41
|
|
|
29
|
|
Non-GAAP taxable
equivalent net interest income, net of noncontrolling
interests
|
|
523,587
|
|
|
532,292
|
|
|
515,782
|
|
|
517,411
|
|
|
496,070
|
|
|
1,571,661
|
|
|
1,385,748
|
|
Less: net interest
income attributable to SVB Leerink
|
|
277
|
|
|
242
|
|
|
442
|
|
|
—
|
|
|
—
|
|
|
961
|
|
|
—
|
|
Non-GAAP taxable
equivalent net interest income, net of noncontrolling interests and
SVB Leerink
|
|
$
|
523,310
|
|
|
$
|
532,050
|
|
|
$
|
515,340
|
|
|
$
|
517,411
|
|
|
$
|
496,070
|
|
|
$
|
1,570,700
|
|
|
$
|
1,385,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP noninterest
income
|
|
$
|
294,009
|
|
|
$
|
333,750
|
|
|
$
|
280,376
|
|
|
$
|
186,707
|
|
|
$
|
210,070
|
|
|
$
|
908,135
|
|
|
$
|
558,277
|
|
Less: income
attributable to noncontrolling interests, including carried
interest allocation
|
|
14,568
|
|
|
18,736
|
|
|
3,248
|
|
|
8,839
|
|
|
6,692
|
|
|
36,552
|
|
|
29,161
|
|
Non-GAAP noninterest
income, net of noncontrolling interests
|
|
279,441
|
|
|
315,014
|
|
|
277,128
|
|
|
177,868
|
|
|
203,378
|
|
|
871,583
|
|
|
529,116
|
|
Less: Non-GAAP net
gains on investment securities, net of noncontrolling
interests
|
|
15,209
|
|
|
29,100
|
|
|
25,592
|
|
|
1,764
|
|
|
25,552
|
|
|
69,901
|
|
|
48,147
|
|
Less: net gains on
equity warrant assets
|
|
37,561
|
|
|
48,347
|
|
|
21,305
|
|
|
16,749
|
|
|
34,141
|
|
|
107,213
|
|
|
72,393
|
|
Less: investment
banking revenue
|
|
38,516
|
|
|
48,694
|
|
|
49,795
|
|
|
—
|
|
|
—
|
|
|
137,005
|
|
|
—
|
|
Less:
commissions
|
|
12,275
|
|
|
14,429
|
|
|
14,108
|
|
|
—
|
|
|
—
|
|
|
40,812
|
|
|
—
|
|
Non-GAAP noninterest
income, net of noncontrolling interests and net of net gains on
investment securities, net gains on equity warrant assets,
investment banking revenue and commissions
|
|
$
|
175,880
|
|
|
$
|
174,444
|
|
|
$
|
166,328
|
|
|
$
|
159,355
|
|
|
$
|
143,685
|
|
|
$
|
516,652
|
|
|
$
|
408,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total
revenue
|
|
$
|
814,653
|
|
|
$
|
863,153
|
|
|
$
|
793,262
|
|
|
$
|
701,167
|
|
|
$
|
703,292
|
|
|
$
|
2,471,068
|
|
|
$
|
1,937,805
|
|
Non-GAAP taxable
equivalent revenue, net of noncontrolling interests, SVB Leerink,
net of net gains on investment securities, net gains on equity
warrant assets, investment banking revenue and
commissions
|
|
$
|
699,190
|
|
|
$
|
706,494
|
|
|
$
|
681,668
|
|
|
$
|
676,766
|
|
|
$
|
639,755
|
|
|
$
|
2,087,352
|
|
|
$
|
1,794,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
efficiency ratio
|
|
48.04
|
%
|
|
44.43
|
%
|
|
46.10
|
%
|
|
43.87
|
%
|
|
44.00
|
%
|
|
46.15
|
%
|
|
45.44
|
%
|
Non-GAAP core
operating efficiency ratio
|
|
48.05
|
|
|
45.49
|
|
|
44.71
|
|
|
45.42
|
|
|
48.35
|
|
|
46.09
|
|
|
49.06
|
|
|
|
Period-end
