x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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91-1962278
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3003 Tasman Drive, Santa Clara, California
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95054-1191
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(Address of principal executive offices)
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(Zip Code)
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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(Dollars in thousands, except par value and share data)
|
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March 31,
2014 |
|
December 31,
2013 |
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,862,464
|
|
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$
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1,538,779
|
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Available-for-sale securities
|
|
12,843,099
|
|
|
11,986,821
|
|
||
Non-marketable and other securities
|
|
1,770,456
|
|
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1,595,494
|
|
||
Investment securities
|
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14,613,555
|
|
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13,582,315
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Loans, net of unearned income
|
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10,833,908
|
|
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10,906,386
|
|
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Allowance for loan losses
|
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(123,542
|
)
|
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(142,886
|
)
|
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Net loans
|
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10,710,366
|
|
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10,763,500
|
|
||
Premises and equipment, net of accumulated depreciation and amortization
|
|
66,123
|
|
|
67,485
|
|
||
Accrued interest receivable and other assets
|
|
458,531
|
|
|
465,110
|
|
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Total assets
|
|
$
|
29,711,039
|
|
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$
|
26,417,189
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Liabilities and total equity
|
|
|
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|
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Liabilities:
|
|
|
|
|
||||
Noninterest-bearing demand deposits
|
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$
|
18,314,830
|
|
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$
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15,894,360
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Interest-bearing deposits
|
|
7,162,075
|
|
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6,578,619
|
|
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Total deposits
|
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25,476,905
|
|
|
22,472,979
|
|
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Short-term borrowings
|
|
4,810
|
|
|
5,080
|
|
||
Other liabilities
|
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407,573
|
|
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404,586
|
|
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Long-term debt
|
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454,770
|
|
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455,216
|
|
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Total liabilities
|
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26,344,058
|
|
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23,337,861
|
|
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Commitments and contingencies (Note 11 and Note 14)
|
|
|
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SVBFG stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized;
no shares issued and outstanding |
|
—
|
|
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—
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Common stock, $0.001 par value, 150,000,000 shares authorized; 45,934,521 shares and 45,800,418 shares outstanding, respectively
|
|
46
|
|
|
46
|
|
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Additional paid-in capital
|
|
642,311
|
|
|
624,256
|
|
||
Retained earnings
|
|
1,482,033
|
|
|
1,390,732
|
|
||
Accumulated other comprehensive loss
|
|
(30,390
|
)
|
|
(48,764
|
)
|
||
Total SVBFG stockholders’ equity
|
|
2,094,000
|
|
|
1,966,270
|
|
||
Noncontrolling interests
|
|
1,272,981
|
|
|
1,113,058
|
|
||
Total equity
|
|
3,366,981
|
|
|
3,079,328
|
|
||
Total liabilities and total equity
|
|
$
|
29,711,039
|
|
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$
|
26,417,189
|
|
|
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Three months ended March 31,
|
||||||
(Dollars in thousands, except per share amounts)
|
|
2014
|
|
2013
|
||||
Interest income:
|
|
|
|
|
||||
Loans
|
|
$
|
148,172
|
|
|
$
|
123,744
|
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Available-for-sale securities:
|
|
|
|
|
||||
Taxable
|
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54,420
|
|
|
45,752
|
|
||
Non-taxable
|
|
796
|
|
|
799
|
|
||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities
|
|
1,636
|
|
|
719
|
|
||
Total interest income
|
|
205,024
|
|
|
171,014
|
|
||
Interest expense:
|
|
|
|
|
||||
Deposits
|
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2,904
|
|
|
2,051
|
|
||
Borrowings
|
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5,792
|
|
|
5,794
|
|
||
Total interest expense
|
|
8,696
|
|
|
7,845
|
|
||
Net interest income
|
|
196,328
|
|
|
163,169
|
|
||
Provision for loan losses
|
|
494
|
|
|
5,813
|
|
||
Net interest income after provision for loan losses
|
|
195,834
|
|
|
157,356
|
|
||
Noninterest income:
|
|
|
|
|
||||
Gains on investment securities, net
|
|
223,912
|
|
|
27,438
|
|
||
Gains on derivative instruments, net
|
|
24,167
|
|
|
10,292
|
|
||
Foreign exchange fees
|
|
17,196
|
|
|
14,196
|
|
||
Credit card fees
|
|
10,282
|
|
|
7,448
|
|
||
Deposit service charges
|
|
9,607
|
|
|
8,793
|
|
||
Lending related fees
|
|
6,303
|
|
|
3,974
|
|
||
Letters of credit and standby letters of credit income
|
|
4,140
|
|
|
3,435
|
|
||
Client investment fees
|
|
3,418
|
|
|
3,475
|
|
||
Other
|
|
11,200
|
|
|
(447
|
)
|
||
Total noninterest income
|
|
310,225
|
|
|
78,604
|
|
||
Noninterest expense:
|
|
|
|
|
||||
Compensation and benefits
|
|
102,507
|
|
|
88,704
|
|
||
Professional services
|
|
21,189
|
|
|
17,160
|
|
||
Premises and equipment
|
|
11,582
|
|
|
10,725
|
|
||
Business development and travel
|
|
10,194
|
|
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8,272
|
|
||
Net occupancy
|
|
7,320
|
|
|
5,767
|
|
||
FDIC assessments
|
|
4,128
|
|
|
3,382
|
|
||
Correspondent bank fees
|
|
3,203
|
|
|
3,055
|
|
||
Provision for unfunded credit commitments
|
|
1,123
|
|
|
2,014
|
|
||
Other
|
|
11,190
|
|
|
9,935
|
|
||
Total noninterest expense
|
|
172,436
|
|
|
149,014
|
|
||
Income before income tax expense
|
|
333,623
|
|
|
86,946
|
|
||
Income tax expense
|
|
58,917
|
|
|
26,401
|
|
||
Net income before noncontrolling interests
|
|
274,706
|
|
|
60,545
|
|
||
Net income attributable to noncontrolling interests
|
|
(183,405
|
)
|
|
(19,654
|
)
|
||
Net income available to common stockholders
|
|
$
|
91,301
|
|
|
$
|
40,891
|
|
Earnings per common share—basic
|
|
$
|
1.99
|
|
|
$
|
0.91
|
|
Earnings per common share—diluted
|
|
1.95
|
|
|
0.90
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Net income before noncontrolling interests
|
|
$
|
274,706
|
|
|
$
|
60,545
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Change in cumulative translation Income (loss):
|
|
|
|
|
||||
Foreign currency translation income (loss)
|
|
1,464
|
|
|
(826
|
)
|
||
Related tax (expense) benefit
|
|
(578
|
)
|
|
297
|
|
||
Change in unrealized gains (losses) on available-for-sale securities:
|
|
|
|
|
||||
Unrealized holding gains (losses)
|
|
29,329
|
|
|
(22,102
|
)
|
||
Related tax (expense) benefit
|
|
(11,805
|
)
|
|
9,666
|
|
||
Reclassification adjustment for (gains) losses included in net income
|
|
(60
|
)
|
|
45
|
|
||
Related tax expense (benefit)
|
|
24
|
|
|
(18
|
)
|
||
Other comprehensive income (loss), net of tax
|
|
18,374
|
|
|
(12,938
|
)
|
||
Comprehensive income
|
|
293,080
|
|
|
47,607
|
|
||
Comprehensive income attributable to noncontrolling interests
|
|
(183,405
|
)
|
|
(19,654
|
)
|
||
Comprehensive income attributable to SVBFG
|
|
$
|
109,675
|
|
|
$
|
27,953
|
|
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
Total SVBFG
Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||
(Dollars in thousands)
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2012
|
|
44,627,182
|
|
|
$
|
45
|
|
|
$
|
547,079
|
|
|
$
|
1,174,878
|
|
|
$
|
108,553
|
|
|
$
|
1,830,555
|
|
|
$
|
774,678
|
|
|
$
|
2,605,233
|
|
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
268,274
|
|
|
—
|
|
|
12,895
|
|
|
—
|
|
|
—
|
|
|
12,895
|
|
|
—
|
|
|
12,895
|
|
|||||||
Common stock issued under ESOP
|
|
74,946
|
|
|
—
|
|
|
5,166
|
|
|
—
|
|
|
—
|
|
|
5,166
|
|
|
—
|
|
|
5,166
|
|
|||||||
Income tax expense from stock options exercised, vesting of restricted stock and other
|
|
—
|
|
|
—
|
|
|
(637
|
)
|
|
—
|
|
|
—
|
|
|
(637
|
)
|
|
—
|
|
|
(637
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40,891
|
|
|
—
|
|
|
40,891
|
|
|
19,654
|
|
|
60,545
|
|
|||||||
Capital calls and (distributions), net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,493
|
)
|
|
(14,493
|
)
|
|||||||
Net change in unrealized gains on available-for-sale securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,409
|
)
|
|
(12,409
|
)
|
|
—
|
|
|
(12,409
|
)
|
|||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(529
|
)
|
|
(529
|
)
|
|
—
|
|
|
(529
|
)
|
|||||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
6,286
|
|
|
—
|
|
|
—
|
|
|
6,286
|
|
|
—
|
|
|
6,286
|
|
|||||||
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Balance at March 31, 2013
|
|
44,970,402
|
|
|
$
|
45
|
|
|
$
|
570,789
|
|
|
$
|
1,215,770
|
|
|
$
|
95,615
|
|
|
$
|
1,882,219
|
|
|
$
|
779,839
|
|
|
$
|
2,662,058
|
|
Balance at December 31, 2013
|
|
45,800,418
|
|
|
$
|
46
|
|
|
$
|
624,256
|
|
|
$
|
1,390,732
|
|
|
$
|
(48,764
|
)
|
|
$
|
1,966,270
|
|
|
$
|
1,113,058
|
|
|
$
|
3,079,328
|
|
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
103,341
|
|
|
—
|
|
|
4,254
|
|
|
—
|
|
|
—
|
|
|
4,254
|
|
|
—
|
|
|
4,254
|
|
|||||||
Common stock issued under ESOP
|
|
30,762
|
|
|
—
|
|
|
3,890
|
|
|
—
|
|
|
—
|
|
|
3,890
|
|
|
—
|
|
|
3,890
|
|
|||||||
Income tax benefit from stock options exercised, vesting of restricted stock and other
|
|
—
|
|
|
—
|
|
|
1,996
|
|
|
—
|
|
|
—
|
|
|
1,996
|
|
|
—
|
|
|
1,996
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
91,301
|
|
|
—
|
|
|
91,301
|
|
|
183,405
|
|
|
274,706
|
|
|||||||
Capital calls and (distributions), net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,482
|
)
|
|
(23,482
|
)
|
|||||||
Net change in unrealized losses on available-for-sale securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,488
|
|
|
17,488
|
|
|
—
|
|
|
17,488
|
|
|||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
886
|
|
|
886
|
|
|
—
|
|
|
886
|
|
|||||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
7,892
|
|
|
—
|
|
|
—
|
|
|
7,892
|
|
|
—
|
|
|
7,892
|
|
|||||||
Other, net
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||||
Balance at March 31, 2014
|
|
45,934,521
|
|
|
$
|
46
|
|
|
$
|
642,311
|
|
|
$
|
1,482,033
|
|
|
$
|
(30,390
|
)
|
|
$
|
2,094,000
|
|
|
$
|
1,272,981
|
|
|
$
|
3,366,981
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income before noncontrolling interests
|
|
$
|
274,706
|
|
|
$
|
60,545
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Provision for loan losses
|
|
494
|
|
|
5,813
|
|
||
Provision for unfunded credit commitments
|
|
1,123
|
|
|
2,014
|
|
||
Changes in fair values of derivatives, net
|
|
13,356
|
|
|
757
|
|
||
Gains on investment securities, net
|
|
(223,912
|
)
|
|
(27,438
|
)
|
||
Depreciation and amortization
|
|
9,459
|
|
|
8,479
|
|
||
Amortization of premiums and discounts on available-for-sale securities, net
|
|
7,541
|
|
|
8,348
|
|
||
Tax expense from stock exercises
|
|
—
|
|
|
(1,247
|
)
|
||
Amortization of share-based compensation
|
|
7,078
|
|
|
5,826
|
|
||
Amortization of deferred loan fees
|
|
(20,502
|
)
|
|
(15,040
|
)
|
||
Deferred income tax expense (benefit)
|
|
15,783
|
|
|
(19
|
)
|
||
Losses from the write-off of premises and equipment
|
|
—
|
|
|
363
|
|
||
Changes in other assets and liabilities:
|
|
|
|
|
||||
Accrued interest receivable and payable, net
|
|
(6,604
|
)
|
|
(4,735
|
)
|
||
Accounts receivable and payable, net
|
|
(7,885
|
)
|
|
6,220
|
|
||
Income tax payable and receivable, net
|
|
25,159
|
|
|
6,236
|
|
||
Accrued compensation
|
|
(74,687
|
)
|
|
(62,375
|
)
|
||
Foreign exchange spot contracts, net
|
|
22,634
|
|
|
26,534
|
|
||
Other, net
|
|
1,821
|
|
|
(21,325
|
)
|
||
Net cash provided by (used for) operating activities
|
|
45,564
|
|
|
(1,044
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of available-for-sale securities
|
|
(1,531,045
|
)
|
|
(219,987
|
)
|
||
Proceeds from sales of available-for-sale securities
|
|
2,097
|
|
|
581
|
|
||
Proceeds from maturities and pay downs of available-for-sale securities
|
|
694,243
|
|
|
653,764
|
|
||
Purchases of non-marketable and other securities (cost and equity method accounting)
|
|
(5,398
|
)
|
|
(5,112
|
)
|
||
Proceeds from sales and distributions of non-marketable and other securities (cost and equity method accounting)
|
|
19,053
|
|
|
7,942
|
|
||
Purchases of non-marketable and other securities (fair value accounting)
|
|
(45,125
|
)
|
|
(30,342
|
)
|
||
Proceeds from sales and distributions of non-marketable and other securities (fair value accounting)
|
|
92,558
|
|
|
21,748
|
|
||
Net increase in loans
|
|
66,086
|
|
|
108,971
|
|
||
Proceeds from recoveries of charged-off loans
|
|
1,312
|
|
|
1,367
|
|
||
Purchases of premises and equipment
|
|
(5,974
|
)
|
|
(6,606
|
)
|
||
Net cash (used for) provided by investing activities
|
|
(712,193
|
)
|
|
532,326
|
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net increase in deposits
|
|
3,003,926
|
|
|
133,456
|
|
||
Decrease in short-term borrowings
|
|
(270
|
)
|
|
(158,650
|
)
|
||
Capital contributions from noncontrolling interests, net of distributions
|
|
(23,482
|
)
|
|
(14,493
|
)
|
||
Tax benefit from stock exercises
|
|
1,996
|
|
|
610
|
|
||
Proceeds from issuance of common stock, ESPP, and ESOP
|
|
8,144
|
|
|
18,061
|
|
||
Net cash provided by (used for) financing activities
|
|
2,990,314
|
|
|
(21,016
|
)
|
||
Net increase in cash and cash equivalents
|
|
2,323,685
|
|
|
510,266
|
|
||
Cash and cash equivalents at beginning of period
|
|
1,538,779
|
|
|
1,008,983
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
3,862,464
|
|
|
$
|
1,519,249
|
|
Supplemental disclosures:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
12,688
|
|
|
$
|
12,372
|
|
Income taxes
|
|
15,486
|
|
|
19,318
|
|
||
Noncash items during the period:
|
|
|
|
|
||||
Changes in unrealized gains and losses on available-for-sale securities, net of tax
|
|
$
|
17,488
|
|
|
$
|
(12,409
|
)
|
1.
|
Basis of Presentation
|
1.
|
We have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance;
|
2.
|
The aggregate indirect and direct variable interests held by the Company have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and,
|
3.
|
Qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE.
|
2.
|
Stockholders’ Equity and EPS
|
|
|
Three months ended March 31,
|
||||||
(Dollars and shares in thousands, except per share amounts)
|
|
2014
|
|
2013
|
||||
Numerator:
|
|
|
|
|
||||
Net income available to common stockholders
|
|
$
|
91,301
|
|
|
$
|
40,891
|
|
Denominator:
|
|
|
|
|
||||
Weighted average common shares outstanding-basic
|
|
45,866
|
|
|
44,802
|
|
||
Weighted average effect of dilutive securities:
|
|
|
|
|
||||
Stock options and ESPP
|
|
566
|
|
|
402
|
|
||
Restricted stock units
|
|
293
|
|
|
189
|
|
||
Denominator for diluted calculation
|
|
46,725
|
|
|
45,393
|
|
||
Earnings per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.99
|
|
|
$
|
0.91
|
|
Diluted
|
|
$
|
1.95
|
|
|
$
|
0.90
|
|
|
|
Three months ended March 31,
|
||||
(Shares in thousands)
|
|
2014
|
|
2013
|
||
Stock options
|
|
6
|
|
|
708
|
|
Restricted stock units
|
|
1
|
|
|
—
|
|
Total
|
|
7
|
|
|
708
|
|
|
|
|
|
Three months ended March 31
|
||||||
(Dollars in thousands)
|
|
Income Statement Location
|
|
2014
|
|
2013
|
||||
Reclassification adjustment for (gains) losses included in net income
|
|
Gains on investment securities, net
|
|
$
|
(60
|
)
|
|
$
|
45
|
|
Related tax expense (benefit)
|
|
Income tax expense
|
|
24
|
|
|
(18
|
)
|
||
Total reclassification adjustment for (gains) losses included in net income, net of tax
|
|
|
|
$
|
(36
|
)
|
|
$
|
27
|
|
3.
|
Share-Based Compensation
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Share-based compensation expense
|
|
$
|
7,078
|
|
|
$
|
5,826
|
|
Income tax benefit related to share-based compensation expense
|
|
(2,160
|
)
|
|
(1,603
|
)
|
(Dollars in thousands)
|
|
Unrecognized
Expense
|
|
Average
Expected
Recognition
Period - in Years
|
||
Stock options
|
|
$
|
13,315
|
|
|
2.39
|
Restricted stock units
|
|
26,893
|
|
|
2.39
|
|
Total unrecognized share-based compensation expense
|
|
$
|
40,208
|
|
|
|
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Life in Years
|
|
Aggregate
Intrinsic Value
of In-The-
Money
Options
|
|||||
Outstanding at December 31, 2013
|
|
1,514,159
|
|
|
$
|
55.27
|
|
|
|
|
|
||
Granted
|
|
9,600
|
|
|
116.05
|
|
|
|
|
|
|||
Exercised
|
|
(99,429
|
)
|
|
44.57
|
|
|
|
|
|
|||
Forfeited
|
|
(5,957
|
)
|
|
66.22
|
|
|
|
|
|
|||
Outstanding at March 31, 2014
|
|
1,418,373
|
|
|
56.38
|
|
|
4.20
|
|
$
|
102,687,693
|
|
|
Vested and expected to vest at March 31, 2014
|
|
1,380,441
|
|
|
56.05
|
|
|
4.16
|
|
100,401,661
|
|
||
Exercisable at March 31, 2014
|
|
587,639
|
|
|
44.59
|
|
|
2.96
|
|
49,473,911
|
|
|
|
Shares
|
|
Weighted
Average
Grant Date Fair
Value
|
|||
Nonvested at December 31, 2013
|
|
682,347
|
|
|
$
|
65.93
|
|
Granted
|
|
3,610
|
|
|
116.78
|
|
|
Vested
|
|
(5,462
|
)
|
|
54.57
|
|
|
Forfeited
|
|
(5,033
|
)
|
|
65.31
|
|
|
Nonvested at March 31, 2014
|
|
675,462
|
|
|
66.30
|
|
4.
|
Cash and Cash Equivalents
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Cash and due from banks (1)
|
|
$
|
3,723,034
|
|
|
$
|
1,349,688
|
|
Securities purchased under agreements to resell (2)
|
|
117,036
|
|
|
172,989
|
|
||
Other short-term investment securities
|
|
22,394
|
|
|
16,102
|
|
||
Total cash and cash equivalents
|
|
$
|
3,862,464
|
|
|
$
|
1,538,779
|
|
|
(1)
|
At
March 31, 2014
and
December 31, 2013
,
$3 billion
and
$715 million
, respectively, of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate, and interest-earning deposits in other financial institutions were
$391 million
and
$300 million
, respectively.
|
(2)
|
At
March 31, 2014
and
December 31, 2013
, securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of
$119 million
and
$176 million
, respectively. None of these securities received as collateral were sold or repledged as of
March 31, 2014
or
December 31, 2013
.
|
5.
|
Investment Securities
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
||||||||||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. treasury securities
|
|
$
|
688,253
|
|
|
$
|
—
|
|
|
$
|
(4,734
|
)
|
|
$
|
683,519
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. agency debentures
|
|
4,106,269
|
|
|
39,175
|
|
|
(26,808
|
)
|
|
4,118,636
|
|
|
4,344,652
|
|
|
41,365
|
|
|
(40,785
|
)
|
|
4,345,232
|
|
||||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency-issued mortgage-backed securities
|
|
3,003,393
|
|
|
26,130
|
|
|
(8,504
|
)
|
|
3,021,019
|
|
|
2,472,528
|
|
|
17,189
|
|
|
(16,141
|
)
|
|
2,473,576
|
|
||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
3,280,209
|
|
|
23,459
|
|
|
(68,664
|
)
|
|
3,235,004
|
|
|
3,386,670
|
|
|
24,510
|
|
|
(85,422
|
)
|
|
3,325,758
|
|
||||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
1,108,079
|
|
|
3,294
|
|
|
(55
|
)
|
|
1,111,318
|
|
|
1,183,333
|
|
|
3,363
|
|
|
(123
|
)
|
|
1,186,573
|
|
||||||||
Agency-issued commercial mortgage-backed securities
|
|
577,086
|
|
|
399
|
|
|
(17,820
|
)
|
|
559,665
|
|
|
581,475
|
|
|
552
|
|
|
(17,423
|
)
|
|
564,604
|
|
||||||||
Municipal bonds and notes
|
|
81,635
|
|
|
4,437
|
|
|
—
|
|
|
86,072
|
|
|
82,024
|
|
|
4,024
|
|
|
(21
|
)
|
|
86,027
|
|
||||||||
Equity securities
|
|
37,489
|
|
|
328
|
|
|
(9,951
|
)
|
|
27,866
|
|
|
4,842
|
|
|
692
|
|
|
(483
|
)
|
|
5,051
|
|
||||||||
Total available-for-sale securities
|
|
$
|
12,882,413
|
|
|
$
|
97,222
|
|
|
$
|
(136,536
|
)
|
|
$
|
12,843,099
|
|
|
$
|
12,055,524
|
|
|
$
|
91,695
|
|
|
$
|
(160,398
|
)
|
|
$
|
11,986,821
|
|
Non-marketable and other securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments (1)
|
|
|
|
|
|
|
|
976,922
|
|
|
|
|
|
|
|
|
862,972
|
|
||||||||||||||
Other venture capital investments (2)
|
|
|
|
|
|
|
|
28,306
|
|
|
|
|
|
|
|
|
32,839
|
|
||||||||||||||
Other securities (fair value accounting) (3)
|
|
|
|
|
|
|
|
381,928
|
|
|
|
|
|
|
|
|
321,374
|
|
||||||||||||||
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other investments (4)
|
|
|
|
|
|
|
|
144,636
|
|
|
|
|
|
|
|
|
142,883
|
|
||||||||||||||
Low income housing tax credit funds
|
|
|
|
|
|
|
|
84,463
|
|
|
|
|
|
|
|
|
72,241
|
|
||||||||||||||
Non-marketable securities (cost method accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments (5)
|
|
|
|
|
|
|
|
140,374
|
|
|
|
|
|
|
|
|
148,994
|
|
||||||||||||||
Other investments
|
|
|
|
|
|
|
|
13,827
|
|
|
|
|
|
|
|
|
14,191
|
|
||||||||||||||
Total non-marketable and other securities
|
|
|
|
|
|
|
|
1,770,456
|
|
|
|
|
|
|
|
|
1,595,494
|
|
||||||||||||||
Total investment securities
|
|
|
|
|
|
|
|
$
|
14,613,555
|
|
|
|
|
|
|
|
|
$
|
13,582,315
|
|
|
(1)
|
The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and our ownership percentage of each fund at
March 31, 2014
and
December 31, 2013
(fair value accounting):
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
SVB Strategic Investors Fund, LP
|
|
$
|
27,134
|
|
|
12.6
|
%
|
|
$
|
29,104
|
|
|
12.6
|
%
|
SVB Strategic Investors Fund II, LP
|
|
97,960
|
|
|
8.6
|
|
|
96,185
|
|
|
8.6
|
|
||
SVB Strategic Investors Fund III, LP
|
|
264,661
|
|
|
5.9
|
|
|
260,272
|
|
|
5.9
|
|
||
SVB Strategic Investors Fund IV, LP
|
|
291,989
|
|
|
5.0
|
|
|
226,729
|
|
|
5.0
|
|
||
Strategic Investors Fund V Funds
|
|
159,794
|
|
|
Various
|
|
|
118,181
|
|
|
Various
|
|
||
Strategic Investors Fund VI Funds
|
|
9,871
|
|
|
0.2
|
|
|
7,944
|
|
|
0.2
|
|
||
SVB Capital Preferred Return Fund, LP
|
|
60,159
|
|
|
20.0
|
|
|
59,028
|
|
|
20.0
|
|
||
SVB Capital—NT Growth Partners, LP
|
|
61,230
|
|
|
33.0
|
|
|
61,126
|
|
|
33.0
|
|
||
SVB Capital Partners II, LP (i)
|
|
595
|
|
|
5.1
|
|
|
708
|
|
|
5.1
|
|
||
Other private equity fund (ii)
|
|
3,529
|
|
|
58.2
|
|
|
3,695
|
|
|
58.2
|
|
||
Total venture capital and private equity fund investments
|
|
$
|
976,922
|
|
|
|
|
$
|
862,972
|
|
|
|
|
(i)
|
At
March 31, 2014
, we had a direct ownership interest of
1.3 percent
and an indirect ownership interest of
3.8 percent
in the fund through our ownership interest of SVB Strategic Investors Fund II, LP.
|
(ii)
|
At
March 31, 2014
, we had a direct ownership interest of
41.5 percent
and indirect ownership interests of
12.6 percent
and
4.1 percent
in the fund through our ownership interest of SVB Capital—NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.
|
(2)
|
The following table shows the amounts of other venture capital investments held by the following consolidated funds and our ownership percentage of each fund at
March 31, 2014
and
December 31, 2013
(fair value accounting):
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Silicon Valley BancVentures, LP
|
|
$
|
6,520
|
|
|
10.7
|
%
|
|
$
|
6,564
|
|
|
10.7
|
%
|
SVB Capital Partners II, LP (i)
|
|
17,696
|
|
|
5.1
|
|
|
22,684
|
|
|
5.1
|
|
||
SVB Capital Shanghai Yangpu Venture Capital Fund
|
|
4,090
|
|
|
6.8
|
|
|
3,591
|
|
|
6.8
|
|
||
Total other venture capital investments
|
|
$
|
28,306
|
|
|
|
|
$
|
32,839
|
|
|
|
|
(i)
|
At
March 31, 2014
, we had a direct ownership interest of
1.3 percent
and an indirect ownership interest of
3.8 percent
in the fund through our ownership of SVB Strategic Investors Fund II, LP.
|
(3)
|
Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. This amount primarily includes total unrealized gains of
$351 million
in two of our public portfolio companies, FireEye, Inc. ("FireEye") and Twitter, Inc. ("Twitter"), of which one portfolio company, FireEye, is currently subject to a lock-up agreement. The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which FireEye securities are subject, the actual sales of the securities and the timing of such actual sales.
|
(4)
|
The following table shows the carrying value and our ownership percentage of each investment at
March 31, 2014
and
December 31, 2013
(equity method accounting):
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Gold Hill Venture Lending 03, LP (i)
|
|
$
|
10,380
|
|
|
9.3
|
%
|
|
$
|
7,900
|
|
|
9.3
|
%
|
Gold Hill Capital 2008, LP (ii)
|
|
21,076
|
|
|
15.5
|
|
|
21,867
|
|
|
15.5
|
|
||
China Joint Venture investment
|
|
79,765
|
|
|
50.0
|
|
|
79,940
|
|
|
50.0
|
|
||
Other investments
|
|
33,415
|
|
|
Various
|
|
|
33,176
|
|
|
Various
|
|
||
Total other investments (equity method accounting)
|
|
$
|
144,636
|
|
|
|
|
$
|
142,883
|
|
|
|
|
(i)
|
At
March 31, 2014
, we had a direct ownership interest of
4.8 percent
in the fund and an indirect interest in the fund through our investment in Gold Hill Venture Lending Partners 03, LLC (“GHLLC”) of
4.5 percent
.
|
(ii)
|
At
March 31, 2014
, we had a direct ownership interest of
11.5 percent
in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of
4.0 percent
.
|
(5)
|
Represents investments in
282
and
288
funds (primarily venture capital funds) at
March 31, 2014
and
December 31, 2013
, respectively, where our ownership interest is typically less than
5%
of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating activities and financial policies. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was
$140 million
, and
$222 million
, respectively, as of
March 31, 2014
. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was
$149 million
and
$215 million
, respectively, as of
December 31, 2013
.
