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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June 30,
2018 |
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December 31,
2017 |
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Assets
|
|
|
|
|
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Cash and cash equivalents
|
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$
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2,712,101
|
|
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$
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2,923,075
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Available-for-sale securities, at fair value (cost of $9,717,156 and $11,131,008, respectively)
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9,593,366
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11,120,664
|
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Held-to-maturity securities, at cost (fair value of $15,493,995 and $12,548,280, respectively)
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15,898,263
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12,663,455
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Non-marketable and other equity securities
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852,505
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651,053
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Total investment securities
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26,344,134
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24,435,172
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Loans, net of unearned income
|
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25,996,192
|
|
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23,106,316
|
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Allowance for loan losses
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(286,709
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)
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(255,024
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)
|
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Net loans
|
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25,709,483
|
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22,851,292
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Premises and equipment, net of accumulated depreciation and amortization
|
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117,603
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|
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128,682
|
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Accrued interest receivable and other assets
|
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984,424
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876,246
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Total assets
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$
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55,867,745
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$
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51,214,467
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Liabilities and total equity
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Liabilities:
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Noninterest-bearing demand deposits
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$
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40,593,302
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$
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36,655,497
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Interest-bearing deposits
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8,293,993
|
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7,598,578
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Total deposits
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48,887,295
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44,254,075
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Short-term borrowings
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417,246
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1,033,730
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Other liabilities
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1,062,391
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911,755
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Long-term debt
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695,972
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695,492
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Total liabilities
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51,062,904
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46,895,052
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Commitments and contingencies (Note 13 and Note 16)
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SVBFG stockholders’ equity:
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Preferred stock, $0.001 par value, 20,000,000 shares authorized; no shares issued and outstanding
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—
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—
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Common stock, $0.001 par value, 150,000,000 shares authorized; 53,210,627 shares and 52,835,188 shares outstanding, respectively
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53
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53
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Additional paid-in capital
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1,346,586
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1,314,377
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Retained earnings
|
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3,397,879
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2,866,837
|
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Accumulated other comprehensive loss
|
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(86,865
|
)
|
|
(1,472
|
)
|
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Total SVBFG stockholders’ equity
|
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4,657,653
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4,179,795
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Noncontrolling interests
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147,188
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139,620
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Total equity
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4,804,841
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4,319,415
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Total liabilities and total equity
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$
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55,867,745
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$
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51,214,467
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Three months ended June 30,
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Six months ended June 30,
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(Dollars in thousands, except per share amounts)
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2018
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2017
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2018
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2017
|
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Interest income:
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Loans
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$
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330,298
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$
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250,197
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$
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627,371
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$
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477,538
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Investment securities:
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Taxable
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137,150
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95,522
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261,627
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185,325
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Non-taxable
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7,666
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885
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12,758
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1,531
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Federal funds sold, securities purchased under agreements to resell and other short-term investment securities
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6,187
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7,323
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11,943
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10,459
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|
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Total interest income
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481,301
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353,927
|
|
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913,699
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674,853
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Interest expense:
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Deposits
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6,270
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2,197
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10,367
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3,914
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Borrowings
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8,588
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9,034
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17,026
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18,250
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Total interest expense
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14,858
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11,231
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27,393
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22,164
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Net interest income
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466,443
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|
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342,696
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886,306
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652,689
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|
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Provision for credit losses
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29,080
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15,806
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57,052
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46,540
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|
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Net interest income after provision for credit losses
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437,363
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326,890
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829,254
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606,149
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Noninterest income:
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Gains on investment securities, net
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36,114
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17,630
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45,172
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33,600
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|
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Gains on equity warrant assets, net
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19,061
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10,820
|
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38,252
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17,510
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Foreign exchange fees
|
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34,077
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26,108
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67,904
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52,355
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Credit card fees
|
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22,926
|
|
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18,099
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44,618
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|
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35,829
|
|
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Deposit service charges
|
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18,794
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|
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14,563
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|
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36,493
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|
|
28,538
|
|
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Client investment fees
|
|
29,452
|
|
|
12,982
|
|
|
52,327
|
|
|
22,008
|
|
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Lending related fees
|
|
9,528
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|
|
8,509
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|
|
20,263
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|
|
17,470
|
|
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Letters of credit and standby letters of credit fees
|
|
8,347
|
|
|
7,006
|
|
|
16,529
|
|
|
13,645
|
|
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Other
|
|
14,390
|
|
|
12,811
|
|
|
26,649
|
|
|
25,232
|
|
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Total noninterest income
|
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192,689
|
|
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128,528
|
|
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348,207
|
|
|
246,187
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|
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Noninterest expense:
|
|
|
|
|
|
|
|
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Compensation and benefits
|
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181,955
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|
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148,973
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|
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347,761
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|
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296,149
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|
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Professional services
|
|
46,813
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|
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27,925
|
|
|
75,538
|
|
|
53,344
|
|
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Premises and equipment
|
|
19,173
|
|
|
18,958
|
|
|
37,718
|
|
|
34,816
|
|
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Net occupancy
|
|
13,288
|
|
|
11,126
|
|
|
26,904
|
|
|
22,777
|
|
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Business development and travel
|
|
12,095
|
|
|
11,389
|
|
|
23,286
|
|
|
20,584
|
|
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FDIC and state assessments
|
|
10,326
|
|
|
9,313
|
|
|
19,756
|
|
|
17,995
|
|
||||
Correspondent bank fees
|
|
3,277
|
|
|
3,163
|
|
|
6,687
|
|
|
6,608
|
|
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Other
|
|
18,812
|
|
|
20,399
|
|
|
33,506
|
|
|
36,606
|
|
||||
Total noninterest expense
|
|
305,739
|
|
|
251,246
|
|
|
571,156
|
|
|
488,879
|
|
||||
Income before income tax expense
|
|
324,313
|
|
|
204,172
|
|
|
606,305
|
|
|
363,457
|
|
||||
Income tax expense
|
|
77,287
|
|
|
71,656
|
|
|
151,253
|
|
|
123,061
|
|
||||
Net income before noncontrolling interests
|
|
247,026
|
|
|
132,516
|
|
|
455,052
|
|
|
240,396
|
|
||||
Net income attributable to noncontrolling interests
|
|
(9,228
|
)
|
|
(9,323
|
)
|
|
(22,293
|
)
|
|
(15,720
|
)
|
||||
Net income available to common stockholders
|
|
$
|
237,798
|
|
|
$
|
123,193
|
|
|
$
|
432,759
|
|
|
$
|
224,676
|
|
Earnings per common share—basic
|
|
$
|
4.48
|
|
|
$
|
2.34
|
|
|
$
|
8.17
|
|
|
$
|
4.28
|
|
Earnings per common share—diluted
|
|
4.42
|
|
|
2.32
|
|
|
8.05
|
|
|
4.22
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income before noncontrolling interests
|
|
$
|
247,026
|
|
|
$
|
132,516
|
|
|
$
|
455,052
|
|
|
$
|
240,396
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency cumulative translation gains and losses:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (losses) gains
|
|
(5,184
|
)
|
|
1,578
|
|
|
(2,078
|
)
|
|
2,535
|
|
||||
Related tax benefit (expense)
|
|
1,433
|
|
|
(644
|
)
|
|
577
|
|
|
(1,034
|
)
|
||||
Change in unrealized gains and losses on available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding losses
|
|
(15,103
|
)
|
|
(5,639
|
)
|
|
(73,130
|
)
|
|
(13,396
|
)
|
||||
Related tax benefit
|
|
4,349
|
|
|
2,500
|
|
|
20,275
|
|
|
5,636
|
|
||||
Reclassification adjustment for losses (gains) included in net income (1)
|
|
—
|
|
|
123
|
|
|
—
|
|
|
(485
|
)
|
||||
Related tax (benefit) expense (1)
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
198
|
|
||||
Reclassification of unrealized gains on equity securities to retained earnings for ASU 2016-01 (1)
|
|
—
|
|
|
—
|
|
|
(40,316
|
)
|
|
—
|
|
||||
Related tax expense (1)
|
|
—
|
|
|
—
|
|
|
11,145
|
|
|
—
|
|
||||
Amortization of unrealized holding gains on securities transferred from available-for-sale to held-to-maturity
|
|
(932
|
)
|
|
(1,566
|
)
|
|
(2,138
|
)
|
|
(3,337
|
)
|
||||
Related tax benefit
|
|
258
|
|
|
630
|
|
|
591
|
|
|
1,343
|
|
||||
Reclassification of stranded tax effect to retained earnings for ASU 2018-02 (1)
|
|
—
|
|
|
—
|
|
|
(319
|
)
|
|
—
|
|
||||
Other comprehensive loss, net of tax
|
|
(15,179
|
)
|
|
(3,068
|
)
|
|
(85,393
|
)
|
|
(8,540
|
)
|
||||
Comprehensive income
|
|
231,847
|
|
|
129,448
|
|
|
369,659
|
|
|
231,856
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
|
(9,228
|
)
|
|
(9,323
|
)
|
|
(22,293
|
)
|
|
(15,720
|
)
|
||||
Comprehensive income attributable to SVBFG
|
|
$
|
222,619
|
|
|
$
|
120,125
|
|
|
$
|
347,366
|
|
|
$
|
216,136
|
|
|
(1)
|
See "Adoption of New Accounting Standards" in
Note 1—“Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
for additional details.
|
|
|
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, 2016
|
|
52,254,074
|
|
|
$
|
52
|
|
|
$
|
1,242,741
|
|
|
$
|
2,376,331
|
|
|
$
|
23,430
|
|
|
$
|
3,642,554
|
|
|
$
|
134,483
|
|
|
$
|
3,777,037
|
|
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
419,247
|
|
|
1
|
|
|
11,821
|
|
|
—
|
|
|
—
|
|
|
11,822
|
|
|
—
|
|
|
11,822
|
|
|||||||
Common stock issued under ESOP
|
|
10,838
|
|
|
—
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
|
2,094
|
|
|
—
|
|
|
2,094
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224,676
|
|
|
—
|
|
|
224,676
|
|
|
15,720
|
|
|
240,396
|
|
|||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,603
|
)
|
|
(9,603
|
)
|
|||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,047
|
)
|
|
(8,047
|
)
|
|
—
|
|
|
(8,047
|
)
|
|||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,994
|
)
|
|
(1,994
|
)
|
|
—
|
|
|
(1,994
|
)
|
|||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,501
|
|
|
1,501
|
|
|
—
|
|
|
1,501
|
|
|||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
26,829
|
|
|
—
|
|
|
—
|
|
|
26,829
|
|
|
—
|
|
|
26,829
|
|
|||||||
Balance at June 30, 2017
|
|
52,684,159
|
|
|
$
|
53
|
|
|
$
|
1,283,485
|
|
|
$
|
2,601,007
|
|
|
$
|
14,890
|
|
|
$
|
3,899,435
|
|
|
$
|
140,600
|
|
|
$
|
4,040,035
|
|
Balance at December 31, 2017
|
|
52,835,188
|
|
|
$
|
53
|
|
|
$
|
1,314,377
|
|
|
$
|
2,866,837
|
|
|
$
|
(1,472
|
)
|
|
$
|
4,179,795
|
|
|
$
|
139,620
|
|
|
$
|
4,319,415
|
|
Cumulative adjustment for ASU 2014-09, net of tax (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,802
|
)
|
|
—
|
|
|
(5,802
|
)
|
|
—
|
|
|
(5,802
|
)
|
|||||||
Cumulative adjustment for ASU 2016-01, net of tax (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103,766
|
|
|
(29,171
|
)
|
|
74,595
|
|
|
—
|
|
|
74,595
|
|
|||||||
Reclassification of stranded tax effect for ASU 2018-02 (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|
(319
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
365,767
|
|
|
—
|
|
|
7,165
|
|
|
—
|
|
|
—
|
|
|
7,165
|
|
|
—
|
|
|
7,165
|
|
|||||||
Common stock issued under ESOP
|
|
9,672
|
|
|
—
|
|
|
2,577
|
|
|
—
|
|
|
—
|
|
|
2,577
|
|
|
—
|
|
|
2,577
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
432,759
|
|
|
—
|
|
|
432,759
|
|
|
22,293
|
|
|
455,052
|
|
|||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,725
|
)
|
|
(14,725
|
)
|
|||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52,855
|
)
|
|
(52,855
|
)
|
|
—
|
|
|
(52,855
|
)
|
|||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,547
|
)
|
|
(1,547
|
)
|
|
—
|
|
|
(1,547
|
)
|
|||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,501
|
)
|
|
(1,501
|
)
|
|
—
|
|
|
(1,501
|
)
|
|||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
22,467
|
|
|
—
|
|
|
—
|
|
|
22,467
|
|
|
—
|
|
|
22,467
|
|
|||||||
Balance at June 30, 2018
|
|
53,210,627
|
|
|
$
|
53
|
|
|
$
|
1,346,586
|
|
|
$
|
3,397,879
|
|
|
$
|
(86,865
|
)
|
|
$
|
4,657,653
|
|
|
$
|
147,188
|
|
|
$
|
4,804,841
|
|
|
(1)
|
See "Adoption of New Accounting Standards" in
Note 1—“Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
for additional details.
|
|
|
Six months ended June 30,
|
||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income before noncontrolling interests
|
|
$
|
455,052
|
|
|
$
|
240,396
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Provision for credit losses
|
|
57,052
|
|
|
46,540
|
|
||
Changes in fair values of equity warrant assets, net of proceeds from exercises
|
|
(24,940
|
)
|
|
(9,053
|
)
|
||
Changes in fair values of derivatives, net
|
|
(8,768
|
)
|
|
8,505
|
|
||
Gains on investment securities, net (1)
|
|
(45,172
|
)
|
|
(20,341
|
)
|
||
Distributions of earnings from non-marketable and other equity securities (1)
|
|
27,409
|
|
|
27,214
|
|
||
Depreciation and amortization
|
|
28,902
|
|
|
26,268
|
|
||
Amortization of premiums and discounts on investment securities, net
|
|
(478
|
)
|
|
1,747
|
|
||
Amortization of share-based compensation
|
|
22,467
|
|
|
19,095
|
|
||
Amortization of deferred loan fees
|
|
(65,606
|
)
|
|
(51,869
|
)
|
||
Deferred income tax benefit
|
|
(18,594
|
)
|
|
(9,827
|
)
|
||
Excess tax benefit from exercise of stock options and vesting of restricted shares
|
|
(14,488
|
)
|
|
(13,028
|
)
|
||
Losses from the write-off of premises and equipment
|
|
7,006
|
|
|
—
|
|
||
Other gains
|
|
—
|
|
|
(3,858
|
)
|
||
Changes in other assets and liabilities:
|
|
|
|
|
||||
Accrued interest receivable and payable, net
|
|
(28,213
|
)
|
|
(8,852
|
)
|
||
Accounts receivable and payable, net
|
|
(10,169
|
)
|
|
(6,227
|
)
|
||
Income tax receivable and payable, net
|
|
(21,076
|
)
|
|
840
|
|
||
Accrued compensation
|
|
(55,814
|
)
|
|
(51,636
|
)
|
||
Foreign exchange spot contracts, net
|
|
68,870
|
|
|
159,607
|
|
||
Other, net
|
|
(26,060
|
)
|
|
41,200
|
|
||
Net cash provided by operating activities
|
|
347,380
|
|
|
396,721
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of available-for-sale securities
|
|
(390,758
|
)
|
|
(1,174,666
|
)
|
||
Proceeds from sales of available-for-sale securities
|
|
—
|
|
|
5,024
|
|
||
Proceeds from maturities and paydowns of available-for-sale securities
|
|
1,775,568
|
|
|
1,715,291
|
|
||
Purchases of held-to-maturity securities
|
|
(4,067,389
|
)
|
|
(2,298,290
|
)
|
||
Proceeds from maturities and paydowns of held-to-maturity securities
|
|
935,820
|
|
|
806,386
|
|
||
Purchases of non-marketable and other securities
|
|
(28,099
|
)
|
|
(9,488
|
)
|
||
Proceeds from sales and distributions of capital of non-marketable and other securities (1)
|
|
75,139
|
|
|
23,765
|
|
||
Net increase in loans
|
|
(2,855,537
|
)
|
|
(1,066,056
|
)
|
||
Purchases of premises and equipment
|
|
(14,851
|
)
|
|
(21,496
|
)
|
||
Net cash used for investing activities
|
|
(4,570,107
|
)
|
|
(2,019,530
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net increase in deposits
|
|
4,633,220
|
|
|
3,485,423
|
|
||
Net decrease in short-term borrowings
|
|
(616,484
|
)
|
|
(512,198
|
)
|
||
Principal payments of long-term debt
|
|
—
|
|
|
(46,235
|
)
|
||
(Distributions to noncontrolling interests), net of contributions from noncontrolling interests
|
|
(14,725
|
)
|
|
(9,603
|
)
|
||
Proceeds from issuance of common stock, ESPP and ESOP
|
|
9,742
|
|
|
13,916
|
|
||
Net cash provided by financing activities
|
|
4,011,753
|
|
|
2,931,303
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(210,974
|
)
|
|
1,308,494
|
|
||
Cash and cash equivalents at beginning of period
|
|
2,923,075
|
|
|
2,545,750
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
2,712,101
|
|
|
$
|
3,854,244
|
|
Supplemental disclosures:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
27,730
|
|
|
$
|
22,293
|
|
Income taxes
|
|
193,682
|
|
|
137,371
|
|
||
Noncash items during the period:
|
|
|
|
|
||||
Changes in unrealized gains and losses on available-for-sale securities, net of tax
|
|
$
|
(52,855
|
)
|
|
$
|
(8,047
|
)
|
Distributions of stock from investments
|
|
3,136
|
|
|
2,514
|
|
|
(1)
|
During the first quarter of 2018 we adopted ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This guidance was adopted on a retrospective basis and impacted the presentation between investing and operating activities related to distributions and net gains from our nonmarketable and other securities portfolio. See
Note 1—“Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
for additional details.
|
1.
|
Basis of Presentation
|
(Dollars in thousands)
|
|
Balance at December 31, 2017
|
|
Adjustments Due to Adoption of ASC 606
|
|
Balance at
January 1, 2018
|
||||||
Accrued interest receivable and other assets:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
$
|
55,946
|
|
|
$
|
(34,340
|
)
|
|
$
|
21,606
|
|
Other liabilities:
|
|
|
|
|
|
|
||||||
Deferred revenue
|
|
27,057
|
|
|
(26,321
|
)
|
|
736
|
|
|||
Current taxes payable
|
|
4,675
|
|
|
(2,217
|
)
|
|
2,458
|
|
|||
Stockholders' Equity:
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
2,866,837
|
|
|
(5,802
|
)
|
|
2,861,035
|
|
|
|
June 30, 2018
|
||||||||||
(Dollars in thousands)
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Accrued interest receivable and other assets:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
$
|
57,740
|
|
|
$
|
97,584
|
|
|
$
|
(39,844
|
)
|
Other liabilities:
|
|
|
|
|
|
|
||||||
Deferred fees
|
|
479
|
|
|
29,964
|
|
|
(29,485
|
)
|
|||
Current taxes payable (receivable)
|
|
1,616
|
|
|
(924
|
)
|
|
2,540
|
|
|||
Stockholders' Equity:
|
|
|
|
|
|
|
||||||
Retained earnings
|
|
3,397,879
|
|
|
3,403,357
|
|
|
(5,478
|
)
|
|
|
Three months ended June 30, 2018
|
||||||||||
(Dollars in thousands)
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Other noninterest income:
|
|
|
|
|
|
|
||||||
Fund management fees
|
|
$
|
5,929
|
|
|
$
|
6,308
|
|
|
$
|
(379
|
)
|
Income tax expense
|
|
77,287
|
|
|
77,380
|
|
|
(93
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income available to common stockholders
|
|
237,798
|
|
|
238,084
|
|
|
(286
|
)
|
|||
Diluted earnings per share
|
|
4.42
|
|
|
4.43
|
|
|
(0.01
|
)
|
|
|
Six months ended June 30, 2018
|
||||||||||
(Dollars in thousands)
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
Other noninterest income:
|
|
|
|
|
|
|
||||||
Fund management fees
|
|
$
|
11,665
|
|
|
$
|
12,914
|
|
|
$
|
(1,249
|
)
|
Income tax expense
|
|
151,253
|
|
|
151,577
|
|
|
(324
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income available to common stockholders
|
|
432,759
|
|
|
433,684
|
|
|
(925
|
)
|
|||
Diluted earnings per share
|
|
8.05
|
|
|
8.07
|
|
|
(0.02
|
)
|
2.