balances at
|
Non-GAAP
non-marketable and other equity securities, net of noncontrolling
interests (Dollars in thousands)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
GAAP non-marketable
and other equity securities
|
|
$
|
1,150,094
|
|
|
$
|
1,079,749
|
|
|
$
|
974,979
|
|
|
$
|
941,104
|
|
|
$
|
896,249
|
|
Less: amounts
attributable to noncontrolling interests
|
|
142,182
|
|
|
148,270
|
|
|
134,130
|
|
|
134,962
|
|
|
130,995
|
|
Non-GAAP
non-marketable and other equity securities, net of noncontrolling
interests
|
|
$
|
1,007,912
|
|
|
$
|
931,479
|
|
|
$
|
840,849
|
|
|
$
|
806,142
|
|
|
$
|
765,254
|
|
|
|
Period-end
balances at
|
SVB Financial
Group tangible common equity, tangible assets and risk-weighted
assets (Dollars in thousands, except ratios)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
GAAP SVBFG
stockholders' equity
|
|
$
|
5,890,680
|
|
|
$
|
5,554,043
|
|
|
$
|
5,342,773
|
|
|
$
|
5,116,209
|
|
|
$
|
4,924,369
|
|
Less: intangible
assets
|
|
190,111
|
|
|
192,981
|
|
|
193,219
|
|
|
—
|
|
|
—
|
|
Tangible common
equity
|
|
$
|
5,700,569
|
|
|
$
|
5,361,062
|
|
|
$
|
5,149,554
|
|
|
$
|
5,116,209
|
|
|
$
|
4,924,369
|
|
GAAP total
assets
|
|
$
|
68,231,233
|
|
|
$
|
63,773,739
|
|
|
$
|
60,160,285
|
|
|
$
|
56,927,979
|
|
|
$
|
58,139,734
|
|
Less: intangible
assets
|
|
190,111
|
|
|
192,981
|
|
|
193,219
|
|
|
—
|
|
|
—
|
|
Tangible
assets
|
|
$
|
68,041,122
|
|
|
$
|
63,580,758
|
|
|
$
|
59,967,066
|
|
|
$
|
56,927,979
|
|
|
$
|
58,139,734
|
|
Risk-weighted
assets
|
|
$
|
43,712,495
|
|
|
$
|
40,843,334
|
|
|
$
|
40,048,892
|
|
|
$
|
38,527,853
|
|
|
$
|
37,889,139
|
|
Tangible common
equity to tangible assets
|
|
8.38
|
%
|
|
8.43
|
%
|
|
8.59
|
%
|
|
8.99
|
%
|
|
8.47
|
%
|
Tangible common
equity to risk-weighted assets
|
|
13.04
|
|
|
13.13
|
|
|
12.86
|
|
|
13.28
|
|
|
13.00
|
|
|
|
Period-end
balances at
|
Silicon Valley
Bank tangible common equity, tangible assets and risk-weighted
assets (Dollars in thousands, except ratios)
|
|
September 30,
2019
|
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
Tangible common
equity
|
|
$
|
4,918,767
|
|
|
$
|
4,936,520
|
|
|
$
|
4,696,564
|
|
|
$
|
4,554,814
|
|
|
$
|
4,260,685
|
|
Tangible
assets
|
|
$
|
66,824,088
|
|
|
$
|
62,380,814
|
|
|
$
|
58,774,326
|
|
|
$
|
56,047,134
|
|
|
$
|
57,245,029
|
|
Risk-weighted
assets
|
|
$
|
41,597,959
|
|
|
$
|
38,821,244
|
|
|
$
|
38,132,316
|
|
|
$
|
37,104,080
|
|
|
$
|
36,424,091
|
|
Tangible common
equity to tangible assets
|
|
7.36
|
%
|
|
7.91
|
%
|
|
7.99
|
%
|
|
8.13
|
%
|
|
7.44
|
%
|
Tangible common
equity to risk-weighted assets
|
|
11.82
|
|
|
12.72
|
|
|
12.32
|
|
|
12.28
|
|
|
11.70
|
|
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SOURCE SVB Financial Group