|
|
|
March 31, 2014
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(Dollars in thousands)
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
||||||||||||
U.S. treasury securities
|
|
$
|
683,519
|
|
|
$
|
(4,734
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
683,519
|
|
|
$
|
(4,734
|
)
|
U.S. agency debentures
|
|
1,570,568
|
|
|
(26,808
|
)
|
|
—
|
|
|
—
|
|
|
1,570,568
|
|
|
(26,808
|
)
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
1,599,028
|
|
|
(6,764
|
)
|
|
20,049
|
|
|
(1,740
|
)
|
|
1,619,077
|
|
|
(8,504
|
)
|
||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,887,167
|
|
|
(63,005
|
)
|
|
139,570
|
|
|
(5,659
|
)
|
|
2,026,737
|
|
|
(68,664
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
102,546
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
102,546
|
|
|
(55
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
369,831
|
|
|
(10,143
|
)
|
|
91,258
|
|
|
(7,677
|
)
|
|
461,089
|
|
|
(17,820
|
)
|
||||||
Equity securities
|
|
25,738
|
|
|
(9,951
|
)
|
|
—
|
|
|
—
|
|
|
25,738
|
|
|
(9,951
|
)
|
||||||
Total temporarily impaired securities (1)
|
|
$
|
6,238,397
|
|
|
$
|
(121,460
|
)
|
|
$
|
250,877
|
|
|
$
|
(15,076
|
)
|
|
$
|
6,489,274
|
|
|
$
|
(136,536
|
)
|
|
(1)
|
As of
March 31, 2014
, we identified a total of
245
investments that were in unrealized loss positions, of which
11
investments totaling
$251 million
with unrealized losses of
$15.1 million
have been in an impaired position for a period of time greater than 12 months. As of
March 31, 2014
, we do not intend to sell any impaired debt securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis. Based on our analysis as of
March 31, 2014
, we deem all impairments to be temporary, and therefore changes in value for our temporarily impaired securities as of the same date are included in other comprehensive income. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis.
|
|
|
December 31, 2013
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer
|
|
Total
|
||||||||||||||||||
(Dollars in thousands)
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
|
Fair Value of
Investments
|
|
Unrealized
Losses
|
||||||||||||
U.S. agency debentures
|
|
$
|
1,821,045
|
|
|
$
|
(40,785
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,821,045
|
|
|
$
|
(40,785
|
)
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
$
|
1,480,870
|
|
|
$
|
(14,029
|
)
|
|
$
|
19,830
|
|
|
$
|
(2,112
|
)
|
|
$
|
1,500,700
|
|
|
$
|
(16,141
|
)
|
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,098,137
|
|
|
(79,519
|
)
|
|
134,420
|
|
|
(5,903
|
)
|
|
2,232,557
|
|
|
(85,422
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
109,699
|
|
|
(123
|
)
|
|
—
|
|
|
—
|
|
|
109,699
|
|
|
(123
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
464,171
|
|
|
(17,423
|
)
|
|
—
|
|
|
—
|
|
|
464,171
|
|
|
(17,423
|
)
|
||||||
Municipal bonds and notes
|
|
3,404
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
3,404
|
|
|
(21
|
)
|
||||||
Equity securities
|
|
910
|
|
|
(483
|
)
|
|
—
|
|
|
—
|
|
|
910
|
|
|
(483
|
)
|
||||||
Total temporarily impaired securities
|
|
$
|
5,978,236
|
|
|
$
|
(152,383
|
)
|
|
$
|
154,250
|
|
|
$
|
(8,015
|
)
|
|
$
|
6,132,486
|
|
|
$
|
(160,398
|
)
|
|
|
March 31, 2014
|
|||||||||||||||||||||||||||||||||
|
|
Total
|
|
One Year
or Less
|
|
After One
Year to
Five Years
|
|
After Five
Years to
Ten Years
|
|
After
Ten Years
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
|
Carrying
Value
|
|
Weighted-
Average
Yield
|
|
Carrying
Value
|
|
Weighted-
Average
Yield
|
|
Carrying
Value
|
|
Weighted-
Average
Yield
|
|
Carrying
Value
|
|
Weighted-
Average
Yield
|
|
Carrying
Value
|
|
Weighted-
Average
Yield
|
|||||||||||||||
U.S. treasury securities
|
|
$
|
683,519
|
|
|
1.90
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
99,063
|
|
|
1.50
|
%
|
|
$
|
584,456
|
|
|
1.96
|
%
|
|
$
|
—
|
|
|
—
|
%
|
U.S. agency debentures
|
|
4,118,636
|
|
|
1.71
|
|
|
470,663
|
|
|
1.44
|
|
|
2,300,971
|
|
|
1.55
|
|
|
1,347,002
|
|
|
2.09
|
|
|
—
|
|
|
—
|
|
|||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency-issued mortgage-backed securities
|
|
3,021,019
|
|
|
2.44
|
|
|
—
|
|
|
—
|
|
|
47,706
|
|
|
2.43
|
|
|
899,214
|
|
|
2.24
|
|
|
2,074,099
|
|
|
2.52
|
|
|||||
Agency-issued collateralized mortgage obligations - fixed rate
|
|
3,235,004
|
|
|
1.91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173,604
|
|
|
2.92
|
|
|
3,061,400
|
|
|
1.85
|
|
|||||
Agency-issued collateralized mortgage obligations - variable rate
|
|
1,111,318
|
|
|
0.70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,111,318
|
|
|
0.70
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
559,665
|
|
|
2.19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
559,665
|
|
|
2.19
|
|
|||||
Municipal bonds and notes
|
|
86,072
|
|
|
5.99
|
|
|
1,338
|
|
|
5.50
|
|
|
27,992
|
|
|
5.74
|
|
|
43,592
|
|
|
6.07
|
|
|
13,150
|
|
|
6.27
|
|
|||||
Total
|
|
$
|
12,815,233
|
|
|
1.90
|
|
|
$
|
472,001
|
|
|
1.45
|
|
|
$
|
2,475,732
|
|
|
1.61
|
|
|
$
|
3,047,868
|
|
|
2.21
|
|
|
$
|
6,819,632
|
|
|
1.90
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Gross gains on investment securities:
|
|
|
|
|
||||
Available-for-sale securities, at fair value (1)
|
|
$
|
373
|
|
|
$
|
—
|
|
Non-marketable securities (fair value accounting):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
111,436
|
|
|
27,381
|
|
||
Other venture capital investments
|
|
2,582
|
|
|
2,640
|
|
||
Other securities (fair value accounting) (2)
|
|
116,750
|
|
|
1,918
|
|
||
Non-marketable securities (equity method accounting):
|
|
|
|
|
||||
Other investments
|
|
3,642
|
|
|
2,715
|
|
||
Non-marketable securities (cost method accounting):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
3,303
|
|
|
1,023
|
|
||
Other investments
|
|
134
|
|
|
145
|
|
||
Total gross gains on investment securities
|
|
238,220
|
|
|
35,822
|
|
||
Gross losses on investment securities:
|
|
|
|
|
||||
Available-for-sale securities, at fair value (1)
|
|
(313
|
)
|
|
(45
|
)
|
||
Non-marketable securities (fair value accounting):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
(101
|
)
|
|
(4,742
|
)
|
||
Other venture capital investments
|
|
(744
|
)
|
|
(464
|
)
|
||
Other securities (fair value accounting)
|
|
(12,773
|
)
|
|
(2,073
|
)
|
||
Non-marketable securities (equity method accounting):
|
|
|
|
|
||||
Other investments
|
|
(212
|
)
|
|
(245
|
)
|
||
Non-marketable securities (cost method accounting):
|
|
|
|
|
||||
Venture capital and private equity fund investments (3)
|
|
(156
|
)
|
|
(469
|
)
|
||
Other investments
|
|
(9
|
)
|
|
(346
|
)
|
||
Total gross losses on investment securities
|
|
(14,308
|
)
|
|
(8,384
|
)
|
||
Gains on investment securities, net
|
|
$
|
223,912
|
|
|
$
|
27,438
|
|
|
(1)
|
Includes realized gains (losses) on sales of available-for-sale securities that are recognized in the income statement. Unrealized gains (losses) on available-for-sale securities are recognized in other comprehensive income. The cost basis of available-for-sale securities sold is determined on a specific identification basis.
|
(2)
|
Other securities (fair value accounting) and other venture capital investments include gains of
$113.0 million
, of which
$46.1 million
consists of realized gains, for the quarter ended March 31, 2014, attributable to one of our portfolio companies, FireEye. Our investment in FireEye is currently subject to a lock-up agreement. The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of the current lock-up agreement to which the FireEye securities are subject, the actual sales of the securities and the timing of such actual sales.
|
(3)
|
Includes OTTI of
$0.1 million
from the declines in value for
7
of the
282
investments and
$0.5 million
from the declines in value for
16
of the
309
investments held at March 31, 2014 and 2013, respectively. We concluded that any declines in value for the remaining investments were temporary, and as such, no OTTI was required to be recognized.
|
6.
|
Loans and Allowance for Loan Losses
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Commercial loans:
|
|
|
|
|
||||
Software
|
|
$
|
4,125,823
|
|
|
$
|
4,102,636
|
|
Hardware
|
|
1,193,183
|
|
|
1,213,032
|
|
||
Venture capital/private equity
|
|
2,201,243
|
|
|
2,386,054
|
|
||
Life science
|
|
1,171,258
|
|
|
1,170,220
|
|
||
Premium wine
|
|
161,186
|
|
|
149,841
|
|
||
Other
|
|
293,597
|
|
|
288,904
|
|
||
Total commercial loans
|
|
9,146,290
|
|
|
9,310,687
|
|
||
Real estate secured loans:
|
|
|
|
|
||||
Premium wine (1)
|
|
540,193
|
|
|
514,993
|
|
||
Consumer loans (2)
|
|
916,998
|
|
|
873,255
|
|
||
Other
|
|
30,548
|
|
|
30,743
|
|
||
Total real estate secured loans
|
|
1,487,739
|
|
|
1,418,991
|
|
||
Construction loans
|
|
98,413
|
|
|
76,997
|
|
||
Consumer loans
|
|
101,466
|
|
|
99,711
|
|
||
Total loans, net of unearned income (3)
|
|
$
|
10,833,908
|
|
|
$
|
10,906,386
|
|
|
(1)
|
Included in our premium wine portfolio are gross construction loans of
$112 million
at both
March 31, 2014
and
December 31, 2013
, respectively.
|
(2)
|
Consumer loans secured by real estate at
March 31, 2014
and
December 31, 2013
were comprised of the following:
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Loans for personal residence
|
|
$
|
724,797
|
|
|
$
|
685,327
|
|
Loans to eligible employees
|
|
123,062
|
|
|
121,548
|
|
||
Home equity lines of credit
|
|
69,139
|
|
|
66,380
|
|
||
Consumer loans secured by real estate
|
|
$
|
916,998
|
|
|
$
|
873,255
|
|
(3)
|
Included within our total loan portfolio are credit card loans of
$105 million
and
$85 million
at
March 31, 2014
and
December 31, 2013
, respectively.
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Commercial loans:
|
|
|
|
|
||||
Software
|
|
$
|
4,125,823
|
|
|
$
|
4,102,636
|
|
Hardware
|
|
1,193,183
|
|
|
1,213,032
|
|
||
Venture capital/private equity
|
|
2,201,243
|
|
|
2,386,054
|
|
||
Life science
|
|
1,171,258
|
|
|
1,170,220
|
|
||
Premium wine
|
|
701,379
|
|
|
664,834
|
|
||
Other
|
|
422,558
|
|
|
396,644
|
|
||
Total commercial loans
|
|
9,815,444
|
|
|
9,933,420
|
|
||
Consumer loans:
|
|
|
|
|
||||
Real estate secured loans
|
|
916,998
|
|
|
873,255
|
|
||
Other consumer loans
|
|
101,466
|
|
|
99,711
|
|
||
Total consumer loans
|
|
1,018,464
|
|
|
972,966
|
|
||
Total loans, net of unearned income
|
|
$
|
10,833,908
|
|
|
$
|
10,906,386
|
|
(Dollars in thousands)
|
|
30 - 59
Days Past
Due
|
|
60 - 89
Days Past
Due
|
|
Greater
Than 90
Days Past
Due
|
|
Total Past
Due
|
|
Current
|
|
Loans Past Due
90 Days or
More Still
Accruing
Interest
|
||||||||||||
March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software
|
|
$
|
9,609
|
|
|
$
|
2,925
|
|
|
$
|
99
|
|
|
$
|
12,633
|
|
|
$
|
4,140,041
|
|
|
$
|
99
|
|
Hardware
|
|
2,007
|
|
|
480
|
|
|
—
|
|
|
2,487
|
|
|
1,193,977
|
|
|
—
|
|
||||||
Venture capital/private equity
|
|
47,711
|
|
|
—
|
|
|
—
|
|
|
47,711
|
|
|
2,174,061
|
|
|
—
|
|
||||||
Life science
|
|
7,248
|
|
|
203
|
|
|
—
|
|
|
7,451
|
|
|
1,173,859
|
|
|
—
|
|
||||||
Premium wine
|
|
1,400
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
700,970
|
|
|
—
|
|
||||||
Other
|
|
70
|
|
|
116
|
|
|
—
|
|
|
186
|
|
|
423,259
|
|
|
—
|
|
||||||
Total commercial loans
|
|
68,045
|
|
|
3,724
|
|
|
99
|
|
|
71,868
|
|
|
9,806,167
|
|
|
99
|
|
||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate secured loans
|
|
6,165
|
|
|
—
|
|
|
—
|
|
|
6,165
|
|
|
910,378
|
|
|
—
|
|
||||||
Other consumer loans
|
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
100,886
|
|
|
—
|
|
||||||
Total consumer loans
|
|
6,194
|
|
|
—
|
|
|
—
|
|
|
6,194
|
|
|
1,011,264
|
|
|
—
|
|
||||||
Total gross loans excluding impaired loans
|
|
74,239
|
|
|
3,724
|
|
|
99
|
|
|
78,062
|
|
|
10,817,431
|
|
|
99
|
|
||||||
Impaired loans
|
|
6,590
|
|
|
370
|
|
|
2,287
|
|
|
9,247
|
|
|
15,742
|
|
|
—
|
|
||||||
Total gross loans
|
|
$
|
80,829
|
|
|
$
|
4,094
|
|
|
$
|
2,386
|
|
|
$
|
87,309
|
|
|
$
|
10,833,173
|
|
|
$
|
99
|
|
December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software
|
|
$
|
9,804
|
|
|
$
|
1,291
|
|
|
$
|
99
|
|
|
$
|
11,194
|
|
|
$
|
4,102,546
|
|
|
$
|
99
|
|
Hardware
|
|
2,679
|
|
|
3,965
|
|
|
—
|
|
|
6,644
|
|
|
1,198,169
|
|
|
—
|
|
||||||
Venture capital/private equity
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
2,408,382
|
|
|
—
|
|
||||||
Life science
|
|
395
|
|
|
131
|
|
|
—
|
|
|
526
|
|
|
1,179,462
|
|
|
—
|
|
||||||
Premium wine
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
665,755
|
|
|
—
|
|
||||||
Other
|
|
1,580
|
|
|
142
|
|
|
—
|
|
|
1,722
|
|
|
397,416
|
|
|
—
|
|
||||||
Total commercial loans
|
|
14,462
|
|
|
5,529
|
|
|
99
|
|
|
20,090
|
|
|
9,951,730
|
|
|
99
|
|
||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate secured loans
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
|
872,586
|
|
|
—
|
|
||||||
Other consumer loans
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
98,965
|
|
|
—
|
|
||||||
Total consumer loans
|
|
248
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
971,551
|
|
|
—
|
|
||||||
Total gross loans excluding impaired loans
|
|
14,710
|
|
|
5,529
|
|
|
99
|
|
|
20,338
|
|
|
10,923,281
|
|
|
99
|
|
||||||
Impaired loans
|
|
4,657
|
|
|
7,043
|
|
|
4,339
|
|
|
16,039
|
|
|
35,610
|
|
|
—
|
|
||||||
Total gross loans
|
|
$
|
19,367
|
|
|
$
|
12,572
|
|
|
$
|
4,438
|
|
|
$
|
36,377
|
|
|
$
|
10,958,891
|
|
|
$
|
99
|
|
(Dollars in thousands)
|
|
Impaired loans for
which there is a
related allowance
for loan losses
|
|
Impaired loans for
which there is no
related allowance
for loan losses
|
|
Total carrying value of impaired loans
|
|
Total unpaid
principal of impaired loans
|
||||||||
March 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software
|
|
$
|
11,214
|
|
|
$
|
547
|
|
|
$
|
11,761
|
|
|
$
|
12,002
|
|
Hardware
|
|
7,541
|
|
|
345
|
|
|
7,886
|
|
|
9,505
|
|
||||
Venture capital/private equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Life science
|
|
909
|
|
|
—
|
|
|
909
|
|
|
4,892
|
|
||||
Premium wine
|
|
—
|
|
|
1,408
|
|
|
1,408
|
|
|
1,769
|
|
||||
Other
|
|
2,339
|
|
|
—
|
|
|
2,339
|
|
|
2,394
|
|
||||
Total commercial loans
|
|
22,003
|
|
|
2,300
|
|
|
24,303
|
|
|
30,562
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
—
|
|
|
236
|
|
|
236
|
|
|
1,432
|
|
||||
Other consumer loans
|
|
450
|
|
|
—
|
|
|
450
|
|
|
730
|
|
||||
Total consumer loans
|
|
450
|
|
|
236
|
|
|
686
|
|
|
2,162
|
|
||||
Total
|
|
$
|
22,453
|
|
|
$
|
2,536
|
|
|
$
|
24,989
|
|
|
$
|
32,724
|
|
December 31, 2013:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software
|
|
$
|
27,308
|
|
|
$
|
310
|
|
|
$
|
27,618
|
|
|
$
|
28,316
|
|
Hardware
|
|
19,329
|
|
|
338
|
|
|
19,667
|
|
|
35,317
|
|
||||
Venture capital/private equity
|
|
40
|
|
|
—
|
|
|
40
|
|
|
40
|
|
||||
Life science
|
|
—
|
|
|
1,278
|
|
|
1,278
|
|
|
4,727
|
|
||||
Premium wine
|
|
—
|
|
|
1,442
|
|
|
1,442
|
|
|
1,778
|
|
||||
Other
|
|
690
|
|
|
—
|
|
|
690
|
|
|
718
|
|
||||
Total commercial loans
|
|
47,367
|
|
|
3,368
|
|
|
50,735
|
|
|
70,896
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
—
|
|
|
244
|
|
|
244
|
|
|
1,434
|
|
||||
Other consumer loans
|
|
670
|
|
|
—
|
|
|
670
|
|
|
941
|
|
||||
Total consumer loans
|
|
670
|
|
|
244
|
|
|
914
|
|
|
2,375
|
|
||||
Total
|
|
$
|
48,037
|
|
|
$
|
3,612
|
|
|
$
|
51,649
|
|
|
$
|
73,271
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Average impaired loans:
|
|
|
|
|
||||
Commercial loans:
|
|
|
|
|
||||
Software
|
|
$
|
14,677
|
|
|
$
|
4,114
|
|
Hardware
|
|
16,020
|
|
|
23,632
|
|
||
Life science
|
|
1,022
|
|
|
314
|
|
||
Premium wine
|
|
1,433
|
|
|
4,336
|
|
||
Other
|
|
1,777
|
|
|
5,218
|
|
||
Total commercial loans
|
|
34,929
|
|
|
37,614
|
|
||
Consumer loans:
|
|
|
|
|
||||
Real estate secured loans
|
|
237
|
|
|
2,676
|
|
||
Other consumer loans
|
|
489
|
|
|
1,129
|
|
||
Total consumer loans
|
|
726
|
|
|
3,805
|
|
||
Total average impaired loans
|
|
$
|
35,655
|
|
|
$
|
41,419
|
|
Three months ended March 31, 2014 (dollars in thousands)
|
|
Beginning Balance December 31, 2013
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for
(Reduction of) Loan Losses
|
|
Ending Balance March 31, 2014
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software
|
|
$
|
64,084
|
|
|
$
|
(8,010
|
)
|
|
$
|
114
|
|
|
$
|
(947
|
)
|
|
$
|
55,241
|
|
Hardware
|
|
36,553
|
|
|
(12,175
|
)
|
|
775
|
|
|
83
|
|
|
25,236
|
|
|||||
Venture capital/private equity
|
|
16,385
|
|
|
—
|
|
|
—
|
|
|
1,291
|
|
|
17,676
|
|
|||||
Life science
|
|
11,926
|
|
|
(681
|
)
|
|
98
|
|
|
131
|
|
|
11,474
|
|
|||||
Premium wine
|
|
3,914
|
|
|
—
|
|
|
219
|
|
|
(396
|
)
|
|
3,737
|
|
|||||
Other
|
|
3,680
|
|
|
(284
|
)
|
|
—
|
|
|
645
|
|
|
4,041
|
|
|||||
Total commercial loans
|
|
136,542
|
|
|
(21,150
|
)
|
|
1,206
|
|
|
807
|
|
|
117,405
|
|
|||||
Consumer loans
|
|
6,344
|
|
|
—
|
|
|
106
|
|
|
(313
|
)
|
|
6,137
|
|
|||||
Total allowance for loan losses
|
|
$
|
142,886
|
|
|
$
|
(21,150
|
)
|
|
$
|
1,312
|
|
|
$
|
494
|
|
|
$
|
123,542
|
|
Three months ended March 31, 2013 (dollars in thousands)
|
|
Beginning Balance December 31, 2012
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for(Reduction of)
Loan Losses
|
|
Ending Balance March 31, 2013
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software
|
|
$
|
42,648
|
|
|
$
|
(1,518
|
)
|
|
$
|
242
|
|
|
$
|
3,638
|
|
|
$
|
45,010
|
|
Hardware
|
|
29,761
|
|
|
(1,997
|
)
|
|
446
|
|
|
(341
|
)
|
|
27,869
|
|
|||||
Venture capital/private equity
|
|
9,963
|
|
|
—
|
|
|
—
|
|
|
519
|
|
|
10,482
|
|
|||||
Life science
|
|
13,606
|
|
|
(2,070
|
)
|
|
203
|
|
|
2,207
|
|
|
13,946
|
|
|||||
Premium wine
|
|
3,523
|
|
|
—
|
|
|
90
|
|
|
86
|
|
|
3,699
|
|
|||||
Other
|
|
3,912
|
|
|
(41
|
)
|
|
6
|
|
|
98
|
|
|
3,975
|
|
|||||
Total commercial loans
|
|
103,413
|
|
|
(5,626
|
)
|
|
987
|
|
|
6,207
|
|
|
104,981
|
|
|||||
Consumer loans
|
|
7,238
|
|
|
—
|
|
|
380
|
|
|
(394
|
)
|
|
7,224
|
|
|||||
Total allowance for loan losses
|
|
$
|
110,651
|
|
|
$
|
(5,626
|
)
|
|
$
|
1,367
|
|
|
$
|
5,813
|
|
|
$
|
112,205
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||
|
|
Individually Evaluated for
Impairment
|
|
Collectively Evaluated for
Impairment
|
|
Individually Evaluated for
Impairment
|
|
Collectively Evaluated for
Impairment
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Allowance for loan losses
|
Recorded investment in loans
|
|
Allowance for loan losses
|
Recorded investment in loans
|
|
Allowance for loan losses
|
Recorded investment in loans
|
|
Allowance for loan losses
|
Recorded investment in loans
|
||||||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Software
|
|
$
|
4,652
|
|
$
|
11,761
|
|
|
$
|
50,589
|
|
$
|
4,114,062
|
|
|
$
|
11,261
|
|
$
|
27,617
|
|
|
$
|
52,823
|
|
$
|
4,075,019
|
|
Hardware
|
|
979
|
|
7,886
|
|
|
24,257
|
|
1,185,297
|
|
|
9,673
|
|
19,667
|
|
|
26,880
|
|
1,193,365
|
|
||||||||
Venture capital/private equity
|
|
—
|
|
—
|
|
|
17,676
|
|
2,201,243
|
|
|
19
|
|
39
|
|
|
16,366
|
|
2,386,015
|
|
||||||||
Life science
|
|
231
|
|
909
|
|
|
11,243
|
|
1,170,349
|
|
|
—
|
|
1,278
|
|
|
11,926
|
|
1,168,942
|
|
||||||||
Premium wine
|
|
—
|
|
1,408
|
|
|
3,737
|
|
699,971
|
|
|
—
|
|
1,442
|
|
|
3,914
|
|
663,392
|
|
||||||||
Other
|
|
802
|
|
2,339
|
|
|
3,239
|
|
420,219
|
|
|
156
|
|
690
|
|
|
3,524
|
|
395,954
|
|
||||||||
Total commercial loans
|
|
6,664
|
|
24,303
|
|
|
110,741
|
|
9,791,141
|
|
|
21,109
|
|
50,733
|
|
|
115,433
|
|
9,882,687
|
|
||||||||
Consumer loans
|
|
112
|
|
686
|
|
|
6,025
|
|
1,017,778
|
|
|
168
|
|
915
|
|
|
6,176
|
|
972,051
|
|
||||||||
Total
|
|
$
|
6,776
|
|
$
|
24,989
|
|
|
$
|
116,766
|
|
$
|
10,808,919
|
|
|
$
|
21,277
|
|
$
|
51,648
|
|
|
$
|
121,609
|
|
$
|
10,854,738
|
|
(Dollars in thousands)
|
|
Pass
|
|
Performing
(Criticized)
|
|
Impaired
|
|
Total
|
||||||||
March 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software
|
|
$
|
3,859,696
|
|
|
$
|
292,978
|
|
|
$
|
11,761
|
|
|
$
|
4,164,435
|
|
Hardware
|
|
1,023,405
|
|
|
173,059
|
|
|
7,886
|
|
|
1,204,350
|
|
||||
Venture capital/private equity
|
|
2,221,772
|
|
|
—
|
|
|
—
|
|
|
2,221,772
|
|
||||
Life science
|
|
1,097,180
|
|
|
84,130
|
|
|
909
|
|
|
1,182,219
|
|
||||
Premium wine
|
|
693,351
|
|
|
9,019
|
|
|
1,408
|
|
|
703,778
|
|
||||
Other
|
|
411,108
|
|
|
12,337
|
|
|
2,339
|
|
|
425,784
|
|
||||
Total commercial loans
|
|
9,306,512
|
|
|
571,523
|
|
|
24,303
|
|
|
9,902,338
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
912,790
|
|
|
3,753
|
|
|
236
|
|
|
916,779
|
|
||||
Other consumer loans
|
|
97,982
|
|
|
2,933
|
|
|
450
|
|
|
101,365
|
|
||||
Total consumer loans
|
|
1,010,772
|
|
|
6,686
|
|
|
686
|
|
|
1,018,144
|
|
||||
Total gross loans
|
|
$
|
10,317,284
|
|
|
$
|
578,209
|
|
|
$
|
24,989
|
|
|
$
|
10,920,482
|
|
December 31, 2013:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software
|
|
$
|
3,875,043
|
|
|
$
|
238,697
|
|
|
$
|
27,618
|
|
|
$
|
4,141,358
|
|
Hardware
|
|
995,055
|
|
|
209,758
|
|
|
19,667
|
|
|
1,224,480
|
|
||||
Venture capital/private equity
|
|
2,408,386
|
|
|
—
|
|
|
40
|
|
|
2,408,426
|
|
||||
Life science
|
|
1,091,993
|
|
|
87,995
|
|
|
1,278
|
|
|
1,181,266
|
|
||||
Premium wine
|
|
652,747
|
|
|
13,008
|
|
|
1,442
|
|
|
667,197
|
|
||||
Other
|
|
383,602
|
|
|
15,536
|
|
|
690
|
|
|
399,828
|
|
||||
Total commercial loans
|
|
9,406,826
|
|
|
564,994
|
|
|
50,735
|
|
|
10,022,555
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
868,789
|
|
|
4,037
|
|
|
244
|
|
|
873,070
|
|
||||
Other consumer loans
|
|
95,586
|
|
|
3,387
|
|
|
670
|
|
|
99,643
|
|
||||
Total consumer loans
|
|
964,375
|
|
|
7,424
|
|
|
914
|
|
|
972,713
|
|
||||
Total gross loans
|
|
$
|
10,371,201
|
|
|
$
|
572,418
|
|
|
$
|
51,649
|
|
|
$
|
10,995,268
|
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Loans modified in TDRs:
|
|
|
|
|
||||
Commercial loans:
|
|
|
|
|
||||
Software
|
|
$
|
10,509
|
|
|
$
|
5,860
|
|
Hardware
|
|
7,541
|
|
|
13,329
|
|
||
Venture capital/ private equity
|
|
—
|
|
|
77
|
|
||
Premium wine
|
|
2,058
|
|
|
1,442
|
|
||
Other
|
|
2,674
|
|
|
1,055
|
|
||
Total commercial loans
|
|
22,782
|
|
|
21,763
|
|
||
Consumer loans:
|
|
|
|
|
||||
Other consumer loans
|
|
450
|
|
|
670
|
|
||
Total consumer loans
|
|
450
|
|
|
670
|
|
||
Total
|
|
$
|
23,232
|
|
|
$
|
22,433
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Loans modified in TDRs during the period:
|
|
|
|
|
||||
Commercial loans:
|
|
|
|
|
||||
Software
|
|
$
|
9,737
|
|
|
$
|
—
|
|
Venture capital/ private equity
|
|
—
|
|
|
821
|
|
||
Life science
|
|
—
|
|
|
454
|
|
||
Premium wine
|
|
650
|
|
|
—
|
|
||
Other
|
|
1,746
|
|
|
—
|
|
||
Total commercial loans
|
|
12,133
|
|
|
1,275
|
|
||
Consumer loans:
|
|
|
|
|
||||
Other consumer loans
|
|
—
|
|
|
100
|
|
||
Total consumer loans
|
|
—
|
|
|
100
|
|
||
Total loans modified in TDR’s during the period (1)
|
|
$
|
12,133
|
|
|
$
|
1,375
|
|
|
(1)
|
There were no partial charge-offs on loans classified as TDRs for the
three
months ended
March 31, 2014
or
March 31, 2013
.