|
Stockholders' Equity and EPS
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
Income Statement Location
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Reclassification adjustment for losses (gains) included in net income (1)
|
|
Gains on investment securities, net
|
|
$
|
—
|
|
|
$
|
123
|
|
|
$
|
—
|
|
|
$
|
(485
|
)
|
Related tax (benefit) expense (1)
|
|
Income tax expense
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
198
|
|
||||
Total reclassification adjustment for losses (gains) included in net income, net of tax (1)
|
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
(287
|
)
|
|
(1)
|
See "Adoption of New Accounting Standards" in
Note 1—“Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
for additional details.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars and shares in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders
|
|
$
|
237,798
|
|
|
$
|
123,193
|
|
|
$
|
432,759
|
|
|
$
|
224,676
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding—basic
|
|
53,064
|
|
|
52,537
|
|
|
52,974
|
|
|
52,441
|
|
||||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options and ESPP
|
|
400
|
|
|
368
|
|
|
408
|
|
|
397
|
|
||||
Restricted stock units
|
|
312
|
|
|
289
|
|
|
350
|
|
|
342
|
|
||||
Weighted average common shares outstanding—diluted
|
|
53,776
|
|
|
53,194
|
|
|
53,732
|
|
|
53,180
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
4.48
|
|
|
$
|
2.34
|
|
|
$
|
8.17
|
|
|
$
|
4.28
|
|
Diluted
|
|
4.42
|
|
|
2.32
|
|
|
8.05
|
|
|
4.22
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
(Shares in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock options
|
|
58
|
|
|
73
|
|
|
33
|
|
|
36
|
|
Restricted stock units
|
|
113
|
|
|
—
|
|
|
59
|
|
|
—
|
|
Total
|
|
171
|
|
|
73
|
|
|
92
|
|
|
36
|
|
3.
|
Share-Based Compensation
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Share-based compensation expense
|
|
$
|
11,944
|
|
|
$
|
9,892
|
|
|
$
|
22,467
|
|
|
$
|
19,095
|
|
Income tax benefit related to share-based compensation expense
|
|
(2,743
|
)
|
|
(3,349
|
)
|
|
(5,060
|
)
|
|
(6,364
|
)
|
(Dollars in thousands)
|
|
Unrecognized
Expense
|
|
Weighted Average Expected
Recognition Period
- in Years
|
||
Stock options
|
|
$
|
15,039
|
|
|
3.10
|
Restricted stock units
|
|
81,376
|
|
|
2.91
|
|
Total unrecognized share-based compensation expense
|
|
$
|
96,415
|
|
|
|
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average Remaining Contractual Life - in Years
|
|
Aggregate
Intrinsic Value
of In-The-
Money
Options
|
|||||
Outstanding at December 31, 2017
|
|
808,049
|
|
|
$
|
105.68
|
|
|
|
|
|
||
Granted
|
|
87,352
|
|
|
305.22
|
|
|
|
|
|
|||
Exercised
|
|
(156,580
|
)
|
|
84.83
|
|
|
|
|
|
|||
Forfeited
|
|
(1,926
|
)
|
|
130.69
|
|
|
|
|
|
|||
Expired
|
|
(2,337
|
)
|
|
60.37
|
|
|
|
|
|
|||
Outstanding at June 30, 2018
|
|
734,558
|
|
|
133.93
|
|
|
3.92
|
|
$
|
115,185,279
|
|
|
Vested and expected to vest at June 30, 2018
|
|
710,108
|
|
|
131.27
|
|
|
3.85
|
|
113,119,954
|
|
||
Exercisable at June 30, 2018
|
|
449,728
|
|
|
97.80
|
|
|
2.82
|
|
85,881,104
|
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at December 31, 2017
|
|
637,667
|
|
|
$
|
135.86
|
|
Granted
|
|
185,292
|
|
|
301.56
|
|
|
Vested
|
|
(206,997
|
)
|
|
130.29
|
|
|
Forfeited
|
|
(21,028
|
)
|
|
148.43
|
|
|
Nonvested at June 30, 2018
|
|
594,934
|
|
|
188.96
|
|
4.
|
Variable Interest Entities
|
(Dollars in thousands)
|
|
Consolidated VIEs
|
|
Unconsolidated VIEs
|
|
Maximum Exposure to Loss in Unconsolidated VIEs
|
||||||
June 30, 2018:
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
4,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other equity securities (1)
|
|
208,275
|
|
|
529,429
|
|
|
529,429
|
|
|||
Accrued interest receivable and other assets
|
|
397
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
|
$
|
212,785
|
|
|
$
|
529,429
|
|
|
$
|
529,429
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Other liabilities (1)
|
|
765
|
|
|
161,113
|
|
|
—
|
|
|||
Total liabilities
|
|
$
|
765
|
|
|
$
|
161,113
|
|
|
$
|
—
|
|
December 31, 2017:
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
6,674
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other equity securities (1)
|
|
190,562
|
|
|
346,097
|
|
|
346,097
|
|
|||
Accrued interest receivable and other assets
|
|
365
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
|
$
|
197,601
|
|
|
$
|
346,097
|
|
|
$
|
346,097
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Other liabilities (1)
|
|
990
|
|
|
100,891
|
|
|
—
|
|
|||
Total liabilities
|
|
$
|
990
|
|
|
$
|
100,891
|
|
|
$
|
—
|
|
|
(1)
|
Included in our unconsolidated non-marketable and other equity securities portfolio at
June 30, 2018
and
December 31, 2017
are investments in qualified affordable housing projects of
$251.5 million
and
$174.2 million
, respectively, and related other liabilities consisting of unfunded credit commitments of
$161.1 million
and
$100.9 million
, respectively.
|
5.
|
Cash and Cash Equivalents
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Cash and due from banks (1)
|
|
$
|
2,670,473
|
|
|
$
|
2,672,290
|
|
Securities purchased under agreements to resell (2)
|
|
37,379
|
|
|
247,876
|
|
||
Other short-term investment securities
|
|
4,249
|
|
|
2,909
|
|
||
Total cash and cash equivalents
|
|
$
|
2,712,101
|
|
|
$
|
2,923,075
|
|
|
(1)
|
At
June 30, 2018
and
December 31, 2017
,
$645.8 million
and
$624.0 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
$1.0 billion
and
$1.1 billion
, respectively.
|
(2)
|
At
June 30, 2018
and
December 31, 2017
, securities purchased und
er agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of
$38.1 million
an
d
$252.8 million
, respectively. None of these securities were sold or repledged as of
June 30, 2018
and
December 31, 2017
.
|
6.
|
Investment Securities
|
|
|
June 30, 2018
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,782,879
|
|
|
$
|
4,186
|
|
|
$
|
(53,995
|
)
|
|
$
|
5,733,070
|
|
U.S. agency debentures
|
|
1,495,657
|
|
|
—
|
|
|
(9,793
|
)
|
|
1,485,864
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,103,572
|
|
|
39
|
|
|
(65,477
|
)
|
|
2,038,134
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
335,048
|
|
|
1,376
|
|
|
(126
|
)
|
|
336,298
|
|
||||
Total available-for-sale securities
|
|
$
|
9,717,156
|
|
|
$
|
5,601
|
|
|
$
|
(129,391
|
)
|
|
$
|
9,593,366
|
|
|
|
December 31, 2017
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
6,865,068
|
|
|
$
|
1,113
|
|
|
$
|
(25,679
|
)
|
|
$
|
6,840,502
|
|
U.S. agency debentures
|
|
1,569,195
|
|
|
3,569
|
|
|
(5,636
|
)
|
|
1,567,128
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,292,311
|
|
|
258
|
|
|
(25,534
|
)
|
|
2,267,035
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
372,481
|
|
|
1,375
|
|
|
(126
|
)
|
|
373,730
|
|
||||
Equity securities
|
|
31,953
|
|
|
40,525
|
|
|
(209
|
)
|
|
72,269
|
|
||||
Total available-for-sale securities
|
|
$
|
11,131,008
|
|
|
$
|
46,840
|
|
|
$
|
(57,184
|
)
|
|
$
|
11,120,664
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Sales proceeds
|
|
$
|
—
|
|
|
$
|
2,946
|
|
|
$
|
—
|
|
|
$
|
5,024
|
|
Net realized gains and losses:
|
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
|
—
|
|
|
418
|
|
|
—
|
|
|
1,093
|
|
||||
Gross realized losses
|
|
—
|
|
|
(541
|
)
|
|
—
|
|
|
(608
|
)
|
||||
Net realized (losses) gains
|
|
$
|
—
|
|
|
$
|
(123
|
)
|
|
$
|
—
|
|
|
$
|
485
|
|
|
|
June 30, 2018
|
||||||||||||||||||||||
|
|
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
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$
|
4,492,009
|
|
|
$
|
(48,430
|
)
|
|
$
|
845,938
|
|
|
$
|
(5,565
|
)
|
|
$
|
5,337,947
|
|
|
$
|
(53,995
|
)
|
U.S. agency debentures
|
|
1,027,612
|
|
|
(3,984
|
)
|
|
458,252
|
|
|
(5,809
|
)
|
|
1,485,864
|
|
|
(9,793
|
)
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,857,591
|
|
|
(60,030
|
)
|
|
166,002
|
|
|
(5,447
|
)
|
|
2,023,593
|
|
|
(65,477
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
19,068
|
|
|
(9
|
)
|
|
46,057
|
|
|
(117
|
)
|
|
65,125
|
|
|
(126
|
)
|
||||||
Total temporarily impaired securities (1)
|
|
$
|
7,396,280
|
|
|
$
|
(112,453
|
)
|
|
$
|
1,516,249
|
|
|
$
|
(16,938
|
)
|
|
$
|
8,912,529
|
|
|
$
|
(129,391
|
)
|
|
(1)
|
As of
June 30, 2018
, we identified a total of
264
investments that were in unrealized loss positions, of which
64
investments totaling
$1.5 billion
with unrealized losses of
$16.9 million
have been in an impaired position for a period of time greater than 12 months. As of
June 30, 2018
, we do not intend to sell any of our impaired 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
June 30, 2018
, 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, 2017
|
||||||||||||||||||||||
|
|
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
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
|
$
|
5,968,914
|
|
|
$
|
(23,397
|
)
|
|
$
|
323,966
|
|
|
$
|
(2,282
|
)
|
|
$
|
6,292,880
|
|
|
$
|
(25,679
|
)
|
U.S. agency debentures
|
|
736,541
|
|
|
(2,289
|
)
|
|
336,196
|
|
|
(3,347
|
)
|
|
1,072,737
|
|
|
(5,636
|
)
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,193,277
|
|
|
(25,534
|
)
|
|
—
|
|
|
—
|
|
|
2,193,277
|
|
|
(25,534
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
13,843
|
|
|
(3
|
)
|
|
53,186
|
|
|
(123
|
)
|
|
67,029
|
|
|
(126
|
)
|
||||||
Equity securities
|
|
624
|
|
|
(209
|
)
|
|
—
|
|
|
—
|
|
|
624
|
|
|
(209
|
)
|
||||||
Total temporarily impaired securities (1)
|
|
$
|
8,913,199
|
|
|
$
|
(51,432
|
)
|
|
$
|
713,348
|
|
|
$
|
(5,752
|
)
|
|
$
|
9,626,547
|
|
|
$
|
(57,184
|
)
|
|
(1)
|
As of
December 31, 2017
, we identified a total of
268
investments that were in unrealized loss positions, of which
46
investments totaling
$713.3 million
with unrealized losses of
$5.8 million
have been in an impaired position for a period of time greater than 12 months.
|
|
|
June 30, 2018
|
||||||||||||||||||
(Dollars in thousands)
|
|
Total
|
|
One Year
or Less |
|
After One
Year to Five Years |
|
After Five
Years to Ten Years |
|
After
Ten Years |
||||||||||
U.S. Treasury securities
|
|
$
|
5,733,070
|
|
|
$
|
2,037,522
|
|
|
$
|
3,349,925
|
|
|
$
|
345,623
|
|
|
$
|
—
|
|
U.S. agency debentures
|
|
1,485,864
|
|
|
555,737
|
|
|
930,127
|
|
|
—
|
|
|
—
|
|
|||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency-issued collateralized mortgage obligations
—
fixed rate
|
|
2,038,134
|
|
|
—
|
|
|
—
|
|
|
47,098
|
|
|
1,991,036
|
|
|||||
Agency-issued collateralized mortgage obligations
—
variable rate
|
|
336,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
336,298
|
|
|||||
Total
|
|
$
|
9,593,366
|
|
|
$
|
2,593,259
|
|
|
$
|
4,280,052
|
|
|
$
|
392,721
|
|
|
$
|
2,327,334
|
|
|
|
June 30, 2018
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
||||||||
Held-to-maturity securities, at cost:
|
|
|
|
|
|
|
|
|
||||||||
U.S. agency debentures (1)
|
|
$
|
713,809
|
|
|
$
|
—
|
|
|
$
|
(13,818
|
)
|
|
$
|
699,991
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
8,588,483
|
|
|
1,591
|
|
|
(210,148
|
)
|
|
8,379,926
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,494,834
|
|
|
—
|
|
|
(91,919
|
)
|
|
2,402,915
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
233,285
|
|
|
691
|
|
|
(31
|
)
|
|
233,945
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
2,335,971
|
|
|
10
|
|
|
(62,982
|
)
|
|
2,272,999
|
|
||||
Municipal bonds and notes
|
|
1,531,881
|
|
|
1,280
|
|
|
(28,942
|
)
|
|
1,504,219
|
|
||||
Total held-to-maturity securities
|
|
$
|
15,898,263
|
|
|
$
|
3,572
|
|
|
$
|
(407,840
|
)
|
|
$
|
15,493,995
|
|
|
(1)
|
Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.
|
|
|
December 31, 2017
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||
Held-to-maturity securities, at cost:
|
|
|
|
|
|
|
|
|
||||||||
U.S. agency debentures (1)
|
|
$
|
659,979
|
|
|
$
|
3,167
|
|
|
$
|
(1,601
|
)
|
|
$
|
661,545
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
6,304,969
|
|
|
4,854
|
|
|
(43,528
|
)
|
|
6,266,295
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,829,979
|
|
|
23
|
|
|
(54,372
|
)
|
|
2,775,630
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
255,782
|
|
|
733
|
|
|
(34
|
)
|
|
256,481
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
1,868,985
|
|
|
694
|
|
|
(25,563
|
)
|
|
1,844,116
|
|
||||
Municipal bonds and notes
|
|
743,761
|
|
|
3,452
|
|
|
(3,000
|
)
|
|
744,213
|
|
||||
Total held-to-maturity securities
|
|
$
|
12,663,455
|
|
|
$
|
12,923
|
|
|
$
|
(128,098
|
)
|
|
$
|
12,548,280
|
|
|
(1)
|
Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.
|
|
|
June 30, 2018
|
||||||||||||||||||||||
|
|
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
|
||||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency debentures
|
|
$
|
645,990
|
|
|
$
|
(10,883
|
)
|
|
$
|
54,001
|
|
|
$
|
(2,935
|
)
|
|
$
|
699,991
|
|
|
$
|
(13,818
|
)
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
7,436,980
|
|
|
(192,418
|
)
|
|
364,687
|
|
|
(17,730
|
)
|
|
7,801,667
|
|
|
(210,148
|
)
|
||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
776,389
|
|
|
(24,833
|
)
|
|
1,626,527
|
|
|
(67,086
|
)
|
|
2,402,916
|
|
|
(91,919
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
3,687
|
|
|
(1
|
)
|
|
8,889
|
|
|
(30
|
)
|
|
12,576
|
|
|
(31
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
1,460,340
|
|
|
(38,747
|
)
|
|
715,596
|
|
|
(24,235
|
)
|
|
2,175,936
|
|
|
(62,982
|
)
|
||||||
Municipal bonds and notes
|
|
1,046,102
|
|
|
(28,359
|
)
|
|
15,859
|
|
|
(583
|
)
|
|
1,061,961
|
|
|
(28,942
|
)
|
||||||
Total temporarily impaired securities (1)
|
|
$
|
11,369,488
|
|
|
$
|
(295,241
|
)
|
|
$
|
2,785,559
|
|
|
$
|
(112,599
|
)
|
|
$
|
14,155,047
|
|
|
$
|
(407,840
|
)
|
|
(1)
|
As of
June 30, 2018
, we identified a total of
1,236
investments that were in unrealized loss positions, of which
226
investments totaling
$2.8 billion
with unrealized losses of
$112.6 million
have been in an impaired position for a period of time greater than 12 months. As of
June 30, 2018
, we do not intend to sell any of our impaired 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, which is consistent with our classification of these securities. Based on our analysis as of
June 30, 2018
, we deem all impairments to be temporary. Market valuations and impairment analyses on assets in the held-to-maturity securities portfolio are reviewed and monitored on a quarterly basis.