|
|
|
Three months ended March 31,
|
||
(Dollars in thousands)
|
|
2013
|
||
TDRs modified within the previous 12 months that defaulted during the period:
|
|
|
||
Commercial loans:
|
|
|
||
Hardware
|
|
$
|
125
|
|
Other
|
|
2,750
|
|
|
Total commercial loans
|
|
2,875
|
|
|
Consumer loans
|
|
247
|
|
|
Total TDRs modified within the previous 12 months that defaulted in the period
|
|
$
|
3,122
|
|
7.
|
Short-Term Borrowings and Long-Term Debt
|
|
|
|
|
|
|
Carrying Value
|
||||||||
(Dollars in thousands)
|
|
Maturity
|
|
Principal value at March 31, 2014
|
|
March 31,
2014 |
|
December 31,
2013 |
||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
Other short-term borrowings
|
|
(1)
|
|
$
|
4,810
|
|
|
$
|
4,810
|
|
|
$
|
5,080
|
|
Total short-term borrowings
|
|
|
|
|
|
$
|
4,810
|
|
|
$
|
5,080
|
|
||
Long-term debt:
|
|
|
|
|
|
|
|
|
||||||
5.375% Senior Notes
|
|
September 15, 2020
|
|
$
|
350,000
|
|
|
$
|
348,265
|
|
|
$
|
348,209
|
|
6.05% Subordinated Notes (2)
|
|
June 1, 2017
|
|
45,964
|
|
|
51,528
|
|
|
51,987
|
|
|||
7.0% Junior Subordinated Debentures
|
|
October 15, 2033
|
|
50,000
|
|
|
54,977
|
|
|
55,020
|
|
|||
Total long-term debt
|
|
|
|
|
|
$
|
454,770
|
|
|
$
|
455,216
|
|
|
(1)
|
Represents cash collateral received from our counterparty for our interest rate swap agreement related to our 6.05% Subordinated Notes.
|
(2)
|
Included in the carrying value of our 6.05% Subordinated Notes at both
March 31, 2014
and
December 31, 2013
was an interest rate swap valued at
$6.0 million
related to hedge accounting associated with the notes.
|
8.
|
Derivative Financial Instruments
|
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
|
Balance Sheet
Location
|
|
Notional or
Contractual
Amount
|
|
Fair Value
|
|
Collateral
(1)
|
|
Net
Exposure
(2)
|
|
Notional or
Contractual
Amount
|
|
Fair Value
|
|
Collateral
(1)
|
|
Net
Exposure
(2)
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate risks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
|
Other assets
|
|
$
|
45,964
|
|
|
$
|
6,025
|
|
|
$
|
4,810
|
|
|
$
|
1,215
|
|
|
$
|
45,964
|
|
|
$
|
6,492
|
|
|
$
|
5,080
|
|
|
$
|
1,412
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Currency exchange risks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange forwards
|
|
Other assets
|
|
7,746
|
|
|
294
|
|
|
—
|
|
|
294
|
|
|
140,760
|
|
|
1,423
|
|
|
—
|
|
|
1,423
|
|
||||||||
Foreign exchange forwards
|
|
Other liabilities
|
|
236,943
|
|
|
(674
|
)
|
|
—
|
|
|
(674
|
)
|
|
62,649
|
|
|
(634
|
)
|
|
—
|
|
|
(634
|
)
|
||||||||
Net exposure
|
|
|
|
|
|
(380
|
)
|
|
—
|
|
|
(380
|
)
|
|
|
|
789
|
|
|
—
|
|
|
789
|
|
||||||||||
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity warrant assets
|
|
Other assets
|
|
180,471
|
|
|
91,135
|
|
|
—
|
|
|
91,135
|
|
|
179,934
|
|
|
103,513
|
|
|
—
|
|
|
103,513
|
|
||||||||
Other derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Client foreign exchange forwards
|
|
Other assets
|
|
376,095
|
|
|
10,881
|
|
|
—
|
|
|
10,881
|
|
|
424,983
|
|
|
13,673
|
|
|
—
|
|
|
13,673
|
|
||||||||
Client foreign exchange forwards
|
|
Other liabilities
|
|
346,376
|
|
|
(9,369
|
)
|
|
—
|
|
|
(9,369
|
)
|
|
367,079
|
|
|
(11,549
|
)
|
|
—
|
|
|
(11,549
|
)
|
||||||||
Client foreign currency options
|
|
Other assets
|
|
85,977
|
|
|
213
|
|
|
—
|
|
|
213
|
|
|
91,854
|
|
|
434
|
|
|
—
|
|
|
434
|
|
||||||||
Client foreign currency options
|
|
Other liabilities
|
|
85,977
|
|
|
(213
|
)
|
|
—
|
|
|
(213
|
)
|
|
91,854
|
|
|
(434
|
)
|
|
—
|
|
|
(434
|
)
|
||||||||
Loan conversion options
|
|
Other assets
|
|
3,282
|
|
|
290
|
|
|
—
|
|
|
290
|
|
|
3,455
|
|
|
314
|
|
|
—
|
|
|
314
|
|
||||||||
Client interest rate derivatives
|
|
Other assets
|
|
263,927
|
|
|
1,471
|
|
|
—
|
|
|
1,471
|
|
|
216,773
|
|
|
1,265
|
|
|
—
|
|
|
1,265
|
|
||||||||
Client interest rate derivatives
|
|
Other liabilities
|
|
263,927
|
|
|
(1,638
|
)
|
|
—
|
|
|
(1,638
|
)
|
|
216,773
|
|
|
(1,396
|
)
|
|
—
|
|
|
(1,396
|
)
|
||||||||
Net exposure
|
|
|
|
|
|
1,635
|
|
|
—
|
|
|
1,635
|
|
|
|
|
2,307
|
|
|
—
|
|
|
2,307
|
|
||||||||||
Net
|
|
|
|
|
|
$
|
98,415
|
|
|
$
|
4,810
|
|
|
$
|
93,605
|
|
|
|
|
$
|
113,101
|
|
|
$
|
5,080
|
|
|
$
|
108,021
|
|
|
(1)
|
Cash collateral received from our counterparty for our interest rate swap agreement is recorded as a component of “short-term borrowings” on our consolidated balance sheets.
|
(2)
|
Net exposure for contracts in a gain position reflects the replacement cost in the event of nonperformance by all such counterparties. The credit ratings of our institutional counterparties as of March 31, 2014 remain at investment grade or higher and there were no material changes in their credit ratings during the three months ended March 31, 2014.
|
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
Statement of income location
|
|
2014
|
|
2013
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate risks:
|
|
|
|
|
|
|
||||
Net cash benefit associated with interest rate swaps
|
|
Interest expense—borrowings
|
|
$
|
639
|
|
|
$
|
634
|
|
Changes in fair value of interest rate swaps
|
|
Net gains on derivative instruments
|
|
(12
|
)
|
|
60
|
|
||
Net gains associated with interest rate risk derivatives
|
|
|
|
$
|
627
|
|
|
$
|
694
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Currency exchange risks:
|
|
|
|
|
|
|
||||
Gains (losses) on revaluations of foreign currency instruments
|
|
Other noninterest income
|
|
$
|
978
|
|
|
$
|
(7,064
|
)
|
(Losses) gains on internal foreign exchange forward contracts, net
|
|
Net gains on derivative instruments
|
|
(1,029
|
)
|
|
6,200
|
|
||
Net (losses) gains associated with currency risk
|
|
|
|
$
|
(51
|
)
|
|
$
|
(864
|
)
|
Other derivative instruments:
|
|
|
|
|
|
|
||||
Net gains on equity warrant assets
|
|
Net gains on derivative instruments
|
|
$
|
25,373
|
|
|
$
|
3,505
|
|
Gains on client foreign exchange forward contracts, net
|
|
Net gains on derivative instruments
|
|
$
|
302
|
|
|
$
|
49
|
|
Net (losses) gains on other derivatives (1)
|
|
Net gains on derivative instruments
|
|
$
|
(467
|
)
|
|
$
|
478
|
|
|
(1)
|
Primarily represents the change in fair value of loan conversion options.
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
|
|
|
||||||||||||||
(Dollars in thousands)
|
|
Gross Amounts of Recognized Assets
|
|
Gross Amounts offset in the Statement of Financial Position
|
|
Net Amounts of Assets Presented in the Statement of Financial Position
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
6,025
|
|
|
$
|
—
|
|
|
$
|
6,025
|
|
|
$
|
(1,215
|
)
|
|
$
|
(4,810
|
)
|
|
$
|
—
|
|
Foreign exchange forwards
|
|
11,175
|
|
|
—
|
|
|
11,175
|
|
|
(4,879
|
)
|
|
—
|
|
|
6,296
|
|
||||||
Foreign currency options
|
|
233
|
|
|
(20
|
)
|
|
213
|
|
|
(124
|
)
|
|
—
|
|
|
89
|
|
||||||
Client interest rate derivatives
|
|
1,471
|
|
|
—
|
|
|
1,471
|
|
|
(193
|
)
|
|
—
|
|
|
1,278
|
|
||||||
Total derivative assets:
|
|
18,904
|
|
|
(20
|
)
|
|
18,884
|
|
|
(6,411
|
)
|
|
(4,810
|
)
|
|
7,663
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
117,036
|
|
|
—
|
|
|
117,036
|
|
|
(117,036
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
135,940
|
|
|
$
|
(20
|
)
|
|
$
|
135,920
|
|
|
$
|
(123,447
|
)
|
|
$
|
(4,810
|
)
|
|
$
|
7,663
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
6,492
|
|
|
$
|
—
|
|
|
$
|
6,492
|
|
|
$
|
(1,412
|
)
|
|
$
|
(5,080
|
)
|
|
$
|
—
|
|
Foreign exchange forwards
|
|
15,096
|
|
|
—
|
|
|
15,096
|
|
|
(6,735
|
)
|
|
—
|
|
|
8,361
|
|
||||||
Foreign currency options
|
|
504
|
|
|
(70
|
)
|
|
434
|
|
|
(155
|
)
|
|
—
|
|
|
279
|
|
||||||
Client interest rate derivatives
|
|
1,265
|
|
|
—
|
|
|
1,265
|
|
|
(256
|
)
|
|
—
|
|
|
1,009
|
|
||||||
Total derivative assets:
|
|
23,357
|
|
|
(70
|
)
|
|
23,287
|
|
|
(8,558
|
)
|
|
(5,080
|
)
|
|
9,649
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
172,989
|
|
|
—
|
|
|
172,989
|
|
|
(172,989
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
196,346
|
|
|
$
|
(70
|
)
|
|
$
|
196,276
|
|
|
$
|
(181,547
|
)
|
|
$
|
(5,080
|
)
|
|
$
|
9,649
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
|
|
|
||||||||||||||
(Dollars in thousands)
|
|
Gross Amounts of Recognized Liabilities
|
|
Gross Amounts offset in the Statement of Financial Position
|
|
Net Amounts of Liabilities Presented in the Statement of Financial Position
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
10,043
|
|
|
$
|
—
|
|
|
$
|
10,043
|
|
|
$
|
(5,880
|
)
|
|
$
|
—
|
|
|
$
|
4,163
|
|
Foreign currency options
|
|
233
|
|
|
(20
|
)
|
|
213
|
|
|
(89
|
)
|
|
—
|
|
|
124
|
|
||||||
Client interest rate derivatives
|
|
1,638
|
|
|
—
|
|
|
1,638
|
|
|
(1,445
|
)
|
|
—
|
|
|
193
|
|
||||||
Total derivative liabilities:
|
|
11,914
|
|
|
(20
|
)
|
|
11,894
|
|
|
(7,414
|
)
|
|
—
|
|
|
4,480
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
11,914
|
|
|
$
|
(20
|
)
|
|
$
|
11,894
|
|
|
$
|
(7,414
|
)
|
|
$
|
—
|
|
|
$
|
4,480
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
12,183
|
|
|
$
|
—
|
|
|
$
|
12,183
|
|
|
$
|
(8,282
|
)
|
|
$
|
—
|
|
|
$
|
3,901
|
|
Foreign currency options
|
|
504
|
|
|
(70
|
)
|
|
434
|
|
|
(279
|
)
|
|
—
|
|
|
155
|
|
||||||
Client interest rate derivatives
|
|
1,396
|
|
|
—
|
|
|
1,396
|
|
|
(1,087
|
)
|
|
—
|
|
|
309
|
|
||||||
Total derivative liabilities:
|
|
14,083
|
|
|
(70
|
)
|
|
14,013
|
|
|
(9,648
|
)
|
|
—
|
|
|
4,365
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
14,083
|
|
|
$
|
(70
|
)
|
|
$
|
14,013
|
|
|
$
|
(9,648
|
)
|
|
$
|
—
|
|
|
$
|
4,365
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Fund management fees
|
|
$
|
2,755
|
|
|
$
|
2,769
|
|
Service-based fee income
|
|
2,027
|
|
|
1,804
|
|
||
Gains (losses) on revaluation of foreign currency instruments (1)
|
|
978
|
|
|
(7,064
|
)
|
||
Currency revaluation gains (losses) (2)
|
|
278
|
|
|
(55
|
)
|
||
Other (3)
|
|
5,162
|
|
|
2,099
|
|
||
Total other noninterest income (loss)
|
|
$
|
11,200
|
|
|
$
|
(447
|
)
|
|
(1)
|
Represents the revaluation of foreign currency denominated financial instruments issued and held by us, primarily loans, deposits and cash.
|
(2)
|
Includes the revaluation of foreign currency denominated financial statements of certain funds. Included in these amounts are gains of
$0.2 million
for each of the
three
months ended
March 31, 2014
, and 2013, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.
|
(3)
|
Includes dividends on FHLB/FRB stock, correspondent bank rebate income and other fee income.
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Client services
|
|
$
|
2,359
|
|
|
$
|
1,935
|
|
Data processing services
|
|
2,227
|
|
|
1,912
|
|
||
Tax credit fund amortization
|
|
2,028
|
|
|
1,317
|
|
||
Telephone
|
|
1,748
|
|
|
1,557
|
|
||
Postage and supplies
|
|
769
|
|
|
538
|
|
||
Dues and publications
|
|
497
|
|
|
458
|
|
||
Other
|
|
1,562
|
|
|
2,218
|
|
||
Total other noninterest expense
|
|
$
|
11,190
|
|
|
$
|
9,935
|
|
10.
|
Segment Reporting
|
•
|
Global Commercial Bank
is comprised of results from the following:
|
◦
|
Our
Commercial Bank
products and services are provided by the Bank to commercial clients in the technology, life science and clean technology (energy and resource innovation) industries. The Bank provides solutions to the financial needs of commercial clients, through credit, global treasury management, foreign exchange, global trade finance, and other services. It serves clients within the United States, as well as non-U.S. clients in key international entrepreneurial markets. In addition, the Bank and its subsidiaries offer a variety of investment services and solutions, including investment advisory and broker-dealer services.
|
◦
|
Our
Private Equity Division
provides banking products and services primarily to our venture capital and private equity clients.
|
◦
|
Our
Wine
practice provides banking products and services to our premium wine industry clients, and our
Community Development Finance
practice makes loans as part of our responsibilities under the Community Reinvestment Act. These practices are formerly known as SVB Specialty Lending.
|
◦
|
SVB Analytics
provides equity valuation services to companies and venture capital/private equity firms.
|
◦
|
Debt Fund Investments
is comprised of our investments in certain debt funds.
|
•
|
SVB Private Bank
is the private banking division of the Bank, which provides banking products and a range of personal financial solutions for consumers. Our clients are primarily venture capital/private equity professionals and executive leaders of the innovation companies they support. We offer a customized suite of private banking
|
•
|
SVB Capita
l is the venture capital investment arm of SVBFG, which focuses primarily on funds management. SVB Capital manages funds (primarily venture capital funds) on behalf of third party limited partners and SVB Financial Group. The SVB Capital family of funds is comprised of funds of funds and direct venture funds. SVB Capital generates income for the Company primarily through management fees, carried interest arrangements and returns through the Company’s investments in the funds.
|
(Dollars in thousands)
|
|
Global
Commercial
Bank (1)
|
|
SVB Private
Bank
|
|
SVB Capital (1)
|
|
Other Items (2)
|
|
Total
|
||||||||||
Three months ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
175,703
|
|
|
$
|
6,892
|
|
|
$
|
14
|
|
|
$
|
13,719
|
|
|
$
|
196,328
|
|
(Provision for) reduction of loan losses
|
|
(807
|
)
|
|
313
|
|
|
—
|
|
|
—
|
|
|
(494
|
)
|
|||||
Noninterest income
|
|
58,637
|
|
|
274
|
|
|
37,672
|
|
|
213,642
|
|
|
310,225
|
|
|||||
Noninterest expense (3)
|
|
(121,925
|
)
|
|
(2,495
|
)
|
|
(2,635
|
)
|
|
(45,381
|
)
|
|
(172,436
|
)
|
|||||
Income before income tax expense (4)
|
|
$
|
111,608
|
|
|
$
|
4,984
|
|
|
$
|
35,051
|
|
|
$
|
181,980
|
|
|
$
|
333,623
|
|
Total average loans, net of unearned income
|
|
$
|
9,762,802
|
|
|
$
|
1,049,901
|
|
|
$
|
—
|
|
|
$
|
(45,019
|
)
|
|
$
|
10,767,684
|
|
Total average assets (5)
|
|
25,571,787
|
|
|
967,873
|
|
|
340,990
|
|
|
886,983
|
|
|
27,767,633
|
|
|||||
Total average deposits
|
|
22,878,150
|
|
|
745,083
|
|
|
—
|
|
|
53,215
|
|
|
23,676,448
|
|
|||||
Three months ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
148,936
|
|
|
$
|
6,104
|
|
|
$
|
1
|
|
|
$
|
8,128
|
|
|
$
|
163,169
|
|
(Provision for) reduction of loan losses
|
|
(6,207
|
)
|
|
394
|
|
|
—
|
|
|
—
|
|
|
(5,813
|
)
|
|||||
Noninterest income
|
|
46,541
|
|
|
234
|
|
|
5,441
|
|
|
26,388
|
|
|
78,604
|
|
|||||
Noninterest expense (3)
|
|
(104,339
|
)
|
|
(1,931
|
)
|
|
(2,386
|
)
|
|
(40,358
|
)
|
|
(149,014
|
)
|
|||||
Income (loss) before income tax expense (4)
|
|
$
|
84,931
|
|
|
$
|
4,801
|
|
|
$
|
3,056
|
|
|
$
|
(5,842
|
)
|
|
$
|
86,946
|
|
Total average loans, net of unearned income
|
|
$
|
7,868,587
|
|
|
$
|
844,807
|
|
|
$
|
—
|
|
|
$
|
(32,477
|
)
|
|
$
|
8,680,917
|
|
Total average assets (5)
|
|
20,540,835
|
|
|
850,084
|
|
|
238,743
|
|
|
684,897
|
|
|
22,314,559
|
|
|||||
Total average deposits
|
|
18,302,877
|
|
|
470,673
|
|
|
—
|
|
|
11,963
|
|
|
18,785,513
|
|
|
(1)
|
Global Commercial Bank’s and SVB Capital’s components of net interest income, noninterest income, noninterest expense and total average assets are shown net of noncontrolling interests for all periods presented. Noncontrolling interest is included within "Other Items" as discussed below.
|
(2)
|
The "Other Items" column reflects the adjustments necessary to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP. Noninterest income is primarily attributable to noncontrolling interests and gains on equity warrant assets. Noninterest expense primarily consists of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses. Additionally, average assets primarily consists of cash and cash equivalents.
|
(3)
|
The Global Commercial Bank segment includes direct depreciation and amortization of
$4.9 million
and
$4.4 million
for the three months ended
March 31, 2014
and
2013
, respectively.
|
(4)
|
The internal reporting model used by management to assess segment performance does not calculate income tax expense by segment. Our effective tax rate is a reasonable approximation of the segment rates.
|
(5)
|
Total average assets equals the greater of total average assets or the sum of total liabilities and total stockholders’ equity for each segment.
|
11.
|
Off-Balance Sheet Arrangements, Guarantees and Other Commitments
|
(Dollars in thousands)
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
Loan commitments available for funding: (1)
|
|
|
|
|
||||
Fixed interest rate commitments
|
|
$
|
1,341,917
|
|
|
$
|
1,392,781
|
|
Variable interest rate commitments
|
|
10,016,728
|
|
|
9,101,973
|
|
||
Total loan commitments available for funding
|
|
11,358,645
|
|
|
10,494,754
|
|
||
Commercial and standby letters of credit (2)
|
|
1,012,651
|
|
|
975,968
|
|
||
Total unfunded credit commitments
|
|
$
|
12,371,296
|
|
|
$
|
11,470,722
|
|
Commitments unavailable for funding (3)
|
|
$
|
1,161,940
|
|
|
$
|
1,006,168
|
|
Maximum lending limits for accounts receivable factoring arrangements (4)
|
|
930,643
|
|
|
894,276
|
|
||
Reserve for unfunded credit commitments (5)
|
|
31,110
|
|
|
29,983
|
|
|
(1)
|
Represents commitments which are available for funding, due to clients meeting all collateral, compliance and financial covenants required under loan commitment agreements.
|
(2)
|
See below for additional information on our commercial and standby letters of credit.
|
(3)
|
Represents commitments which are currently unavailable for funding, due to clients failing to meet all collateral, compliance and financial covenants under loan commitment agreements.
|
(4)
|
We extend credit under accounts receivable factoring arrangements when our clients’ sales invoices are deemed creditworthy under existing underwriting practices.
|
(5)
|
Our reserve for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit.
|
(Dollars in thousands)
|
|
Expires In One
Year or Less
|
|
Expires After
One Year
|
|
Total Amount
Outstanding
|
|
Maximum Amount
of Future Payments
|
||||||||
Financial standby letters of credit
|
|
$
|
880,712
|
|
|
$
|
59,497
|
|
|
$
|
940,209
|
|
|
$
|
940,209
|
|
Performance standby letters of credit
|
|
58,475
|
|
|
5,786
|
|
|
64,261
|
|
|
64,261
|
|
||||
Commercial letters of credit
|
|
8,181
|
|
|
—
|
|
|
8,181
|
|
|
8,181
|
|
||||
Total
|
|
$
|
947,368
|
|
|
$
|
65,283
|
|
|
$
|
1,012,651
|
|
|
$
|
1,012,651
|
|
Our Ownership in Venture Capital/Private Equity Funds
(Dollars in thousands)
|
|
SVBFG Capital Commitments
|
|
SVBFG Unfunded
Commitments
|
|
SVBFG Ownership
of each Fund (4)
|
|||||
Silicon Valley BancVentures, LP
|
|
$
|
6,000
|
|
|
$
|
270
|
|
|
10.7
|
%
|
SVB Capital Partners II, LP (1)
|
|
1,200
|
|
|
162
|
|
|
5.1
|
|
||
SVB Capital Shanghai Yangpu Venture Capital Fund
|
|
933
|
|
|
161
|
|
|
6.8
|
|
||
SVB Strategic Investors Fund, LP
|
|
15,300
|
|
|
688
|
|
|
12.6
|
|
||
SVB Strategic Investors Fund II, LP
|
|
15,000
|
|
|
1,050
|
|
|
8.6
|
|
||
SVB Strategic Investors Fund III, LP
|
|
15,000
|
|
|
1,688
|
|
|
5.9
|
|
||
SVB Strategic Investors Fund IV, LP
|
|
12,239
|
|
|
3,060
|
|
|
5.0
|
|
||
Strategic Investors Fund V Funds
|
|
515
|
|
|
305
|
|
|
Various
|
|
||
Strategic Investors Fund VI Funds
|
|
500
|
|
|
477
|
|
|
0.2
|
|
||
SVB Capital Preferred Return Fund, LP
|
|
12,688
|
|
|
—
|
|
|
20.0
|
|
||
SVB Capital—NT Growth Partners, LP
|
|
24,670
|
|
|
1,340
|
|
|
33.0
|
|
||
Other private equity fund (2)
|
|
9,338
|
|
|
—
|
|
|
58.2
|
|
||
Partners for Growth, LP
|
|
25,000
|
|
|
9,750
|
|
|
50.0
|
|
||
Debt funds (equity method accounting)
|
|
65,437
|
|
|
4,950
|
|
|
Various
|
|
||
Other fund investments (3)
|
|
301,663
|
|
|
33,122
|
|
|
Various
|
|
||
Total
|
|
$
|
505,483
|
|
|
$
|
57,023
|
|
|
|
|
(1)
|
Our ownership includes direct ownership of
1.3 percent
and indirect ownership interest of
3.8 percent
through our investment in SVB Strategic Investors Fund II, LP.
|
(2)
|
Our ownership includes direct ownership of
41.5 percent
and indirect ownership interests of
12.6 percent
and
4.1 percent
in the fund through our ownership interest of SVB Capital - NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.
|
(3)
|
Represents commitments to
287
funds (primarily venture capital funds) where our ownership interest is generally less than
5 percent
of the voting interests of each such fund.
|
(4)
|
We are subject to the Volcker Rule, which restricts or limits our sponsorship of and ownership of interests in “covered” funds including venture capital and private equity funds. For funds that we sponsor, the Volcker Rule limits the amount of our investment to 3% of the fund, and our aggregate investments in all such funds must not exceed 3% of our Tier 1 capital. The current deadline to conform to these limits is July 21, 2015. The time period to divest an investment that is not permitted by the final rule may be extended by the Federal Reserve Board for up to two one-year general extensions, and one additional extension up to five additional years for investments in funds that are considered illiquid. We intend to seek the maximum extensions available to us. However, there is no guarantee that the Federal Reserve Board will grant any of these extensions. See “Business - Supervision and Regulation” under Item 1 of Part I of our 2013 Form 10-K.
|
Limited Partnership
(Dollars in thousands)
|
Unfunded
Commitments
|
||
SVB Strategic Investors Fund, LP
|
$
|
2,250
|
|
SVB Strategic Investors Fund II, LP
|
6,409
|
|
|
SVB Strategic Investors Fund III, LP
|
20,214
|
|
|
SVB Strategic Investors Fund IV, LP
|
54,430
|
|
|
Strategic Investors Fund V Funds
|
202,688
|
|
|
Strategic Investors Fund VI Funds
|
130,846
|
|
|
SVB Capital Preferred Return Fund, LP
|
9,075
|
|
|
SVB Capital—NT Growth Partners, LP
|
10,310
|
|
|
Other private equity fund
|
243
|
|
|
Total
|
$
|
436,465
|
|
12.
|
Income Taxes
|
13.
|
Fair Value of Financial Instruments
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance at March 31, 2014
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
$
|
683,519
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
683,519
|
|
U.S. agency debentures
|
|
—
|
|
|
4,118,636
|
|
|
—
|
|
|
4,118,636
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
—
|
|
|
3,021,019
|
|
|
—
|
|
|
3,021,019
|
|
||||
Agency-issued collateralized mortgage obligations - fixed rate
|
|
—
|
|
|
3,235,004
|
|
|
—
|
|
|
3,235,004
|
|
||||
Agency-issued collateralized mortgage obligations - variable rate
|
|
—
|
|
|
1,111,318
|
|
|
—
|
|
|
1,111,318
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
—
|
|
|
559,665
|
|
|
—
|
|
|
559,665
|
|
||||
Municipal bonds and notes
|
|
—
|
|
|
86,072
|
|
|
—
|
|
|
86,072
|
|
||||
Equity securities
|
|
24,328
|
|
|
3,538
|
|
|
—
|
|
|
27,866
|
|
||||
Total available-for-sale securities
|
|
707,847
|
|
|
12,135,252
|
|
|
—
|
|
|
12,843,099
|
|
||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
—
|
|
|
—
|
|
|
976,922
|
|
|
976,922
|
|
||||
Other venture capital investments
|
|
—
|
|
|
—
|
|
|
28,306
|
|
|
28,306
|
|
||||
Other securities
|
|
19,441
|
|
|
—
|
|
|
362,487
|
|
|
381,928
|
|
||||
Total non-marketable and other securities (fair value accounting)
|
|
19,441
|
|
|
—
|
|
|
1,367,715
|
|
|
1,387,156
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
—
|
|
|
6,025
|
|
|
—
|
|
|
6,025
|
|
||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
11,388
|
|
|
—
|
|
|
11,388
|
|
||||
Equity warrant assets
|
|
—
|
|
|
3,493
|
|
|
87,642
|
|
|
91,135
|
|
||||
Loan conversion options
|
|
—
|
|
|
290
|
|
|
—
|
|
|
290
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
1,471
|
|
|
—
|
|
|
1,471
|
|
||||
Total assets (1)
|
|
$
|
727,288
|
|
|
$
|
12,157,919
|
|
|
$
|
1,455,357
|
|
|
$
|
14,340,564
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
10,256
|
|
|
$
|
—
|
|
|
$
|
10,256
|
|
Client interest rate derivatives
|
|
—
|
|
|
1,638
|
|
|
—
|
|
|
1,638
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
11,894
|
|
|
$
|
—
|
|
|
$
|
11,894
|
|
|
(1)
|
Included in Level 1 and Level 3 assets are
$18.5 million
and
$1.3 billion
, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance at December 31, 2013
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. agency debentures
|
|
—
|
|
|
4,345,232
|
|
|
—
|
|
|
4,345,232
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
—
|
|
|
2,473,576
|
|
|
—
|
|
|
2,473,576
|
|
||||
Agency-issued collateralized mortgage obligations - fixed rate
|
|
—
|
|
|
3,325,758
|
|
|
—
|
|
|
3,325,758
|
|
||||
Agency-issued collateralized mortgage obligations - variable rate
|
|
—
|
|
|
1,186,573
|
|
|
—
|
|
|
1,186,573
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
—
|
|
|
564,604
|
|
|
—
|
|
|
564,604
|
|
||||
Municipal bonds and notes
|
|
—
|
|
|
86,027
|
|
|
—
|
|
|
86,027
|
|
||||
Equity securities
|
|
3,732
|
|
|
1,319
|
|
|
—
|
|
|
5,051
|
|
||||
Total available-for-sale securities
|
|
3,732
|
|
|
11,983,089
|
|
|
—
|
|
|
11,986,821
|
|
||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
—
|
|
|
—
|
|
|
862,972
|
|
|
862,972
|
|
||||
Other venture capital investments
|
|
—
|
|
|
—
|
|
|
32,839
|
|
|
32,839
|
|
||||
Other Securities
|
|
2,125
|
|
|
—
|
|
|
319,249
|
|
|
321,374
|
|
||||
Total non-marketable and other securities (fair value accounting)
|
|
2,125
|
|
|
—
|
|
|
1,215,060
|
|
|
1,217,185
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
—
|
|
|
6,492
|
|
|
—
|
|
|
6,492
|
|
||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
15,530
|
|
|
—
|
|
|
15,530
|
|
||||
Equity warrant assets
|
|
—
|
|
|
3,622
|
|
|
99,891
|
|
|
103,513
|
|
||||
Loan conversion options
|
|
—
|
|
|
314
|
|
|
—
|
|
|
314
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
1,265
|
|
|
—
|
|
|
1,265
|
|
||||
Total assets (1)
|
|
$
|
5,857
|
|
|
$
|
12,010,312
|
|
|
$
|
1,314,951
|
|
|
$
|
13,331,120
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
12,617
|
|
|
$
|
—
|
|
|
$
|
12,617
|
|
Client interest rate derivatives
|
|
—
|
|
|
1,396
|
|
|
—
|
|
|
1,396
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
14,013
|
|
|
$
|
—
|
|
|
$
|
14,013
|
|
|
(1)
|
Included in Level 1 and Level 3 assets are
$2.0 million
and
$1.1 billion
, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.
|
(Dollars in thousands)
|
|
Beginning
Balance
|
|
Total Realized and Unrealized Gains (Losses) Included in Income
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Distributions and Other Settlements
|
|
Transfers Into Level 3
|
|
Transfers Out of Level 3
|
|
Ending
Balance
|
||||||||||||||||||
Three months ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Venture capital and private equity fund investments
|
|
$
|
862,972
|
|
|
$
|
111,335
|
|
|
$
|
44,455
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41,840
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
976,922
|
|
Other venture capital investments
|
|
32,839
|
|
|
1,838
|
|
|
670
|
|
|
(3,514
|
)
|
|
—
|
|
|
(3,527
|
)
|
|
—
|
|
|
—
|
|
|
28,306
|
|
|||||||||
Other securities (fair value accounting) (3)
|
|
319,249
|
|
|
102,694
|
|
|
—
|
|
|
(46,840
|
)
|
|
—
|
|
|
3,417
|
|
|
—
|
|
|
(16,033
|
)
|
|
362,487
|
|
|||||||||
Total non-marketable and other securities (fair value accounting)(1)
|
|
1,215,060
|
|
|
215,867
|
|
|
45,125
|
|
|
(50,354
|
)
|
|
—
|
|
|
(41,950
|
)
|
|
—
|
|
|
(16,033
|
)
|
|
1,367,715
|
|
|||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Equity warrant assets (2)
|
|
99,891
|
|
|
24,378
|
|
|
—
|
|
|
(39,993
|
)
|
|
3,417
|
|
|
626
|
|
|
—
|
|
|
(677
|
)
|
|
87,642
|
|
|||||||||
Total assets
|
|
$
|
1,314,951
|
|
|
$
|
240,245
|
|
|
$
|
45,125
|
|
|
$
|
(90,347
|
)
|
|
$
|
3,417
|
|
|
$
|
(41,324
|
)
|
|
$
|
—
|
|
|
$
|
(16,710
|
)
|
|
$
|
1,455,357
|
|
Three months ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Venture capital and private equity fund investments
|
|
$
|
665,921
|
|
|
$
|
22,510
|
|
|
$
|
29,744
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(17,099
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
701,076
|
|
Other venture capital investments
|
|
127,091
|
|
|
2,188
|
|
|
166
|
|
|
(21
|
)
|
|
—
|
|
|
(1,077
|
)
|
|
—
|
|
|
(3,561
|
)
|
|
124,786
|
|
|||||||||
Other securities (fair value accounting)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total non-marketable and other securities (fair value accounting) (1)
|
|
793,012
|
|
|
24,698
|
|
|
29,910
|
|
|
(21
|
)
|
|
—
|
|
|
(18,176
|
)
|
|
—
|
|
|
(3,561
|
)
|
|
825,862
|
|
|||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Equity warrant assets (2)
|
|
66,129
|
|
|
1,459
|
|
|
—
|
|
|
(2,250
|
)
|
|
1,926
|
|
|
364
|
|
|
—
|
|
|
(1,582
|
)
|
|
66,046
|
|
|||||||||
Total assets
|
|
$
|
859,141
|
|
|
$
|
26,157
|
|
|
$
|
29,910
|
|
|
$
|
(2,271
|
)
|
|
$
|
1,926
|
|
|
$
|
(17,812
|
)
|
|
$
|
—
|
|
|
$
|
(5,143
|
)
|
|
$
|
891,908
|
|
|
(1)
|
Realized and unrealized gains (losses) are recorded on the line items “gains on investment securities, net”, and “other noninterest income”, components of noninterest income.
|
(2)
|
Realized and unrealized gains (losses) are recorded on the line item “gains on derivative instruments, net”, a component of noninterest income.
|
(3)
|
Ending balance Includes total unrealized valuation gains of
$351 million
attributable to two of our portfolio companies, FireEye and Twitter.
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
$
|
111,856
|
|
|
$
|
22,621
|
|
Other venture capital investments
|
|
(15
|
)
|
|
526
|
|
||
Other securities
|
|
78,968
|
|
|
—
|
|
||
Total non-marketable and other securities (fair value accounting) (1)
|
|
190,809
|
|
|
23,147
|
|
||
Other assets:
|
|
|
|
|
||||
Equity warrant assets (2)
|
|
3,782
|
|
|
1,181
|
|
||
Total unrealized gains, net
|
|
$
|
194,591
|
|
|
$
|
24,328
|
|
Unrealized gains attributable to noncontrolling interests
|
|
$
|
176,085
|
|
|
$
|
21,187
|
|
|
(1)
|
Unrealized gains (losses) are recorded on the line items “gains on investment securities, net”, and “other noninterest income”, components of noninterest income.
|
(2)
|
Unrealized gains (losses) are recorded on the line item “gains on derivative instruments, net”, a component of noninterest income.
|
(Dollars in thousands)
|
|
Fair value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted
Average
|
|||
March 31, 2014:
|
|
|
|
|
|
|
|
|
|||
Other venture capital investments (fair value accounting)
|
|
$
|
28,306
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1
|
)
|
Other securities
|
|
362,487
|
|
|
Modified stock price
|
|
Sales restrictions discount (2)
|
|
10.1
|
%
|
|
Equity warrant assets (public portfolio)
|
|
9,128
|
|
|
Modified Black-Scholes option pricing model
|
|
Volatility
|
|
42.3
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
1.9
|
%
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
14.1
|
%
|
||||
Equity warrant assets (private portfolio)
|
|
78,514
|
|
|
Modified Black-Scholes option pricing model
|
|
Volatility
|
|
39.8
|
%
|
|
|
|
|
|
|
Risk-Free interest rate
|
|
0.8
|
%
|
|||
|
|
|
|
|
Marketability discount (3)
|
|
22.5
|
%
|
|||
|
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
%
|
|||
December 31, 2013:
|
|
|
|
|
|
|
|
|
|||
Other venture capital investments (fair value accounting)
|
|
32,839
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1
|
)
|
|
Other securities
|
|
319,249
|
|
|
Modified stock price
|
|
Sales restrictions discount (2)
|
|
12.0
|
%
|
|
Equity warrant assets (public portfolio)
|
|
24,217
|
|
|
Modified Black-Scholes option pricing model
|
|
Volatility
|
|
41.3
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
1.7
|
%
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
13.7
|
%
|
||||
Equity warrant assets (private portfolio)
|
|
75,674
|
|
|
Modified Black-Scholes option pricing model
|
|
Volatility
|
|
40.1
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
0.8
|
%
|
||||
|
|
|
|
Marketability discount (3)
|
|
22.5
|
%
|
||||
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
%
|
|
(1)
|
In determining the fair value of our other venture capital investment portfolio, we evaluate a variety of factors related to each underlying private portfolio company including, but not limited to, actual and forecasted results, cash position, recent or planned transactions and market comparable companies. Additionally, we have ongoing communication with the portfolio companies and venture capital fund managers, to determine whether there is a material change in fair value.
|
(2)
|
We adjust quoted market prices of public companies, which are subject to certain sales restrictions. Sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sales restrictions, which typically range from 3 to 6 months.
|
(3)
|
Our marketability discount is applied to all private company warrants to account for a general lack of liquidity due to the private nature of the associated underlying company. The quantitative measure used is based on long-run averages and is influenced over time by various factors, including market conditions. On a quarterly basis, a sensitivity analysis is performed on our marketability discount.
|
(4)
|
We adjust the contractual remaining term of private company warrants based on our estimate of the actual remaining life, which we determine by utilizing historical data on cancellations and exercises. At
March 31, 2014
, the weighted average contractual remaining term was
6.2
years, compared to our estimated remaining life of
2.8
years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.
|
|
|
|
|
Estimated Fair Value
|
||||||||||||
(Dollars in thousands)
|
|
Carrying Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
March 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
3,862,464
|
|
|
$
|
3,862,464
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other securities (cost and equity method accounting)
|
|
383,300
|
|
|
—
|
|
|
—
|
|
|
469,899
|
|
||||
Net commercial loans
|
|
9,698,039
|
|
|
|
|
|
|
|
|
9,876,872
|
|
||||
Net consumer loans
|
|
1,012,327
|
|
|
|
|
|
|
|
|
1,068,082
|
|
||||
FHLB and Federal Reserve Bank stock
|
|
40,632
|
|
|
—
|
|
|
—
|
|
|
40,632
|
|
||||
Accrued interest receivable
|
|
70,384
|
|
|
—
|
|
|
70,384
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Other short-term borrowings
|
|
4,810
|
|
|
4,810
|
|
|
—
|
|
|
—
|
|
||||
Non-maturity deposits (1)
|
|
25,327,648
|
|
|
25,327,648
|
|
|
—
|
|
|
|
|
||||
Time deposits
|
|
149,257
|
|
|
|
|
|
149,261
|
|
|
|
|
||||
5.375% Senior Notes
|
|
348,265
|
|
|
—
|
|
|
388,437
|
|
|
—
|
|
||||
6.05% Subordinated Notes (2)
|
|
51,528
|
|
|
—
|
|
|
55,521
|
|
|
—
|
|
||||
7.0% Junior Subordinated Debentures
|
|
54,977
|
|
|
—
|
|
|
52,289
|
|
|
—
|
|
||||
Accrued interest payable
|
|
2,866
|
|
|
—
|
|
|
2,866
|
|
|
—
|
|
||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
||||||||
Commitments to extend credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,427
|
|
||||
December 31, 2013:
|
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
1,538,779
|
|
|
$
|
1,538,779
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other securities (cost and equity method accounting)
|
|
378,309
|
|
|
—
|
|
|
—
|
|
|
447,783
|
|
||||
Net commercial loans
|
|
9,796,878
|
|
|
—
|
|
|
—
|
|
|
9,935,917
|
|
||||
Net consumer loans
|
|
966,622
|
|
|
—
|
|
|
—
|
|
|
1,005,080
|
|
||||
FHLB and Federal Reserve Bank stock
|
|
40,632
|
|
|
—
|
|
|
—
|
|
|
40,632
|
|
||||
Accrued interest receivable
|
|
67,772
|
|
|
—
|
|
|
67,772
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Other short-term borrowings
|
|
5,080
|
|
|
5,080
|
|
|
—
|
|
|
—
|
|
||||
Non-maturity deposits (1)
|
|
22,259,119
|
|
|
22,259,119
|
|
|
—
|
|
|
—
|
|
||||
Time deposits
|
|
213,860
|
|
|
—
|
|
|
213,874
|
|
|
—
|
|
||||
5.375% Senior Notes
|
|
348,209
|
|
|
—
|
|
|
383,782
|
|
|
—
|
|
||||
6.05% Subordinated Notes (2)
|
|
51,987
|
|
|
—
|
|
|
56,297
|
|
|
—
|
|
||||
7.0% Junior Subordinated Debentures
|
|
55,020
|
|
|
—
|
|
|
51,915
|
|
|
—
|
|
||||
Accrued interest payable
|
|
6,858
|
|
|
—
|
|
|
6,858
|
|
|
—
|
|
||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
||||||||
Commitments to extend credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,285
|
|
|
(1)
|
Includes noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits.
|
(2)
|
At
March 31, 2014
and
December 31, 2013
, included in the carrying value and estimated fair value of our
6.05%
Subordinated Notes was
$6.0 million
and
$6.5 million
, respectively, related to hedge accounting associated with the notes.
|
(Dollars in thousands)
|
|
Carrying Amount
|
|
Fair Value
|
|
Unfunded
Commitments
|
||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments (1)
|
|
$
|
976,922
|
|
|
$
|
976,922
|
|
|
$
|
436,465
|
|
Non-marketable and other securities (equity method accounting):
|
|
|
|
|
|
|
||||||
Other investments (2)
|
|
54,264
|
|
|
55,792
|
|
|
5,836
|
|
|||
Non-marketable securities (cost method accounting):
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments (3)
|
|
140,374
|
|
|
221,605
|
|
|
31,630
|
|
|||
Total
|
|
$
|
1,171,560
|
|
|
$
|
1,254,319
|
|
|
$
|
473,931
|
|
|
(1)
|
Venture capital and private equity fund investments within non-marketable securities (fair value accounting) include investments made by our managed funds of funds and one of our direct venture funds. These investments represent investments in venture capital and private equity funds that invest primarily in U.S. and global technology and life sciences companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are
$897 million
and
$431 million
, respectively, attributable to noncontrolling interests. It is estimated that we will receive distributions from the fund investments over the next
10
to
13
years, depending on the age of the funds and any potential extensions of terms of the funds.
|
(2)
|
Other investments within non-marketable securities (equity method accounting) include investments in debt funds and venture capital and private equity fund investments that invest in or lend money to primarily U.S. and global technology and life sciences companies. It is estimated that we will receive distributions from the fund investments over the next
10
to
13
years, depending on the age of the funds.
|
(3)
|
Venture capital and private equity fund investments within non-marketable securities (cost method accounting) include investments in venture capital and private equity fund investments that invest primarily in U.S. and global technology and life sciences companies. It is estimated that we will receive distributions from the fund investments over the next
10
to
13
years, depending on the age of the funds and any potential extensions of the terms of the funds.
|
14.
|
Legal Matters
|
15.
|
Related Parties
|
16.
|
Subsequent Events
|
Non-GAAP losses on investments securities, net of noncontrolling interests (Dollars in millions)
|
|
Through May 7, 2014
|
||
GAAP losses on certain nonmarketable and other securities
|
|
$
|
150
|
|
Less: losses attributable to noncontrolling interests, including carried interest
|
|
121
|
|
|
Non-GAAP losses on certain nonmarketable and other securities, net of noncontrolling interests
|
|
$
|
29
|
|
▪
|
Projections of our net interest income, noninterest income, earnings per share, noninterest expenses (including professional services, compliance, compensation and other costs), cash flows, balance sheet positions, capital expenditures, liquidity and capitalization or other financial items
|
▪
|
Descriptions of our strategic initiatives, plans or objectives for future operations, including pending sales or acquisitions
|
▪
|
Forecasts of venture capital/private equity funding and investment levels
|
▪
|
Forecasts of future interest rates, economic performance, and income from investments
|
▪
|
Forecasts of expected levels of provisions for loan losses, loan growth and client funds
|
▪
|
Descriptions of assumptions underlying or relating to any of the foregoing
|
•
|
Market and economic conditions (including interest rate environment, and levels of public offerings, mergers/acquisitions and venture capital financing activities) and the associated impact on us
|
•
|
The sufficiency of our capital, including sources of capital (such as funds generated through retained earnings), the extent to which capital may be used or required, and our capital category classification
|
•
|
The adequacy of our liquidity position, including sources of liquidity (such as funds generated through retained earnings)
|
•
|
Our overall investment plans, strategies and activities, including venture capital/private equity funding and investments, and our investment of excess cash/liquidity
|
•
|
The realization, timing, valuation and performance of equity or other investments, including the impact of changes in our valuation of our investments, such as FireEye and Twitter.
|
•
|
The likelihood that the market value of our temporarily impaired investments will recover
|
•
|
Our intent to sell our available-for-sale securities prior to recovery of our cost basis, or the likelihood of such
|
•
|
The impact on our interest income from mortgage prepayment levels as it relates to our premium amortization expense, and from changes in loan yields due to shifts in loan mix
|
•
|
Expected cash requirements for unfunded commitments to certain investments, including capital calls
|
•
|
Our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to earnings from a change in interest rates
|
•
|
The credit quality of our loan portfolio, including levels and trends of nonperforming loans, impaired loans, criticized loans and troubled debt restructurings
|
•
|
The adequacy of reserves (including allowance for loan and lease losses) and the appropriateness of our methodology for calculating such reserves
|
•
|
The level of loan and deposit balances
|
•
|
The level of client investment fees and associated margins
|
•
|
The profitability of our products and services, including loan yields, loan pricing, and interest margins
|
•
|
Our strategic initiatives, including the expansion of operations and business activities in China, India, Israel, the UK and elsewhere domestically or internationally
|
•
|
The expansion and growth of our noninterest income sources
|
•
|
Distributions of venture capital, private equity or debt fund investment proceeds; intentions to sell such fund investments
|
•
|
The changes in, or adequacy of, our unrecognized tax benefits and any associated impact
|
•
|
The realization of certain deferred tax assets, and of any benefit stemming from certain net operating loss carryforwards.
|
•
|
The extent to which counterparties, including those to our forward and option contracts, will perform their contractual obligations
|
•
|
The condition and suitability of our properties
|
•
|
The manner in which we compete
|
•
|
Our estimated potential liability associated with certain securities subject to rescission rights in connection with our 401(k) plan
|
•
|
The effect of application of accounting pronouncements and regulatory requirements
|
•
|
The effect of lawsuits and claims
|
•
|
Regulatory developments, including the nature and timing of the adoption and effectiveness of requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), new capital requirements and other applicable Federal, State and International laws and regulations, and any related impact on us
|
•
|
The expected impact of the "Volcker Rule" under the Dodd-Frank Act, including our intention to seek the maximum extensions to the conformance period applicable to us
|
▪
|
Continued strong growth in our lending business with record high average loan balances of $10.8 billion, an increase of $2.1 billion, or 24.0 percent.
|
▪
|
Average available-for-sale securities of $12.2 billion, an increase of $1.3 billion, or 12.5 percent. Period-end available-for-sale securities of $12.8 billion, an increase of $1.9 billion, or 17.7 percent.
|
▪
|
Average deposit balances of $23.7 billion, an increase of $4.9 billion, or 26.0 percent. Period-end deposit balances were $25.5 billion, an increase of $6.2 billion, or 31.9 percent.
|
▪
|
Average total client funds (including on-balance sheet deposits and off-balance sheet client investment funds) were $50.8 billion, an increase of $9.5 billion, or 23.0 percent. Period-end total client funds were $53.7 billion, an increase of $11.4 billion, or 27.0 percent.
|
▪
|
Net interest income (fully taxable equivalent basis) of $196.8 million, an increase of $33.2 million, or 20.3 percent, primarily due to an increase in interest income from loans and available-for-sale securities attributable to growth in average balances of $2.1 billion and $1.3 billion, respectively. This increase was partially offset by a decrease in the overall yield of our loan portfolio primarily resulting from the growth in our higher credit quality venture capital and private equity loan portfolio, and overall low market rate environment, as well as, the overall increased competition in the market.
|
▪
|
Net interest margin of 3.13 percent, compared to 3.25 percent, primarily reflective of a 20 basis point decrease in the overall yield of our loan portfolio. The decrease was largely offset by strong growth in average loan balances and a higher overall yield on our available-for-sale securities portfolio driven by higher reinvestment yields and lower amortization expense.
|
▪
|
Provision for loan losses of $0.5 million, compared to $5.8 million. The provision of $0.5 million for the first quarter of 2014 was primarily driven by net charge-offs of $19.8 million, offset by a $14.5 million decrease in the reserve for impaired loans and a $4.8 million decrease related to lower reserves due to improvement in the overall credit quality of gross performing loans.
|
▪
|
Non-GAAP core fee income (deposit service charges, letters of credit fees, credit card fees, lending related fees, client investment fees, and foreign exchange fees) of $50.9 million, an increase of $9.6 million, or 23.3 percent. This increase reflects increased client activity and continued growth in our business, primarily from foreign exchange fees, credit card fees and lending related fees. See “Results of Operations—Noninterest Income” for a description and reconciliation of non-GAAP core fee income.
|
▪
|
Non-GAAP net gains on investment securities, net of noncontrolling interests of $37.4 million, compared to $5.1 million. The increase was primarily related to strong IPO and M&A activity with the largest gains coming from FireEye, as noted below. See “Results of Operations—Noninterest Income—Gains on Investment Securities, Net” for further details and a reconciliation of non-GAAP net gains on investment securities, net of noncontrolling interests.
|
▪
|
Gains on equity warrant assets of
$25.4 million
, an increase of $21.9 million compared to
$3.5 million
. This increase was primarily driven by IPO and M&A activity, and included $15.2 million from a single warrant held in our client, FireEye, as noted below.
|
▪
|
FireEye gains on investment securities of $113.0 million ($21.8 million net of noncontrolling interests), $15.2 million from gains on equity warrant assets and an unrealized loss on available-for-sale securities of $8.2 million reflected as a $4.9 million decrease (net of tax) in other accumulated comprehensive loss in stockholders' equity. See Investment Securities section for details related to FireEye activity during the first quarter of 2014.
|
▪
|
Noninterest expense of $172.4 million, an increase of $23.4 million, or 15.7 percent. The increase was primarily due to increases in incentive compensation and other employee benefits as a result of our strong financial performance and an increase in average FTEs, as well as increased professional services expenses to support continued growth in our business and IT infrastructure initiatives. Average FTEs increased by 4.8 percent to 1,735 for the three months ended March 31, 2014, compared to 1,655 FTEs for the comparable 2013 period.
|
▪
|
Overall, our liquidity remained strong based on the attributes of our period-end available-for-sale securities portfolio, which totaled $12.8 billion at March 31, 2014. Our available-for-sale securities portfolio continued to be a good source of liquidity as it was invested in high quality investments and generated steady monthly cash flows. Additionally, our available-for-sale securities portfolio continued to provide us with the ability to secure wholesale borrowings, as needed.
|
|
|
Three months ended March 31,
|
||||||||||
(Dollars in thousands, except per share data and ratios)
|
|
2014
|
|
2013
|
|
% Change
|
||||||
Income Statement:
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share
|
|
$
|
1.95
|
|
|
$
|
0.90
|
|
|
116.7
|
|
%
|
Net income available to common stockholders
|
|
91,301
|
|
|
40,891
|
|
|
123.3
|
|
|
||
Net interest income
|
|
196,328
|
|
|
163,169
|
|
|
20.3
|
|
|
||
Net interest margin
|
|
3.13
|
%
|
|
3.25
|
%
|
|
(12
|
)
|
bps
|
||
Provision for loan losses
|
|
$
|
494
|
|
|
$
|
5,813
|
|
|
(91.5
|
)
|
%
|
Noninterest income
|
|
310,225
|
|
|
78,604
|
|
|
NM
|
|
|
||
Noninterest expense
|
|
172,436
|
|
|
149,014
|
|
|
15.7
|
|
|
||
Non-GAAP core fee income (1)
|
|
50,946
|
|
|
41,321
|
|
|
23.3
|
|
|
||
Non-GAAP noninterest income, net of noncontrolling interests (1)
|
|
123,507
|
|
|
56,114
|
|
|
120.1
|
|
|
||
Non-GAAP noninterest expense, net of noncontrolling interests (2)
|
|
169,115
|
|
|
146,154
|
|
|
15.7
|
|
|
||
Balance Sheet:
|
|
|
|
|
|
|
|
|||||
Average loans, net of unearned income
|
|
$
|
10,767,684
|
|
|
$
|
8,680,917
|
|
|
24.0
|
|
%
|
Average noninterest-bearing demand deposits
|
|
16,880,520
|
|
|
13,386,501
|
|
|
26.1
|
|
|
||
Average interest-bearing deposits
|
|
6,795,928
|
|
|
5,399,012
|
|
|
25.9
|
|
|
||
Average total deposits
|
|
23,676,448
|
|
|
18,785,513
|
|
|
26.0
|
|
|
||
Earnings Ratios:
|
|
|
|
|
|
|
|
|||||
Return on average assets (annualized) (3)
|
|
1.33
|
%
|
|
0.74
|
%
|
|
79.7
|
|
%
|
||
Return on average SVBFG stockholders’ equity (annualized) (4)
|
|
17.63
|
|
|
8.89
|
|
|
98.3
|
|
|
||
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|||||
Allowance for loan losses as a percentage of total period-end gross loans
|
|
1.13
|
%
|
|
1.26
|
%
|
|
(13
|
)
|
bps
|
||
Allowance for loan losses for performing loans as a percentage of total gross performing loans
|
|
1.07
|
|
|
1.18
|
|
|
(11
|
)
|
|
||
Gross loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.79
|
|
|
0.26
|
|
|
53
|
|
|
||
Net loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.74
|
|
|
0.20
|
|
|
54
|
|
|
||
Capital Ratios:
|
|
|
|
|
|
|
|
|||||
Total risk-based capital ratio
|
|
13.41
|
%
|
|
14.59
|
%
|
|
(118
|
)
|
bps
|
||
Tier 1 risk-based capital ratio
|
|
12.35
|
|
|
13.30
|
|
|
(95
|
)
|
|
||
Tier 1 leverage ratio
|
|
7.99
|
|
|
8.39
|
|
|
(40
|
)
|
|
||
Tangible common equity to tangible assets (5)
|
|
7.05
|
|
|
8.26
|
|
|
(121
|
)
|
|
||
Tangible common equity to risk-weighted assets (5)
|
|
12.17
|
|
|
13.94
|
|
|
(177
|
)
|
|
||
Bank total risk-based capital ratio
|
|
11.47
|
|
|
13.01
|
|
|
(154
|
)
|
|
||
Bank tier 1 risk-based capital ratio
|
|
10.39
|
|
|
11.70
|
|
|
(131
|
)
|
|
||
Bank tier 1 leverage ratio
|
|
6.72
|
|
|
7.35
|
|
|
(63
|
)
|
|
||
Bank tangible common equity to tangible assets (5)
|
|
6.20
|
|
|
7.62
|
|
|
(142
|
)
|
|
||
Bank tangible common equity to risk-weighted assets (5)
|
|
10.29
|
|
|
12.45
|
|
|
(216
|
)
|
|
||
Other Ratios:
|
|
|
|
|
|
|
|
|||||
Operating efficiency ratio (6)
|
|
34.01
|
%
|
|
61.52
|
%
|
|
(44.7
|
)
|
%
|
||
Non-GAAP operating efficiency ratio (2)
|
|
52.81
|
|
|
66.53
|
|
|
(20.6
|
)
|
|
||
Book value per common share (7)
|
|
$
|
45.59
|
|
|
$
|
41.85
|
|
|
8.9
|
|
|
Other Statistics:
|
|
|
|
|
|
|
|
|||||
Average full-time equivalent employees
|
|
1,735
|
|
|
1,655
|
|
|
4.8
|
|
%
|
||
Period-end full-time equivalent employees
|
|
1,737
|
|
|
1,663
|
|
|
4.4
|
|
|
|
(1)
|
See “Results of Operations–Noninterest Income” for a description and reconciliation of non-GAAP core fee income and noninterest income.
|
(2)
|
See “Results of Operations–Noninterest Expense” for a description and reconciliation of non-GAAP noninterest expense and non-GAAP operating efficiency ratio.
|
(3)
|
Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average assets.
|
(4)
|
Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average SVBFG stockholders’ equity.
|
(5)
|
See “Capital Resources–Capital Ratios” for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.
|
(6)
|
The operating efficiency ratio is calculated by dividing total noninterest expense by total taxable-equivalent net interest income plus noninterest income.
|
(7)
|
Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares at period-end.