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
|
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 |
||||||||||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency debentures
|
|
$
|
104,688
|
|
|
$
|
(1,601
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104,688
|
|
|
$
|
(1,601
|
)
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
4,270,377
|
|
|
(34,092
|
)
|
|
408,913
|
|
|
(9,436
|
)
|
|
4,679,290
|
|
|
(43,528
|
)
|
||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,011,709
|
|
|
(13,631
|
)
|
|
1,741,614
|
|
|
(40,741
|
)
|
|
2,753,323
|
|
|
(54,372
|
)
|
||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
—
|
|
|
—
|
|
|
9,812
|
|
|
(34
|
)
|
|
9,812
|
|
|
(34
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
979,361
|
|
|
(11,566
|
)
|
|
773,712
|
|
|
(13,997
|
)
|
|
1,753,073
|
|
|
(25,563
|
)
|
||||||
Municipal bonds and notes
|
|
344,796
|
|
|
(2,103
|
)
|
|
32,844
|
|
|
(897
|
)
|
|
377,640
|
|
|
(3,000
|
)
|
||||||
Total temporarily impaired securities (1)
|
|
$
|
6,710,931
|
|
|
$
|
(62,993
|
)
|
|
$
|
2,966,895
|
|
|
$
|
(65,105
|
)
|
|
$
|
9,677,826
|
|
|
$
|
(128,098
|
)
|
|
(1)
|
As of
December 31, 2017
, we identified a total of
753
investments that were in unrealized loss positions, of which
237
investments totaling
$3.0 billion
with unrealized losses of
$65.1 million
have been in an impaired position for a period of time greater than 12 months.
|
|
|
June 30, 2018
|
||||||||||||||||||||||||||||||||||||||
|
|
Total
|
|
One Year
or Less
|
|
After One Year to
Five Years
|
|
After Five Years to
Ten Years
|
|
After
Ten Years
|
||||||||||||||||||||||||||||||
(Dollars in thousands)
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||
U.S. agency debentures
|
|
$
|
713,809
|
|
|
$
|
699,991
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122,040
|
|
|
$
|
120,081
|
|
|
$
|
591,769
|
|
|
$
|
579,910
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Agency-issued mortgage-backed securities
|
|
8,588,483
|
|
|
8,379,926
|
|
|
707
|
|
|
706
|
|
|
172,594
|
|
|
168,271
|
|
|
672,564
|
|
|
648,623
|
|
|
7,742,618
|
|
|
7,562,326
|
|
||||||||||
Agency-issued collateralized mortgage obligations
—
fixed rate
|
|
2,494,834
|
|
|
2,402,915
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
412,530
|
|
|
394,779
|
|
|
2,082,304
|
|
|
2,008,136
|
|
||||||||||
Agency-issued collateralized mortgage obligations
—
variable rate
|
|
233,285
|
|
|
233,945
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233,285
|
|
|
233,945
|
|
||||||||||
Agency-issued commercial mortgage-backed securities
|
|
2,335,971
|
|
|
2,272,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,335,971
|
|
|
2,272,999
|
|
||||||||||
Municipal bonds and notes
|
|
1,531,881
|
|
|
1,504,219
|
|
|
7,257
|
|
|
7,236
|
|
|
75,946
|
|
|
74,989
|
|
|
259,085
|
|
|
250,034
|
|
|
1,189,593
|
|
|
1,171,960
|
|
||||||||||
Total
|
|
$
|
15,898,263
|
|
|
$
|
15,493,995
|
|
|
$
|
7,964
|
|
|
$
|
7,942
|
|
|
$
|
370,580
|
|
|
$
|
363,341
|
|
|
$
|
1,935,948
|
|
|
$
|
1,873,346
|
|
|
$
|
13,583,771
|
|
|
$
|
13,249,366
|
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Non-marketable and other equity securities:
|
|
|
|
|
||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
||||
Consolidated venture capital and private equity fund investments (1)
|
|
$
|
133,007
|
|
|
$
|
128,111
|
|
Unconsolidated venture capital and private equity fund investments (2)
|
|
211,113
|
|
|
98,548
|
|
||
Other investments without a readily determinable fair value (3)
|
|
24,015
|
|
|
27,680
|
|
||
Other equity securities in public companies (fair value accounting) (4)
|
|
4,412
|
|
|
310
|
|
||
Non-marketable securities (equity method accounting) (5):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
102,838
|
|
|
89,809
|
|
||
Debt funds
|
|
14,215
|
|
|
21,183
|
|
||
Other investments
|
|
111,426
|
|
|
111,198
|
|
||
Investments in qualified affordable housing projects, net (6)
|
|
251,479
|
|
|
174,214
|
|
||
Total non-marketable and other equity securities
|
|
$
|
852,505
|
|
|
$
|
651,053
|
|
|
(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
June 30, 2018
and
December 31, 2017
(fair value accounting):
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Strategic Investors Fund, LP
|
|
$
|
13,972
|
|
|
12.6
|
%
|
|
$
|
14,673
|
|
|
12.6
|
%
|
Capital Preferred Return Fund, LP
|
|
58,148
|
|
|
20.0
|
|
|
54,147
|
|
|
20.0
|
|
||
Growth Partners, LP
|
|
59,886
|
|
|
33.0
|
|
|
58,372
|
|
|
33.0
|
|
||
CP I, LP
|
|
1,001
|
|
|
10.7
|
|
|
919
|
|
|
10.7
|
|
||
Total consolidated venture capital and private equity fund investments
|
|
$
|
133,007
|
|
|
|
|
$
|
128,111
|
|
|
|
(2)
|
The carrying value represents investments in
226
and
235
funds (primarily venture capital funds) at
June 30, 2018
and
December 31, 2017
, 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. Effective January 1, 2018 we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which eliminated the concept of cost method accounting. On a prospective basis we will carry our unconsolidated venture capital and private equity fund investments at fair value based on the fund investments' net asset values per share as obtained from the general partners of the investments. For each fund investment, we adjust the net asset value per share for differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example March 31
st
, for our June 30
th
consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period. We recorded a cumulative adjustment to opening retained earnings on January 1, 2018 for the difference between fair value and cost for these fund investments. The estimated fair value and carrying value of these venture capital and private equity fund investments was
$211.1 million
as of
June 30, 2018
. As of December 31, 2017, these investments were carried at cost and had a carrying value of
$98.5 million
.
|
(3)
|
Effective January 1, 2018, we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which eliminated the concept of cost method accounting. On a prospective basis we will report our other investments in the line item "Other investments without a readily determinable fair value". These investments include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted. The following table shows the changes to the carrying amount of other investments without a readily determinable fair value for the six months ended
June 30, 2018
:
|
(Dollars in thousands)
|
|
Six months ended June 30, 2018
|
||
Carrying value as of January 1, 2018
|
|
$
|
27,680
|
|
Upward carrying value adjustments
|
|
3,630
|
|
|
Downward carrying value adjustments
|
|
(1,611
|
)
|
|
Additions
|
|
3,654
|
|
|
Sales and dispositions
|
|
(9,338
|
)
|
|
Carrying value as of June 30, 2018
|
|
$
|
24,015
|
|
(4)
|
Investments classified as other equity securities (fair value accounting) represent shares held in public companies as a result of exercising public equity warrant assets and direct equity investments in public companies held by our consolidated funds. Effective January 1, 2018 we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Prior to January 1, 2018 we reported equity securities in public companies that we held as a result of exercising public equity warrant assets in available-for-sale securities. On a prospective basis, these equity securities will be reported in non-marketable and other equity securities.
|
(5)
|
The following table shows the carrying value and our ownership percentage of each investment at
June 30, 2018
and
December 31, 2017
(equity method accounting):
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Venture capital and private equity fund investments:
|
|
|
|
|
|
|
|
|
||||||
Strategic Investors Fund II, LP
|
|
$
|
5,003
|
|
|
8.6
|
%
|
|
$
|
6,342
|
|
|
8.6
|
%
|
Strategic Investors Fund III, LP
|
|
18,858
|
|
|
5.9
|
|
|
18,758
|
|
|
5.9
|
|
||
Strategic Investors Fund IV, LP
|
|
29,152
|
|
|
5.0
|
|
|
25,551
|
|
|
5.0
|
|
||
Strategic Investors Fund V funds
|
|
21,247
|
|
|
Various
|
|
|
16,856
|
|
|
Various
|
|
||
CP II, LP (i)
|
|
6,792
|
|
|
5.1
|
|
|
6,700
|
|
|
5.1
|
|
||
Other venture capital and private equity fund investments
|
|
21,786
|
|
|
Various
|
|
|
15,602
|
|
|
Various
|
|
||
Total venture capital and private equity fund investments
|
|
$
|
102,838
|
|
|
|
|
$
|
89,809
|
|
|
|
||
Debt funds:
|
|
|
|
|
|
|
|
|
||||||
Gold Hill Capital 2008, LP (ii)
|
|
$
|
11,153
|
|
|
15.5
|
%
|
|
$
|
18,690
|
|
|
15.5
|
%
|
Other debt funds
|
|
3,062
|
|
|
Various
|
|
|
2,493
|
|
|
Various
|
|
||
Total debt funds
|
|
$
|
14,215
|
|
|
|
|
$
|
21,183
|
|
|
|
||
Other investments:
|
|
|
|
|
|
|
|
|
||||||
SPD Silicon Valley Bank Co., Ltd.
|
|
$
|
75,837
|
|
|
50.0
|
%
|
|
$
|
75,337
|
|
|
50.0
|
%
|
Other investments
|
|
35,589
|
|
|
Various
|
|
|
35,861
|
|
|
Various
|
|
||
Total other investments
|
|
$
|
111,426
|
|
|
|
|
$
|
111,198
|
|
|
|
|
(i)
|
Our ownership includes direct ownership of
1.3 percent
and indirect ownership interest of
3.8 percent
through our investments in Strategic Investors Fund II, LP.
|
(ii)
|
Our ownership includes 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
.
|
(6)
|
The following table presents the balances of our investments in qualified affordable housing projects and related unfunded commitments included as a component of “other liabilities” on our consolidated balance sheets at
June 30, 2018
and
December 31, 2017
:
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Investments in qualified affordable housing projects, net
|
|
$
|
251,479
|
|
|
$
|
174,214
|
|
Other liabilities
|
|
161,113
|
|
|
100,891
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Tax credits and other tax benefits recognized
|
|
$
|
5,207
|
|
|
$
|
3,968
|
|
|
$
|
10,629
|
|
|
$
|
8,660
|
|
Amortization expense included in provision for income taxes (i)
|
|
4,705
|
|
|
3,385
|
|
|
9,497
|
|
|
6,621
|
|
|
(i)
|
All investments are amortized using the proportional amortization method and amortization expense is included in the provision for income taxes.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net gains on non-marketable and other equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Consolidated venture capital and private equity fund investments
|
|
$
|
4,397
|
|
|
$
|
9,713
|
|
|
$
|
16,044
|
|
|
$
|
16,176
|
|
Unconsolidated venture capital and private equity fund investments (1)
|
|
19,136
|
|
|
6,184
|
|
|
30,855
|
|
|
9,231
|
|
||||
Other investments without a readily determinable fair value (1)
|
|
60
|
|
|
30
|
|
|
1,801
|
|
|
3,403
|
|
||||
Other equity securities in public companies (fair value accounting) (1)
|
|
88
|
|
|
(25
|
)
|
|
(22,194
|
)
|
|
(107
|
)
|
||||
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments
|
|
9,212
|
|
|
2,657
|
|
|
18,781
|
|
|
6,391
|
|
||||
Debt funds
|
|
726
|
|
|
682
|
|
|
(1,573
|
)
|
|
251
|
|
||||
Other investments
|
|
2,495
|
|
|
(1,488
|
)
|
|
1,458
|
|
|
(2,230
|
)
|
||||
Total net gains on non-marketable and other equity securities
|
|
$
|
36,114
|
|
|
$
|
17,753
|
|
|
$
|
45,172
|
|
|
$
|
33,115
|
|
Less: Net gains (losses) on non-marketable and other equity securities sold
|
|
1,915
|
|
|
31
|
|
|
(21,163
|
)
|
|
3,404
|
|
||||
Unrealized net gains on non-marketable and other equity securities still held
|
|
$
|
34,199
|
|
|
$
|
17,722
|
|
|
$
|
66,335
|
|
|
$
|
29,711
|
|
|
(1)
|
Prior period amounts are not determined in a manner consistent with the current period presentation due to the adoption of accounting standard update (ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825)).
|
7.
|
Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Commercial loans:
|
|
|
|
|
||||
Software/internet
|
|
$
|
6,230,358
|
|
|
$
|
6,172,531
|
|
Hardware
|
|
1,269,241
|
|
|
1,193,599
|
|
||
Private equity/venture capital
|
|
12,224,155
|
|
|
9,952,377
|
|
||
Life science/healthcare
|
|
2,087,872
|
|
|
1,808,827
|
|
||
Premium wine
|
|
198,813
|
|
|
204,105
|
|
||
Other
|
|
316,392
|
|
|
365,724
|
|
||
Total commercial loans
|
|
22,326,831
|
|
|
19,697,163
|
|
||
Real estate secured loans:
|
|
|
|
|
||||
Premium wine (1)
|
|
685,357
|
|
|
669,053
|
|
||
Consumer loans (2)
|
|
2,481,062
|
|
|
2,300,506
|
|
||
Other
|
|
41,275
|
|
|
42,068
|
|
||
Total real estate secured loans
|
|
3,207,694
|
|
|
3,011,627
|
|
||
Construction loans
|
|
64,388
|
|
|
68,546
|
|
||
Consumer loans
|
|
397,279
|
|
|
328,980
|
|
||
Total loans, net of unearned income (3)
|
|
$
|
25,996,192
|
|
|
$
|
23,106,316
|
|
|
(1)
|
Included in our premium wine portfolio are gross construction loans of
$104 million
and
$100 million
at
June 30, 2018
and
December 31, 2017
, respectively.
|
(2)
|
Consumer loans secured by real estate at
June 30, 2018
and
December 31, 2017
were comprised of the following:
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Loans for personal residence
|
|
$
|
2,144,326
|
|
|
$
|
1,995,840
|
|
Loans to eligible employees
|
|
266,988
|
|
|
243,118
|
|
||
Home equity lines of credit
|
|
69,748
|
|
|
61,548
|
|
||
Consumer loans secured by real estate
|
|
$
|
2,481,062
|
|
|
$
|
2,300,506
|
|
(3)
|
Included within our total loan portfolio are credit card loans of
$315 million
and
$270 million
at
June 30, 2018
and
December 31, 2017
, respectively.
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Commercial loans:
|
|
|
|
|
||||
Software/internet
|
|
$
|
6,230,358
|
|
|
$
|
6,172,531
|
|
Hardware
|
|
1,269,241
|
|
|
1,193,599
|
|
||
Private equity/venture capital
|
|
12,224,155
|
|
|
9,952,377
|
|
||
Life science/healthcare
|
|
2,087,872
|
|
|
1,808,827
|
|
||
Premium wine
|
|
884,170
|
|
|
873,158
|
|
||
Other
|
|
422,055
|
|
|
476,338
|
|
||
Total commercial loans
|
|
23,117,851
|
|
|
20,476,830
|
|
||
Consumer loans:
|
|
|
|
|
||||
Real estate secured loans
|
|
2,481,062
|
|
|
2,300,506
|
|
||
Other consumer loans
|
|
397,279
|
|
|
328,980
|
|
||
Total consumer loans
|
|
2,878,341
|
|
|
2,629,486
|
|
||
Total loans, net of unearned income
|
|
$
|
25,996,192
|
|
|
$
|
23,106,316
|
|
(Dollars in thousands)
|
|
30 - 59
Days Past
Due
|
|
60 - 89
Days Past
Due
|
|
Equal to or Greater
Than 90
Days Past
Due
|
|
Total Past
Due
|
|
Current
|
|
Loans Past Due
90 Days or
More Still
Accruing
Interest
|
||||||||||||
June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
7,996
|
|
|
$
|
6,271
|
|
|
$
|
459
|
|
|
$
|
14,726
|
|
|
$
|
6,174,542
|
|
|
$
|
459
|
|
Hardware
|
|
645
|
|
|
40
|
|
|
3
|
|
|
688
|
|
|
1,238,451
|
|
|
3
|
|
||||||
Private equity/venture capital
|
|
62,536
|
|
|
10
|
|
|
—
|
|
|
62,546
|
|
|
12,170,459
|
|
|
—
|
|
||||||
Life science/healthcare
|
|
671
|
|
|
269
|
|
|
—
|
|
|
940
|
|
|
2,130,976
|
|
|
—
|
|
||||||
Premium wine
|
|
3,350
|
|
|
—
|
|
|
—
|
|
|
3,350
|
|
|
879,176
|
|
|
—
|
|
||||||
Other
|
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
|
436,011
|
|
|
—
|
|
||||||
Total commercial loans
|
|
75,199
|
|
|
6,593
|
|
|
462
|
|
|
82,254
|
|
|
23,029,615
|
|
|
462
|
|
||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate secured loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,473,458
|
|
|
—
|
|
||||||
Other consumer loans
|
|
1,489
|
|
|
—
|
|
|
—
|
|
|
1,489
|
|
|
395,787
|
|
|
—
|
|
||||||
Total consumer loans
|
|
1,489
|
|
|
—
|
|
|
—
|
|
|
1,489
|
|
|
2,869,245
|
|
|
—
|
|
||||||
Total gross loans excluding impaired loans
|
|
76,688
|
|
|
6,593
|
|
|
462
|
|
|
83,743
|
|
|
25,898,860
|
|
|
462
|
|
||||||
Impaired loans
|
|
1,557
|
|
|
2,070
|
|
|
36,196
|
|
|
39,823
|
|
|
138,356
|
|
|
—
|
|
||||||
Total gross loans
|
|
$
|
78,245
|
|
|
$
|
8,663
|
|
|
$
|
36,658
|
|
|
$
|
123,566
|
|
|
$
|
26,037,216
|
|
|
$
|
462
|
|
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
14,257
|
|
|
$
|
6,526
|
|
|
$
|
141
|
|
|
$
|
20,924
|
|
|
$
|
6,101,147
|
|
|
$
|
141
|
|
Hardware
|
|
1,145
|
|
|
77
|
|
|
50
|
|
|
1,272
|
|
|
1,163,278
|
|
|
50
|
|
||||||
Private equity/venture capital
|
|
86,566
|
|
|
38,580
|
|
|
—
|
|
|
125,146
|
|
|
9,835,317
|
|
|
—
|
|
||||||
Life science/healthcare
|
|
4,390
|
|
|
191
|
|
|
—
|
|
|
4,581
|
|
|
1,841,692
|
|
|
—
|
|
||||||