|
|
|
2014 Compared to 2013
|
||||||||||
|
|
Three months ended March 31, increase (decrease) due to change in
|
||||||||||
(Dollars in thousands)
|
|
Volume
|
|
Rate
|
|
Total
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities
|
|
$
|
1,133
|
|
|
$
|
(216
|
)
|
|
$
|
917
|
|
Available-for-sale securities (taxable)
|
|
5,998
|
|
|
2,670
|
|
|
8,668
|
|
|||
Available-for-sale securities (non-taxable)
|
|
(30
|
)
|
|
26
|
|
|
(4
|
)
|
|||
Loans, net of unearned income
|
|
28,845
|
|
|
(4,417
|
)
|
|
24,428
|
|
|||
Increase (decrease) in interest income, net
|
|
35,946
|
|
|
(1,937
|
)
|
|
34,009
|
|
|||
Interest expense:
|
|
|
|
|
|
|
||||||
NOW deposits
|
|
14
|
|
|
5
|
|
|
19
|
|
|||
Money market deposits
|
|
999
|
|
|
(82
|
)
|
|
917
|
|
|||
Money market deposits in foreign offices
|
|
18
|
|
|
—
|
|
|
18
|
|
|||
Time deposits
|
|
(10
|
)
|
|
(63
|
)
|
|
(73
|
)
|
|||
Sweep deposits in foreign offices
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
Total increase (decrease) in deposits expense
|
|
993
|
|
|
(140
|
)
|
|
853
|
|
|||
Short-term borrowings
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
5.375% Senior Notes
|
|
—
|
|
|
7
|
|
|
7
|
|
|||
Junior Subordinated Debentures
|
|
—
|
|
|
7
|
|
|
7
|
|
|||
6.05% Subordinated Notes
|
|
(5
|
)
|
|
17
|
|
|
12
|
|
|||
Total (decrease) increase in borrowings expense
|
|
(33
|
)
|
|
31
|
|
|
(2
|
)
|
|||
Increase (decrease) in interest expense, net
|
|
960
|
|
|
(109
|
)
|
|
851
|
|
|||
Increase (decrease) in net interest income
|
|
$
|
34,986
|
|
|
$
|
(1,828
|
)
|
|
$
|
33,158
|
|
•
|
Interest income
for the
three months ended
March 31, 2014
increased by $34.0 million primarily due to:
|
◦
|
A $24.5 million increase in interest income on loans to $148.2 million for the three months ended March 31, 2014, compared to $123.7 million for the comparable 2013 period. This increase was reflective of an increase in average loan balances of $2.1 billion, partially offset by a decrease in our overall yield on our loan portfolio. The decrease in the overall loan yield was primarily due to a shift in the mix of our loan portfolio with higher growth in our lower-yielding venture capital/private equity loan portfolio, lower rates on existing and new capital call lines as a result of increased competition and a generally low market rate environment.
|
◦
|
An $8.7 million increase in interest income on available-for-sale securities to $55.6 million for the three months ended
March 31, 2014
, compared to $47.0 million for the comparable 2013 period. The increase was reflective of an increase in average available-for-sale securities balances of $1.3 billion as a result of deposit growth. In addition, overall yield in our available-for-sale securities portfolio increased 9 basis points to 1.84 percent, primarily attributable to higher reinvestment yields and an increased yield impact from lower premium amortization expense. As of
March 31, 2014
, the remaining unamortized premium balance, net of discounts, on our available-for-sale securities portfolio was $39 million, compared to $106 million for the comparable 2013 period.
|
•
|
Interest expense
for the
three months ended
March 31, 2014
increased to $8.7 million, compared to $7.8 million for the comparable 2013 period. The items impacting interest expense were as follows:
|
◦
|
An increase in interest expense from interest-bearing deposits of $0.9 million, mainly attributable to growth of our average money market deposits of $1.5 billion.
|
◦
|
Interest expense from our long-term debt remained relatively flat at $5.8 million.
|
|
|
Three months ended March 31,
|
||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||
(Dollars in thousands)
|
|
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)
|
|
$
|
2,482,190
|
|
|
$
|
1,636
|
|
|
0.27
|
%
|
|
$
|
822,418
|
|
|
$
|
719
|
|
|
0.35
|
%
|
Available-for-sale securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
12,167,143
|
|
|
54,420
|
|
|
1.81
|
|
|
10,803,735
|
|
|
45,752
|
|
|
1.72
|
|
||||
Non-taxable (3)
|
|
81,782
|
|
|
1,225
|
|
|
6.07
|
|
|
83,811
|
|
|
1,229
|
|
|
5.95
|
|
||||
Total loans, net of unearned income (4) (5)
|
|
10,767,684
|
|
|
148,172
|
|
|
5.58
|
|
|
8,680,917
|
|
|
123,744
|
|
|
5.78
|
|
||||
Total interest-earning assets
|
|
25,498,799
|
|
|
205,453
|
|
|
3.27
|
|
|
20,390,881
|
|
|
171,444
|
|
|
3.41
|
|
||||
Cash and due from banks
|
|
264,478
|
|
|
|
|
|
|
279,179
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
|
(141,073
|
)
|
|
|
|
|
|
(115,486
|
)
|
|
|
|
|
||||||||
Other assets (6)
|
|
2,145,429
|
|
|
|
|
|
|
1,759,985
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
27,767,633
|
|
|
|
|
|
|
$
|
22,314,559
|
|
|
|
|
|
||||||
Funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NOW deposits
|
|
$
|
150,737
|
|
|
$
|
136
|
|
|
0.37
|
%
|
|
$
|
135,436
|
|
|
$
|
117
|
|
|
0.35
|
%
|
Money market deposits
|
|
4,582,863
|
|
|
2,412
|
|
|
0.21
|
|
|
3,043,021
|
|
|
1,495
|
|
|
0.20
|
|
||||
Money market deposits in foreign offices
|
|
191,715
|
|
|
46
|
|
|
0.10
|
|
|
115,659
|
|
|
28
|
|
|
0.10
|
|
||||
Time deposits
|
|
168,050
|
|
|
100
|
|
|
0.24
|
|
|
172,401
|
|
|
173
|
|
|
0.41
|
|
||||
Sweep deposits in foreign offices
|
|
1,702,563
|
|
|
210
|
|
|
0.05
|
|
|
1,932,495
|
|
|
238
|
|
|
0.05
|
|
||||
Total interest-bearing deposits
|
|
6,795,928
|
|
|
2,904
|
|
|
0.17
|
|
|
5,399,012
|
|
|
2,051
|
|
|
0.15
|
|
||||
Short-term borrowings
|
|
4,984
|
|
|
—
|
|
|
—
|
|
|
74,939
|
|
|
28
|
|
|
0.15
|
|
||||
5.375% Senior Notes
|
|
348,229
|
|
|
4,828
|
|
|
5.62
|
|
|
348,013
|
|
|
4,821
|
|
|
5.62
|
|
||||
Junior Subordinated Debentures
|
|
55,005
|
|
|
839
|
|
|
6.19
|
|
|
55,181
|
|
|
832
|
|
|
6.11
|
|
||||
6.05% Subordinated Notes
|
|
51,968
|
|
|
125
|
|
|
0.98
|
|
|
54,282
|
|
|
113
|
|
|
0.84
|
|
||||
Total interest-bearing liabilities
|
|
7,256,114
|
|
|
8,696
|
|
|
0.49
|
|
|
5,931,427
|
|
|
7,845
|
|
|
0.54
|
|
||||
Portion of noninterest-bearing funding sources
|
|
18,242,685
|
|
|
|
|
|
|
14,459,454
|
|
|
|
|
|
||||||||
Total funding sources
|
|
25,498,799
|
|
|
8,696
|
|
|
0.14
|
|
|
20,390,881
|
|
|
7,845
|
|
|
0.16
|
|
||||
Noninterest-bearing funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
16,880,520
|
|
|
|
|
|
|
13,386,501
|
|
|
|
|
|
||||||||
Other liabilities
|
|
396,203
|
|
|
|
|
|
|
359,913
|
|
|
|
|
|
||||||||
SVBFG stockholders’ equity
|
|
2,099,819
|
|
|
|
|
|
|
1,866,310
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
1,134,977
|
|
|
|
|
|
|
770,408
|
|
|
|
|
|
||||||||
Portion used to fund interest-earning assets
|
|
(18,242,685
|
)
|
|
|
|
|
|
(14,459,454
|
)
|
|
|
|
|
||||||||
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity
|
|
$
|
27,767,633
|
|
|
|
|
|
|
$
|
22,314,559
|
|
|
|
|
|
||||||
Net interest income and margin
|
|
|
|
$
|
196,757
|
|
|
3.13
|
%
|
|
|
|
$
|
163,599
|
|
|
3.25
|
%
|
||||
Total deposits
|
|
$
|
23,676,448
|
|
|
|
|
|
|
$
|
18,785,513
|
|
|
|
|
|
||||||
Reconciliation to reported net interest income
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustments for taxable equivalent basis
|
|
|
|
(429
|
)
|
|
|
|
|
|
(430
|
)
|
|
|
||||||||
Net interest income, as reported
|
|
|
|
$
|
196,328
|
|
|
|
|
|
|
$
|
163,169
|
|
|
|
|
(1)
|
Includes average interest-earning deposits in other financial institutions of
$317 million
and
$176 million
for the
three months ended
March 31, 2014
and
2013
, respectively. For the
three months ended
March 31, 2014
and
2013
, balances also include
$2.0 billion
and
$0.4 billion
, respectively, deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate.
|
(2)
|
Yields on available-for-sale securities are based on amortized cost, and therefore do not give effect to unrealized changes in fair value that are reflected in other comprehensive income.
|
(3)
|
Interest income on non-taxable available-for-sale securities is presented on a fully taxable-equivalent basis using the federal statutory income tax rate of 35.0 percent for all periods presented.
|
(4)
|
Nonaccrual loans are reflected in the average balances of loans.
|
(5)
|
Interest income includes loan fees of
$24.3 million
and
$16.8 million
for the
three months ended
March 31, 2014
and
2013
, respectively.
|
(6)
|
Average investment securities of
$1.6 billion
and
$1.4 billion
for the
three months ended
March 31, 2014
and
2013
, respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable securities.
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Allowance for loan losses, beginning balance
|
|
$
|
142,886
|
|
|
$
|
110,651
|
|
Provision for loan losses
|
|
494
|
|
|
5,813
|
|
||
Gross loan charge-offs
|
|
(21,150
|
)
|
|
(5,626
|
)
|
||
Loan recoveries
|
|
1,312
|
|
|
1,367
|
|
||
Allowance for loan losses, ending balance
|
|
$
|
123,542
|
|
|
$
|
112,205
|
|
Provision for loan losses as a percentage of period-end total gross loans (annualized)
|
|
0.02
|
%
|
|
0.26
|
%
|
||
Gross loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.79
|
|
|
0.26
|
|
||
Net loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.74
|
|
|
0.20
|
|
||
Allowance for loan losses as a percentage of period-end total gross loans
|
|
1.13
|
|
|
1.26
|
|
||
Period-end total gross loans
|
|
$
|
10,920,482
|
|
|
$
|
8,922,829
|
|
Average total gross loans
|
|
10,852,905
|
|
|
8,755,699
|
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Non-GAAP core fee income:
|
|
|
|
|
|
|
|||||
Foreign exchange fees
|
|
$
|
17,196
|
|
|
$
|
14,196
|
|
|
21.1
|
%
|
Credit card fees
|
|
10,282
|
|
|
7,448
|
|
|
38.1
|
|
||
Deposit service charges
|
|
9,607
|
|
|
8,793
|
|
|
9.3
|
|
||
Lending related fees (1)
|
|
6,303
|
|
|
3,974
|
|
|
58.6
|
|
||
Letters of credit and standby letters of credit income
|
|
4,140
|
|
|
3,435
|
|
|
20.5
|
|
||
Client investment fees
|
|
3,418
|
|
|
3,475
|
|
|
(1.6
|
)
|
||
Total non-GAAP core fee income (2)
|
|
50,946
|
|
|
41,321
|
|
|
23.3
|
|
||
Gains on investment securities, net
|
|
223,912
|
|
|
27,438
|
|
|
NM
|
|
||
Gains on derivative instruments, net
|
|
24,167
|
|
|
10,292
|
|
|
134.8
|
|
||
Other
|
|
11,200
|
|
|
(447
|
)
|
|
NM
|
|
||
Total noninterest income
|
|
$
|
310,225
|
|
|
$
|
78,604
|
|
|
NM
|
|
|
(1)
|
Lending related fees consists of fee income associated with credit commitments such as unused commitment fees, syndication fees and other loan processing fees and, historically, has been included in other noninterest income. Prior period amounts have been reclassified to conform with the current period presentation.
|
(2)
|
The following table provides a reconciliation of GAAP noninterest income to non-GAAP core fee income:
|
|
|
Three months ended March 31,
|
||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
||||
GAAP noninterest income (as reported)
|
|
$
|
310,225
|
|
|
$
|
78,604
|
|
|
NM
|
Less: gains on investment securities, net
|
|
223,912
|
|
|
27,438
|
|
|
NM
|
||
Less: gains on derivative instruments, net
|
|
24,167
|
|
|
10,292
|
|
|
134.8
|
||
Less: other noninterest income
|
|
11,200
|
|
|
(447
|
)
|
|
NM
|
||
Non-GAAP core fee income (1)
|
|
$
|
50,946
|
|
|
$
|
41,321
|
|
|
23.3
|
|
(1)
|
This non-GAAP measure represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control.
|
|
|
Three months ended March 31,
|
||||||||
Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
||||
GAAP noninterest income (as reported)
|
|
$
|
310,225
|
|
|
$
|
78,604
|
|
|
NM
|
Less: income attributable to noncontrolling interests, including carried interest
|
|
186,718
|
|
|
22,490
|
|
|
NM
|
||
Non-GAAP noninterest income, net of noncontrolling interests
|
|
$
|
123,507
|
|
|
$
|
56,114
|
|
|
120.1
|
|
•
|
Gains of
$20.6 million
from our managed direct venture funds, driven by the continued strong stock performance of public companies (including FireEye) during the first quarter.
|
•
|
Gains of
$10.0 million
from our managed funds of funds, primarily related to unrealized valuation increases from two of our funds of funds.
|
•
|
Gains of
$3.7 million
from our strategic and other investments, primarily driven by strong distributions from strategic venture capital fund investments.
|
•
|
Gains of
$3.0 million
from our investments in debt funds, primarily from unrealized valuation increases from the investments within the funds.
|
(Dollars in thousands)
|
|
Managed
Funds of
Funds
|
|
Managed
Direct
Venture
Funds
|
|
Debt
Funds
|
|
Available-
For-Sale
Securities
|
|
Strategic
and Other
Investments
|
|
Total
|
||||||||||||
Three months ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total gains on investment securities, net
|
|
$
|
111,448
|
|
|
$
|
105,702
|
|
|
$
|
3,001
|
|
|
$
|
60
|
|
|
$
|
3,701
|
|
|
$
|
223,912
|
|
Less: income (losses) attributable to noncontrolling interests, including carried interest
|
|
101,451
|
|
|
85,114
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
186,552
|
|
||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests
|
|
$
|
9,997
|
|
|
$
|
20,588
|
|
|
$
|
3,014
|
|
|
$
|
60
|
|
|
$
|
3,701
|
|
|
$
|
37,360
|
|
Three months ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
22,802
|
|
|
$
|
1,856
|
|
|
$
|
1,753
|
|
|
$
|
(45
|
)
|
|
$
|
1,072
|
|
|
$
|
27,438
|
|
Less: income (losses) attributable to noncontrolling interests, including carried interest
|
|
20,802
|
|
|
1,496
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
22,296
|
|
||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
2,000
|
|
|
360
|
|
|
1,755
|
|
|
(45
|
)
|
|
1,072
|
|
|
5,142
|
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Equity warrant assets (1)
|
|
|
|
|
|
|
|||||
Gains on exercises, net
|
|
$
|
18,402
|
|
|
$
|
814
|
|
|
NM
|
|
Cancellations and expirations
|
|
(87
|
)
|
|
(104
|
)
|
|
(16.3
|
)
|
||
Changes in fair value
|
|
7,058
|
|
|
2,795
|
|
|
152.5
|
|
||
Net gains on equity warrant assets
|
|
25,373
|
|
|
3,505
|
|
|
NM
|
|
||
Gains on foreign exchange forward contracts, net:
|
|
|
|
|
|
|
|||||
Gains on client foreign exchange forward contracts, net (2)
|
|
302
|
|
|
49
|
|
|
NM
|
|
||
(Losses) gains on internal foreign exchange forward contracts, net (3)
|
|
(1,029
|
)
|
|
6,200
|
|
|
(116.6
|
)
|
||
Total (losses) gains on foreign exchange forward contracts, net
|
|
(727
|
)
|
|
6,249
|
|
|
(111.6
|
)
|
||
Changes in fair value of interest rate swaps
|
|
(12
|
)
|
|
60
|
|
|
(120.0
|
)
|
||
Net (losses) gains on other derivatives (4)
|
|
(467
|
)
|
|
478
|
|
|
(197.7
|
)
|
||
Gains on derivative instruments, net
|
|
$
|
24,167
|
|
|
$
|
10,292
|
|
|
134.8
|
|
|
(1)
|
At
March 31, 2014
, we held warrants in
1,343
companies, compared to
1,282
companies at
March 31, 2013
.
|
(2)
|
Represents the net gains for foreign exchange forward contracts executed on behalf of clients, excluding any spread or fees earned in connection with these trades.
|
(3)
|
Represents the change in the fair value of foreign exchange forward contracts used to economically reduce our foreign exchange exposure related to certain foreign currency denominated instruments. Refer to revaluation of foreign currency instruments included in the line item "other" within noninterest income for the amount we were able to partially offset.
|
(4)
|
Primarily represents the change in fair value of loan conversion options held by SVB Financial.
|
•
|
Net gains on equity warrant assets of $25.4 million for the three months ended
March 31, 2014
, compared to
$3.5 million
for the comparable
2013
period. The increase was primarily due to net gains of $18.4 million from the exercise of equity warrant assets for the three months ended March 31, 2014, primarily reflective of $15.2 million in gains
|
•
|
Net losses of
$1.0 million
on foreign exchange forward contracts hedging certain of our foreign currency denominated instruments for the
three months ended
March 31, 2014
, compared to net gains of
$6.2 million
for the comparable
2013
period. The losses for the
three months ended
March 31, 2014
were primarily attributable to the weakening of the U.S. Dollar against the Euro and Pound Sterling, and were offset by gains of $1.0 million from the revaluation of foreign currency denominated instruments that are included in the line item "other" within noninterest income as noted below.
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in millions)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Client directed investment assets (1)
|
|
$
|
7,182
|
|
|
$
|
6,898
|
|
|
4.1
|
%
|
Client investment assets under management (2)
|
|
13,513
|
|
|
11,309
|
|
|
19.5
|
|
||
Sweep money market funds
|
|
6,440
|
|
|
4,283
|
|
|
50.4
|
|
||
Total average client investment funds (3)
|
|
$
|
27,135
|
|
|
$
|
22,490
|
|
|
20.7
|
|
|
(1)
|
Comprised of mutual funds and Repurchase Agreement Program assets.
|
(2)
|
These funds represent investments in third party money market mutual funds and fixed-income securities managed by SVB Asset Management.
|
(3)
|
Client investment funds are maintained at third party financial institutions and are not recorded on our balance sheet.
|
(Dollars in millions)
|
|
March 31, 2014
|
|
December 31, 2013
|
|
% Change
|
|||
Client directed investment assets
|
|
7,395
|
|
|
7,073
|
|
|
4.6
|
%
|
Client investment assets under management
|
|
14,330
|
|
|
12,677
|
|
|
13.0
|
|
Sweep money market funds
|
|
6,513
|
|
|
6,613
|
|
|
(1.5
|
)
|
Total period-end client investment funds
|
|
28,238
|
|
|
26,363
|
|
|
7.1
|
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Fund management fees
|
|
2,755
|
|
|
2,769
|
|
|
(0.5
|
)
|
||
Service-based fee income
|
|
2,027
|
|
|
1,804
|
|
|
12.4
|
|
||
Gains (losses) on revaluation of foreign currency instruments (1)
|
|
978
|
|
|
(7,064
|
)
|
|
(113.8
|
)
|
||
Currency revaluation (losses) gains (2)
|
|
278
|
|
|
(55
|
)
|
|
NM
|
|
||
Other (3)
|
|
5,162
|
|
|
2,099
|
|
|
145.9
|
|
||
Total other noninterest income (loss)
|
|
$
|
11,200
|
|
|
$
|
(447
|
)
|
|
NM
|
|
|
(1)
|
Represents the revaluation of foreign currency denominated financial instruments issued and held by us, primarily loans, deposits and cash. These instruments partially offset the impact of changes in internal foreign exchange forward contracts. Refer to internal foreign exchange forward contracts, net included within gains on derivative instruments as noted above.
|
(2)
|
Includes the revaluation of foreign currency denominated financial statements of certain funds. Included in these amounts were gains of $0.2 million for both the three months ended March 31, 2014 and 2013, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.
|
(3)
|
Includes dividends on FHLB/FRB stock, correspondent bank rebate income and other fee income. For the three month period ended March 31, 2014, this amount also includes $3.0 million in gains from certain holdings from our India operations.
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Compensation and benefits
|
|
$
|
102,507
|
|
|
$
|
88,704
|
|
|
15.6
|
%
|
Professional services
|
|
21,189
|
|
|
17,160
|
|
|
23.5
|
|
||
Premises and equipment
|
|
11,582
|
|
|
10,725
|
|
|
8.0
|
|
||
Business development and travel
|
|
10,194
|
|
|
8,272
|
|
|
23.2
|
|
||
Net occupancy
|
|
7,320
|
|
|
5,767
|
|
|
26.9
|
|
||
FDIC assessments
|
|
4,128
|
|
|
3,382
|
|
|
22.1
|
|
||
Correspondent bank fees
|
|
3,203
|
|
|
3,055
|
|
|
4.8
|
|
||
Provision for unfunded credit commitments
|
|
1,123
|
|
|
2,014
|
|
|
(44.2
|
)
|
||
Other
|
|
11,190
|
|
|
9,935
|
|
|
12.6
|
|
||
Total noninterest expense
|
|
$
|
172,436
|
|
|
$
|
149,014
|
|
|
15.7
|
|
|
|
Three months ended March 31,
|
|||||||||
Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
GAAP noninterest expense
|
|
$
|
172,436
|
|
|
$
|
149,014
|
|
|
15.7
|
%
|
Less: amounts attributable to noncontrolling interests
|
|
3,321
|
|
|
2,860
|
|
|
16.1
|
|
||
Non-GAAP noninterest expense, net of noncontrolling interests
|
|
$
|
169,115
|
|
|
$
|
146,154
|
|
|
15.7
|
|
GAAP taxable equivalent net interest income
|
|
$
|
196,757
|
|
|
$
|
163,599
|
|
|
20.3
|
|
Less: income attributable to noncontrolling interests
|
|
8
|
|
|
24
|
|
|
(66.7
|
)
|
||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests
|
|
$
|
196,749
|
|
|
$
|
163,575
|
|
|
20.3
|
|
GAAP noninterest income
|
|
$
|
310,225
|
|
|
$
|
78,604
|
|
|
NM
|
|
Non-GAAP noninterest income, net of noncontrolling interests
|
|
123,507
|
|
|
56,114
|
|
|
120.1
|
|
||
GAAP taxable equivalent revenue
|
|
$
|
506,982
|
|
|
$
|
242,203
|
|
|
109.3
|
|
Non-GAAP taxable equivalent revenue, net of noncontrolling interests
|
|
$
|
320,256
|
|
|
$
|
219,689
|
|
|
45.8
|
|
GAAP operating efficiency ratio
|
|
34.01
|
%
|
|
61.52
|
%
|
|
(44.7
|
)
|
||
Non-GAAP operating efficiency ratio (1)
|
|
52.81
|
%
|
|
66.53
|
%
|
|
(20.6
|
)
|
|
(1)
|
The non-GAAP operating efficiency ratio is calculated by dividing non-GAAP noninterest expense by non-GAAP total taxable-equivalent income.
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Compensation and benefits
|
|
|
|
|
|
|
|||||
Salaries and wages
|
|
$
|
44,353
|
|
|
$
|
39,323
|
|
|
12.8
|
%
|
Incentive compensation & ESOP
|
|
26,448
|
|
|
22,193
|
|
|
19.2
|
|
||
Other employee benefits (1)
|
|
31,706
|
|
|
27,188
|
|
|
16.6
|
|
||
Total compensation and benefits
|
|
$
|
102,507
|
|
|
$
|
88,704
|
|
|
15.6
|
|
Period-end full-time equivalent employees
|
|
1,737
|
|
|
1,663
|
|
|
4.4
|
|
||
Average full-time equivalent employees
|
|
1,735
|
|
|
1,655
|
|
|
4.8
|
|
|
(1)
|
Other employee benefits includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), warrant and retention program plans, agency fees and other employee related expenses.
|
•
|
An increase of $5.0 million in salaries and wages expense, primarily due to an increase in the number of average FTEs. Average FTEs increased by 80 to
1,735
FTEs for the three months ended
March 31, 2014
, compared to
1,655
FTEs for the comparable 2013 period, primarily to support our product development, operational and sales and advisory teams, as well as to support our commercial banking operations and initiatives.
|
•
|
An increase of $4.5 million in other employee benefits, primarily due to warrant incentive program plan expense resulting from the gains recorded on our equity warrant assets during the first quarter of 2014, and share-based plan expense primarily as a result of the increase in the valuation of our common stock. The remaining increases related to various other employee benefits.
|
•
|
An increase of $4.3 million in incentive compensation and ESOP expense, primarily reflective of our strong performance in the first quarter of 2014 and our current expectation that we will exceed our internal performance targets for 2014.
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Client services
|
|
$
|
2,359
|
|
|
$
|
1,935
|
|
|
21.9
|
%
|
Data processing services
|
|
2,227
|
|
|
1,912
|
|
|
16.5
|
|
||
Tax credit fund amortization
|
|
2,028
|
|
|
1,317
|
|
|
54.0
|
|
||
Telephone
|
|
1,748
|
|
|
1,557
|
|
|
12.3
|
|
||
Postage and supplies
|
|
769
|
|
|
538
|
|
|
42.9
|
|
||
Dues and publications
|
|
497
|
|
|
458
|
|
|
8.5
|
|
||
Other
|
|
1,562
|
|
|
2,218
|
|
|
(29.6
|
)
|
||
Total other noninterest expense
|
|
$
|
11,190
|
|
|
$
|
9,935
|
|
|
12.6
|
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Net interest income (1)
|
|
$
|
(8
|
)
|
|
$
|
(24
|
)
|
|
(66.7
|
)%
|
Noninterest income (1)
|
|
(202,138
|
)
|
|
(23,288
|
)
|
|
NM
|
|
||
Noninterest expense (1)
|
|
3,321
|
|
|
2,860
|
|
|
16.1
|
|
||
Carried interest (2)
|
|
15,420
|
|
|
798
|
|
|
NM
|
|
||
Net income attributable to noncontrolling interests
|
|
$
|
(183,405
|
)
|
|
$
|
(19,654
|
)
|
|
NM
|
|
|
(1)
|
Represents noncontrolling interests’ share in net interest income, noninterest income and noninterest expense.
|
(2)
|
Represents the preferred allocation of income earned by us as the general partner of certain consolidated funds.
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Net interest income
|
|
$
|
175,703
|
|
|
$
|
148,936
|
|
|
18.0
|
%
|
Provision for loan losses
|
|
(807
|
)
|
|
(6,207
|
)
|
|
(87.0
|
)
|
||
Noninterest income
|
|
58,637
|
|
|
46,541
|
|
|
26.0
|
|
||
Noninterest expense
|
|
(121,925
|
)
|
|
(104,339
|
)
|
|
16.9
|
|
||
Income before income tax expense
|
|
$
|
111,608
|
|
|
$
|
84,931
|
|
|
31.4
|
|
Total average loans, net of unearned income
|
|
$
|
9,762,802
|
|
|
$
|
7,868,587
|
|
|
24.1
|
|
Total average assets
|
|
25,571,787
|
|
|
20,540,835
|
|
|
24.5
|
|
||
Total average deposits
|
|
22,878,150
|
|
|
18,302,877
|
|
|
25.0
|
|
|
|
Three months ended March 31,
|
|||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
|||||
Net interest income
|
|
$
|
6,892
|
|
|
$
|
6,104
|
|
|
12.9
|
%
|
Reduction of loan losses
|
|
313
|
|
|
394
|
|
|
(20.6
|
)
|
||
Noninterest income
|
|
274
|
|
|
234
|
|
|
17.1
|
|
||
Noninterest expense
|
|
(2,495
|
)
|
|
(1,931
|
)
|
|
29.2
|
|
||
Income before income tax expense
|
|
$
|
4,984
|
|
|
$
|
4,801
|
|
|
3.8
|
|
Total average loans, net of unearned income
|
|
$
|
1,049,901
|
|
|
$
|
844,807
|
|
|
24.3
|
|
Total average assets
|
|
967,873
|
|
|
850,084
|
|
|
13.9
|
|
||
Total average deposits
|
|
745,083
|
|
|
470,673
|
|
|
58.3
|
|
|
|
Three months ended March 31,
|
||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
% Change
|
||||
Net interest income
|
|
$
|
14
|
|
|
$
|
1
|
|
|
NM
|
Noninterest income
|
|
37,672
|
|
|
5,441
|
|
|
NM
|
||
Noninterest expense
|
|
(2,635
|
)
|
|
(2,386
|
)
|
|
10.4
|
||
Income before income tax expense
|
|
$
|
35,051
|
|
|
$
|
3,056
|
|
|
NM
|
Total average assets
|
|
$
|
340,990
|
|
|
$
|
238,743
|
|
|
42.8
|
|
•
|
Net gains on investment securities of $34.3 million for the three months ended
March 31, 2014
, compared to net gains of $3.0 million for the comparable
2013
period. The net gains on investment securities of $34.3 million for the three months ended
March 31, 2014
were primarily driven by unrealized valuation increases and carried interest allocations in two of our managed direct venture funds, related to FireEye, as well as unrealized valuation increases from two of our funds of funds.
|
•
|
Fund management fees of
$2.8 million
for both the three months ended
March 31, 2014
and 2013.