Premium wine
|
|
418
|
|
|
—
|
|
|
—
|
|
|
418
|
|
|
871,074
|
|
|
—
|
|
||||||
Other
|
|
445
|
|
|
—
|
|
|
—
|
|
|
445
|
|
|
490,292
|
|
|
—
|
|
||||||
Total commercial loans
|
|
107,221
|
|
|
45,374
|
|
|
191
|
|
|
152,786
|
|
|
20,302,800
|
|
|
191
|
|
||||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate secured loans
|
|
2,164
|
|
|
532
|
|
|
—
|
|
|
2,696
|
|
|
2,292,980
|
|
|
—
|
|
||||||
Other consumer loans
|
|
796
|
|
|
—
|
|
|
—
|
|
|
796
|
|
|
327,234
|
|
|
—
|
|
||||||
Total consumer loans
|
|
2,960
|
|
|
532
|
|
|
—
|
|
|
3,492
|
|
|
2,620,214
|
|
|
—
|
|
||||||
Total gross loans excluding impaired loans
|
|
110,181
|
|
|
45,906
|
|
|
191
|
|
|
156,278
|
|
|
22,923,014
|
|
|
191
|
|
||||||
Impaired loans
|
|
1,344
|
|
|
11,902
|
|
|
30,403
|
|
|
43,649
|
|
|
131,212
|
|
|
—
|
|
||||||
Total gross loans
|
|
$
|
111,525
|
|
|
$
|
57,808
|
|
|
$
|
30,594
|
|
|
$
|
199,927
|
|
|
$
|
23,054,226
|
|
|
$
|
191
|
|
(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
|
||||||||
June 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
58,136
|
|
|
$
|
44,384
|
|
|
$
|
102,520
|
|
|
$
|
126,752
|
|
Hardware
|
|
17,093
|
|
|
25,201
|
|
|
42,294
|
|
|
43,403
|
|
||||
Private equity/venture capital
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Life science/healthcare
|
|
26,170
|
|
|
250
|
|
|
26,420
|
|
|
31,517
|
|
||||
Premium wine
|
|
331
|
|
|
2,193
|
|
|
2,524
|
|
|
2,576
|
|
||||
Other
|
|
8
|
|
|
—
|
|
|
8
|
|
|
36
|
|
||||
Total commercial loans
|
|
101,738
|
|
|
72,028
|
|
|
173,766
|
|
|
204,284
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
3,254
|
|
|
1,159
|
|
|
4,413
|
|
|
6,012
|
|
||||
Other consumer loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total consumer loans
|
|
3,254
|
|
|
1,159
|
|
|
4,413
|
|
|
6,012
|
|
||||
Total
|
|
$
|
104,992
|
|
|
$
|
73,187
|
|
|
$
|
178,179
|
|
|
$
|
210,296
|
|
December 31, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
49,645
|
|
|
$
|
61,009
|
|
|
$
|
110,654
|
|
|
$
|
129,006
|
|
Hardware
|
|
15,637
|
|
|
20,713
|
|
|
36,350
|
|
|
41,721
|
|
||||
Private equity/venture capital
|
|
658
|
|
|
—
|
|
|
658
|
|
|
984
|
|
||||
Life science/healthcare
|
|
20,521
|
|
|
1,166
|
|
|
21,687
|
|
|
26,360
|
|
||||
Premium wine
|
|
—
|
|
|
2,877
|
|
|
2,877
|
|
|
2,911
|
|
||||
Other
|
|
32
|
|
|
—
|
|
|
32
|
|
|
165
|
|
||||
Total commercial loans
|
|
86,493
|
|
|
85,765
|
|
|
172,258
|
|
|
201,147
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
1,331
|
|
|
850
|
|
|
2,181
|
|
|
3,712
|
|
||||
Other consumer loans
|
|
422
|
|
|
—
|
|
|
422
|
|
|
436
|
|
||||
Total consumer loans
|
|
1,753
|
|
|
850
|
|
|
2,603
|
|
|
4,148
|
|
||||
Total
|
|
$
|
88,246
|
|
|
$
|
86,615
|
|
|
$
|
174,861
|
|
|
$
|
205,295
|
|
Three months ended June 30,
|
|
Average impaired loans
|
|
Interest income recognized on impaired loans
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
110,101
|
|
|
$
|
136,374
|
|
|
$
|
315
|
|
|
$
|
711
|
|
Hardware
|
|
37,058
|
|
|
29,771
|
|
|
237
|
|
|
510
|
|
||||
Private equity/venture capital
|
|
72
|
|
|
327
|
|
|
—
|
|
|
3
|
|
||||
Life science/healthcare
|
|
21,790
|
|
|
36,033
|
|
|
5
|
|
|
191
|
|
||||
Premium wine
|
|
2,604
|
|
|
3,221
|
|
|
36
|
|
|
38
|
|
||||
Other
|
|
379
|
|
|
708
|
|
|
—
|
|
|
—
|
|
||||
Total commercial loans
|
|
172,004
|
|
|
206,434
|
|
|
593
|
|
|
1,453
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
4,466
|
|
|
1,360
|
|
|
3
|
|
|
—
|
|
||||
Other consumer loans
|
|
693
|
|
|
1,679
|
|
|
—
|
|
|
—
|
|
||||
Total consumer loans
|
|
5,159
|
|
|
3,039
|
|
|
3
|
|
|
—
|
|
||||
Total average impaired loans
|
|
$
|
177,163
|
|
|
$
|
209,473
|
|
|
$
|
596
|
|
|
$
|
1,453
|
|
Six months ended June 30,
|
|
Average impaired loans
|
|
Interest income recognized on impaired loans
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
109,444
|
|
|
$
|
123,145
|
|
|
$
|
562
|
|
|
$
|
938
|
|
Hardware
|
|
37,742
|
|
|
31,940
|
|
|
289
|
|
|
943
|
|
||||
Private equity/venture capital
|
|
187
|
|
|
342
|
|
|
—
|
|
|
5
|
|
||||
Life science/healthcare
|
|
22,234
|
|
|
37,488
|
|
|
11
|
|
|
291
|
|
||||
Premium wine
|
|
2,686
|
|
|
3,217
|
|
|
72
|
|
|
76
|
|
||||
Other
|
|
195
|
|
|
885
|
|
|
—
|
|
|
—
|
|
||||
Total commercial loans
|
|
172,488
|
|
|
197,017
|
|
|
934
|
|
|
2,253
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Real estate secured loans
|
|
3,765
|
|
|
1,424
|
|
|
8
|
|
|
—
|
|
||||
Other consumer loans
|
|
716
|
|
|
1,914
|
|
|
—
|
|
|
—
|
|
||||
Total consumer loans
|
|
4,481
|
|
|
3,338
|
|
|
8
|
|
|
—
|
|
||||
Total average impaired loans
|
|
$
|
176,969
|
|
|
$
|
200,355
|
|
|
$
|
942
|
|
|
$
|
2,253
|
|
Three months ended June 30, 2018
|
|
Beginning Balance March 31, 2018
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for
(Reduction of) Loan Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2018
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
103,295
|
|
|
$
|
(13,402
|
)
|
|
$
|
404
|
|
|
$
|
13,179
|
|
|
$
|
(828
|
)
|
|
$
|
102,648
|
|
Hardware
|
|
28,472
|
|
|
(461
|
)
|
|
643
|
|
|
6,447
|
|
|
(406
|
)
|
|
34,695
|
|
||||||
Private equity/venture capital
|
|
91,618
|
|
|
(112
|
)
|
|
—
|
|
|
(2,237
|
)
|
|
140
|
|
|
89,409
|
|
||||||
Life science/healthcare
|
|
25,806
|
|
|
—
|
|
|
3
|
|
|
9,876
|
|
|
(621
|
)
|
|
35,064
|
|
||||||
Premium wine
|
|
3,365
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
(5
|
)
|
|
3,438
|
|
||||||
Other
|
|
3,482
|
|
|
(1,164
|
)
|
|
566
|
|
|
13
|
|
|
(1
|
)
|
|
2,896
|
|
||||||
Total commercial loans
|
|
256,038
|
|
|
(15,139
|
)
|
|
1,616
|
|
|
27,356
|
|
|
(1,721
|
)
|
|
268,150
|
|
||||||
Total consumer loans
|
|
18,256
|
|
|
(289
|
)
|
|
310
|
|
|
300
|
|
|
(18
|
)
|
|
18,559
|
|
||||||
Total allowance for loan losses
|
|
$
|
274,294
|
|
|
$
|
(15,428
|
)
|
|
$
|
1,926
|
|
|
$
|
27,656
|
|
|
$
|
(1,739
|
)
|
|
$
|
286,709
|
|
Three months ended June 30, 2017
|
|
Beginning Balance March 31, 2017
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for
(Reduction of) Loan Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2017
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
109,502
|
|
|
$
|
(19,401
|
)
|
|
$
|
1,236
|
|
|
$
|
1,527
|
|
|
$
|
73
|
|
|
$
|
92,937
|
|
Hardware
|
|
23,284
|
|
|
(249
|
)
|
|
77
|
|
|
4,474
|
|
|
214
|
|
|
27,800
|
|
||||||
Private equity/venture capital
|
|
57,078
|
|
|
—
|
|
|
—
|
|
|
9,263
|
|
|
444
|
|
|
66,785
|
|
||||||
Life science/healthcare
|
|
31,542
|
|
|
(4,678
|
)
|
|
8
|
|
|
819
|
|
|
39
|
|
|
27,730
|
|
||||||
Premium wine
|
|
4,343
|
|
|
—
|
|
|
—
|
|
|
(1,155
|
)
|
|
(55
|
)
|
|
3,133
|
|
||||||
Other
|
|
4,377
|
|
|
(753
|
)
|
|
180
|
|
|
316
|
|
|
15
|
|
|
4,135
|
|
||||||
Total commercial loans
|
|
230,126
|
|
|
(25,081
|
)
|
|
1,501
|
|
|
15,244
|
|
|
730
|
|
|
222,520
|
|
||||||
Total consumer loans
|
|
13,004
|
|
|
—
|
|
|
1,034
|
|
|
(59
|
)
|
|
(3
|
)
|
|
13,976
|
|
||||||
Total allowance for loan losses
|
|
$
|
243,130
|
|
|
$
|
(25,081
|
)
|
|
$
|
2,535
|
|
|
$
|
15,185
|
|
|
$
|
727
|
|
|
$
|
236,496
|
|
Six months ended June 30, 2018
|
|
Beginning Balance December 31, 2017
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for
(Reduction of) Loan Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2018
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
96,104
|
|
|
$
|
(20,073
|
)
|
|
$
|
977
|
|
|
$
|
25,980
|
|
|
$
|
(340
|
)
|
|
$
|
102,648
|
|
Hardware
|
|
27,614
|
|
|
(3,414
|
)
|
|
1,231
|
|
|
9,551
|
|
|
(287
|
)
|
|
34,695
|
|
||||||
Private equity/venture capital
|
|
82,468
|
|
|
(112
|
)
|
|
10
|
|
|
6,568
|
|
|
475
|
|
|
89,409
|
|
||||||
Life science/healthcare
|
|
24,924
|
|
|
(864
|
)
|
|
56
|
|
|
11,507
|
|
|
(559
|
)
|
|
35,064
|
|
||||||
Premium wine
|
|
3,532
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
(11
|
)
|
|
3,438
|
|
||||||
Other
|
|
3,941
|
|
|
(1,263
|
)
|
|
1,103
|
|
|
(893
|
)
|
|
8
|
|
|
2,896
|
|
||||||
Total commercial loans
|
|
238,583
|
|
|
(25,726
|
)
|
|
3,377
|
|
|
52,630
|
|
|
(714
|
)
|
|
268,150
|
|
||||||
Total consumer loans
|
|
16,441
|
|
|
(289
|
)
|
|
337
|
|
|
2,022
|
|
|
48
|
|
|
18,559
|
|
||||||
Total allowance for loan losses
|
|
$
|
255,024
|
|
|
$
|
(26,015
|
)
|
|
$
|
3,714
|
|
|
$
|
54,652
|
|
|
$
|
(666
|
)
|
|
$
|
286,709
|
|
Six months ended June 30, 2017
|
|
Beginning Balance December 31, 2016
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for
(Reduction of) Loan Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2017
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software/internet
|
|
$
|
97,388
|
|
|
$
|
(27,381
|
)
|
|
$
|
2,407
|
|
|
$
|
20,246
|
|
|
$
|
277
|
|
|
$
|
92,937
|
|
Hardware
|
|
31,166
|
|
|
(4,273
|
)
|
|
344
|
|
|
394
|
|
|
169
|
|
|
27,800
|
|
||||||
Private equity/venture capital
|
|
50,299
|
|
|
—
|
|
|
—
|
|
|
15,969
|
|
|
517
|
|
|
66,785
|
|
||||||
Life science/healthcare
|
|
25,446
|
|
|
(6,410
|
)
|
|
44
|
|
|
8,527
|
|
|
123
|
|
|
27,730
|
|
||||||
Premium wine
|
|
4,115
|
|
|
—
|
|
|
—
|
|
|
(929
|
)
|
|
(53
|
)
|
|
3,133
|
|
||||||
Other
|
|
4,768
|
|
|
(1,047
|
)
|
|
477
|
|
|
(74
|
)
|
|
11
|
|
|
4,135
|
|
||||||
Total commercial loans
|
|
213,182
|
|
|
(39,111
|
)
|
|
3,272
|
|
|
44,133
|
|
|
1,044
|
|
|
222,520
|
|
||||||
Total consumer loans
|
|
12,184
|
|
|
—
|
|
|
1,055
|
|
|
731
|
|
|
6
|
|
|
13,976
|
|
||||||
Total allowance for loan losses
|
|
$
|
225,366
|
|
|
$
|
(39,111
|
)
|
|
$
|
4,327
|
|
|
$
|
44,864
|
|
|
$
|
1,050
|
|
|
$
|
236,496
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Beginning balance
|
|
$
|
52,823
|
|
|
$
|
46,335
|
|
|
$
|
51,770
|
|
|
$
|
45,265
|
|
Provision for unfunded credit commitments
|
|
1,424
|
|
|
621
|
|
|
2,400
|
|
|
1,676
|
|
||||
Foreign currency translation adjustments
|
|
(143
|
)
|
|
44
|
|
|
(66
|
)
|
|
59
|
|
||||
Ending balance (1)
|
|
$
|
54,104
|
|
|
$
|
47,000
|
|
|
$
|
54,104
|
|
|
$
|
47,000
|
|
|
(1)
|
See
Note 13—“Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
for additional disclosures related to our commitments to extend credit.
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
|
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/internet
|
|
$
|
25,320
|
|
|
$
|
102,520
|
|
|
$
|
77,328
|
|
|
$
|
6,127,838
|
|
|
$
|
23,088
|
|
|
$
|
110,654
|
|
|
$
|
73,016
|
|
|
$
|
6,061,877
|
|
Hardware
|
|
13,392
|
|
|
42,294
|
|
|
21,303
|
|
|
1,226,947
|
|
|
8,450
|
|
|
36,350
|
|
|
19,164
|
|
|
1,157,249
|
|
||||||||
Private equity/venture capital
|
|
—
|
|
|
—
|
|
|
89,409
|
|
|
12,224,155
|
|
|
330
|
|
|
658
|
|
|
82,138
|
|
|
9,951,719
|
|
||||||||
Life science/healthcare
|
|
14,442
|
|
|
26,420
|
|
|
20,622
|
|
|
2,061,452
|
|
|
9,315
|
|
|
21,687
|
|
|
15,609
|
|
|
1,787,140
|
|
||||||||
Premium wine
|
|
—
|
|
|
2,524
|
|
|
3,438
|
|
|
881,646
|
|
|
—
|
|
|
2,877
|
|
|
3,532
|
|
|
870,281
|
|
||||||||
Other
|
|
8
|
|
|
8
|
|
|
2,888
|
|
|
422,047
|
|
|
32
|
|
|
32
|
|
|
3,909
|
|
|
476,306
|
|
||||||||
Total commercial loans
|
|
53,162
|
|
|
173,766
|
|
|
214,988
|
|
|
22,944,085
|
|
|
41,215
|
|
|
172,258
|
|
|
197,368
|
|
|
20,304,572
|
|
||||||||
Total consumer loans
|
|
515
|
|
|
4,413
|
|
|
18,044
|
|
|
2,873,928
|
|
|
578
|
|
|
2,603
|
|
|
15,863
|
|
|
2,626,883
|
|
||||||||
Total
|
|
$
|
53,677
|
|
|
$
|
178,179
|
|
|
$
|
233,032
|
|
|
$
|
25,818,013
|
|
|
$
|
41,793
|
|
|
$
|
174,861
|
|
|
$
|
213,231
|
|
|
$
|
22,931,455
|
|
(Dollars in thousands)
|
|
Pass
|
|
Performing (Criticized)
|
|
Performing Impaired (Criticized)
|
|
Nonperforming Impaired (Nonaccrual)
|
|
Total
|
||||||||||
June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software/internet
|
|
$
|
5,645,661
|
|
|
$
|
543,607
|
|
|
$
|
25,369
|
|
|
$
|
77,151
|
|
|
$
|
6,291,788
|
|
Hardware
|
|
1,163,629
|
|
|
75,510
|
|
|
25,201
|
|
|
17,093
|
|
|
1,281,433
|
|
|||||
Private equity/venture capital
|
|
12,229,454
|
|
|
3,551
|
|
|
—
|
|
|
—
|
|
|
12,233,005
|
|
|||||
Life science/healthcare
|
|
1,909,151
|
|
|
222,765
|
|
|
250
|
|
|
26,170
|
|
|
2,158,336
|
|
|||||
Premium wine
|
|
840,649
|
|
|
41,877
|
|
|
2,193
|
|
|
331
|
|
|
885,050
|
|
|||||
Other
|
|
432,652
|
|
|
3,363
|
|
|
—
|
|
|
8
|
|
|
436,023
|
|
|||||
Total commercial loans
|
|
22,221,196
|
|
|
890,673
|
|
|
53,013
|
|
|
120,753
|
|
|
23,285,635
|
|
|||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate secured loans
|
|
2,462,007
|
|
|
11,451
|
|
|
324
|
|
|
4,089
|
|
|
2,477,871
|
|
|||||
Other consumer loans
|
|
396,902
|
|
|
374
|
|
|
—
|
|
|
—
|
|
|
397,276
|
|
|||||
Total consumer loans
|
|
2,858,909
|
|
|
11,825
|
|
|
324
|
|
|
4,089
|
|
|
2,875,147
|
|
|||||
Total gross loans
|
|
$
|
25,080,105
|
|
|
$
|
902,498
|
|
|
$
|
53,337
|
|
|
$
|
124,842
|
|
|
$
|
26,160,782
|
|
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Software/internet
|
|
$
|
5,655,739
|
|
|
$
|
466,332
|
|
|
$
|
31,794
|
|
|
$
|
78,860
|
|
|
$
|
6,232,725
|
|
Hardware
|
|
1,112,574
|
|
|
51,976
|
|
|
20,165
|
|
|
16,185
|
|
|
1,200,900
|
|
|||||
Private equity/venture capital
|
|
9,955,082
|
|
|
5,381
|
|
|
—
|
|
|
658
|
|
|
9,961,121
|
|
|||||
Life science/healthcare
|
|
1,720,613
|
|
|
125,660
|
|
|
1,167
|
|
|
20,520
|
|
|
1,867,960
|
|
|||||
Premium wine
|
|
834,537
|
|
|
36,955
|
|
|
2,476
|
|
|
401
|
|
|
874,369
|
|
|||||
Other
|
|
469,721
|
|
|
21,016
|
|
|
—
|
|
|
32
|
|
|
490,769
|
|
|||||
Total commercial loans
|
|
19,748,266
|
|
|
707,320
|
|
|
55,602
|
|
|
116,656
|
|
|
20,627,844
|
|
|||||
Consumer loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate secured loans
|
|
2,282,375
|
|
|
13,301
|
|
|
—
|
|
|
2,181
|
|
|
2,297,857
|
|
|||||
Other consumer loans
|
|
326,851
|
|
|
1,179
|
|
|
—
|
|
|
422
|
|
|
328,452
|
|
|||||
Total consumer loans
|
|
2,609,226
|
|
|
14,480
|
|
|
—
|
|
|
2,603
|
|
|
2,626,309
|
|
|||||
Total gross loans
|
|
$
|
22,357,492
|
|
|
$
|
721,800
|
|
|
$
|
55,602
|
|
|
$
|
119,259
|
|
|
$
|
23,254,153
|
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Loans modified in TDRs:
|
|
|
|
|
||||
Commercial loans:
|
|
|
|
|
||||
Software/internet
|
|
$
|
50,202
|
|
|
$
|
73,455
|
|
Hardware
|
|
49,834
|
|
|
51,132
|
|
||
Private equity/venture capital
|
|
—
|
|
|
350
|
|
||
Life science/healthcare
|
|
25,460
|
|
|
19,235
|
|
||
Premium wine
|
|
3,048
|
|
|
3,198
|
|
||
Total commercial loans
|
|
128,544
|
|
|
147,370
|
|
||
Consumer loans:
|
|
|
|
|
||||
Other consumer loans
|
|
325
|
|
|
423
|
|
||
Total
|
|
$
|
128,869
|
|
|
$
|
147,793
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Loans modified in TDRs during the period:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
14,783
|
|
|
$
|
16,135
|
|
|
$
|
14,783
|
|
|
$
|
22,242
|
|
Hardware
|
|
1,954
|
|
|
—
|
|
|
3,448
|
|
|
—
|
|
||||
Private equity/venture capital
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Life science/healthcare
|
|
6,231
|
|
|
4,588
|
|
|
7,461
|
|
|
4,588
|
|
||||
Premium wine
|
|
—
|
|
|
190
|
|
|
—
|
|
|
190
|
|
||||
Total commercial loans
|
|
22,968
|
|
|
20,913
|
|
|
25,692
|
|
|
27,020
|
|
||||
Consumer loans:
|
|
|
|
|
|
|
|
|
||||||||
Other consumer loans
|
|
—
|
|
|
—
|
|
|
325
|
|
|
—
|
|
||||
Total consumer loans
|
|
—
|
|
|
—
|
|
|
325
|
|
|
—
|
|
||||
Total loans modified in TDRs during the period (1)
|
|
$
|
22,968
|
|
|
$
|
20,913
|
|
|
$
|
26,017
|
|
|
$
|
27,020
|
|
|
(1)
|
There were
$8.5 million
of partial charge-offs for both the
three and six months ended
June 30, 2018
and
$12.5 million
and
$15.1 million
of partial charge-offs during the
three and six months ended
June 30, 2017
, respectively.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
TDRs modified within the previous 12 months that defaulted during the period:
|
|
|
|
|
|
|
|
|
||||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||||
Software/internet
|
|
$
|
19,625
|
|
|
$
|
—
|
|
|
$
|
22,657
|
|
|
$
|
—
|
|
Hardware
|
|
3,449
|
|
|
—
|
|
|
3,449
|
|
|
—
|
|
||||
Life science/healthcare
|
|
1,230
|
|
|
—
|
|
|
1,230
|
|
|
—
|
|
||||
Premium wine
|
|
—
|
|
|
190
|
|
|
—
|
|
|
190
|
|
||||
Total TDRs modified within the previous 12 months that defaulted in the period
|
|
$
|
24,304
|
|
|
$
|
190
|
|
|
$
|
27,336
|
|
|
$
|
190
|
|
8.
|
Short-Term Borrowings and Long-Term Debt
|
|
|
|
|
|
|
Carrying Value
|
||||||||
(Dollars in thousands)
|
|
Maturity
|
|
Principal value at June 30, 2018
|
|
June 30,
2018 |
|
December 31,
2017 |
||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
Short-term FHLB advances
|
|
July 2, 2018
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
700,000
|
|
Federal funds purchased
|
|
|
|
—
|
|
|
—
|
|
|
330,000
|
|
|||
Other short-term borrowings
|
|
(1)
|
|
17,246
|
|
|
17,246
|
|
|
3,730
|
|
|||
Total short-term borrowings
|
|
|
|
|
|
$
|
417,246
|
|
|
$
|
1,033,730
|
|
||
Long-term debt:
|
|
|
|
|
|
|
|
|
||||||
3.50% Senior Notes
|
|
January 29, 2025
|
|
$
|
350,000
|
|
|
$
|
347,470
|
|
|
$
|
347,303
|
|
5.375% Senior Notes
|
|
September 15, 2020
|
|
350,000
|
|
|
348,502
|
|
|
348,189
|
|
|||
Total long-term debt
|
|
|
|
|
|
$
|
695,972
|
|
|
$
|
695,492
|
|
|
(1)
|
Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.
|
9.
|
Derivative Financial Instruments
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Notional or
Contractual
Amount
|
|
Fair Value
|
|
Notional or
Contractual
Amount
|
|
Fair Value
|
||||||||||||||||
(Dollars in thousands)
|
|
|
Derivative Assets (1)
|
|
Derivative Liabilities (1)
|
|
|
Derivative Assets (1)
|
|
Derivative Liabilities (1)
|
||||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency exchange risks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
501,372
|
|
|
$
|
16,250
|
|
|
$
|
—
|
|
|
$
|
50,889
|
|
|
$
|
414
|
|
|
$
|
—
|
|
Foreign exchange forwards
|
|
243,969
|
|
|
—
|
|
|
9,636
|
|
|
425,055
|
|
|
—
|
|
|
5,201
|
|
||||||
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity warrant assets
|
|
227,490
|
|
|
143,725
|
|
|
—
|
|
|
211,253
|
|
|
123,763
|
|
|
—
|
|
||||||
Client foreign exchange forwards
|
|
2,582,993
|
|
|
81,395
|
|
|
—
|
|
|
2,203,643
|
|
|
95,035
|
|
|
—
|
|
||||||
Client foreign exchange forwards
|
|
2,305,484
|
|
|
—
|
|
|
73,323
|
|
|
2,092,207
|
|
|
—
|
|
|
90,253
|
|
||||||
Client foreign currency options
|
|
107,907
|
|
|
1,713
|
|
|
—
|
|
|
102,678
|
|
|
1,187
|
|
|
—
|
|
||||||
Client foreign currency options
|
|
107,907
|
|
|
—
|
|
|
1,713
|
|
|
102,678
|
|
|
—
|
|
|
1,187
|
|
||||||
Client interest rate derivatives (2)
|
|
919,033
|
|
|
6,422
|
|
|
—
|
|
|
726,984
|
|
|
11,753
|
|
|
—
|
|
||||||
Client interest rate derivatives
|
|
1,274,209
|
|
|
—
|
|
|
12,532
|
|
|
782,586
|
|
|
—
|
|
|
11,940
|
|
||||||
Total Derivatives not designated as hedging instruments
|
|
|
|
$
|
249,505
|
|
|
$
|
97,204
|
|
|
|
|
$
|
232,152
|
|
|
$
|
108,581
|
|
|
(1)
|
Derivative assets and liabilities are included in
"
accrued interest receivable and other assets
"
and
"
other liabilities
"
, respectively, on our consolidated balance sheets.
|
(2)
|
The amount reported for
June 30, 2018
reflects rule changes implemented by two central clearing houses that allow entities to elect to treat derivative assets, liabilities and the related variation margin as settlement of the related derivative fair values for legal and accounting purposes, as opposed to presenting gross derivative assets and liabilities. As a result, client interest rate derivatives at
June 30, 2018
, reflect reductions of approximately
$5.8 million
of derivative assets that previously would have been reported on a gross basis and approximately
$281.8 million
in related notional amounts for these derivative assets cleared through central clearing houses.
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
Statement of income location
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate risks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash benefit associated with interest rate swaps
|
|
Interest expense—borrowings
|
|
$
|
—
|
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
935
|
|
Changes in fair value of interest rate swaps
|
|
Other noninterest income
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Net gains associated with interest rate risk derivatives
|
|
|
|
$
|
—
|
|
|
$
|
375
|
|
|
$
|
—
|
|
|
$
|
928
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Currency exchange risks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Losses) gains on revaluations of internal foreign currency instruments, net
|
|
Other noninterest income
|
|
$
|
(319
|
)
|
|
$
|
14,596
|
|
|
$
|
2,607
|
|
|
$
|
18,704
|
|
Gains (losses) on internal foreign exchange forward contracts, net
|
|
Other noninterest income
|
|
459
|
|
|
(14,554
|
)
|
|
(3,053
|
)
|
|
(17,799
|
)
|
||||
Net gains (losses) associated with internal currency risk
|
|
|
|
$
|
140
|
|
|
$
|
42
|
|
|
$
|
(446
|
)
|
|
$
|
905
|
|
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Losses) gains on revaluations of client foreign currency instruments, net
|
|
Other noninterest income
|
|
$
|
(2,748
|
)
|
|
$
|
2,375
|
|
|
$
|
4,905
|
|
|
$
|
5,129
|
|
Gains (losses) on client foreign exchange forward contracts, net
|
|
Other noninterest income
|
|
2,844
|
|
|
(2,190
|
)
|
|
(4,270
|
)
|
|
(4,479
|
)
|
||||
Net gains associated with client currency risk
|
|
|
|
$
|
96
|
|
|
$
|
185
|
|
|
$
|
635
|
|
|
$
|
650
|
|
Net gains on equity warrant assets
|
|
Gains on equity warrant assets, net
|
|
$
|
19,061
|
|
|
$
|
10,820
|
|
|
$
|
38,252
|
|
|
$
|
17,510
|
|
Net (losses) gains on other derivatives
|
|
Other noninterest income
|
|
$
|
(10
|
)
|
|
$
|
(210
|
)
|
|
$
|
421
|
|
|
$
|
(486
|
)
|
|
|
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
|
|
Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
|
|
Net Amount
|
||||||||||||||
(Dollars in thousands)
|
|
|
|
|
Financial Instruments
|
|
Cash Collateral Received (1)
|
|
||||||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
97,645
|
|
|
$
|
—
|
|
|
$
|
97,645
|
|
|
$
|
(32,627
|
)
|
|
$
|
(14,416
|
)
|
|
$
|
50,602
|
|
Foreign currency options
|
|
1,713
|
|
|
—
|
|
|
1,713
|
|
|
(973
|
)
|
|
—
|
|
|
740
|
|
||||||
Client interest rate derivatives
|
|
6,422
|
|
|
—
|
|
|
6,422
|
|
|
(3,592
|
)
|
|
(2,830
|
)
|
|
—
|
|
||||||
Total derivative assets
|
|
105,780
|
|
|
—
|
|
|
105,780
|
|
|
(37,192
|
)
|
|
(17,246
|
)
|
|
51,342
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
37,379
|
|
|
—
|
|
|
37,379
|
|
|
(37,379
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
143,159
|
|
|
$
|
—
|
|
|
$
|
143,159
|
|
|
$
|
(74,571
|
)
|
|
$
|
(17,246
|
)
|
|
$
|
51,342
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
95,449
|
|
|
$
|
—
|
|
|
$
|
95,449
|
|
|
$
|
(14,570
|
)
|
|
$
|
(3,616
|
)
|
|
$
|
77,263
|
|
Foreign currency options
|
|
1,187
|
|
|
—
|
|
|
1,187
|
|
|
(557
|
)
|
|
—
|
|
|
630
|
|
||||||
Client interest rate derivatives
|
|
11,753
|
|
|
—
|
|
|
11,753
|
|
|
(11,627
|
)
|
|
(114
|
)
|
|
12
|
|
||||||
Total derivative assets
|
|
108,389
|
|
|
—
|
|
|
108,389
|
|
|
(26,754
|
)
|
|
(3,730
|
)
|
|
77,905
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
247,876
|
|
|
—
|
|
|
247,876
|
|
|
(247,876
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
356,265
|
|
|
$
|
—
|
|
|
$
|
356,265
|
|
|
$
|
(274,630
|
)
|
|
$
|
(3,730
|
)
|
|
$
|
77,905
|
|
|
(1)
|
Cash collateral received from our counterparties in relation to market value exposures of derivative contracts in our favor is recorded as a component of “short-term borrowings” on our consolidated balance sheets.
|
|
|
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
|
|
Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
|
|
Net Amount
|
||||||||||||||
(Dollars in thousands)
|
|
|
|
|
Financial Instruments
|
|
Cash Collateral Pledged (1)
|
|
||||||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
82,959
|
|
|
$
|
—
|
|
|
$
|
82,959
|
|
|
$
|
(14,638
|
)
|
|
$
|
(41,113
|
)
|
|
$
|
27,208
|
|
Foreign currency options
|
|
1,713
|
|
|
—
|
|
|
1,713
|
|
|
(772
|
)
|
|
—
|
|
|
941
|
|
||||||
Client interest rate derivatives
|
|
12,532
|
|
|
—
|
|
|
12,532
|
|
|
—
|
|
|
(12,448
|
)
|
|
84
|
|
||||||
Total derivative liabilities
|
|
97,204
|
|
|
—
|
|
|
97,204
|
|
|
(15,410
|
)
|
|
(53,561
|
)
|
|
28,233
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
97,204
|
|
|
$
|
—
|
|
|
$
|
97,204
|
|
|
$
|
(15,410
|
)
|
|
$
|
(53,561
|
)
|
|
$
|
28,233
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
$
|
95,454
|
|
|
$
|
—
|
|
|
$
|
95,454
|
|
|
$
|
(10,997
|
)
|
|
$
|
(69,110
|
)
|
|
$
|
15,347
|
|
Foreign currency options
|
|
1,187
|
|
|
—
|
|
|
1,187
|
|
|
(501
|
)
|
|
(130
|
)
|
|
556
|
|
||||||
Client interest rate derivatives
|
|
11,940
|
|
|
—
|
|
|
11,940
|
|
|
—
|
|
|
(11,924
|
)
|
|
16
|
|
||||||
Total derivative liabilities
|
|
108,581
|
|
|
—
|
|
|
108,581
|
|
|
(11,498
|
)
|
|
(81,164
|
)
|
|
15,919
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
108,581
|
|
|
$
|
—
|
|
|
$
|
108,581
|
|
|
$
|
(11,498
|
)
|
|
$
|
(81,164
|
)
|
|
$
|
15,919
|
|
|
(1)
|
Cash collateral pledged to our counterparties in relation to market value exposures of derivative contracts in a liability position is recorded as a component of “cash and cash equivalents
"
on our consolidated balance sheets.
|
10.
|
Noninterest Income
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Noninterest income:
|
|
|
|
|
|
|
|
|
||||||||
Gains on investment securities, net
|
|
$
|
36,114
|
|
|
$
|
17,630
|
|
|
$
|
45,172
|
|
|
$
|
33,600
|
|
Gains on equity warrant assets, net
|
|
19,061
|
|
|
10,820
|
|
|
38,252
|
|
|
17,510
|
|
||||
Foreign exchange fees
|
|
34,077
|
|
|
26,108
|
|
|
67,904
|
|
|
52,355
|
|
||||
Credit card fees
|
|
22,926
|
|
|
18,099
|
|
|
44,618
|
|
|
35,829
|
|
||||
Deposit service charges
|
|
18,794
|
|
|
14,563
|
|
|
36,493
|
|
|
28,538
|
|
||||
Client investment fees
|
|
29,452
|
|
|
12,982
|
|
|
52,327
|
|
|
22,008
|
|
||||
Lending related fees
|
|
9,528
|
|
|
8,509
|
|
|
20,263
|
|
|
17,470
|
|
||||
Letters of credit and standby letters of credit fees
|
|
8,347
|
|
|
7,006
|
|
|
16,529
|
|
|
13,645
|
|
||||
Other
|
|
14,390
|
|
|
12,811
|
|
|
26,649
|
|
|
25,232
|
|
||||
Total noninterest income
|
|
$
|
192,689
|
|
|
$
|
128,528
|
|
|
$
|
348,207
|
|
|
$
|
246,187
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gains on non-marketable and other equity securities, net
|
|
$
|
36,114
|
|
|
$
|
17,753
|
|
|
$
|
45,172
|
|
|
$
|
33,115
|
|
(Losses) gains on sales of available-for-sale securities, net
|
|
—
|
|
|
(123
|
)
|
|
—
|
|
|
485
|
|
||||
Total gains on investment securities, net
|
|
$
|
36,114
|
|
|
$
|
17,630
|
|
|
$
|
45,172
|
|
|
$
|
33,600
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Equity warrant assets:
|
|
|
|
|
|
|
|
|
||||||||
Gains on exercises, net
|
|
$
|
8,875
|
|
|
$
|
3,121
|
|
|
$
|
20,509
|
|
|
$
|
11,345
|
|
Cancellations and expirations
|
|
(826
|
)
|
|
(571
|
)
|
|
(1,726
|
)
|
|
(1,129
|
)
|
||||
Changes in fair value, net
|
|
11,012
|
|
|
8,270
|
|
|
19,469
|
|
|
7,294
|
|
||||
Total net gains on equity warrant assets
|
|
$
|
19,061
|
|
|
$
|
10,820
|
|
|
$
|
38,252
|
|
|
$
|
17,510
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign exchange fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Spot contract commissions
|
|
$
|
31,548
|
|
|
$
|
23,583
|
|
|
$
|
62,750
|
|
|
$
|
46,007
|
|
Forward contract commissions
|
|
2,455
|
|
|
2,470
|
|
|
4,940
|
|
|
6,071
|
|
||||
Option premium fees
|
|
74
|
|
|
55
|
|
|
214
|
|
|
277
|
|
||||
Total foreign exchange fees
|
|
$
|
34,077
|
|
|
$
|
26,108
|
|
|
$
|
67,904
|
|
|
$
|
52,355
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Credit card fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Card interchange fees, net
|
|
$
|
18,137
|
|
|
$
|
14,033
|
|
|
$
|
35,697
|
|
|
$
|
28,003
|
|
Merchant service fees
|
|
3,425
|
|
|
2,883
|
|
|
6,331
|
|
|
5,623
|
|
||||
Card service fees
|
|
1,364
|
|
|
1,183
|
|
|
2,590
|
|
|
2,203
|
|
||||
Total credit card fees
|
|
$
|
22,926
|
|
|
$
|
18,099
|
|
|
$
|
44,618
|
|
|
$
|
35,829
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Client investment fees by type:
|
|
|
|
|
|
|
|
|
||||||||
Sweep money market fees
|
|
$
|
17,178
|
|
|
$
|
6,474
|
|
|
$
|
29,500
|
|
|
$
|
10,870
|
|
Asset management fees (1)
|
|
5,730
|
|
|
4,111
|
|
|
11,088
|
|
|
7,490
|
|
||||
Repurchase agreement fees
|
|
6,544
|
|
|
2,397
|
|
|
11,739
|
|
|
3,648
|
|
||||
Total client investment fees (2)
|
|
$
|
29,452
|
|
|
$
|
12,982
|
|
|
$
|
52,327
|
|
|
$
|
22,008
|
|
|
(1)
|
Represents fees earned from investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.
|
(2)
|
Represents fees earned on client investment funds which are maintained at third-party financial institutions and are not recorded on our balance sheet.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Lending related fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Unused commitment fees
|
|
$
|
7,827
|
|
|
$
|
7,021
|
|
|
$
|
16,584
|
|
|
$
|
13,588
|
|
Other
|
|
1,701
|
|
|
1,488
|
|
|
3,679
|
|
|
3,882
|
|
||||
Total lending related fees
|
|
$
|
9,528
|
|
|
$
|
8,509
|
|
|
$
|
20,263
|
|
|
$
|
17,470
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Other noninterest income by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Fund management fees
|
|
$
|
5,929
|
|
|
$
|
5,536
|
|
|
$
|
11,665
|
|
|
$
|
10,705
|
|
Net gains on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)
|
|
236
|
|
|
227
|
|
|
189
|
|
|
1,555
|
|
||||
Other service revenue
|
|
8,225
|
|
|
7,048
|
|
|
14,795
|
|
|
12,972
|
|
||||
Total other noninterest income
|
|
$
|
14,390
|
|
|
$
|
12,811
|
|
|
$
|
26,649
|
|
|
$
|
25,232
|
|
|
(1)
|
Represents the net revaluation of client and internal foreign currency denominated financial instruments. We enter into foreign exchange forward contracts to economically reduce our foreign exchange exposure related to client and internal foreign currency denominated financial instruments.