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value
(as reported)
|
|
Amount attributable
to SVBFG
|
|
Carrying value
(as reported)
|
|
Amount attributable
to SVBFG
|
||||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments (1)
|
|
$
|
976,922
|
|
|
$
|
80,087
|
|
|
$
|
862,972
|
|
|
$
|
76,505
|
|
Other venture capital investments (2)
|
|
28,306
|
|
|
1,873
|
|
|
32,839
|
|
|
2,097
|
|
||||
Other securities (fair value accounting) (3)
|
|
381,928
|
|
|
27,992
|
|
|
321,374
|
|
|
23,058
|
|
||||
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
|
|
||||||||
Other investments
|
|
144,636
|
|
|
144,636
|
|
|
142,883
|
|
|
142,883
|
|
||||
Low income housing tax credit funds
|
|
84,463
|
|
|
84,463
|
|
|
72,241
|
|
|
72,241
|
|
||||
Non-marketable securities (cost method accounting):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
140,374
|
|
|
140,374
|
|
|
148,994
|
|
|
148,994
|
|
||||
Other investments
|
|
13,827
|
|
|
13,827
|
|
|
14,191
|
|
|
14,191
|
|
||||
Total non-marketable and other securities
|
|
$
|
1,770,456
|
|
|
$
|
493,252
|
|
|
$
|
1,595,494
|
|
|
$
|
479,969
|
|
(1)
|
The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at
March 31, 2014
and
December 31, 2013
:
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value
(as reported)
|
|
Amount
attributable
to SVBFG
|
|
Carrying value
(as reported)
|
|
Amount
attributable
to SVBFG
|
||||||||
SVB Strategic Investors Fund, LP
|
|
$
|
27,134
|
|
|
$
|
3,408
|
|
|
$
|
29,104
|
|
|
$
|
3,656
|
|
SVB Strategic Investors Fund II, LP
|
|
97,960
|
|
|
8,397
|
|
|
96,185
|
|
|
8,244
|
|
||||
SVB Strategic Investors Fund III, LP
|
|
264,661
|
|
|
15,538
|
|
|
260,272
|
|
|
15,280
|
|
||||
SVB Strategic Investors Fund IV, LP
|
|
291,989
|
|
|
14,599
|
|
|
226,729
|
|
|
11,337
|
|
||||
Strategic Investors Fund V Funds
|
|
159,794
|
|
|
231
|
|
|
118,181
|
|
|
184
|
|
||||
Strategic Investors Fund VI Funds
|
|
9,871
|
|
|
15
|
|
|
7,944
|
|
|
12
|
|
||||
SVB Capital Preferred Return Fund, LP
|
|
60,159
|
|
|
12,965
|
|
|
59,028
|
|
|
12,722
|
|
||||
SVB Capital—NT Growth Partners, LP
|
|
61,230
|
|
|
21,375
|
|
|
61,126
|
|
|
21,339
|
|
||||
SVB Capital Partners II, LP
|
|
595
|
|
|
30
|
|
|
708
|
|
|
36
|
|
||||
Other private equity fund
|
|
3,529
|
|
|
3,529
|
|
|
3,695
|
|
|
3,695
|
|
||||
Total venture capital and private equity fund investments
|
|
$
|
976,922
|
|
|
$
|
80,087
|
|
|
$
|
862,972
|
|
|
$
|
76,505
|
|
(2)
|
The following table shows the amounts of other venture capital investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at
March 31, 2014
and
December 31, 2013
:
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value
(as reported)
|
|
Amount
attributable
to SVBFG
|
|
Carrying value
(as reported)
|
|
Amount
attributable
to SVBFG
|
||||||||
Silicon Valley BancVentures, LP
|
|
$
|
6,520
|
|
|
$
|
697
|
|
|
$
|
6,564
|
|
|
$
|
702
|
|
SVB Capital Partners II, LP
|
|
17,696
|
|
|
899
|
|
|
22,684
|
|
|
1,152
|
|
||||
SVB Capital Shanghai Yangpu Venture Capital Fund
|
|
4,090
|
|
|
277
|
|
|
3,591
|
|
|
243
|
|
||||
Total other venture capital investments
|
|
$
|
28,306
|
|
|
$
|
1,873
|
|
|
$
|
32,839
|
|
|
$
|
2,097
|
|
(3)
|
Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. This amount primarily includes total unrealized gains of $351 million in two of our public portfolio companies, FireEye and Twitter, of which one portfolio company, FireEye, is currently subject to a lock-up agreement. The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which FireEye securities are subject, the actual sales of the securities and the timing of such actual sales.
|
•
|
A $15.2 million gain from the exercise and conversion of our warrants during the quarter as we exercised the warrants at a share price of $88.19 on March 4, 2014 compared to the December 31, 2013 price of $43.61. Subsequent to our exercise and conversion of our warrants to common stock, FireEye’s share price decreased to $61.57 as of March 31, 2014 resulting in a loss of $8.2 million, which is included as an unrealized loss in equity recorded in accumulated other comprehensive loss.
|
•
|
A $113.0 million ($21.8 million net of noncontrolling interests) gain from the sale of a portion of shares through FireEye’s follow-on equity offering in March 2014, and the increased valuation of the remaining shares from the December 31, 2013 market share price, held by our managed direct venture funds.
|
Non-GAAP losses on investments securities, net of noncontrolling interests (Dollars in millions)
|
|
Through May 7, 2014
|
||
GAAP losses on certain nonmarketable and other securities
|
|
$
|
150
|
|
Less: losses attributable to noncontrolling interests, including carried interest
|
|
121
|
|
|
Non-GAAP losses on certain nonmarketable and other securities, net of noncontrolling interests
|
|
$
|
29
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||
Software
|
|
$
|
4,164,435
|
|
|
38.1
|
%
|
|
$
|
4,141,358
|
|
|
37.7
|
%
|
Hardware
|
|
1,204,350
|
|
|
11.0
|
|
|
1,224,480
|
|
|
11.1
|
|
||
Venture capital/private equity
|
|
2,221,772
|
|
|
20.3
|
|
|
2,408,426
|
|
|
21.9
|
|
||
Life science
|
|
1,182,219
|
|
|
10.8
|
|
|
1,181,266
|
|
|
10.7
|
|
||
Premium wine
|
|
162,694
|
|
|
1.5
|
|
|
151,255
|
|
|
1.4
|
|
||
Other
|
|
296,345
|
|
|
2.8
|
|
|
291,630
|
|
|
2.7
|
|
||
Total commercial loans
|
|
9,231,815
|
|
|
84.5
|
|
|
9,398,415
|
|
|
85.5
|
|
||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
||||||
Premium wine
|
|
541,084
|
|
|
5.0
|
|
|
515,942
|
|
|
4.7
|
|
||
Consumer
|
|
916,779
|
|
|
8.4
|
|
|
873,070
|
|
|
7.9
|
|
||
Other
|
|
30,833
|
|
|
0.3
|
|
|
31,033
|
|
|
0.3
|
|
||
Total real estate secured loans
|
|
1,488,696
|
|
|
13.7
|
|
|
1,420,045
|
|
|
12.9
|
|
||
Construction loans
|
|
98,606
|
|
|
0.9
|
|
|
77,165
|
|
|
0.7
|
|
||
Consumer loans
|
|
101,365
|
|
|
0.9
|
|
|
99,643
|
|
|
0.9
|
|
||
Total gross loans
|
|
$
|
10,920,482
|
|
|
100.0
|
%
|
|
$
|
10,995,268
|
|
|
100.0
|
%
|
|
|
March 31, 2014
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Less than
Five Million
|
|
Five to Ten
Million
|
|
Ten to Twenty
Million
|
|
Twenty to Thirty Million
|
|
Thirty Million
or More
|
|
Total
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software
|
|
$
|
1,053,369
|
|
|
$
|
654,905
|
|
|
$
|
878,069
|
|
|
$
|
912,594
|
|
|
$
|
665,498
|
|
|
$
|
4,164,435
|
|
Hardware
|
|
272,176
|
|
|
174,876
|
|
|
194,775
|
|
|
293,922
|
|
|
268,601
|
|
|
1,204,350
|
|
||||||
Venture capital/private equity
|
|
373,792
|
|
|
280,132
|
|
|
431,294
|
|
|
304,291
|
|
|
832,263
|
|
|
2,221,772
|
|
||||||
Life science
|
|
349,864
|
|
|
215,196
|
|
|
277,525
|
|
|
147,475
|
|
|
192,159
|
|
|
1,182,219
|
|
||||||
Premium wine (1)
|
|
74,986
|
|
|
38,272
|
|
|
23,924
|
|
|
25,512
|
|
|
—
|
|
|
162,694
|
|
||||||
Other
|
|
126,334
|
|
|
50,223
|
|
|
13,703
|
|
|
71,085
|
|
|
35,000
|
|
|
296,345
|
|
||||||
Commercial loans
|
|
2,250,521
|
|
|
1,413,604
|
|
|
1,819,290
|
|
|
1,754,879
|
|
|
1,993,521
|
|
|
9,231,815
|
|
||||||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premium wine (1)
|
|
137,071
|
|
|
158,511
|
|
|
142,133
|
|
|
72,814
|
|
|
30,555
|
|
|
541,084
|
|
||||||
Consumer (2)
|
|
799,026
|
|
|
87,946
|
|
|
9,807
|
|
|
20,000
|
|
|
—
|
|
|
916,779
|
|
||||||
Other
|
|
2,500
|
|
|
5,000
|
|
|
—
|
|
|
23,333
|
|
|
—
|
|
|
30,833
|
|
||||||
Real estate secured loans
|
|
938,597
|
|
|
251,457
|
|
|
151,940
|
|
|
116,147
|
|
|
30,555
|
|
|
1,488,696
|
|
||||||
Construction loans
|
|
10,097
|
|
|
74,475
|
|
|
14,034
|
|
|
—
|
|
|
—
|
|
|
98,606
|
|
||||||
Consumer loans (2)
|
|
51,469
|
|
|
17,036
|
|
|
510
|
|
|
2,350
|
|
|
30,000
|
|
|
101,365
|
|
||||||
Total gross loans
|
|
$
|
3,250,684
|
|
|
$
|
1,756,572
|
|
|
$
|
1,985,774
|
|
|
$
|
1,873,376
|
|
|
$
|
2,054,076
|
|
|
$
|
10,920,482
|
|
|
(1)
|
Premium wine clients can have loan balances included in both commercial loans and real estate secured loans, the total of which are used for the breakout of the above categories.
|
(2)
|
Consumer loan clients have loan balances included in both real estate secured loans and other consumer loans, the total of which are used for the breakout of the above categories.
|
|
|
December 31, 2013
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Less than
Five Million
|
|
Five to Ten
Million
|
|
Ten to Twenty
Million
|
|
Twenty to Thirty Million
|
|
Thirty Million
or More
|
|
Total
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software
|
|
$
|
1,031,179
|
|
|
$
|
647,060
|
|
|
$
|
905,815
|
|
|
$
|
832,375
|
|
|
$
|
724,929
|
|
|
$
|
4,141,358
|
|
Hardware
|
|
280,794
|
|
|
205,705
|
|
|
187,140
|
|
|
235,973
|
|
|
314,868
|
|
|
1,224,480
|
|
||||||
Venture capital/private equity
|
|
328,073
|
|
|
248,787
|
|
|
371,980
|
|
|
201,193
|
|
|
1,258,393
|
|
|
2,408,426
|
|
||||||
Life science
|
|
332,991
|
|
|
262,420
|
|
|
249,749
|
|
|
122,426
|
|
|
213,680
|
|
|
1,181,266
|
|
||||||
Premium wine (1)
|
|
77,431
|
|
|
24,667
|
|
|
24,810
|
|
|
24,347
|
|
|
—
|
|
|
151,255
|
|
||||||
Other
|
|
131,351
|
|
|
48,698
|
|
|
—
|
|
|
76,581
|
|
|
35,000
|
|
|
291,630
|
|
||||||
Commercial loans
|
|
2,181,819
|
|
|
1,437,337
|
|
|
1,739,494
|
|
|
1,492,895
|
|
|
2,546,870
|
|
|
9,398,415
|
|
||||||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premium wine (1)
|
|
136,748
|
|
|
128,291
|
|
|
146,439
|
|
|
73,594
|
|
|
30,870
|
|
|
515,942
|
|
||||||
Consumer loans (2)
|
|
760,693
|
|
|
82,545
|
|
|
9,832
|
|
|
20,000
|
|
|
—
|
|
|
873,070
|
|
||||||
Other
|
|
2,500
|
|
|
5,000
|
|
|
—
|
|
|
23,533
|
|
|
—
|
|
|
31,033
|
|
||||||
Real estate secured loans
|
|
899,941
|
|
|
215,836
|
|
|
156,271
|
|
|
117,127
|
|
|
30,870
|
|
|
1,420,045
|
|
||||||
Construction loans
|
|
16,432
|
|
|
48,359
|
|
|
12,374
|
|
|
—
|
|
|
—
|
|
|
77,165
|
|
||||||
Consumer loans (2)
|
|
46,019
|
|
|
20,022
|
|
|
600
|
|
|
3,003
|
|
|
29,999
|
|
|
99,643
|
|
||||||
Total gross loans
|
|
$
|
3,144,211
|
|
|
$
|
1,721,554
|
|
|
$
|
1,908,739
|
|
|
$
|
1,613,025
|
|
|
$
|
2,607,739
|
|
|
$
|
10,995,268
|
|
|
(1)
|
Premium wine clients can have loan balances included in both commercial loans and real estate secured loans, the total of which are used for the breakout of the above categories.
|
(2)
|
Consumer loan clients have loan balances included in both real estate secured loans and other consumer loans, the total of which are used for the breakout of the above categories.
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Gross nonperforming, past due, and restructured loans:
|
|
|
|
|
||||
Impaired loans
|
|
$
|
24,989
|
|
|
$
|
51,649
|
|
Loans past due 90 days or more still accruing interest
|
|
99
|
|
|
99
|
|
||
Total nonperforming loans
|
|
25,088
|
|
|
51,748
|
|
||
OREO and other foreclosed assets
|
|
1,878
|
|
|
1,001
|
|
||
Total nonperforming assets
|
|
$
|
26,966
|
|
|
$
|
52,749
|
|
Performing TDRs
|
|
$
|
1,481
|
|
|
$
|
403
|
|
Nonperforming loans as a percentage of total gross loans
|
|
0.23
|
%
|
|
0.47
|
%
|
||
Nonperforming assets as a percentage of total assets
|
|
0.09
|
|
|
0.20
|
|
||
Allowance for loan losses
|
|
$
|
123,542
|
|
|
$
|
142,886
|
|
As a percentage of total gross loans
|
|
1.13
|
%
|
|
1.30
|
%
|
||
As a percentage of total gross nonperforming loans
|
|
492.43
|
|
|
276.12
|
|
||
Allowance for loan losses for impaired loans
|
|
$
|
6,776
|
|
|
$
|
21,277
|
|
As a percentage of total gross loans
|
|
0.06
|
%
|
|
0.19
|
%
|
||
As a percentage of total gross nonperforming loans
|
|
27.01
|
|
|
41.12
|
|
||
Allowance for loan losses for total gross performing loans
|
|
$
|
116,766
|
|
|
$
|
121,609
|
|
As a percentage of total gross loans
|
|
1.07
|
%
|
|
1.11
|
%
|
||
As a percentage of total gross performing loans
|
|
1.07
|
|
|
1.11
|
|
||
Total gross loans
|
|
$
|
10,920,482
|
|
|
$
|
10,995,268
|
|
Total gross performing loans
|
|
10,895,394
|
|
|
10,943,520
|
|
||
Reserve for unfunded credit commitments (1)
|
|
31,110
|
|
|
29,983
|
|
||
As a percentage of total unfunded credit commitments
|
|
0.25
|
%
|
|
0.26
|
%
|
||
Total unfunded credit commitments (2)
|
|
$
|
12,371,296
|
|
|
$
|
11,470,722
|
|
|
(1)
|
The “Reserve for unfunded credit commitments” is included as a component of other liabilities. See “Provision for Unfunded Credit Commitments” above for a discussion of the changes to the reserve.
|
(2)
|
Includes unfunded loan commitments and letters of credit.
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
|
% Change
|
|||||
Derivative assets, gross (1)
|
|
$
|
110,309
|
|
|
$
|
127,114
|
|
|
(13.2
|
)%
|
Foreign exchange spot contract assets, gross
|
|
107,168
|
|
|
73,423
|
|
|
46.0
|
|
||
Accrued interest receivable
|
|
70,384
|
|
|
67,772
|
|
|
3.9
|
|
||
FHLB and Federal Reserve Bank stock
|
|
40,632
|
|
|
40,632
|
|
|
—
|
|
||
Deferred tax assets
|
|
39,946
|
|
|
68,237
|
|
|
(41.5
|
)
|
||
Accounts receivable
|
|
22,997
|
|
|
15,773
|
|
|
45.8
|
|
||
Other assets
|
|
67,095
|
|
|
72,159
|
|
|
(7.0
|
)
|
||
Total accrued interest receivable and other assets
|
|
$
|
458,531
|
|
|
$
|
465,110
|
|
|
(1.4
|
)
|
|
(1)
|
See “Derivatives” section below.
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
|
% Change
|
|||||
Assets:
|
|
|
|
|
|
|
|||||
Equity warrant assets
|
|
$
|
91,135
|
|
|
$
|
103,513
|
|
|
(12.0
|
)%
|
Foreign exchange forward and option contracts
|
|
11,388
|
|
|
15,530
|
|
|
(26.7
|
)
|
||
Interest rate swaps
|
|
6,025
|
|
|
6,492
|
|
|
(7.2
|
)
|
||
Loan conversion options
|
|
290
|
|
|
314
|
|
|
(7.6
|
)
|
||
Client interest rate derivatives
|
|
1,471
|
|
|
1,265
|
|
|
16.3
|
|
||
Total derivative assets
|
|
$
|
110,309
|
|
|
$
|
127,114
|
|
|
(13.2
|
)
|
Liabilities:
|
|
|
|
|
|
|
|||||
Foreign exchange forward and option contracts
|
|
$
|
(10,256
|
)
|
|
$
|
(12,617
|
)
|
|
(18.7
|
)
|
Client interest rate derivatives
|
|
(1,638
|
)
|
|
(1,396
|
)
|
|
17.3
|
|
||
Total derivative liabilities
|
|
$
|
(11,894
|
)
|
|
$
|
(14,013
|
)
|
|
(15.1
|
)
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Balance, beginning of period
|
|
$
|
103,513
|
|
|
$
|
74,272
|
|
New equity warrant assets
|
|
4,079
|
|
|
2,503
|
|
||
Non-cash increases in fair value
|
|
7,058
|
|
|
2,795
|
|
||
Exercised equity warrant assets (1)
|
|
(23,428
|
)
|
|
(7,133
|
)
|
||
Terminated equity warrant assets
|
|
(87
|
)
|
|
(104
|
)
|
||
Balance, end of period
|
|
$
|
91,135
|
|
|
$
|
72,333
|
|
|
(Dollars in thousands)
|
|
March 31, 2014
|
|
December 31, 2013
|
|
% Change
|
|||||
Foreign exchange spot contract liabilities, gross
|
|
$
|
147,104
|
|
|
$
|
90,725
|
|
|
62.1
|
%
|
Accrued compensation
|
|
42,447
|
|
|
117,134
|
|
|
(63.8
|
)
|
||
Reserve for unfunded credit commitments
|
|
31,110
|
|
|
29,983
|
|
|
3.8
|
|
||
Derivative liabilities, gross (1)
|
|
11,894
|
|
|
14,013
|
|
|
(15.1
|
)
|
||
Other
|
|
175,018
|
|
|
152,731
|
|
|
14.6
|
|
||
Total other liabilities
|
|
$
|
407,573
|
|
|
$
|
404,586
|
|
|
0.7
|
|
|
(1)
|
See “Derivatives” section above.
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(Dollars in thousands)
|
|
Total Balance
|
|
Level 3
|
|
Total Balance
|
|
Level 3
|
||||||||
Assets carried at fair value
|
|
$
|
14,340,564
|
|
|
$
|
1,455,357
|
|
|
$
|
13,331,120
|
|
|
$
|
1,314,951
|
|
As a percentage of total assets
|
|
48.3
|
%
|
|
4.9
|
%
|
|
50.5
|
%
|
|
5.0
|
%
|
||||
Liabilities carried at fair value
|
|
$
|
11,894
|
|
|
$
|
—
|
|
|
$
|
14,013
|
|
|
$
|
—
|
|
As a percentage of total liabilities
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
||||
|
|
Level 1 and 2
|
|
Level 3
|
|
Level 1 and 2
|
|
Level 3
|
||||||||
Percentage of assets measured at fair value
|
|
89.9
|
%
|
|
10.1
|
%
|
|
90.1
|
%
|
|
9.9
|
%
|
|
|
March 31, 2014
|
|
December 31, 2013
|
|
Minimum ratio to be
“Well Capitalized”
|
|
Minimum ratio to be
“Adequately Capitalized”
|
||||
SVB Financial:
|
|
|
|
|
|
|
|
|
||||
Total risk-based capital ratio
|
|
13.41
|
%
|
|
13.13
|
%
|
|
10.0
|
%
|
|
8.0
|
%
|
Tier 1 risk-based capital ratio
|
|
12.35
|
|
|
11.94
|
|
|
6.0
|
|
|
4.0
|
|
Tier 1 leverage ratio
|
|
7.99
|
|
|
8.31
|
|
|
N/A
|
|
|
4.0
|
|
Tangible common equity to tangible assets ratio (1)(2)
|
|
7.05
|
|
|
7.44
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (1)(2)
|
|
12.17
|
|
|
11.63
|
|
|
N/A
|
|
|
N/A
|
|
Bank:
|
|
|
|
|
|
|
|
|
||||
Total risk-based capital ratio
|
|
11.47
|
%
|
|
11.32
|
%
|
|
10.0
|
%
|
|
8.0
|
%
|
Tier 1 risk-based capital ratio
|
|
10.39
|
|
|
10.11
|
|
|
6.0
|
|
|
4.0
|
|
Tier 1 leverage ratio
|
|
6.72
|
|
|
7.04
|
|
|
5.0
|
|
|
4.0
|
|
Tangible common equity to tangible assets ratio (1)(2)
|
|
6.20
|
|
|
6.59
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (1)(2)
|
|
10.29
|
|
|
9.87
|
|
|
N/A
|
|
|
N/A
|
|
|
(1)
|
See below for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.
|
(2)
|
The Federal Reserve Bank has not issued any minimum guidelines for the tangible common equity to tangible assets ratio or the tangible common equity to risk-weighted assets ratio. However, we believe these ratios provide meaningful supplemental information regarding our capital levels and are therefore provided above.
|
|
|
SVB Financial
|
|
Bank
|
||||||||||||
Non-GAAP tangible common equity and tangible assets (dollars in thousands, except ratios)
|
|
March 31,
2014 |
|
December 31,
2013 |
|
March 31,
2014 |
|
December 31,
2013 |
||||||||
GAAP SVBFG stockholders’ equity
|
|
$
|
2,094,000
|
|
|
$
|
1,966,270
|
|
|
$
|
1,737,916
|
|
|
$
|
1,639,024
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tangible common equity
|
|
$
|
2,094,000
|
|
|
$
|
1,966,270
|
|
|
$
|
1,737,916
|
|
|
$
|
1,639,024
|
|
GAAP Total assets
|
|
$
|
29,711,039
|
|
|
$
|
26,417,189
|
|
|
$
|
28,012,627
|
|
|
$
|
24,854,119
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tangible assets
|
|
$
|
29,711,039
|
|
|
$
|
26,417,189
|
|
|
$
|
28,012,627
|
|
|
$
|
24,854,119
|
|
Risk-weighted assets
|
|
$
|
17,199,987
|
|
|
$
|
16,901,501
|
|
|
$
|
16,895,389
|
|
|
$
|
16,612,870
|
|
Tangible common equity to tangible assets
|
|
7.05
|
%
|
|
7.44
|
%
|
|
6.20
|
%
|
|
6.59
|
%
|
||||
Tangible common equity to risk-weighted assets
|
|
12.17
|
|
|
11.63
|
|
|
10.29
|
|
|
9.87
|
|
|
|
Three months ended March 31,
|
||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
Average cash and cash equivalents
|
|
$
|
2,746,668
|
|
|
$
|
1,101,597
|
|
Percentage of total average assets
|
|
9.9
|
%
|
|
4.9
|
%
|
||
Net cash provided by (used for) operating activities
|
|
$
|
45,564
|
|
|
$
|
(1,044
|
)
|
Net cash (used for) provided by investing activities
|
|
(712,193
|
)
|
|
532,326
|
|
||
Net cash provided by (used for) financing activities
|
|
2,990,314
|
|
|
(21,016
|
)
|
||
Net increase in cash and cash equivalents
|
|
$
|
2,323,685
|
|
|
$
|
510,266
|
|
|
|
Estimated
|
|
Estimated Increase In EVE
|
|
Estimated
|
|
Estimated Increase/
(Decrease) In NII
|
||||||||||||||
Change in interest rates (basis points)
|
|
EVE
|
|
Amount
|
|
Percent
|
|
NII
|
|
Amount
|
|
Percent
|
||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||
March 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
+200
|
|
$
|
5,255,694
|
|
|
$
|
752,179
|
|
|
16.7
|
|
|
$
|
1,025,960
|
|
|
$
|
191,589
|
|
|
23.0
|
%
|
+100
|
|
4,862,566
|
|
|
359,051
|
|
|
8.0
|
|
|
921,188
|
|
|
86,817
|
|
|
10.4
|
|
||||
—
|
|
4,503,515
|
|
|
—
|
|
|
—
|
|
|
834,371
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
4,265,608
|
|
|
(237,907
|
)
|
|
(5.3
|
)
|
|
819,746
|
|
|
(14,625
|
)
|
|
(1.8
|
)
|
||||
-200
|
|
4,518,475
|
|
|
14,960
|
|
|
0.3
|
|
|
809,004
|
|
|
(25,367
|
)
|
|
(3.0
|
)
|
||||
December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
+200
|
|
$
|
4,656,411
|
|
|
$
|
477,866
|
|
|
11.4
|
%
|
|
$
|
990,190
|
|
|
$
|
161,314
|
|
|
19.5
|
%
|
+100
|
|
4,382,397
|
|
|
203,852
|
|
|
4.9
|
|
|
899,336
|
|
|
70,460
|
|
|
8.5
|
|
||||
—
|
|
4,178,545
|
|
|
—
|
|
|
—
|
|
|
828,876
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
3,960,086
|
|
|
(218,459
|
)
|
|
(5.2
|
)
|
|
826,222
|
|
|
(2,654
|
)
|
|
(0.3
|
)
|
||||
-200
|
|
4,041,604
|
|
|
(136,941
|
)
|
|
(3.3
|
)
|
|
822,448
|
|
|
(6,428
|
)
|
|
(0.8
|
)
|
|
|
SVB Financial Group
|
|
|
|
Date: May 9, 2014
|
|
/s/ MICHAEL DESCHENEAUX
|
|
|
Michael Descheneaux
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
SVB Financial Group
|
|
|
|
Date: May 9, 2014
|
|
/s/ KAMRAN HUSAIN
|
|
|
Kamran Husain
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|||||
3.1
|
|
Restated Certificate of Incorporation
|
|
8-K
|
|
000-15637
|
|
3.1
|
|
May 31, 2005
|
|
|
3.2
|
|
Amended and Restated Bylaws
|
|
8-K
|
|
000-15637
|
|
3.2
|
|
July 27, 2010
|
|
|
3.3
|
|
Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock
|
|
8-K
|
|
000-15637
|
|
3.3
|
|
December 8, 2008
|
|
|
3.4
|
|
Certificate of Designations of Fixed Rate Cumulative Perpetual Preferred Stock, Series B
|
|
8-K
|
|
000-15637
|
|
3.4
|
|
December 15, 2008
|
|
|
4.1
|
|
Junior Subordinated Indenture, dated as of October 30, 2003 between SVB Financial and Wilmington Trust Company, as trustee
|
|
8-K
|
|
000-15637
|
|
4.12
|
|
November 19, 2003
|
|
|
4.2
|
|
7.0% Junior Subordinated Deferrable Interest Debenture due October 15, 2033 of SVB Financial
|
|
8-K
|
|
000-15637
|
|
4.13
|
|
November 19, 2003
|
|
|
4.3
|
|
Amended and Restated Trust Agreement, dated as of October 30, 2003, by and among SVB Financial as Depositor, Wilmington Trust Company as Property Trustee, Wilmington Trust Company as Delaware Trustee, and the Administrative Trustees named therein
|
|
8-K
|
|
000-15637
|
|
4.14
|
|
November 19, 2003
|
|
|
4.4
|
|
Certificate Evidencing 7% Cumulative Trust Preferred Securities of SVB Capital II, dated as of October 30, 2003
|
|
8-K
|
|
000-15637
|
|
4.15
|
|
November 19, 2003
|
|
|
4.5
|
|
Guarantee Agreement, dated as of October 30, 2003, between SVB Financial and Wilmington Trust Company, as Trustee
|
|
8-K
|
|
000-15637
|
|
4.16
|
|
November 19, 2003
|
|
|
4.6
|
|
Agreement as to Expenses and Liabilities, dated as of October 30, 2003, between SVB Financial and SVB Capital II
|
|
8-K
|
|
000-15637
|
|
4.17
|
|
November 19, 2003
|
|
|
4.7
|
|
Certificate Evidencing 7% Common Securities of SVB Capital II, dated as of October 30, 2003
|
|
8-K
|
|
000-15637
|
|
4.18
|
|
November 19, 2003
|
|
|
4.8
|
|
Officers’ Certificate and Company Order, dated as of October 30, 2003, relating to the 7.0% Junior Subordinated Deferrable Interest Debentures due October 15, 2033
|
|
8-K
|
|
000-15637
|
|
4.19
|
|
November 19, 2003
|
|
|
4.9
|
|
Indenture, dated September 20, 2010, by and between SVB Financial Group and U.S. Bank National Association, as trustee
|
|
8-K
|
|
000-15637
|
|
4.1
|
|
September 20, 2010
|
|
|
4.10
|
|
Form of 5.375% Senior Note due 2020
|
|
8-K
|
|
000-15637
|
|
4.2
|
|
September 20, 2010
|
|
|
*10.2
|
|
International Long-Term Assignment Agreement for David Jones
|
|
8-K
|
|
000-15637
|
|
10.1
|
|
February 14, 2014
|
|
|
*10.3
|
|
UK Sub-Plan of the 2006 Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
*10.4
|
|
Form of U.K. Approved Stock Options and Award Agreement under the UK Sub-Plan of the 2006 Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
*10.5
|
|
Israeli Sub-Plan of the 2006 Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
*10.6
|
|
2006 Equity Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Section 1350 Certifications
|
|
|
|
|
|
|
|
|
|
**
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
*
|
Denotes management contract or any compensatory plan, contract or arrangement
|
**
|
Furnished herewith
|
1.
|
INTRODUCTION
|
1.1
|
The Administrator (as defined under the Plan) has established this U.K. Sub-plan (the “
U.K. Sub-plan
”) of the SVB Financial Group 2006 Equity Incentive Plan (as may be amended or restated from time to time) (the “
Plan
”) pursuant to Section 4(b)(v) of the Plan for the purpose of granting Approved Options (as defined in Rule 1.4 below) to employees of SVB Financial Group and its Subsidiaries (as defined in Rule 2 below), who are or may be subject to United Kingdom taxation, in a tax efficient manner. For the avoidance of doubt, the terms of the Plan (insofar as they have not been replaced or modified by these Rules (as defined in Rule 2 below)) shall form part of the U.K. Sub-plan.
|
1.2
|
The U.K. Sub-plan is intended to qualify as a CSOP Scheme (as defined in Rule 2 below). The Company makes no undertaking nor representation that the U.K. Sub-plan will continue to qualify as a CSOP Scheme.
|
1.3
|
Where the Administrator wishes to grant Approved Options to Employees (as defined in Rule 2 below) in the United Kingdom, such Approved Options may be granted subject to and in accordance with the Rules of this U.K. Sub-plan. In the event of any conflict between the Plan and the U.K. Sub-plan, the U.K. Sub-plan will prevail. This will not preclude the Administrator from also granting other Awards (as defined in the Plan), including Options (as defined in the Plan) which are not subject to this U.K. Sub-plan, to an Employee under the provisions of the Plan.
|
1.4
|
Options granted under the U.K. Sub-plan shall be referred to as “
Approved Options
.