|
Three months ended June 30, 2018
(Dollars in thousands)
|
|
Global
Commercial
Bank
|
|
SVB Private
Bank
|
|
SVB Capital
|
|
Other Income
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Spot contract commissions
|
|
$
|
31,350
|
|
|
$
|
144
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
31,548
|
|
Card interchange fees, gross
|
|
31,734
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
31,838
|
|
|||||
Merchant service fees
|
|
3,425
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,425
|
|
|||||
Deposit service charges
|
|
18,386
|
|
|
31
|
|
|
—
|
|
|
377
|
|
|
18,794
|
|
|||||
Client investment fees
|
|
11,895
|
|
|
379
|
|
|
—
|
|
|
17,178
|
|
|
29,452
|
|
|||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
5,929
|
|
|
—
|
|
|
5,929
|
|
|||||
Correspondent bank rebates
|
|
1,473
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,473
|
|
|||||
Total revenue from contracts with customers
|
|
$
|
98,263
|
|
|
$
|
554
|
|
|
$
|
5,929
|
|
|
$
|
17,713
|
|
|
$
|
122,459
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues outside the scope of ASC 606 (1)
|
|
14,982
|
|
|
10
|
|
|
22,569
|
|
|
32,669
|
|
|
70,230
|
|
|||||
Total noninterest income
|
|
$
|
113,245
|
|
|
$
|
564
|
|
|
$
|
28,498
|
|
|
$
|
50,382
|
|
|
$
|
192,689
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
Six months ended June 30, 2018
(Dollars in thousands)
|
|
Global
Commercial
Bank
|
|
SVB Private
Bank
|
|
SVB Capital
|
|
Other Income
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Spot contract commissions
|
|
$
|
62,322
|
|
|
$
|
323
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
62,750
|
|
Card interchange fees, gross
|
|
61,183
|
|
|
—
|
|
|
—
|
|
|
203
|
|
|
61,386
|
|
|||||
Merchant service fees
|
|
6,331
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,331
|
|
|||||
Deposit service charges
|
|
35,426
|
|
|
59
|
|
|
—
|
|
|
1,008
|
|
|
36,493
|
|
|||||
Client investment fees
|
|
22,145
|
|
|
681
|
|
|
—
|
|
|
29,501
|
|
|
52,327
|
|
|||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
11,665
|
|
|
—
|
|
|
11,665
|
|
|||||
Correspondent bank rebates
|
|
2,869
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,869
|
|
|||||
Total revenue from contracts with customers
|
|
$
|
190,276
|
|
|
$
|
1,063
|
|
|
$
|
11,665
|
|
|
$
|
30,817
|
|
|
$
|
233,821
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues outside the scope of ASC 606 (1)
|
|
22,315
|
|
|
9
|
|
|
45,744
|
|
|
46,318
|
|
|
114,386
|
|
|||||
Total noninterest income
|
|
$
|
212,591
|
|
|
$
|
1,072
|
|
|
$
|
57,409
|
|
|
$
|
77,135
|
|
|
$
|
348,207
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
11.
|
Other Noninterest Expense
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Lending and other client related processing costs
|
|
$
|
7,403
|
|
|
$
|
6,332
|
|
|
$
|
10,603
|
|
|
$
|
11,871
|
|
Data processing services
|
|
2,703
|
|
|
2,428
|
|
|
5,195
|
|
|
5,010
|
|
||||
Telephone
|
|
2,378
|
|
|
2,671
|
|
|
4,756
|
|
|
5,374
|
|
||||
Dues and publications
|
|
845
|
|
|
677
|
|
|
1,694
|
|
|
1,472
|
|
||||
Postage and supplies
|
|
813
|
|
|
652
|
|
|
1,480
|
|
|
1,401
|
|
||||
Other
|
|
4,670
|
|
|
7,639
|
|
|
9,778
|
|
|
11,478
|
|
||||
Total other noninterest expense
|
|
$
|
18,812
|
|
|
$
|
20,399
|
|
|
$
|
33,506
|
|
|
$
|
36,606
|
|
12.
|
Segment Reporting
|
•
|
Global Commercial Bank
is comprised of results from the following:
|
◦
|
Our
Commercial Bank
products and services are provided by the Bank and its subsidiaries to commercial clients in the technology, life science/healthcare and private equity/venture capital 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 innovation markets. In addition, the Bank and its subsidiaries offer a variety of investment services and solutions to its clients that enable them to effectively manage their assets.
|
◦
|
Our
Private Equity Division
provides banking products and services primarily to our private equity and venture capital clients.
|
◦
|
Our
Wine
practice provides banking products and services to our premium wine industry clients, including vineyard development loans.
|
◦
|
SVB Analytics
previously provided equity valuation services and currently provides research for investors and companies in the global innovation economy. In September 2017, SVB Analytics sold its equity valuation services business.
|
◦
|
Debt Fund Investments
is comprised of our investments in certain debt funds in which we are a strategic investor.
|
•
|
SVB Private Bank
is the private banking division of the Bank, which provides a range of personal financial solutions for consumers. Our clients are primarily private equity/venture capital professionals and executive leaders of the innovation companies they support. We offer a customized suite of private banking services, including mortgages, home equity lines of credit, restricted stock purchase loans, capital call lines of credit and other secured and unsecured lending, as well as cash and wealth management services.
|
•
|
SVB Capital
is the funds management business of SVBFG, which focuses primarily on venture capital investments. SVB Capital manages funds (primarily venture capital funds) on behalf of third-party limited partners and, on a more limited basis, SVB Financial Group. The SVB Capital family of funds is comprised of direct venture funds that invest in companies and funds of funds that invest in other venture capital funds. SVB Capital generates income for the Company primarily from investment returns (including carried interest allocations) and management fees.
|
(Dollars in thousands)
|
|
Global
Commercial
Bank (1)
|
|
SVB Private
Bank
|
|
SVB Capital (1)
|
|
Other Items (2)
|
|
Total
|
||||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
409,057
|
|
|
$
|
15,645
|
|
|
$
|
9
|
|
|
$
|
41,732
|
|
|
$
|
466,443
|
|
Provision for credit losses
|
|
(27,356
|
)
|
|
(300
|
)
|
|
—
|
|
|
(1,424
|
)
|
|
(29,080
|
)
|
|||||
Noninterest income
|
|
113,245
|
|
|
564
|
|
|
28,498
|
|
|
50,382
|
|
|
192,689
|
|
|||||
Noninterest expense (3)
|
|
(197,695
|
)
|
|
(5,927
|
)
|
|
(5,666
|
)
|
|
(96,451
|
)
|
|
(305,739
|
)
|
|||||
Income (loss) before income tax expense (4)
|
|
$
|
297,251
|
|
|
$
|
9,982
|
|
|
$
|
22,841
|
|
|
$
|
(5,761
|
)
|
|
$
|
324,313
|
|
Total average loans, net of unearned income
|
|
$
|
21,714,870
|
|
|
$
|
2,777,617
|
|
|
$
|
—
|
|
|
$
|
366,016
|
|
|
$
|
24,858,503
|
|
Total average assets (5)
|
|
52,540,865
|
|
|
2,515,984
|
|
|
369,841
|
|
|
(1,006,044
|
)
|
|
54,420,646
|
|
|||||
Total average deposits
|
|
45,991,701
|
|
|
1,480,162
|
|
|
—
|
|
|
500,088
|
|
|
47,971,951
|
|
|||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
311,051
|
|
|
$
|
14,742
|
|
|
$
|
16
|
|
|
$
|
16,887
|
|
|
$
|
342,696
|
|
Provision for credit losses
|
|
(14,856
|
)
|
|
(329
|
)
|
|
—
|
|
|
(621
|
)
|
|
(15,806
|
)
|
|||||
Noninterest income
|
|
83,904
|
|
|
536
|
|
|
15,019
|
|
|
29,069
|
|
|
128,528
|
|
|||||
Noninterest expense (3)
|
|
(176,702
|
)
|
|
(4,050
|
)
|
|
(6,192
|
)
|
|
(64,302
|
)
|
|
(251,246
|
)
|
|||||
Income (loss) before income tax expense (4)
|
|
$
|
203,397
|
|
|
$
|
10,899
|
|
|
$
|
8,843
|
|
|
$
|
(18,967
|
)
|
|
$
|
204,172
|
|
Total average loans, net of unearned income
|
|
$
|
17,907,635
|
|
|
$
|
2,365,464
|
|
|
$
|
—
|
|
|
$
|
235,442
|
|
|
$
|
20,508,541
|
|
Total average assets (5)
|
|
45,478,211
|
|
|
2,397,188
|
|
|
355,292
|
|
|
(681,327
|
)
|
|
47,549,364
|
|
|||||
Total average deposits
|
|
40,477,823
|
|
|
1,302,890
|
|
|
—
|
|
|
357,933
|
|
|
42,138,646
|
|
|||||
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
778,924
|
|
|
$
|
31,892
|
|
|
$
|
16
|
|
|
$
|
75,474
|
|
|
$
|
886,306
|
|
Provision for credit losses
|
|
(52,630
|
)
|
|
(2,022
|
)
|
|
—
|
|
|
(2,400
|
)
|
|
(57,052
|
)
|
|||||
Noninterest income
|
|
212,591
|
|
|
1,072
|
|
|
57,409
|
|
|
77,135
|
|
|
348,207
|
|
|||||
Noninterest expense (3)
|
|
(382,261
|
)
|
|
(11,969
|
)
|
|
(10,713
|
)
|
|
(166,213
|
)
|
|
(571,156
|
)
|
|||||
Income (loss) before income tax expense (4)
|
|
$
|
556,624
|
|
|
$
|
18,973
|
|
|
$
|
46,712
|
|
|
$
|
(16,004
|
)
|
|
$
|
606,305
|
|
Total average loans, net of unearned income
|
|
$
|
21,199,897
|
|
|
$
|
2,722,444
|
|
|
$
|
—
|
|
|
$
|
413,421
|
|
|
$
|
24,335,762
|
|
Total average assets (5)
|
|
51,252,398
|
|
|
2,553,024
|
|
|
371,572
|
|
|
(777,378
|
)
|
|
53,399,616
|
|
|||||
Total average deposits
|
|
45,022,054
|
|
|
1,526,038
|
|
|
—
|
|
|
496,078
|
|
|
47,044,170
|
|
|||||
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
586,929
|
|
|
$
|
28,352
|
|
|
$
|
16
|
|
|
$
|
37,392
|
|
|
$
|
652,689
|
|
Provision for credit losses
|
|
(43,745
|
)
|
|
(1,119
|
)
|
|
—
|
|
|
(1,676
|
)
|
|
(46,540
|
)
|
|||||
Noninterest income
|
|
163,423
|
|
|
1,254
|
|
|
31,794
|
|
|
49,716
|
|
|
246,187
|
|
|||||
Noninterest expense (3)
|
|
(349,548
|
)
|
|
(7,968
|
)
|
|
(9,664
|
)
|
|
(121,699
|
)
|
|
(488,879
|
)
|
|||||
Income (loss) before income tax expense (4)
|
|
$
|
357,059
|
|
|
$
|
20,519
|
|
|
$
|
22,146
|
|
|
$
|
(36,267
|
)
|
|
$
|
363,457
|
|
Total average loans, net of unearned income
|
|
$
|
17,778,065
|
|
|
$
|
2,305,723
|
|
|
$
|
—
|
|
|
$
|
206,353
|
|
|
$
|
20,290,141
|
|
Total average assets (5)
|
|
44,188,162
|
|
|
2,335,350
|
|
|
364,036
|
|
|
(456,138
|
)
|
|
46,431,410
|
|
|||||
Total average deposits
|
|
39,393,219
|
|
|
1,319,776
|
|
|
—
|
|
|
341,618
|
|
|
41,054,613
|
|
|
(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”.
|
(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. Net interest income consists primarily of interest earned from our fixed income investment portfolio, net of FTP. Noninterest income consists primarily of gains on equity warrant assets and gains or losses on the sale of fixed income investments and equity securities from exercised warrant
|
(3)
|
The Global Commercial Bank segment includes direct depreciation and amortization of
$5.6 million
and
$7.2 million
for the three months ended
June 30, 2018
and
2017
, respectively, and
$11.1 million
and
$13.4 million
for the
six months ended
June 30, 2018
and
2017
, 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 equal the greater of total average assets or the sum of total average liabilities and total average stockholders’ equity for each segment to reconcile the results to the consolidated financial statements prepared in conformity with GAAP.
|
13.
|
Off-Balance Sheet Arrangements, Guarantees and Other Commitments
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Loan commitments available for funding: (1)
|
|
|
|
|
||||
Fixed interest rate commitments
|
|
$
|
1,803,673
|
|
|
$
|
1,478,157
|
|
Variable interest rate commitments
|
|
14,904,556
|
|
|
14,034,169
|
|
||
Total loan commitments available for funding
|
|
16,708,229
|
|
|
15,512,326
|
|
||
Commercial and standby letters of credit (2)
|
|
2,020,131
|
|
|
1,950,211
|
|
||
Total unfunded credit commitments
|
|
$
|
18,728,360
|
|
|
$
|
17,462,537
|
|
Commitments unavailable for funding (3)
|
|
$
|
2,747,090
|
|
|
$
|
2,117,057
|
|
Allowance for unfunded credit commitments (4)
|
|
54,104
|
|
|
51,770
|
|
|
(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)
|
Our allowance 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
|
|
$
|
1,850,099
|
|
|
$
|
43,050
|
|
|
$
|
1,893,149
|
|
|
$
|
1,893,149
|
|
Performance standby letters of credit
|
|
99,750
|
|
|
13,345
|
|
|
113,095
|
|
|
113,095
|
|
||||
Commercial letters of credit
|
|
13,836
|
|
|
51
|
|
|
13,887
|
|
|
13,887
|
|
||||
Total
|
|
$
|
1,963,685
|
|
|
$
|
56,446
|
|
|
$
|
2,020,131
|
|
|
$
|
2,020,131
|
|
(Dollars in thousands)
|
|
SVBFG Capital Commitments
|
|
SVBFG Unfunded
Commitments
|
|
SVBFG Ownership
of each Fund (3)
|
|||||
CP I, LP
|
|
$
|
6,000
|
|
|
$
|
270
|
|
|
10.7
|
%
|
CP II, LP (1)
|
|
1,200
|
|
|
162
|
|
|
5.1
|
|
||
Shanghai Yangpu Venture Capital Fund (LP)
|
|
924
|
|
|
—
|
|
|
6.8
|
|
||
Strategic Investors Fund, LP
|
|
15,300
|
|
|
688
|
|
|
12.6
|
|
||
Strategic Investors Fund II, LP
|
|
15,000
|
|
|
1,050
|
|
|
8.6
|
|
||
Strategic Investors Fund III, LP
|
|
15,000
|
|
|
1,275
|
|
|
5.9
|
|
||
Strategic Investors Fund IV, LP
|
|
12,239
|
|
|
2,325
|
|
|
5.0
|
|
||
Strategic Investors Fund V funds
|
|
515
|
|
|
131
|
|
|
Various
|
|
||
Capital Preferred Return Fund, LP
|
|
12,688
|
|
|
—
|
|
|
20.0
|
|
||
Growth Partners, LP
|
|
24,670
|
|
|
1,340
|
|
|
33.0
|
|
||
Debt funds (equity method accounting)
|
|
58,493
|
|
|
—
|
|
|
Various
|
|
||
Other fund investments (2)
|
|
304,184
|
|
|
9,685
|
|
|
Various
|
|
||
Total
|
|
$
|
466,213
|
|
|
$
|
16,926
|
|
|
|
|
(1)
|
Our ownership includes direct ownership of
1.3
percent and indirect ownership interest of
3.8
percent through our investment in Strategic Investors Fund II, LP.
|
(2)
|
Represents commitments to
232
funds (primarily venture capital funds) where our ownership interest is generally less than
five percent
of the voting interests of each such fund.
|
(3)
|
We are subject to the Volcker Rule, which restricts or limits us from sponsoring or having ownership interests in “covered” funds including venture capital and private equity funds. See “Business - Supervision and Regulation” under Part 1, Item 1 of our 2017 Form 10-K.
|
(Dollars in thousands)
|
|
Unfunded Commitments
|
||
Strategic Investors Fund, LP
|
|
$
|
1,338
|
|
Capital Preferred Return Fund, LP
|
|
2,700
|
|
|
Growth Partners, LP
|
|
1,895
|
|
|
Total
|
|
$
|
5,933
|
|
14.
|
Income Taxes
|
15.
|
Fair Value of Financial Instruments
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance at June 30, 2018
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
5,733,070
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,733,070
|
|
U.S. agency debentures
|
|
—
|
|
|
1,485,864
|
|
|
—
|
|
|
1,485,864
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued collateralized mortgage obligations
—
fixed rate
|
|
—
|
|
|
2,038,134
|
|
|
—
|
|
|
2,038,134
|
|
||||
Agency-issued collateralized mortgage obligations
—v
ariable rate
|
|
—
|
|
|
336,298
|
|
|
—
|
|
|
336,298
|
|
||||
Total available-for-sale securities
|
|
5,733,070
|
|
|
3,860,296
|
|
|
—
|
|
|
9,593,366
|
|
||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments measured at net asset value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343,119
|
|
||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
—
|
|
|
—
|
|
|
1,001
|
|
|
1,001
|
|
||||
Other equity securities in public companies
|
|
835
|
|
|
3,577
|
|
|
—
|
|
|
4,412
|
|
||||
Total non-marketable and other equity securities (fair value accounting)
|
|
835
|
|
|
3,577
|
|
|
1,001
|
|
|
348,532
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
99,358
|
|
|
—
|
|
|
99,358
|
|
||||
Equity warrant assets
|
|
—
|
|
|
5,972
|
|
|
137,753
|
|
|
143,725
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
6,422
|
|
|
—
|
|
|
6,422
|
|
||||
Total assets
|
|
$
|
5,733,905
|
|
|
$
|
3,975,625
|
|
|
$
|
138,754
|
|
|
$
|
10,191,403
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
84,672
|
|
|
$
|
—
|
|
|
$
|
84,672
|
|
Client interest rate derivatives
|
|
—
|
|
|
12,532
|
|
|
—
|
|
|
12,532
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
97,204
|
|
|
$
|
—
|
|
|
$
|
97,204
|
|
|
(1)
|
Included in Level 3 assets is
$0.9 million
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, 2017
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
6,840,502
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,840,502
|
|
U.S. agency debentures
|
|
—
|
|
|
1,567,128
|
|
|
—
|
|
|
1,567,128
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
—
|
|
|
2,267,035
|
|
|
—
|
|
|
2,267,035
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
—
|
|
|
373,730
|
|
|
—
|
|
|
373,730
|
|
||||
Equity securities
|
|
158
|
|
|
72,111
|
|
|
—
|
|
|
72,269
|
|
||||
Total available-for-sale securities
|
|
6,840,660
|
|
|
4,280,004
|
|
|
—
|
|
|
11,120,664
|
|
||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments measured at net asset value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,192
|
|
||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
—
|
|
|
—
|
|
|
919
|
|
|
919
|
|
||||
Other equity securities in public companies (1)
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
||||
Total non-marketable and other equity securities (fair value accounting)
|
|
310
|
|
|
—
|
|
|
919
|
|
|
128,421
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
96,636
|
|
|
—
|
|
|
96,636
|
|
||||
Equity warrant assets
|
|
—
|
|
|
2,432
|
|
|
121,331
|
|
|
123,763
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
11,753
|
|
|
—
|
|
|
11,753
|
|
||||
Total assets
|
|
$
|
6,840,970
|
|
|
$
|
4,390,825
|
|
|
$
|
122,250
|
|
|
$
|
11,481,237
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
96,641
|
|
|
$
|
—
|
|
|
$
|
96,641
|
|
Client interest rate derivatives
|
|
—
|
|
|
11,940
|
|
|
—
|
|
|
11,940
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
108,581
|
|
|
$
|
—
|
|
|
$
|
108,581
|
|
|
(1)
|
Included in Level 1 and Level 3 assets are
$0.2 million
and
$0.8 million
, 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
|
|
Sales
|
|
Issuances
|
|
Distributions and Other Settlements
|
|
Transfers Out of Level 3
|
|
Ending
Balance
|
||||||||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
1,001
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,001
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity warrant assets (2)
|
|
131,506
|
|
|
18,249
|
|
|
(15,235
|
)
|
|
4,299
|
|
|
—
|
|
|
(1,066
|
)
|
|
137,753
|
|
|||||||
Total assets
|
|
$
|
132,507
|
|
|
$
|
18,249
|
|
|
$
|
(15,235
|
)
|
|
$
|
4,299
|
|
|
$
|
—
|
|
|
$
|
(1,066
|
)
|
|
$
|
138,754
|
|
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
2,040
|
|
|
$
|
(143
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,897
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity warrant assets (2)
|
|
122,199
|
|
|
10,586
|
|
|
(6,500
|
)
|
|
3,419
|
|
|
—
|
|
|
(752
|
)
|
|
128,952
|
|
|||||||
Total assets
|
|
$
|
124,239
|
|
|
$
|
10,443
|
|
|
$
|
(6,500
|
)
|
|
$
|
3,419
|
|
|
$
|
—
|
|
|
$
|
(752
|
)
|
|
$
|
130,849
|
|
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other venture capital investments (1)
|
|
$
|
919
|
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,001
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity warrant assets (2)
|
|
121,331
|
|
|
36,860
|
|
|
(27,363
|
)
|
|
9,198
|
|
|
—
|
|
|
(2,273
|
)
|
|
137,753
|
|
|||||||
Total assets
|
|
$
|
122,250
|
|
|
$
|
36,942
|
|
|
$
|
(27,363
|
)
|
|
$
|
9,198
|
|
|
$
|
—
|
|
|
$
|
(2,273
|
)
|
|
$
|
138,754
|
|
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other venture capital investments (1)
|
|
$
|
2,040
|
|
|
$
|
(143
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,897
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equity warrant assets (2)
|
|
128,813
|
|
|
17,195
|
|
|
(23,586
|
)
|
|
7,449
|
|
|
—
|
|
|
(919
|
)
|
|
128,952
|
|
|||||||
Total assets
|
|
$
|
130,853
|
|
|
$
|
17,052
|
|
|
$
|
(23,586
|
)
|
|
$
|
7,449
|
|
|
$
|
—
|
|
|
$
|
(919
|
)
|
|
$
|
130,849
|
|
|
(1)
|
Realized and unrealized gains (losses) are recorded in the line item “Gains on investment securities, net”, a component of noninterest income.
|
(2)
|
Realized and unrealized gains (losses) are recorded in the line item “Gains on equity warrant assets, net”, a component of noninterest income.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Non-marketable and other securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
—
|
|
|
$
|
(143
|
)
|
|
$
|
82
|
|
|
$
|
(143
|
)
|
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Equity warrant assets (2)
|
|
10,236
|
|
|
7,984
|
|
|
18,147
|
|
|
7,440
|
|
||||
Total unrealized gains, net
|
|
$
|
10,236
|
|
|
$
|
7,841
|
|
|
$
|
18,229
|
|
|
$
|
7,297
|
|
Unrealized (losses) gains attributable to noncontrolling interests (1)
|
|
$
|
—
|
|
|
$
|
(127
|
)
|
|
$
|
73
|
|
|
$
|
(127
|
)
|
|
(1)
|
Unrealized gains (losses) are recorded in the line item “Gains
on investment securities, net
”, a component of noninterest income.
|
(2)
|
Unrealized gains (losses) are recorded in the line item “Gains
on equity warrant assets, net
”, a component of noninterest income.
|
(Dollars in thousands)
|
|
Fair value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Weighted
Average
|
|||
June 30, 2018:
|
|
|
|
|
|
|
|
|
|||
Venture capital and private equity fund investments (fair value accounting)
|
|
$
|
1,001
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1
|
)
|
Equity warrant assets (public portfolio)
|
|
2,065
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
48.6
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
2.8
|
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
18.6
|
|
||||
Equity warrant assets (private portfolio)
|
|
135,688
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
37.8
|
|
|
|
|
|
|
Risk-Free interest rate
|
|
2.5
|
|
||||
|
|
|
|
Marketability discount (3)
|
|
16.6
|
|
||||
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
|
||||
December 31, 2017:
|
|
|
|
|
|
|
|
|
|||
Venture capital and private equity fund investments (fair value accounting)
|
|
$
|
919
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1
|
)
|
Equity warrant assets (public portfolio)
|
|
1,936
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
47.9
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
2.1
|
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
15.5
|
|
||||
Equity warrant assets (private portfolio)
|
|
119,395
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
36.7
|
|
|
|
|
|
|
Risk-Free interest rate
|
|
1.8
|
|
||||
|
|
|
|
Marketability discount (3)
|
|
16.4
|
|
||||
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
|
|
(1)
|
In determining the fair value of our venture capital and private equity fund investment portfolio (not measured at net asset value), 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. We use company provided valuation reports, if available, to support our valuation assumptions. These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.
|
(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
three
to
six
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 upon various option-pricing models. 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
June 30, 2018
, the weighted average contractual remaining term was
6.1
years, compared to our estimated remaining life of
2.7
years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.
|
|
|
|
|
Estimated Fair Value
|
||||||||||||||||
(Dollars in thousands)
|
|
Carrying Amount
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
2,712,101
|
|
|
$
|
2,712,101
|
|
|
$
|
2,712,101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
|
15,898,263
|
|
|
15,493,995
|
|
|
—
|
|
|
15,493,995
|
|
|
—
|
|
|||||
Non-marketable securities not measured at net asset value
|
|
116,484
|
|
|
116,484
|
|
|
—
|
|
|
—
|
|
|
116,484
|
|
|||||
Non-marketable securities measured at net asset value
|
|
136,010
|
|
|
136,010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net commercial loans
|
|
22,849,701
|
|
|
23,139,492
|
|
|
—
|
|
|
—
|
|
|
23,139,492
|
|
|||||
Net consumer loans
|
|
2,859,782
|
|
|
2,872,681
|
|
|
—
|
|
|
—
|
|
|
2,872,681
|
|
|||||
FHLB and Federal Reserve Bank stock
|
|
58,864
|
|
|
58,864
|
|
|
—
|
|
|
—
|
|
|
58,864
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
417,246
|
|
|
417,246
|
|
|
417,246
|
|
|
—
|
|
|
—
|
|
|||||
Non-maturity deposits (1)
|
|
48,825,291
|
|
|
48,825,291
|
|
|
48,825,291
|
|
|
—
|
|
|
—
|
|
|||||
Time deposits
|
|
62,004
|
|
|
61,732
|
|
|
—
|
|
|
61,732
|
|
|
—
|
|
|||||
3.50% Senior Notes
|
|
347,470
|
|
|
339,283
|
|
|
—
|
|
|
339,283
|
|
|
—
|
|
|||||
5.375% Senior Notes
|
|
348,502
|
|
|
364,980
|
|
|
—
|
|
|
364,980
|
|
|
—
|
|
|||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commitments to extend credit
|
|
—
|
|
|
23,553
|
|
|
—
|
|
|
—
|
|
|
23,553
|
|
|||||
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
2,923,075
|
|
|
$
|
2,923,075
|
|
|
$
|
2,923,075
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
|
12,663,455
|
|
|
12,548,280
|
|
|
—
|
|
|
12,548,280
|
|
|
—
|
|
|||||
Non-marketable securities (cost and equity method accounting) not measured at net asset value
|
|
120,019
|
|
|
126,345
|
|
|
—
|
|
|
—
|
|
|
126,345
|
|
|||||
Non-marketable securities (cost and equity method accounting) measured at net asset value
|
|
228,399
|
|
|
331,496
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net commercial loans
|
|
20,238,247
|
|
|
20,520,623
|
|
|
—
|
|
|
—
|
|
|
20,520,623
|
|
|||||
Net consumer loans
|
|
2,613,045
|
|
|
2,593,538
|
|
|
—
|
|
|
—
|
|
|
2,593,538
|
|
|||||
FHLB and Federal Reserve Bank stock
|
|
60,020
|
|
|
60,020
|
|
|
—
|
|
|
—
|
|
|
60,020
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
1,033,730
|
|
|
1,033,730
|
|
|
1,033,730
|
|
|
—
|
|
|
—
|
|
|||||
Non-maturity deposits (1)
|
|
44,206,929
|
|
|
44,206,929
|
|
|
44,206,929
|
|
|
—
|
|
|
—
|
|
|||||
Time deposits
|
|
47,146
|
|
|
46,885
|
|
|
—
|
|
|
46,885
|
|
|
—
|
|
|||||
3.50% Senior Notes
|
|
347,303
|
|
|
352,058
|
|
|
—
|
|
|
352,058
|
|
|
—
|
|
|||||
5.375% Senior Notes
|
|
348,189
|
|
|
374,483
|
|
|
—
|
|
|
374,483
|
|
|
—
|
|
|||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commitments to extend credit
|
|
—
|
|
|
22,208
|
|
|
—
|
|
|
—
|
|
|
22,208
|
|
|
(1)
|
Includes noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits.
|
(Dollars in thousands)
|
|
Carrying Amount
|
|
Fair Value
|
|
Unfunded Commitments
|
||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments (1)
|
|
$
|
343,119
|
|
|
$
|
343,119
|
|
|
$
|
13,639
|
|
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments (2)
|
|
102,838
|
|
|
102,838
|
|
|
4,943
|
|
|||
Debt funds (2)
|
|
14,215
|
|
|
14,215
|
|
|
—
|
|
|||
Other investments (2)
|
|
18,957
|
|
|
18,957
|
|
|
886
|
|
|||
Total
|
|
$
|
479,129
|
|
|
$
|
479,129
|
|
|
$
|
19,468
|
|
|
(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 (consolidated VIEs) and investments in venture capital and private equity fund investments (unconsolidated VIEs). Collectively, these investments in venture capital and private equity funds are primarily in U.S. and global technology and life science/healthcare companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are
$97.8 million
and
$4.5 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)
|
Venture capital and private equity fund investments, debt funds, and other fund investments within non-marketable securities (equity method accounting) include funds that invest in or lend money to primarily U.S. and global technology and life science/healthcare companies. It is estimated that we will receive distributions from the funds over the next
5
to
8
years, depending on the age of the funds and any potential extensions of the terms of the funds.
|
16.
|
Legal Matters
|
17.
|
Related Parties
|
•
|
Financial projections, including with respect to 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 private equity/venture capital funding and investment levels;
|
•
|
Forecasts of future interest rates, economic performance, and income from investments;
|
•
|
Forecasts of expected levels of provisions for loan losses, nonperforming loans, loan growth and client funds; and
|
•
|
Descriptions of assumptions underlying or relating to any of the foregoing.
|
•
|
Market and economic conditions, including the interest rate environment, and the associated impact on us;
|
•
|
The credit profile and credit quality of our loan portfolio and volatility of our levels of nonperforming assets and charge-offs;
|
•
|
The adequacy of our allowance for loan losses and the need to make provisions for loan losses for any period;
|
•
|
The borrowing needs of our clients;
|
•
|
The sufficiency of our capital and liquidity positions;
|
•
|
The levels of loans, deposits and client investment fund balances;
|
•
|
The performance of our portfolio investments; the general condition of the public and private equity and mergers and acquisitions markets and their impact on our investments, including equity warrant assets, venture capital and private equity funds and direct equity investments;
|
•
|
Our overall investment plans and strategies; the realization, timing, valuation and performance of our equity or other investments;
|
•
|
The levels of public offerings, mergers and acquisitions and venture capital investment activity of our clients that may impact the borrowing needs of our clients;
|
•
|
The occurrence of fraudulent activity, including breaches of our information security or cyber security-related incidents;
|
•
|
Business disruptions and interruptions due to natural disasters and other external events;
|
•
|
The impact on our reputation and business from our interactions with business partners, counterparties, service providers and other third parties;
|
•
|
Expansion of our business internationally, and the impact of international market and economic events on us;
|
•
|
The impact of governmental policy, legal requirements and regulations, including the Economic Growth, Regulatory Relief and Consumer Protection Act and the Dodd-Frank Act, promulgated by the Federal Reserve and other regulatory requirements;
|
•
|
The impact of lawsuits and claims, as well as legal or regulatory proceedings;
|
•
|
The impact of changes in accounting standards and tax laws, including the impact of the Tax Cuts and Jobs Act;
|
•
|
The levels of equity capital available to our client or portfolio companies;
|
•
|
The effectiveness of our risk management framework and quantitative models;
|
•
|
Our ability to maintain or increase our market share, including through successfully implementing our business strategy and undertaking new business initiatives; and
|
•
|
Other factors as discussed in “Risk Factors” under Part I, Item 1A in our
2017
Form 10-K.
|
BALANCE SHEET
|
|
EARNINGS
|
Assets.
$54.4 billion in average total assets (up 14.5%).
$55.9 billion in period-end total assets (up 15.4%).
Loans.
$24.9 billion in average total loan balances, net of unearned income (up 21.2%). $26.0 billion in period-end total loan balances, net of unearned income (up 23.9%).
Total Client Funds.
(on-balance sheet deposits and off-balance sheet client investment funds). $119.3 billion in average total client fund balances (up 30.7%). $124.7 billion in period-end total client fund balances (up 32.1%).
Fixed Income Investments.
$25.2 billion in average fixed income investment securities (up 16.9%). $25.5 billion in period-end fixed income investment securities (up 15.8%).
|
|
EPS
.
Earnings per diluted share of $4.42 (up 90.5%).
Net Income
.
Consolidated net income available to common stockholders of $237.8 million (up 93.0%).
- Net interest income of $466.4 million (up 36.1%).
- Net interest margin of 3.59% (up 59 bps).
- Noninterest income of $192.7 million (up 49.9%), with non-GAAP core fee income
+
of $123.1 million (up 41.1%).
- Noninterest expense of $305.7 million (up 21.7%).
ROE.
Return on average equity (annualized) (“
ROE
”) performance of 20.82%.
Operating Efficiency Ratio.
Operating efficiency ratio of 46.39%.
|
|
|
|
CAPITAL
|
|
CREDIT QUALITY
|
Capital
.
Continued strong capital levels, with all capital ratios considered “well-capitalized” under banking regulations. SVBFG and SVB capital ratios, respectively, were:
- CET 1 risk-based capital ratio of 12.92% and 11.76%.
- Tier 1 risk-based capital ratio of 13.10% and 11.76%.
- Total risk-based capital ratio of 14.03% and 12.72%.
- Tier 1 leverage ratio of 8.81% and 7.72%.
|
|
Credit Quality
.
Continued disciplined underwriting.
- Allowance for loan losses of 1.10% as a percentage of period-end total gross loans.
- Provision for loan losses of 0.42% as a percentage of period-end total gross loans (annualized).
- Net loan charge-offs of 0.22% as a percentage of average total gross loans (annualized).
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
(Dollars in thousands, except per share data, employees and ratios)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per common share
|
|
$
|
4.42
|
|
|
$
|
2.32
|
|
|
90.5
|
|
%
|
|
$
|
8.05
|
|
|
$
|
4.22
|
|
|
90.8
|
|
%
|
Net income available to common stockholders
|
|
237,798
|
|
|
123,193
|
|
|
93.0
|
|
|
|
432,759
|
|
|
224,676
|
|
|
92.6
|
|
|
||||
Net interest income
|
|
466,443
|
|
|
342,696
|
|
|
36.1
|
|
|
|
886,306
|
|
|
652,689
|
|
|
35.8
|
|
|
||||
Net interest margin
|
|
3.59
|
%
|
|
3.00
|
%
|
|
59
|
|
bps
|
|
3.49
|
%
|
|
2.94
|
%
|
|
55
|
|
bps
|
||||
Provision for credit losses
|
|
$
|
29,080
|
|
|
$
|
15,806
|
|
|
84.0
|
|
%
|
|
$
|
57,052
|
|
|
$
|
46,540
|
|
|
22.6
|
|
%
|
Noninterest income
|
|
192,689
|
|
|
128,528
|
|
|
49.9
|
|
|
|
348,207
|
|
|
246,187
|
|
|
41.4
|
|
|
||||
Noninterest expense
|
|
305,739
|
|
|
251,246
|
|
|
21.7
|
|
|
|
571,156
|
|
|
488,879
|
|
|
16.8
|
|
|
||||
Non-GAAP core fee income (1)
|
|
123,124
|
|
|
87,267
|
|
|
41.1
|
|
|
|
238,134
|
|
|
169,845
|
|
|
40.2
|
|
|
||||
Non-GAAP noninterest income, net of noncontrolling interests (1)
|
|
183,244
|
|
|
118,992
|
|
|
54.0
|
|
|
|
325,738
|
|
|
230,092
|
|
|
41.6
|
|
|
||||
Non-GAAP noninterest expense, net of noncontrolling interests(2)
|
|
305,512
|
|
|
251,023
|
|
|
21.7
|
|
|
|
570,961
|
|
|
488,487
|
|
|
16.9
|
|
|
||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average available-for-sale securities
|
|
$
|
10,048,423
|
|
|
$
|
12,393,079
|
|
|
(18.9
|
)
|
%
|
|
$
|
10,396,533
|
|
|
$
|
12,471,237
|
|
|
(16.6
|
)
|
%
|
Average held-to-maturity securities
|
|
15,112,154
|
|
|
9,128,407
|
|
|
65.6
|
|
|
|
14,178,427
|
|
|
8,865,752
|
|
|
59.9
|
|
|
||||
Average loans, net of unearned income
|
|
24,858,503
|
|
|
20,508,541
|
|
|
21.2
|
|
|
|
24,335,762
|
|
|
20,290,141
|
|
|
19.9
|
|
|
||||
Average noninterest-bearing demand deposits
|
|
39,814,450
|
|
|
34,629,070
|
|
|
15.0
|
|
|
|
38,887,766
|
|
|
33,674,549
|
|
|
15.5
|
|
|
||||
Average interest-bearing deposits
|
|
8,157,501
|
|
|
7,509,576
|
|
|
8.6
|
|
|
|
8,156,404
|
|
|
7,380,064
|
|
|
10.5
|
|
|
||||
Average total deposits
|
|
47,971,951
|
|
|
42,138,646
|
|
|
13.8
|
|
|
|
47,044,170
|
|
|
41,054,613
|
|
|
14.6
|
|
|
||||
Earnings Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets (annualized) (3)
|
|
1.75
|
%
|
|
1.04
|
%
|
|
68.3
|
|
%
|
|
1.63
|
%
|
|
0.98
|
%
|
|
66.3
|
|
%
|
||||
Return on average SVBFG stockholders’ equity (annualized) (4)
|
|
20.82
|
|
|
12.75
|
|
|
63.3
|
|
|
|
19.51
|
|
|
11.91
|
|
|
63.8
|
|
|
||||
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses as a % of total period-end gross loans
|
|
1.10
|
%
|
|
1.12
|
%
|
|
(2
|
)
|
bps
|
|
1.10
|
%
|
|
1.12
|
%
|
|
(2
|
)
|
bps
|
||||
Allowance for loan losses for performing loans as a % of total gross performing loans
|
|
0.90
|
|
|
0.93
|
|
|
(3
|
)
|
|
|
0.90
|
|
|
0.93
|
|
|
(3
|
)
|
|
||||
Gross loan charge-offs as a % of average total gross loans (annualized)
|
|
0.25
|
|
|
0.49
|
|
|
(24
|
)
|
|
|
0.21
|
|
|
0.39
|
|
|
(18
|
)
|
|
||||
Net loan charge-offs as a % of average total gross loans (annualized)
|
|
0.22
|
|
|
0.44
|
|
|
(22
|
)
|
|
|
0.18
|
|
|
0.34
|
|
|
(16
|
)
|
|
||||
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CET 1 risk-based capital ratio
|
|
12.92
|
%
|
|
13.05
|
%
|
|
(13
|
)
|
bps
|
|
12.92
|
%
|
|
13.05
|
%
|
|
(13
|
)
|
bps
|
||||
Tier 1 risk-based capital ratio
|
|
13.10
|
|
|
13.43
|
|
|
(33
|
)
|
|
|
13.10
|
|
|
13.43
|
|
|
(33
|
)
|
|
||||
Total risk-based capital ratio
|
|
14.03
|
|
|
14.39
|
|
|
(36
|
)
|
|
|
14.03
|
|
|
14.39
|
|
|
(36
|
)
|
|
||||
Tier 1 leverage ratio
|
|
8.81
|
|
|
8.40
|
|
|
41
|
|
|
|
8.81
|
|
|
8.40
|
|
|
41
|
|
|
||||
Tangible common equity to tangible assets (5)
|
|
8.34
|
|
|
8.06
|
|
|
28
|
|
|
|
8.34
|
|
|
8.06
|
|
|
28
|
|
|
||||
Tangible common equity to risk-weighted assets (5)
|
|
12.68
|
|
|
13.11
|
|
|
(43
|
)
|
|
|
12.68
|
|
|
13.11
|
|
|
(43
|
)
|
|
||||
Bank CET 1 risk-based capital ratio
|
|
11.76
|
|
|
12.59
|
|
|
(83
|
)
|
|
|
11.76
|
|
|
12.59
|
|
|
(83
|
)
|
|
||||
Bank tier 1 risk-based capital ratio
|
|
11.76
|
|
|
12.59
|
|
|
(83
|
)
|
|
|
11.76
|
|
|
12.59
|
|
|
(83
|
)
|
|
||||
Bank total risk-based capital ratio
|
|
12.72
|
|
|
13.59
|
|
|
(87
|
)
|
|
|
12.72
|
|
|
13.59
|
|
|
(87
|
)
|
|
||||
Bank tier 1 leverage ratio
|
|
7.72
|
|
|
7.66
|
|
|
6
|
|
|
|
7.72
|
|
|
7.66
|
|
|
6
|
|
|
||||
Bank tangible common equity to tangible assets (5)
|
|
7.39
|
|
|
7.58
|
|
|
(19
|
)
|
|
|
7.39
|
|
|
7.58
|
|
|
(19
|
)
|
|
||||
Bank tangible common equity to risk-weighted assets (5)
|
|
11.52
|
|
|
12.65
|
|
|
(113
|
)
|
|
|
11.52
|
|
|
12.65
|
|
|
(113
|
)
|
|
||||
Other Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP operating efficiency ratio (6)
|
|
46.39
|
%
|
|
53.32
|
%
|
|
(13.0
|
)
|
%
|
|
46.27
|
%
|
|
54.39
|
%
|
|
(14.9
|
)
|
%
|
||||
Non-GAAP operating efficiency ratio (2)
|
|
46.88
|
|
|
54.32
|
|
|
(13.7
|
)
|
|
|
46.98
|
|
|
55.28
|
|
|
(15.0
|
)
|
|
||||
Book value per common share (7)
|
|
$
|
87.53
|
|
|
$
|
74.02
|
|
|
18.3
|
|
|
|
$
|
87.53
|
|
|
$
|
74.02
|
|
|
18.3
|
|
|
Other Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average full-time equivalent employees
|
|
2,591
|
|
|
2,372
|
|
|
9.2
|
|
%
|
|
2,545
|
|
|
2,358
|
|
|
7.9
|
|
%
|
||||
Period-end full-time equivalent employees
|
|
2,626
|
|
|
2,380
|
|
|
10.3
|
|
|
|
2,626
|
|
|
2,380
|
|
|
10.3
|
|
|
|
(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.