” Only Approved Options, a type of Nonstatutory Stock Option, may be granted under the U.K. Sub-plan and accordingly references in the Plan to Incentive Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, and Full Value Awards (as those terms are defined in the Plan), and any other type of stock or cash based Award referred to in the Plan, shall be disregarded for the purposes of the U.K. Sub-plan.
|
1.5
|
The provisions of the U.K. Sub-plan shall only apply to Approved Options granted under the U.K. Sub-plan.
|
1.6
|
The endnotes contained in the U.K. Sub-plan are provided for information purposes only.
|
2.
|
DEFINITIONS (SECTION 2 OF THE PLAN)
|
2.1
|
Unless defined herein, capitalized words or phrases shall have the meaning given to them in the Plan. For the purposes of the U.K. Sub-plan:
|
(a)
|
“
Control
” has the meaning given by section 995
i
of the (U.K.) Income Tax Act 1997.
|
(b)
|
“
CSOP Scheme
” means a company share option plan scheme approved by HMRC pursuant to Schedule 4.
|
(c)
|
“
Employee
” means (i) any person employed by the Company or any Subsidiary (other than a director), and (ii) any “full-time” director of the Company or any Subsidiary, being a director required to work at least 25 hours or more per week (excluding meal breaks).
|
(d)
|
“
Fair Market Value
” means, as at any date, the value of a Share determined as follows:
|
(i)
|
if the Shares are listed on NASDAQ, the closing sale price for the Shares for the applicable date (or, if the applicable date is not a trading day, the next preceding date which is a trading day); or
|
(ii)
|
if the Shares are not so listed, the fair market value shall be determined by the Administrator in good faith in accordance with the provisions of Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance for the purposes of the U.K. Sub-plan with HMRC Shares and Assets Valuation,
|
(e)
|
“
HMRC
” means Her Majesty’s Revenue & Customs.
|
(f)
|
“
Optionee
” means an Employee who receives an Approved Option.
|
(g)
|
“
Rules
” means the rules of this U.K. Sub-plan.
|
(h)
|
“
Schedule 4
” means Schedule 4 to the (U.K.) Income Tax (Earnings and Pensions) Act 2003.
|
(i)
|
“
Share
” means a share of the Company’s Common Stock which satisfies the conditions of paragraphs 16 to 18 (inclusive) and paragraph 20
iii
of Schedule 4 at all material times.
|
(j)
|
“
Subsidiary
” means any company over which the Company has Control and which meets the definition of Subsidiary or Affiliate in the Plan.
|
(k)
|
“
Subsisting Option
” means an Approved Option which has neither lapsed nor been exercised.
|
2.2
|
Any reference in this U.K. Sub-plan to any enactment includes a reference to that enactment as from time to time modified, extended or replaced.
|
3.
|
ADMINISTRATION (SECTION 4 OF THE PLAN)
|
3.1
|
Any discretion that the Administrator has with respect to Approved Options may only be exercised fairly and reasonably and not in breach of this U.K. Sub-plan or Section 4 of the Plan.
|
3.2
|
Approved Options may be granted only to Employees, and not to Consultants or Directors who are not Employees (and, for the avoidance of doubt, this Rule shall take precedence over Section 5 of the Plan).
|
3.3
|
Approved Options may only be granted after the date on which formal approval under Schedule 4 for the U.K. Sub-plan has been obtained from HMRC. Approved Options may only be granted over Shares.
|
3.4
|
No Approved Option may be granted to any Employee who is precluded by paragraph 9 (
material interest
)
iv
of Schedule 4 from participating in a CSOP Scheme.
|
3.5
|
Terms and conditions of Approved Options must be consistent with the U.K. Sub-plan, must be set out in the Award Agreement at the time of grant, and must not be amended, waived or modified after grant without the
|
3.6
|
The Award Agreement must state whether or not the Shares which may be acquired on the exercise of the Approved Option may be subject to any restriction within the meaning of paragraph 36(3) of Schedule 4 and, if so, the details of the restriction must also be included.
|
3.7
|
Approved Options granted to any Employee shall be limited and take effect so that the aggregate Fair Market Value of the Shares subject to the Approved Option, when aggregated with the Fair Market Value of Shares subject to Subsisting Options, shall not exceed £30,000. For the purposes of this Rule 3.7, Subsisting Options shall include all outstanding Approved Options granted under this U.K. Sub-plan and outstanding approved options granted under any other CSOP Scheme which has or may be established by the Company or any associated company within the meaning of paragraph 35 of Schedule 4. This limit shall be determined on the basis of the Fair Market Value of Shares as at the date(s) of grant of the relevant Approved Options and the Fair Market Value at the date(s) of grant of options granted under the rules of any other CSOP Scheme, converted from U.S. dollars into pounds sterling at the rate of exchange applicable as at the date(s) of grant.
|
4.
|
LIMITATIONS (SECTION 6 OF THE PLAN)
|
4.1
|
No program to re-price or exchange Approved Options (as described in Section 6(c) of the Plan) may be implemented in respect of Approved Options except in accordance with Rule 8.2 or 9.2 of the U.K. Sub-plan (as applicable).
|
5.
|
OPTION EXERCISE PRICE AND CONSIDERATION (SECTION 7(b) OF THE PLAN)
|
5.1
|
The exercise price per Share of an Approved Option shall not be less than the Fair Market Value of a Share on the date of grant (and, for the avoidance of doubt, this Rule shall take precedence over any provision to the contrary in Section 7 of the Plan).
|
5.2
|
Any performance conditions imposed on the exercise of an Approved Option:
|
(a)
|
must be objective and set at the date of grant of the Approved Option; and
|
(b)
|
cannot be waived or amended unless events occur which cause the Administrator to consider that the performance conditions will not achieve their original purpose (in which case the Administrator may make such alterations or additions to the performance conditions as are fair and reasonable provided that the amended performance conditions are no more difficult to meet than those originally imposed).
|
5.3
|
The exercise price of an Approved Option may only be paid by cash, cheque, and/or though a cashless exercise. The exercise price may not be paid using previously acquired Shares or by the Company withholding Shares.
|
5.4
|
No Approved Option may be exercised by any Optionee who is precluded by paragraph 9 (
material interest
)
v
of Schedule 4 from participating in a CSOP Scheme.
|
5.5
|
Shares shall be allocated or issued to the Optionee within 30 days of exercise. Except for any rights determined by reference to a date preceding the date of allotment or transfer, such Shares shall rank equally and as one class with other Shares of the same class already in issue.
|
6.
|
TERMINATION OF SERVICE (SECTION 7(c) OF THE PLAN)
|
6.1
|
Section 7(c)(ii) of the Plan shall apply if the Optionee’s status as a Service Provider terminates by reason of
|
6.2
|
Following the Optionee’s death, an Approved Option may only be exercised by the personal representatives of the Optionee and may not be exercised later than 12 months after the date of death of the Optionee.
|
7.
|
NON-TRANSFERABILITY OF OPTIONS (SECTION 15 OF THE PLAN)
|
7.1
|
Section 15 of the Plan shall be replaced by the following provision for the purposes of the U.K. Sub-plan.
|
7.2
|
An Approved Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner and, following the Optionee’s death, may only be exercised by the personal representatives of the Optionee.
|
8.
|
ADJUSTMENTS (SECTION 16(a) OF THE PLAN)
|
8.1
|
Outstanding Approved Options shall be adjusted only in accordance with Rule 8.2 of the U.K. Sub-plan.
|
8.2
|
In the event of any change to the capitalization, rights issue, consolidation, subdivision or reduction of share capital within paragraph 22(3) of Schedule 4 or other variation of share capital within paragraph 22(3) of Schedule 4, the number of Shares subject to an Approved Option and the exercise price for each of those Shares shall be adjusted in such manner as the Administrator considers to be fair and reasonable provided that:
|
(a)
|
the aggregate amount payable on the exercise of an Approved Option in full is not increased;
|
(b)
|
no adjustment shall be made without the prior approval of HMRC, if such approval is required by Schedule 4; and
|
(c)
|
following the adjustment, the Shares continue to satisfy the conditions specified in paragraphs 16 to 18 (inclusive) and paragraph 20 of Schedule 4.
|
9.
|
CHANGE IN CONTROL (SECTION 16(c) OF THE PLAN)
|
9.1
|
An Approved Option may be exchanged for another option only in accordance with Rule 9.2 of the U.K. Sub-plan, and Section 16(c) of the Plan shall be interpreted accordingly. Section 16(c) of the Plan shall not apply in the event that the company with which the Optionee holds office or employment ceases to be an associated company (as defined in paragraph 35(1) of Schedule 4) of the Company by reason of a change of control (as determined in accordance with sections 450 and 451 of the Companies Act 2006). Further, the words "In the event that the successor corporation (the "Successor Corporation") refuses to assume or substitute for the Award" in Section 16(c) of the Plan shall be replaced by the words "In the event that Approved Options are not exchanged pursuant to an agreement with the successor corporation (the "Successor Corporation" or "Successor Entity") in accordance with Rule 9.2 of the U.K. Sub-plan" for the purposes of the U.K. Sub-plan.
|
9.2
|
If any company (the “
Successor Entity
”):
|
(a)
|
obtains Control of the Company as a result of making a general offer (i) to acquire the whole of the issued ordinary share capital of the Company which is made on a condition such that if it is satisfied
|
(b)
|
obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899
vi
of the Companies Act 2006 (or under a relevant equivalent or closely comparable provision of applicable overseas company law accepted as such by HMRC); or
|
(c)
|
becomes bound or entitled to acquire shares in the Company under sections 979 to 982 or 983 to 985
vii
of the Companies Act 2006 (or under a relevant equivalent or closely comparable provision of applicable overseas company law accepted as such by HMRC),
|
9.3
|
The conditions are that the New Option:
|
(a)
|
is over shares in the Successor Entity or in a company which has Control over the Successor Entity which satisfies the conditions specified in paragraphs 16 to 18 (inclusive) and paragraph 20 of Schedule 4;
|
(b)
|
is a right to acquire such number of shares as has on acquisition of the New Option an aggregate market value equal to the aggregate Fair Market Value of the shares subject to the Old Option on its disposal;
|
(c)
|
has a purchase price per share such that the aggregate price payable on complete exercise equals the aggregate price which would have been payable on complete exercise of the Old Option; and
|
(d)
|
is otherwise identical in terms to the Old Option.
|
9.4
|
Where any New Option is granted pursuant to this Rule 9, the provisions of the U.K. Sub-plan shall, in relation to the New Option, be construed as if references to the Company and the Shares were references to the Successor Entity or, as the case may be, to the other company to whose shares the New Option relates and to the shares in the Successor Entity or that other company. The New Option shall, for all other purposes of the U.K. Sub-plan, be treated as having been acquired at the same time as the Old Option, which is released in consideration for the grant of the New Option.
|
9.5
|
The release of the Old Option and the grant of a New Option under this Rule 9 must take place within the period of six (6) months beginning with the time when, as the case may be, Control of the Company has been obtained and any conditions in connection with the change of Control are satisfied or the court sanctions a compromise or arrangement (as applicable), or within the period during which the Successor Entity remains bound or entitled in accordance with Rule 9.2(c) above.
|
9.6
|
If an event has occurred within Rule 9.2, the U.K. Sub-plan remains that of the Company and no further Approved Options may be granted under the U.K. Sub-plan.
|
9.7
|
For the purposes of Rule 9.2(a)(i), the reference to the issued ordinary share capital of the Company does not include any capital already held by the person making the offer or a person connected with that person, and for the purposes of Rule 9.2(a)(ii), the reference to the shares in the Company does not include any shares already held by the person making the offer or a person connected with that person. For the purposes of Rule 9.2(a) it does not matter if the general offer is made to different shareholders by different means.
|
9.8
|
An Optionee may exercise an Approved Option, to the extent the Approved Option is vested and outstanding: (i) within six (6) months after the relevant date (as specified in paragraph 25A of Schedule 4); or (ii) at any time when any person is bound or entitled to acquire Shares under sections 979 to 982 or 983 to 985 of the Companies Act 2006, in circumstances where sections 524(2E)(c) to 524(2E)(g) of the (U.K.) Income Tax (Earnings and Pensions) Act 2003 apply, but in no event beyond the term during which the Optionee was otherwise entitled to exercise the Approved Option pursuant to any other provision of the Plan or U.K. Sub-plan or discretion of the Administrator. This Rule 9.8 shall not limit the period during which an Optionee may otherwise be entitled to exercise an Approved Option under other terms in the U.K. Sub-plan.
|
10.
|
TAX WITHHOLDING (SECTION 17 OF THE PLAN)
|
10.1
|
Section 17 of the Plan shall be replaced by the following provisions.
|
10.2
|
If the Company or any Subsidiary is liable to withhold and account to HMRC for any sum in respect of income tax or National Insurance contributions (“
Taxes
”) in connection with the Approved Option, and the Optionee has not provided the Company or the relevant Subsidiary with sufficient funds to cover such amount, the Company shall be entitled to withhold or collect such Taxes:
|
(e)
|
by deduction from salary or any other amount payable to the Optionee at any time, including proceeds acquired upon a cashless exercise;
|
(f)
|
directly from the Optionee by payment in cleared funds;
|
(g)
|
by arranging, on behalf of the Optionee, for the sale of sufficient Shares that the Optionee is entitled to receive on the exercise of the Approved Option; or
|
10.3
|
A withholding liability may not be satisfied by the Company withholding Shares otherwise due to be received by the Optionee on the exercise of the Approved Option.
|
10.4
|
If the Company or any Subsidiary is liable to withhold and account to any other tax authority for any sum in respect of tax or social security contributions in connection with the Approved Option, the Company shall be entitled to withhold or collect such amounts using any of the methods listed in Rule 10.2 above.
|
10.5
|
The Award Agreement may provide that it is a condition of exercise that the Optionee agrees to pay or accept any liability for secondary Class 1 National Insurance contributions which may be payable by the Company or Subsidiary on the exercise of the Approved Option (“
Employer NICs
”). The Optionee may also be required to execute a joint election with the Company or the Optionee’s employer to formally transfer the liability for Employer’s NICs to the Optionee, the form of such election being formally approved by HMRC, and any other joint election which may be required between the Optionee and any successor to the Company or the Optionee’s employer.
|
10.6
|
The Award Agreement may provide that it is a condition of exercise that the Optionee agrees to enter into a joint election within Section 431 of the (U.K.) Income Tax (Earnings and Pensions) Act 2003 (“
ITEPA 2003
”) in respect of computing any tax charge on the acquisition of “restricted securities” (as defined in Sections 423 and 424 of ITEPA 2003).
|
11.
|
NO EFFECT ON EMPLOYMENT OR SERVICE (SECTION 18 OF THE PLAN)
|
11.1
|
The following provision shall be added to Section 18 of the Plan.
|
11.2
|
The rights and obligations of any Optionee under the terms of that person’s employment with the Company or any Subsidiary shall not be affected by participation in the U.K. Sub-plan or any right to participate in the U.K. Sub-plan. An individual who is granted an Approved Option shall have no right to compensation or damages in consequence of the loss or diminution in value of the Approved Option or Shares acquired pursuant to the Approved Option for any reason including, but not limited to, as a result of the termination of that person’s employment with the Company or Subsidiary for any reason whatsoever and whether or not in breach of contract. If an individual did acquire any such rights, that person would be deemed to have waived them irrevocably by not renouncing the Approved Option.
|
12.
|
AMENDMENT AND TERMINATION OF THE PLAN (SECTION 21 OF THE PLAN)
|
12.1
|
The Administrator may not make any amendment to the U.K. Sub-plan or to the Award Agreement for Approved Options without first obtaining the approval of HMRC if such amendment relates to a “key feature” (as defined in paragraph 30(4)
viii
of Schedule 4) of this CSOP Scheme; provided however that the approval of HMRC will only be required for amendments made by the Administrator if it is a requirement of Schedule 4 or HMRC practice at the time of the amendment that such changes must be approved by HMRC. For the avoidance of doubt, Section 4(b)(v) and Section 21 of the Plan shall be subject to this Rule.
|
12.2
|
The U.K. Sub-plan shall terminate in accordance with the termination of the Plan.
|
|
•
|
a transfer, reversion or forfeiture of the shares for less than market value;
|
•
|
a restriction on the freedom of the holder to dispose of or hold onto the shares; or
|
•
|
a disadvantage due to the disposal or retention of the shares.
|
•
|
form part of the ordinary share capital of the Company, as the scheme organiser;
|
•
|
be in a company listed on a recognised stock exchange (such as NASDAQ);
|
•
|
be fully paid up and not redeemable; and
|
•
|
the majority of the issued shares of the same class as the Shares must be “open market” shares (i.e. if the persons holding the shares are not (a) persons who acquired their shares as a result of a right conferred on them or an opportunity afforded to them as a director or employee of the scheme organiser or any other company, and not as a result of an offer to the public, or (b) trustees holding shares on behalf of persons who acquired their beneficial interests in the shares as mentioned in (a)).
|
Notice of Grant of U.K. Approved Stock Options
and Award Agreement
|
SVB FINANCIAL GROUP
ID: 94-2875288
3003 Tasman Drive
Santa Clara, CA 95054
|
||
Grant Agreement:
|
|||
Participant Name: ###PARTICIPANT_NAME###
|
Grant Name:###GRANT_NAME###
|
||
Employee Number: ###EMPLOYEE_NUMBER###
|
Issue Date/Date of Grant:
###ISSUE_DATE###
|
||
Total Nonqualified Stock Options: Total ###DICTIONARY_AWARD_NAME###: ###TOTAL_AWARDS###
|
Expiry/Expiration Date: ###EMPLOYEE_GRANT_EXPIRY_DATE###
|
||
Plan: UK Sub-Plan of the 2006 Equity Incentive Plan
|
Grant/Option Price:###GRANT_PRICE### ###GRANT_PRICE_REM_START### ###GRANT_PRICE_REM_END###
|
||
###EMPLOYEE_GRANT_VEST_SCHEDULE_TABLE###
|
Grant
Number
:
###EMPLOYEE_GRANT_NUMBER###
|
(a)
|
The terms of this UK-Approved Stock Option, including the circumstances under which this UK-Approved Stock Option will lapse or be cancelled (in whole or in part), any conditions to which the exercise of this UK-Approved Stock Option is subject (in whole or in part) and any mechanism for varying the terms of this UK-Approved Stock Option, are set out in the UK-Approved Stock Option Award Agreement and the rules of the UK Sub-Plan of the 2006 Equity Incentive Plan. The rules of the UK Sub-Plan of the 2006 Equity Incentive Plan and the rules of the SVB Financial Group 2006 Equity Incentive Plan can be accessed in your Solium Account.
|
By your acceptance and the Company’s signature below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Company’s 2006 Equity Incentive Plan, the UK Sub-Plan of the Company's 2006 Equity Incentive Plan and this UK-Approved Stock Option Award Agreement, all of which are attached and made a part of this document.
|
###HR_SIGNATURE###
|
|
|
SVB Financial Group
|
|
Date
|
|
|
|
|
|
|
Participant Name
|
|
Date
|
•
|
the Plan is discretionary in nature and the Administrator may amend, suspend, or terminate it at any time;
|
•
|
the grant of this Option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of the options even if options have been granted in the past;
|
•
|
all determinations with respect to future Option or other grants, if any, including but not limited to, the times when the Option shall be granted or when the Option shall vest, will be at the sole discretion of the Administrator;
|
•
|
your participation in the Plan is voluntary;
|
•
|
this Option and any Shares acquired under the Plan and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
|
•
|
this Option and the Shares subject to this Option are not part of normal or expected compensation or salary for any purpose;
|
•
|
the future value of the Shares is unknown, indeterminable, and cannot be predicted with certainty;
|
•
|
if the underlying Shares do not increase in value, this Option will have no value;
|
•
|
if you exercise this Option and acquire Shares, the value of such Shares may increase or decrease in value, even below the Option Price;
|
•
|
neither the Plan nor the Option shall be construed to create
a right to employment or be interpreted as forming an employment or service contract with the Company, your Employer (the “Employer) or any Affiliate, and shall not interfere with the ability of the Company, the Employer or any Affiliate, as applicable, to terminate your status as a Service Provider (if any);
|
•
|
no claim or entitlement to compensation or damages shall arise from forfeiture of this Option resulting from the termination of your status as a Service Provider (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of this Option to which you are otherwise not entitled, you
|
•
|
nothing herein contained shall affect your right to participate in and receive benefits under and in accordance with the then current provisions of any pension, insurance or other welfare plan or program of the Company or any Affiliate;
|
•
|
unless otherwise provided in the Plan or by the Company in its discretion, this Option and the benefits evidenced by this Award Agreement do not create any entitlement to have this Option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares of the Company; and
|
•
|
you acknowledge and agree that neither the Company, the Employer nor any Affiliate
shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of this Option or of any amounts due to you pursuant to the exercise of this Option or the subsequent sale of any Shares acquired upon exercise.
|
Grant
|
|
Grant
|
|
Type of
|
|
Number of Shares
|
|
Exercise Price
|
|
Aggregate
|
Number:
|
|
Date:
|
|
Option:
|
|
to be Exercised:
|
|
Per Share:
|
|
Exercise Price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NQ
(UK-Approved)
|
|
|
|
$
|
|
$
|
|
|
|
|
NQ
(UK-Approved)
|
|
|
|
|
|
|
|
|
|
|
NQ
(UK-Approved)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
o
CASH(1)
|
|
o
CASHLESS (Sale of underlying shares of option to pay exercise price)
|
|
|
|
|
|
o
Sell shares
|
o
Sell all shares listed above
|
|
|
|
|
|
|
|
|
Firm:
|
|
|
|
|
Account #
|
|
|
Contact Person:
|
|
|
Phone:
|
|
|
Fax:
|
|
|
|
|
Very truly yours,
|
||
|
|
|
|
||
SS#:
|
|
|
|
||
|
|
|
Signed
|
||
Telephone:
|
|
|
|
||
|
|
|
Address
|
||
|
|
|
|
||
Date:
|
|
|
|
||
|
|
|
|
|
|
1.
|
General
|
1.1
|
This Israeli Subplan (the
“Subplan”
) to the SVB Financial Group (the
“Company”
) 2006 Equity Incentive Plan (the “
Plan
”) is effective as of January 8, 2014.
|
1.2
|
The provisions specified hereunder apply only to persons who are or are deemed to be residents of the State of Israel for tax purposes or are otherwise subject to taxation in Israel with respect to the Awards (the
“Israeli Participants”
).
|
1.3
|
This Subplan applies with respect to Awards granted under the Plan to Israeli Participants. The purpose of this Subplan is to provide a method whereby employees of an Affiliate who satisfy the eligibility provisions under the Plan and are Israeli Participants may be offered an opportunity to receive Awards that qualify for favorable tax treatment under Section 102 of the ITO, as defined below in Section 2. Except as otherwise provided by this Subplan, all grants made pursuant to this Subplan shall be governed by the terms of the Plan. This Subplan complies with and is subject to the ITO and Section 102, as defined below in Section 2.
|
1.4
|
This Subplan is to be read as a continuation of the Plan and applies to Awards granted to Israeli Participants only to the extent necessary to comply with the requirements set by Israeli tax law in general, and in particular, with the provisions of the ITO. This Subplan does not add to or modify the Plan in respect of any other category of Participants.
|
2.
|
Definitions
|
2.1
|
Except as otherwise provided herein, capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Plan.
|
2.2
|
The following additional definitions will apply to grants made pursuant to this Subplan:
|
a.
|
“3(i) Award”
means an Award that is subject to taxation pursuant to Section 3(i) of the ITO which has been granted to any person who is not an Eligible 102 Participant.
|
b.
|
“102 Capital Gains Track”
means the tax alternative set forth in Section 102(b)(2) and 102(b)(3) of the ITO.
|
c.
|
“102 Capital Gains Track Grant”
means a 102 Trustee Grant qualifying for the special tax treatment under the 102 Capital Gains Track.
|
d.
|
“102 Ordinary Income Track”
means the tax alternative set forth in Section 102(b)(1) of the ITO.
|
e.
|
“102 Ordinary Income Track Grant”
means a 102 Trustee Grant qualifying for the ordinary income tax treatment under the 102 Ordinary Income Track.
|
f.
|
“102 Trustee Grant”
means Awards elected and designated by the Company as an Award granted pursuant to Section 102(b) of the ITO (includes both 102 Capital Gains Track Grants and 102 Ordinary Income Track Grants) and held in trust by a Trustee for the benefit of an Eligible 102 Participant
.
|
g.
|
“Award”
solely for purposes of this Subplan means a grant of Options, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards, granted pursuant to the terms and conditions of the Plan and this Subplan, provided they are payable only or settled only using Shares.
|
h.
|
“Affiliate”
means any “Employer” within the meaning of article (1) of "Employing Company" as defined under Section 102(a) of the ITO that also meets the definition of Affiliate under the Plan.
|
i.
|
“Controlling Shareholder”
means a “controlling shareholder” within the meaning of Section 32(9) of the ITO, currently defined as an individual who, prior to the grant or as a result of the grant, exercise or vesting of any Award, holds or would hold, directly or indirectly, in his name or with a "relative" (as defined in the ITO) (i) 10% of the outstanding Shares of the Company; (ii) 10% of the voting power of the Company; (iii) the right to hold or purchase 10% of the outstanding equity or voting power; (iv) the right to obtain 10% of the profits of the Company; or (v) the right to appoint a director in the Company.
|
j.
|
“Election”
means the Company’s choice of the type (as between the 102 Capital Gains Track or 102 Ordinary Income Track) of 102 Trustee Grants it will make under the Plan, as filed with the ITA.
|
k.
|
“Eligible 102 Participant”
means an Israeli Participant who is employed by an Israeli resident Affiliate, who is subject to the provisions of Section 102, including an individual who is serving as a director or an office holder but excluding any Controlling Shareholder or non-employee service provider, unless otherwise approved in writing by the ITA.
|
l.
|
“ITA”
means the Israeli Tax Authority.
|
m.
|
“ITO”
means the Israeli Income Tax Ordinance [New Version], 1961 and the rules, regulations, orders or procedures promulgated thereunder and any amendments thereto, including specifically the Rules, all as may be amended from time to time.
|
n.
|
“Non-Trustee Grant”
means an Award granted to an Eligible 102 Participant pursuant to Section 102(c) of the ITO and not held in trust by a Trustee.
|
o.
|
“Required Holding Period”
means the requisite holding period prescribed by the ITO and the Rules, or such other period as may be required by the ITA, with respect to 102 Trustee Grants, during which 102 Trustee Grants granted or any rights or Shares issued pursuant to the 102 Trustee Grant by the Company, must be held by the Trustee for the benefit of the person to whom they were granted in order for such grant to enjoy the tax benefits afforded to a 102 Trustee Grant. Currently, the Required Holding Period for 102 Capital Gains Track Grants is 24 months from the Grant Date, and for 102 Ordinary Income Track Grants is 12 months from the Grant Date.
|
p.
|
‘‘Rules”
means the Income Tax Rules (Tax Benefits in Shares Issuance to Employees), 5763-2003.
|
q.
|
"Shares"
means a share of Common Stock as defined in the Plan.
|
r.
|
“Section 102”
means Section 102 of the ITO, as amended from time to time, including by the Law Amending the Income Tax Ordinance (Number 132), 2002, effective as of January 1, 2003 and by the Law Amending the Income Tax Ordinance (Number 147), 2005, and any written rulings provided to the Company or any Affiliate by the ITA applying to the grant of Awards under this Subplan.
|
s.
|
“Trustee”
means a person or entity designated by the Committee to serve as a trustee of the 102 Trustee Grants and approved by the ITA in accordance with the provisions of Section 102(a) of the ITO and the Rules.
|
3.
|
Types of Awards and Section 102 Election
|
3.1
|
102 Trustee Grants shall be made pursuant to either (a) Sections 102(b)(2) and 102(b)(3) of the ITO as 102 Capital Gains Track Grants or (b) Section 102(b)(1) of the ITO as 102 Ordinary Income Track Grants. The Company shall choose only one tax route for the Plan. The Company’s Election regarding the type of 102 Trustee Grant it chooses to make shall be filed with the ITA. Once the Company has filed such Election, it may change the type of 102 Trustee Grant that it chooses to make only after the lapse of at least 12 months from the end of the calendar year in which the first grant was made in accordance with the previous Election unless provided otherwise under Section 102 or by the ITA. For the avoidance of doubt, such Election shall not prevent the Company from granting Non-Trustee Grants to Eligible 102 Participants at any time.
|
3.2
|
Eligible 102 Participants may receive only 102 Trustee Grants or Non-Trustee Grants under this Subplan. Individuals or entities that are not Eligible 102 Participants may be granted only 3(i) Awards under this Subplan.
|
3.3
|
Unless otherwise approved by the ITA, no 102 Trustee Grants may be made pursuant to this Subplan until 30 days after the requisite filings required by Section 102 and the Rules have been made with the ITA.
|
3.4
|
The Award Agreement or other documents evidencing the Awards granted or Shares issued pursuant to the Plan and this Subplan shall indicate whether the grant is a 102 Trustee Grant, a Non-Trustee Grant, or a 3(i) Award, and if the grant is a 102 Trustee Grant, whether it is a 102 Capital Gains Track Grant or a 102 Ordinary Income Track Grant.
|
3.5
|
The designation of Non-Trustee Grants and 102 Trustee Grants shall be subject to the terms and conditions set forth in Section 102.
|
3.6
|
Awards granted to individuals or entities that are not Eligible 102 Participants shall be designated as 3(i) Awards and shall be subject to tax according to the applicable provisions of the ITO.
|
4.
|
Terms And Conditions of 102 Trustee Grants
|
4.1
|
Each 102 Trustee Grant will be deemed granted on the date stated in the Award Agreement, provided that (i) the Company will provide notice to the Trustee of the Award within 45 days of the date the Committee or the Board of Directors of the Company approves the 102 Trustee Grant, and (ii) proof of acceptance by the Participant of the terms of the 102 Trustee Grant is provided to the Trustee within 90 days of the Grant Date, or in both cases, in such other form or period of time as may be required under Section 102.
|
4.2
|
Each 102 Trustee Grant granted to an Eligible 102 Participant and all Shares acquired pursuant to the grant, exercise or the vesting/settlement of an Award, shall be issued to and registered in the name of a Trustee or controlled by the Trustee for the benefit of the Eligible 102 Participant in accordance with the provisions of Section 102. In the event that the requirements for 102 Trustee Grants are not met, the 102 Trustee Grants may be regarded as Non-Trustee Grants or as Awards which are not subject to Section 102, all in accordance with the provisions of Section 102.
|
4.3
|
With respect to any 102 Trustee Grant, and subject to the provisions of Section 102, an Eligible 102 Participant shall not sell or release from trust any Share received upon the grant, exercise or vesting of a 102 Trustee Grant and/or any Share received following any realization of rights, including, without limitation, stock dividends, under the Plan at least until the lapse of the Required Holding Period. Notwithstanding the above, if any such sale or release occurs during the Required Holding Period, the sanctions under Section 102 shall apply to and shall be borne by such Eligible 102 Participant.
|
4.4
|
In the event a stock dividend is declared and/or additional rights are granted with respect to Awards and/or to Shares which derive from Awards granted as 102 Trustee Grants, such stock dividend, dividend equivalent/units and/or other rights shall also be deposited with the Trustee and will be subject to the provisions of this Section 4. The Required Holding Period for such Shares and/or rights shall be measured from the commencement of the Required Holding Period for the Award with respect to which the stock dividend was declared and/or dividend equivalent or other rights were granted.
|
4.5
|
Each 102 Trustee Grant (whether a 102 Capital Gains Track Grant or a 102 Ordinary lncome Track Grant, as applicable) shall be subject to the relevant terms of Section 102 and the lTO and the agreement between the Trustee and the Company or any Israeli resident Affiliate (“Trust Agreement”), which shall be deemed an integral part of the 102 Trustee Grant, and the terms of Section 102 and the ITO shall prevail over any term contained in the Plan, this Subplan or any Award Agreement that is not consistent therewith. Any provision of the ITO and any additional terms required by the ITA not expressly specified in this Subplan or in the Award Agreement, as applicable, which are necessary to receive or maintain any tax benefit pursuant the Section 102, shall be binding on the Eligible 102 Participant. The Trustee and the Eligible 102 Participant granted a 102 Trustee Grant shall comply with the ITO and the terms and conditions of the Trust Agreement. For avoidance of doubt, it is reiterated that compliance with the ITO and Section 102 specifically includes compliance with the Rules. Further, the Eligible 102 Participant agrees to execute or otherwise accept any and all documents that the Company, the Affiliate employing the Israeli Participant, or the Trustee may reasonably determine to be necessary in order to comply with the ITO and the Rules.
|
4.6
|
During the Required Holding Period, the Eligible 102 Participant will not be allowed to direct the Trustee to release or sell the Awards, or the Shares issued pursuant to the Awards, or any rights derived from the Awards (including stock dividends or dividend equivalents) or any Shares derived thereof to the Eligible 102 Participant or to a third party, unless permitted to do so under the ITO or the Rules. Notwithstanding the foregoing, the Trustee may, pursuant to a written request and subject to the ITO and the Rules, release and transfer the Shares issued with respect to an Award to a designated third party, provided that both of the following conditions have been fulfilled prior to such transfer: (i) all taxes required to be paid upon the release and transfer of the Shares have been withheld for transfer to the tax authorities and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Plan, Subplan, any applicable Award Agreement and any applicable laws related to the issuance of Shares. Such sale or release during the Required Holding Period will result in different tax ramifications to the Eligible 102 Participant under Section 102 of the ITO and the Rules, which shall apply to and shall be borne solely by such Eligible 102 Participant.
|
4.7
|
In the event a cash dividend is paid on the Shares, the Trustee shall transfer the dividend proceeds to the Eligible 102 Participant after deduction of taxes and mandatory payments in compliance with applicable withholding requirements, and subject to any other requirements imposed by the ITA.
|
4.8
|
If an Award granted as a 102 Trustee Grant is granted, exercised or vested/settled, as applicable, during the Required Holding Period, the Shares issued upon such grant, exercise or vesting/settling, as applicable, shall be issued in the name of the Trustee for the benefit of the Eligible 102 Participant. If such an Award is exercised or vested/settled, as applicable, after the Required Holding Period ends, the Shares issued upon such exercise or vesting shall, at the election of the Eligible 102 Participant, either (i) be issued in the name of the Trustee, or (ii) be transferred to the Eligible 102 Participant directly, provided that the Participant first complies with all applicable provisions of the Plan, Subplan, and the Company and/or its Affiliate confirms that all of the taxes and mandatory payments in compliance with applicable withholding requirements have been paid by the Eligible 102 Participant.
|
4.9
|
No Award granted as a 102 Capital Gains Track Grant will be earned subject to performance goals or performance levels as described with respect to Performance Shares in the Plan unless the ITA approves otherwise in writing.
|
4.10
|
Notwithstanding Section 7 of the Plan, Options granted to Eligible 102 Participants will be exercised only by payment of cash (exercise and hold) or by a broker assisted cashless exercise (exercise and sell or exercise and sell to cover) if approved by the Committee, and withholding tax obligations with respect to Awards will not be satisfiable with respect to an Award by withholding Shares otherwise deliverable upon exercise or vesting of the Award, in both instances, unless and to the extent permitted under Section 102 or as expressly authorized by the ITA in writing.
|
5.
|
Assignability
|
5.1
|
The Trustee will not perform any transaction or act regarding the Awards granted as 102 Trustee Grants, including transferring, selling, seizing, assigning, hypothecating or pledging (willingly or unwillingly), disposing or assigning the Awards or any Shares subject to the Awards, and will not give any power of attorney regarding the Awards, in any manner other than by will or by the laws of descent and distribution and as permitted by the Plan, unless all the taxes are paid to the ITA, or the Trustee ensures that taxes will be paid. If the Awards are transferred by will or by the laws of descent and distribution, Section 102 and its regulations, including the Rules, will apply to the heirs or the transferees of the Eligible 102 Participant.
|
6.
|
Tax Consequences
|
6.1
|
Any tax consequences arising from the grant, exercise or vesting/settlement of any Award, from the issuance, sale or transfer of Shares, or from any other event or act (of the Company and/or an Affiliate in Israel and/or the Trustee and/or the Eligible 102 Participant) relating to an Award or Shares issued thereupon shall be borne solely by the Eligible 102 Participant. The Company, the applicable Affiliate in Israel, and/or the Trustee shall withhold taxes according to the requirements under applicable laws related to tax withholding, including withholding taxes at source. Furthermore, the Eligible 102 Participant shall agree to indemnify the Company, the applicable Affiliate in Israel, and/or the Trustee and hold them harmless against and from any and all liability for any such tax, interest, linkage differences or penalty thereon, including, without any limitation, liabilities relating to the necessity to withhold or to have withheld any such tax from any payment made to the Eligible 102 Participant.
|
6.2
|
The Company, the applicable Affiliate, and/or the Trustee may make such provisions and take such steps as they may deem necessary or appropriate for the withholding of all taxes required by law to be withheld with respect to Awards granted under the Plan and the exercise, vesting/settlement, sale, transfer or other disposition thereof, including (but not limited to) (i) withholding from the Eligible 102 Participant’s wages or other cash compensation paid to the Eligible 102 Participant by the Company or an Affiliate in Israel; or (ii) withholding otherwise deliverable Shares;
or (iii) selling a sufficient number of such Shares otherwise deliverable to the Eligible 102 Participant through such means as the Trustee may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld either through a voluntary sale or through a mandatory sale arranged by the Company (on the Eligible 102 Participant’s behalf pursuant to the Eligible 102 Participant’s authorization), to the extent permitted by Section 102 of the ITO or pursuant to the approval of the ITA; or (iv) requiring an Eligible 102 Participant to pay to the Company or an Affiliate in Israel the amount so required to be withheld as a condition of the issuance, delivery, distribution or release of any Shares. In addition, the Eligible 102 Participant will be required to pay any amount, including penalties, interest and linkage differences that exceeds the tax to be withheld and transferred to the tax authorities, pursuant to applicable tax laws, regulations and rules.
|
6.3
|
The Company, the applicable Affiliate in Israel and/or the Trustee shall not be required to release any Awards and/or Shares to the Eligible 102 Participant until all required tax withholding has been performed.
|
6.4
|
For the avoidance of doubt, there is no assurance that all of the Awards granted pursuant to Section 102 of the ITO shall be eligible for the tax benefits pursuant to Section 102 of the ITO. Therefore, any tax consequences arising from the grant, exercise or vesting/settlement of any Awards, from the issuance of Shares covered thereby, from the subsequent sale of Shares or from any other event or act (of the Company, an Affiliate in Israel, the Trustee, and/or the Eligible 102 Participant), shall be borne solely by the Eligible 102 Participant.
|
6.5
|
Following the grant of Awards under this Subplan and in any case in which the Eligible 102 Participant may cease to be considered an “Israeli Resident” as this term is defined in the ITO, the Company, an Affiliate in Israel, and/or the Trustee may, if and to the extent the ITO and/or the rules promulgated thereunder shall impose such obligation on them, withhold all applicable taxes from the Eligible 102 Participant, remit the amount withheld to the ITA, and report to such Eligible 102 Participant the amount so withheld and paid to the ITA.
|
6.6
|
With respect to Non-Trustee Grants, if the Eligible 102 Participant ceases to be employed by the Company or an Affiliate in Israel, or otherwise if so requested by the Company or the Affiliate, the Eligible 102 Participant shall extend to the Company or to the employing Company a security or guarantee for the payment of tax due at the time of sale of Shares to the satisfaction of the Company or the employing Company, all in accordance with the provisions of Section 102 of the ITO and the Rules.
|
7.
|
Governing Law and Jurisdiction
|
7.1
|
Notwithstanding the governing law provisions of the Plan and the Award Agreement, this Subplan shall be governed by, and interpreted in accordance with, the laws of the state of Israel applicable to contracts made and to be performed therein
.
|
•
|
to attract and retain the best available personnel for positions of substantial responsibility,
|
•
|
to provide incentives to individuals who perform services to the Company,
|
•
|
to align with stockholder interests, and
|
•
|
to promote the success of the Company’s business.
|
(a)
|
“
Administrator
” means the Board or any of its Committees, including its Compensation Committee, as will be administering the Plan, in accordance with Section 4 of the Plan.
|
(b)
|
“
Affiliate
” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.
|
(c)
|
“
Applicable Laws
” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
|
(d)
|
“
Award
” means, individually or collectively, a grant under the Plan of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.
|
(e)
|
“
Award Agreement
” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
|
(ii)
|
A deliberate disregard of the rules of the Company which results in loss, damage or injury to the Company, or
|
(iv)
|
Inducing any client or customer of the Company to break any contract with the Company or inducing any principal for whom the Company acts as agent to terminate such agency relations; or
|
(vi)
|
Any act which results in the Participant being removed from any office of the Company by any bank regulatory agency.
|
(i)
|
A merger or consolidation of Silicon Valley Bank (the “Bank”) or the Company with any other corporation, other than a merger or consolidation which would result in beneficial owners of the total voting power in the election of directors represented by the voting securities (“
Voting Securities
”) of the Bank or the Company (as the case may be) outstanding immediately prior thereto continuing to beneficially own securities representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total Voting Securities of the Bank or the Company, or of such surviving entity, outstanding immediately after such merger or consolidation;
|
(ii)
|
The filing of a plan of liquidation or dissolution of the Bank or the closing of the sale, lease, exchange or other transfer or disposition by the Bank or the Company of all or substantially all of the Bank’s assets;
|
(iii)
|
Any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Bank or the Company, (B) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their beneficial ownership of stock in the Company, or (C) the Company (with respect to the Company’s ownership of the stock of the Bank), is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Bank or the Company representing fifty percent (50%) or more of the Voting Securities; or
|
(iv)
|
Any person (as such term is used in Sections 13(d) or 14(d) of the Exchange Act), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Bank or the Company, (B) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock in the Bank, or (C) the Company (with respect to the Company’s ownership of the stock of the Bank) is or becomes the beneficial owner (within the meaning or Rule 13d-3 under the Exchange Act), directly or indirectly, of the securities of the Bank or the Company representing twenty-five percent (25%) or more of the Voting Securities of such corporation, and
within twelve (12) months of the occurrence of such event, a change in the composition of the Board occurs as a result of which sixty percent (60%) or fewer of the Directors are Incumbent Directors. For purposes of this definition, Incumbent Directors will mean Directors who either (A) are Directors as of the date hereof, (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors who are Incumbent Directors described in (A) above at the time of such election or nomination, or (C) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Directors who are Incumbent Directors described in (A) or (B) above at the time of such election or nomination. Notwithstanding the foregoing, “Incumbent Directors” will not include an individual whose election or nomination to the Board occurs in order to provide representation for a person or group of related persons who have initiated or encouraged an actual or threatened proxy contest relating to the election of Directors.
|
(i)
|
“
Code
” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
|
(j)
|
“
Committee
” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.
|
(m)
|
“
Consultant
” means any person, including an advisor, engaged by the Company or its Affiliates to render services to such entity.
|
(o)
|
“
Determination Date
” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.
|
(q)
|
“
Disability
” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
|
(r)
|
“
Employee
” means any person, including Officers and Directors, employed by the Company or its Affiliates. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
|
(t)
|
“
Fair Market Value
” means, as of any date, the value of Common Stock as the Administrator may determine in good faith by reference to the price of such stock on any established stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value of the Common Stock will be determined by the Administrator in good faith.
|
(v)
|
“
Full Value Award
” means an Award granted with an exercise price, if any, less than the Fair Market Value on the date of grant of such Award and generally will be in the form of Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units.
|
(w)
|
“
Incentive Stock Option
” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
|
(x)
|
“
Nonstatutory Stock Option
” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
|
(y)
|
“
Officer
” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
|
(ab)
|
“
Parent
” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
|
(ae)
|
“
Performance Period
” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion.
|
(af)
|
“
Performance Share
” means an Award denominated in Shares which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 11.
|
(ag)
|
“
Performance Unit
” means an Award which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 11.
|
(ah)
|
“
Period of Restriction
” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
|
(aj)
|
“
Restricted Stock
” means Shares issued pursuant to an Award of Restricted Stock under Section 9 of the Plan, or issued pursuant to the early exercise of an Option.
|
(ak)
|
“
Restricted Stock Unit
” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 10. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
|
(al)
|
“
Rule 16b-3
” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
|
(ap)
|
“
Stock Appreciation Right
” means an Award, granted alone or in connection with an Option, that pursuant to Section 8 is designated as a Stock Appreciation Right.
|
(aq)
|
“
Subsidiary
” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
|
(a)
|
Stock Subject to the Plan
. Subject to the provisions of Section 16 of the Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is 7,543,321 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.
|
(b)
|
Full Value Awards
. Any Shares subject to Full Value Awards will be counted against the numerical limits of this Section 3 as two Shares for every one Share subject thereto. Further, if Shares acquired pursuant to any such Award are forfeited or repurchased by the Company and would otherwise return to the Plan pursuant to Section 3(c), two times the number of Shares so forfeited or repurchased will return to the Plan and will again become available for issuance.
|
(c)
|
Lapsed Awards
. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, all of the Shares covered by the Award (that is, Shares actually issued pursuant to a Stock Appreciation Right, as well as the Shares that represent payment of the exercise price) will cease to be available under the Plan. However, Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award will not become available for future grant or sale under the Plan. Shares used to satisfy the tax withholding obligations related to an Award (other than an Option or Stock Appreciation Right) will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment provided in Section 16, the maximum number of Shares that may be issued upon the
|
(i)
|
Multiple Administrative Bodies
. Different Committees with respect to different groups of Service Providers may administer the Plan.
|
(ii)
|
Section 162(m)
. To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.
|
(iii)
|
Rule 16b-3
. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.
|
(iv)
|
Other Administration
. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.
|
(b)
|
Powers of the Administrator
. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
|
(iii)
|
to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder;
|
(v)
|
to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;
|
(vii)
|
to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
|
(viii)
|
to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award pursuant to such procedures as the Administrator may determine; and
|
(c)
|
Effect of Administrator’s Decision
. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
|
(d)
|
Limitations on Vesting and Acceleration
. Full Value Awards that result in issuing up to 5% of the maximum aggregate number of Shares authorized for issuance under the Plan (the “
5% Limit
”) may be granted to any one or more Service Providers without respect to any minimum vesting provisions included in the Plan. Further, all Full Value Awards that have their vesting discretionarily accelerated by the Administrator other than upon or in connection with a Change in Control or upon or in connection with a Participant’s termination of service due to death, Disability or retirement, are subject to the 5% Limit. Notwithstanding the foregoing, the Administrator may, in its discretion, accelerate the vesting of Full Value Awards such that the Plan
|
(e)
|
Vesting of Full Value Awards Granted to Directors
. Full Value Awards that are granted on an annual basis to Directors following the Company’s Annual Meeting of Stockholders, shall become fully vested no earlier than the last day of the Director’s then current annual term of service as a member of the Board. Notwithstanding the foregoing, Full Value Awards granted pursuant to the 5% Limit or Full Value Awards that accelerate in connection with a Change in Control or upon or in connection with a Director’s termination of service due to death, Disability or retirement are not subject to the vesting provisions contained in this Section 4(e).
|
(a)
|
Incentive Stock Option $100,000 Rule
. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.
|
(b)
|
Section 162(m) Limitations
. The following limitations shall apply to Awards under the Plan: during any Fiscal Year, no Employee will be granted: (i) Options to purchase more than 250,000 Shares; (ii) Stock Appreciation Rights covering more than 250,000 Shares; (iii) more than an aggregate of 125,000 Shares of Restricted Stock; (iv) more than an aggregate of 125,000 Restricted Stock Units; and (v) Performance Units having an initial value greater than $4,000,000, and more than 125,000 Performance Shares.
|
(c)
|
Repricings/Modifications
. The Administrator may not, without first obtaining stockholder approval: (A) modify or amend an Option or Stock Appreciation Right to reduce the exercise price of such Option or Stock Appreciation Right after it has been granted (except for adjustments made pursuant to Section 16), or (B) cancel any outstanding Option or Stock Appreciation Right and immediately replace it with a new Option or Stock Appreciation Right with a lower exercise price. This will include, without limitation, a repricing of the Option or Stock Appreciation Right as well as an exchange program whereby the Participant agrees to cancel an existing Option or Stock Appreciation Right in exchange for an Option, Stock Appreciation Right or other Award.
|
(d)
|
Outside Director Award Limitations
. No Outside Director may be granted, in any Fiscal Year, Awards covering Shares having an initial value greater than $500,000. Awards granted to an individual while he or she was an Employee or Consultant, but not an Outside Director, shall not count for purposes of these limitations. The foregoing limitations will be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 16.
|
(a)
|
Term of Option
. The Administrator will determine the term of each Option in its sole discretion. Any Option granted under the Plan will not be exercisable after the expiration of seven (7) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
|
(i)
|
Exercise Price
. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, but will be no less than 100% of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 7(b), Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.
|
(ii)
|
Waiting Period and Exercise Dates
. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
|
(iii)
|
Form of Consideration
. The Administrator will determine the acceptable form(s) of consideration for exercising an Option, including the method of payment, to the extent permitted by Applicable Laws.
|
(i)
|
Procedure for Exercise; Rights as a Stockholder
. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
|
(ii)
|
Termination of Relationship as a Service Provider
. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination for Cause or as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
|
(iii)
|
Disability of Participant
. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
|
(iv)
|
Death of Participant
. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement
|
(v)
|
Termination for Cause
. If a Participant’s status as a Service Provider is terminated for Cause, then the Option will immediately terminate, and the Shares covered by such Option will revert to and again become available for issuance under the Plan.
|
(vi)
|
Other Termination
. A Participant’s Award Agreement may also provide that if the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would result in liability under Section 16(b), then the Option will terminate on the earlier of (A) the expiration of the term of the Option set forth in the Award Agreement, or (B) the 10th day after the last date on which such exercise would result in such liability under Section 16(b). Finally, a Participant’s Award Agreement may also provide that if the exercise of the Option following the termination of the Participant’s status as a Service Provider (other than upon the Participant’s death or disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (A) the expiration of the term of the Option, or (B) the expiration of a period of three (3) months after the termination of the Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.
|
(a)
|
Grant of Stock Appreciation Rights
. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
|
(b)
|
Number of Shares
. Subject to the provisions of Section 6(b), the Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Participant.
|
(c)
|
Exercise Price and Other Terms
. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will be not less than 100% of the Fair Market Value of a Share on the date of grant.
|
(d)
|
Stock Appreciation Right Agreement
. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
|
(e)
|
Expiration of Stock Appreciation Rights
. The Administrator will determine the term of each Stock Appreciation Right in its sole discretion. Any Stock Appreciation Right granted under the Plan will not be exercisable after the expiration of seven (7) years from the date of grant or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the rules of Section 7(c) also will apply to Stock Appreciation Rights.
|
(f)
|
Payment of Stock Appreciation Right Amount
. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
|
(i)
|
The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
|
(a)
|
Grant of Restricted Stock
. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
|
(b)
|
Restricted Stock Agreement
. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed.
|
(c)
|
Transferability
. Except as provided in this Section 9, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
|
(d)
|
Other Restrictions
. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
|
(e)
|
Removal of Restrictions
. Except as otherwise provided in this Section 9, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The restrictions will lapse at a rate determined by the Administrator; provided, however, that, with respect to Restricted Stock granted to Employees or Consultants, and except as otherwise provided in Section 15(c), Shares of Restricted Stock will not vest more rapidly than one-third (1/3rd) of the total number of Shares of Restricted Stock subject to an Award each year from the date of grant (or, if applicable, the date an Employee or Consultant begins his or her employment or service with the Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock.
|
(f)
|
Voting Rights
. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
|
(g)
|
Dividends and Other Distributions
. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
|
(h)
|
Return of Restricted Stock to Company
. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
|
(i)
|
Section 162(m) Performance Restrictions
. For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it
|
(a)
|
Grant
. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award Agreement that will specify such other terms and conditions as the Administrator, in its sole discretion, will determine, including all terms, conditions, and restrictions related to the grant, the number of Restricted Stock Units and the form of payout, which, subject to Section 10(d), may be left to the discretion of the Administrator.
|
(b)
|
Vesting Criteria and Other Terms
. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the vesting criteria, and such other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that, with respect to Restricted Stock Units granted to Employees or Consultants, and except as otherwise provided in Section 15(c), an Award of Restricted Stock Units will not vest more rapidly than one-third (1/3rd) of the total number of Restricted Stock Units subject to an Award each year from the date of grant (or, if applicable, the date an Employee or Consultant begins his or her employment or service with the Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock Units.
|
(c)
|
Earning Restricted Stock Units
. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as specified in the Award Agreement.
|
(d)
|
Form and Timing of Payment
. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will be available for grant under the Plan.
|
(e)
|
Cancellation
. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
|
(f)
|
Section 162(m) Performance Restrictions
. For purposes of qualifying grants of Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
|
(a)
|
Grant of Performance Units/Shares
. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. Subject to the provisions of Section 6(b), the Administrator will have complete discretion in determining the number of Performance Units/Shares granted to each Participant.
|
(b)
|
Value of Performance Units/Shares
. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
|
(c)
|
Performance Objectives and Other Terms
. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Participant. The Administrator may set performance objectives based upon the achievement of Company wide, divisional, or individual goals, or any other basis determined by
|
(d)
|
Earning of Performance Units/Shares
. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved.
|
(e)
|
Form and Timing of Payment of Performance Units/Shares
. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.
|
(f)
|
Cancellation of Performance Units/Shares
. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.
|
(g)
|
Section 162(m) Performance Restrictions
. For purposes of qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Performance Units/Shares which are intended to be qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
|
(a)
|
General
. If the Administrator, in its discretion, decides to grant an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the provisions of this Section 12 will control over any contrary provision in the Plan; provided, however, that the Administrator may in its discretion grant Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code to such Participants that are based on Performance Goals or other specific criteria or goals but that do not satisfy the requirements of this Section 12.
|
(b)
|
Performance Goals
. Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Section 162(m) of the Code and may provide for a targeted level or levels of achievement (“
Performance Goals
”) including assets; bond rating; cash flow; cash position; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per Share; economic profit; economic value added; equity or stockholder’s equity; earnings; revenue; market share; net income; net profit; net sales; noninterest income as percent of total income; operating earnings; operating income; profit before tax; ratio of debt to debt plus equity; ratio of operating earnings to capital spending; results of regulatory reviews and examinations;
return on equity; return on net assets; return on sales; sales; total return to stockholders; book value; ratio of nonperforming assets to performing assets; credit quality; loan balances; deposit balances; or measures of regulatory capital. With respect to the Company as a whole or a business unit of the Company, any Performance Goals may be: (i) used to measure specific performance levels or growth over certain performance periods, and (ii) may be measured relative to a peer group or index. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator, will determine whether any
|
(c)
|
Procedures
. To the extent necessary to comply with the performance-based compensation requirements of Section 162(m) of the Code, with respect to any Award granted subject to Performance Goals, no later than the Determination Date, the Administrator will, in writing, (a) designate one or more Service Providers who would be considered a “covered employee” within the meaning of Section 162(m) of the Code (hereinafter a “
Covered Employee
”), (b) select the Performance Goals applicable to the Performance Period, (c) establish the Performance Goals, and amounts or methods of computation of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the relationship between Performance Goals and the amounts or methods of computation of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the amounts earned by a Covered Employee, the Administrator will have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period. A Participant will be eligible to receive payment pursuant to an Award for a Performance Period only if the Performance Goals for such period are achieved.
|
(d)
|
Additional Limitations
. Notwithstanding any other provision of the Plan, any Award which is granted to a Participant and is intended to constitute qualified performance based compensation under Section 162(m) of the Code will be subject to any additional limitations set forth in the Code (including any amendment to Section 162(m) of the Code) or any regulations and ruling issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the extent necessary to conform to such requirements.
|
(a)
|
Adjustments
. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits set forth in Sections 3, 6, 7, 8, 9, 10, and 11.
|
(b)
|
Dissolution or Liquidation
. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
|
(c)
|
Change in Control
. In the event of a merger of the Company with or into another company or Change in Control, each outstanding Award will be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the “
Successor Corporation
”). In the event that the Successor Corporation refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
|
(a)
|
Withholding Requirements
. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).
|
(b)
|
Withholding Arrangements
. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld, or (d) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.
|
(a)
|
Amendment and Termination
. The Administrator may at any time amend, alter, suspend or terminate the Plan.
|
(b)
|
Stockholder Approval
. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
|
(c)
|
Effect of Amendment or Termination
. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
|
(a)
|
Legal Compliance
. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
|
(b)
|
Investment Representations
. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SVB Financial Group;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 9, 2014
|
|
/s/ GREG BECKER
|
|
|
Greg Becker
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SVB Financial Group;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 9, 2014
|
|
/s/ MICHAEL DESCHENEAUX
|
|
|
Michael Descheneaux
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: May 9, 2014
|
|
/s/ GREG BECKER
|
|
|
Greg Becker
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: May 9, 2014
|
|
/s/ MICHAEL DESCHENEAUX
|
|
|
Michael Descheneaux
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|