|
|
|
2018 Compared to 2017
|
|
2018 Compared to 2017
|
||||||||||||||||||||
|
|
Three months ended June 30, increase (decrease) due to change in
|
|
Six months ended June 30, increase (decrease) due to change in
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
||||||||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell, trade receivables purchased and other short-term investment securities
|
|
$
|
(4,105
|
)
|
|
$
|
2,969
|
|
|
$
|
(1,136
|
)
|
|
$
|
(3,200
|
)
|
|
$
|
4,684
|
|
|
$
|
1,484
|
|
Fixed income investment portfolio (taxable)
|
|
23,256
|
|
|
18,372
|
|
|
41,628
|
|
|
42,418
|
|
|
33,884
|
|
|
76,302
|
|
||||||
Fixed income investment portfolio (non-taxable)
|
|
8,315
|
|
|
28
|
|
|
8,343
|
|
|
13,940
|
|
|
(146
|
)
|
|
13,794
|
|
||||||
Loans, net of unearned income
|
|
57,797
|
|
|
22,303
|
|
|
80,100
|
|
|
104,296
|
|
|
45,537
|
|
|
149,833
|
|
||||||
Increase in interest income, net
|
|
85,263
|
|
|
43,672
|
|
|
128,935
|
|
|
157,454
|
|
|
83,959
|
|
|
241,413
|
|
||||||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest bearing checking and savings accounts
|
|
25
|
|
|
—
|
|
|
25
|
|
|
65
|
|
|
1
|
|
|
66
|
|
||||||
Money market deposits
|
|
554
|
|
|
3,500
|
|
|
4,054
|
|
|
1,087
|
|
|
5,324
|
|
|
6,411
|
|
||||||
Money market deposits in foreign offices
|
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
4
|
|
|
(3
|
)
|
|
1
|
|
||||||
Time deposits
|
|
4
|
|
|
4
|
|
|
8
|
|
|
1
|
|
|
3
|
|
|
4
|
|
||||||
Sweep deposits in foreign offices
|
|
(8
|
)
|
|
(4
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(8
|
)
|
|
(29
|
)
|
||||||
Total increase in deposits expense
|
|
576
|
|
|
3,498
|
|
|
4,074
|
|
|
1,136
|
|
|
5,317
|
|
|
6,453
|
|
||||||
Short-term borrowings
|
|
568
|
|
|
1
|
|
|
569
|
|
|
711
|
|
|
172
|
|
|
883
|
|
||||||
3.50% Senior Notes
|
|
3
|
|
|
—
|
|
|
3
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
5.375% Senior Notes
|
|
8
|
|
|
—
|
|
|
8
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||||
Junior Subordinated Debentures
|
|
(831
|
)
|
|
—
|
|
|
(831
|
)
|
|
(1,663
|
)
|
|
—
|
|
|
(1,663
|
)
|
||||||
6.05% Subordinated Notes
|
|
(196
|
)
|
|
—
|
|
|
(196
|
)
|
|
(467
|
)
|
|
—
|
|
|
(467
|
)
|
||||||
Total (decrease) increase in borrowings expense
|
|
(448
|
)
|
|
1
|
|
|
(447
|
)
|
|
(1,396
|
)
|
|
172
|
|
|
(1,224
|
)
|
||||||
Increase (decrease) in interest expense, net
|
|
128
|
|
|
3,499
|
|
|
3,627
|
|
|
(260
|
)
|
|
5,489
|
|
|
5,229
|
|
||||||
Increase in net interest income
|
|
$
|
85,135
|
|
|
$
|
40,173
|
|
|
$
|
125,308
|
|
|
$
|
157,714
|
|
|
$
|
78,470
|
|
|
$
|
236,184
|
|
•
|
Interest income
for the
three months ended
June 30, 2018
increased by
$128.9 million
due primarily to:
|
◦
|
An
$80.1 million
increase in interest income on loans to
$330.3 million
for the
three months ended
June 30, 2018
, compared to
$250.2 million
for the comparable
2017
period. The increase was reflective of an increase in average loan balances of
$4.3 billion
and an increase in the overall loan yield of 44 basis points to 5.33 percent from 4.89 percent. Gross loan yields, excluding loan interest recoveries and loan fees, increased 52 basis points to 4.72 percent from 4.20 percent, reflective primarily of the benefit of interest rate increases. Loan fee yields were down three basis points to 61 basis points for the three months ended June 30, 2018,
|
◦
|
A $50.0 million increase in interest income on fixed income investment securities to
$146.9 million
for the
three months ended
June 30, 2018
, compared to
$96.9 million
for the comparable
2017
period. The increase was reflective of an increase in average fixed income investments of $3.6 billion due to growth in average deposit balances and an increase in our fixed income investment securities yield of 53 basis points to 2.34 percent from 1.81 percent resulting primarily from higher reinvestment yields on maturing fixed income investments as well as higher yields on new purchases due to interest rate increases, and
|
◦
|
A
$1.1 million
decrease in interest income from our interest earning cash and short-term investment securities. The decrease was due primarily to a decrease of $1.6 billion in average interest-earning Federal Reserve cash balances.
|
•
|
Interest expense
for the
three months ended
June 30, 2018
increased by
$3.6 million
due primarily to:
|
◦
|
A
$4.1 million
increase in deposits interest expense due primarily to an increase in interest paid on our interest-bearing money market deposits as a result of market rate adjustments, and
|
◦
|
A
$0.4 million
decrease in borrowings interest expense primarily due to the repayment of our 6.05% Subordinated Notes and the redemption of our Junior Subordinated Debentures in 2017.
|
•
|
Interest income
for the
six months ended
June 30, 2018
increased by
$241.4 million
due primarily to:
|
◦
|
A
$149.8 million
increase in interest income on loans to
$627.4 million
for the
six months ended
June 30, 2018
, compared to
$477.5 million
for the comparable
2017
period. The increase was reflective of an increase in average loan balances of $4.0 billion and an increase in the overall loan yield of 45 basis points to 5.20 percent from 4.75 percent. Gross loan yields, excluding loan interest recoveries and loan fees, increased to 4.64 percent from 4.12 percent, reflective of the benefit of interest rate increases, partially offset by the strong growth of our lower yielding private equity/venture capital loan portfolio. Our private equity/venture capital loan portfolio represented
46.8
percent and 42.2 percent of our total gross loan portfolio at June 30, 2018 and 2017, respectively. The increase in gross loan yields of 52 basis points were partially offset by a decrease in fee income from early pay-offs reflective of the increasing rate environment,
|
◦
|
A $90.1 million increase in interest income on fixed income investment securities to
$277.8 million
for the
six months ended
June 30, 2018
, compared to
$187.7 million
for the comparable
2017
period. The increase was reflective of an increase in average fixed income investments of $3.2 billion due to growth in average deposit balances and an increase in our fixed income investment securities yield of 51 basis points to 2.28 percent from 1.77 percent resulting primarily from higher reinvestment yields on maturing fixed income investments as well as higher yields on new purchases due to interest rate increases, and
|
◦
|
A
$1.5 million
increase in interest income from our interest earning cash and short-term investment securities. The increase was due to the benefit from the impact of the increases in the Federal Funds target rate, offset by lower average balances of $0.7 billion.
|
•
|
Interest expense
for the
six months ended
June 30, 2018
increased by
$5.2 million
primarily due to:
|
◦
|
An increase in deposits interest expense of
$6.5 million
, due primarily to an increase in interest paid on our interest-bearing money market deposits as a result of market rate adjustments, and
|
◦
|
A
$1.2 million
decrease in borrowings interest expense primarily due to the repayment of our 6.05% Subordinated Notes and the redemption of our Junior Subordinated Debentures in 2017.
|
•
|
Our net interest margin increased by 59 basis points to 3.59 percent for the
three months ended
June 30, 2018
, compared to
3.00
percent for the comparable
2017
period. The higher margin during the second quarter of 2018 was reflective primarily of the increases in the Federal Funds target rate since the second quarter of 2017 as well as a shift in the mix of the growth in our interest-earning assets to higher-yielding loans and fixed income investment securities from our interest earning cash and other short-term investment securities. Average loans and fixed income investment securities represented 47.5 percent and 48.0 percent, respectively, of quarter-to-date average interest earnings assets compared to 44.6 percent and 46.9 percent, respectively, for the comparable 2017 period.
|
•
|
Our net interest margin increased by 55 basis points to 3.49 percent for the
six months ended
June 30, 2018
, compared to
2.94 percent
for the comparable
2017
period. The higher margin for the six months ended June 30, 2018, was reflective primarily of the increases in the Federal Funds target rate since June 30, 2017, as well as a shift in the mix of the growth in our interest-earning assets to higher-yielding loans and fixed income investment securities from our interest earning cash and other short-term investment securities. Average loans and fixed income investment securities
|
|
|
Three months ended June 30,
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||
(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)
|
|
$
|
2,346,820
|
|
|
$
|
6,187
|
|
|
1.06
|
%
|
|
$
|
3,903,377
|
|
|
$
|
7,323
|
|
|
0.75
|
%
|
Investment securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
10,048,423
|
|
|
46,606
|
|
|
1.86
|
|
|
12,393,079
|
|
|
48,271
|
|
|
1.56
|
|
||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
13,969,843
|
|
|
90,544
|
|
|
2.60
|
|
|
8,964,785
|
|
|
47,251
|
|
|
2.11
|
|
||||
Non-taxable (3)
|
|
1,142,311
|
|
|
9,704
|
|
|
3.41
|
|
|
163,622
|
|
|
1,361
|
|
|
3.34
|
|
||||
Total loans, net of unearned income (4) (5)
|
|
24,858,503
|
|
|
330,297
|
|
|
5.33
|
|
|
20,508,541
|
|
|
250,197
|
|
|
4.89
|
|
||||
Total interest-earning assets
|
|
52,365,900
|
|
|
483,338
|
|
|
3.70
|
|
|
45,933,404
|
|
|
354,403
|
|
|
3.10
|
|
||||
Cash and due from banks
|
|
534,908
|
|
|
|
|
|
|
356,884
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
|
(280,679
|
)
|
|
|
|
|
|
(250,167
|
)
|
|
|
|
|
||||||||
Other assets (6)
|
|
1,800,517
|
|
|
|
|
|
|
1,509,243
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
54,420,646
|
|
|
|
|
|
|
$
|
47,549,364
|
|
|
|
|
|
||||||
Funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing checking and savings accounts
|
|
$
|
554,411
|
|
|
$
|
106
|
|
|
0.08
|
%
|
|
$
|
424,070
|
|
|
$
|
81
|
|
|
0.08
|
%
|
Money market deposits
|
|
6,265,809
|
|
|
6,021
|
|
|
0.39
|
|
|
5,689,552
|
|
|
1,967
|
|
|
0.14
|
|
||||
Money market deposits in foreign offices
|
|
220,334
|
|
|
21
|
|
|
0.04
|
|
|
210,069
|
|
|
22
|
|
|
0.04
|
|
||||
Time deposits
|
|
56,755
|
|
|
23
|
|
|
0.16
|
|
|
47,376
|
|
|
15
|
|
|
0.13
|
|
||||
Sweep deposits in foreign offices
|
|
1,060,192
|
|
|
100
|
|
|
0.04
|
|
|
1,138,509
|
|
|
112
|
|
|
0.04
|
|
||||
Total interest-bearing deposits
|
|
8,157,501
|
|
|
6,271
|
|
|
0.31
|
|
|
7,509,576
|
|
|
2,197
|
|
|
0.12
|
|
||||
Short-term borrowings
|
|
121,098
|
|
|
580
|
|
|
1.92
|
|
|
2,690
|
|
|
11
|
|
|
1.64
|
|
||||
3.50% Senior Notes
|
|
347,415
|
|
|
3,146
|
|
|
3.63
|
|
|
347,087
|
|
|
3,143
|
|
|
3.63
|
|
||||
5.375% Senior Notes
|
|
348,399
|
|
|
4,861
|
|
|
5.60
|
|
|
347,785
|
|
|
4,853
|
|
|
5.60
|
|
||||
Junior Subordinated Debentures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,435
|
|
|
831
|
|
|
6.12
|
|
||||
6.05% Subordinated Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,934
|
|
|
196
|
|
|
2.54
|
|
||||
Total interest-bearing liabilities
|
|
8,974,413
|
|
|
14,858
|
|
|
0.66
|
|
|
8,292,507
|
|
|
11,231
|
|
|
0.54
|
|
||||
Portion of noninterest-bearing funding sources
|
|
43,391,487
|
|
|
|
|
|
|
37,640,897
|
|
|
|
|
|
||||||||
Total funding sources
|
|
52,365,900
|
|
|
14,858
|
|
|
0.11
|
|
|
45,933,404
|
|
|
11,231
|
|
|
0.10
|
|
||||
Noninterest-bearing funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
39,814,450
|
|
|
|
|
|
|
34,629,070
|
|
|
|
|
|
||||||||
Other liabilities
|
|
908,594
|
|
|
|
|
|
|
617,097
|
|
|
|
|
|
||||||||
SVBFG stockholders’ equity
|
|
4,581,591
|
|
|
|
|
|
|
3,874,880
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
141,598
|
|
|
|
|
|
|
135,810
|
|
|
|
|
|
||||||||
Portion used to fund interest-earning assets
|
|
(43,391,487
|
)
|
|
|
|
|
|
(37,640,897
|
)
|
|
|
|
|
||||||||
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity
|
|
$
|
54,420,646
|
|
|
|
|
|
|
$
|
47,549,364
|
|
|
|
|
|
||||||
Net interest income and margin
|
|
|
|
$
|
468,480
|
|
|
3.59
|
%
|
|
|
|
$
|
343,172
|
|
|
3.00
|
%
|
||||
Total deposits
|
|
$
|
47,971,951
|
|
|
|
|
|
|
$
|
42,138,646
|
|
|
|
|
|
||||||
Reconciliation to reported net interest income
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustments for taxable equivalent basis
|
|
|
|
(2,037
|
)
|
|
|
|
|
|
(476
|
)
|
|
|
||||||||
Net interest income, as reported
|
|
|
|
$
|
466,443
|
|
|
|
|
|
|
$
|
342,696
|
|
|
|
|
(1)
|
Includes average interest-earning deposits in other financial institutions of
$0.9 billion
and
$1.0 billion
for the three months ended
June 30, 2018
, and
2017
, respectively. For the three months ended
June 30, 2018
, and
2017
, balances also include
$1.3 billion
and
$2.8 billion
, respectively, deposited at the FRB, earning interest at the Federal Funds target rate.
|
(2)
|
Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.
|
(3)
|
Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for the three months ended June 30, 2018, and 35.0 percent for the three months ended June 30, 2017.
|
(4)
|
Nonaccrual loans are reflected in the average balances of loans.
|
(5)
|
Interest income includes loan fees of
$38 million
and
$33 million
for the three months ended
June 30, 2018
, and
2017
, respectively.
|
(6)
|
Average investment securities of
$773 million
and
$663 million
for the three months ended
June 30, 2018
, and
2017
, respectively, were classified as other assets as they were noninterest-earning assets. These investments consisted primarily of non-marketable and other securities.
|
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||
(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)
|
|
$
|
2,529,384
|
|
|
$
|
11,943
|
|
|
0.95
|
%
|
|
$
|
3,207,021
|
|
|
$
|
10,459
|
|
|
0.66
|
%
|
Investment securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
10,396,533
|
|
|
94,582
|
|
|
1.83
|
|
|
12,471,237
|
|
|
93,978
|
|
|
1.52
|
|
||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
13,196,969
|
|
|
167,045
|
|
|
2.55
|
|
|
8,731,526
|
|
|
91,347
|
|
|
2.11
|
|
||||
Non-taxable (3)
|
|
981,458
|
|
|
16,149
|
|
|
3.32
|
|
|
134,226
|
|
|
2,355
|
|
|
3.54
|
|
||||
Total loans, net of unearned income (4) (5)
|
|
24,335,762
|
|
|
627,371
|
|
|
5.20
|
|
|
20,290,141
|
|
|
477,538
|
|
|
4.75
|
|
||||
Total interest-earning assets
|
|
51,440,106
|
|
|
917,090
|
|
|
3.60
|
|
|
44,834,151
|
|
|
675,677
|
|
|
3.04
|
|
||||
Cash and due from banks
|
|
467,954
|
|
|
|
|
|
|
355,790
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
|
(271,931
|
)
|
|
|
|
|
|
(242,264
|
)
|
|
|
|
|
||||||||
Other assets (6)
|
|
1,763,487
|
|
|
|
|
|
|
1,483,733
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
53,399,616
|
|
|
|
|
|
|
$
|
46,431,410
|
|
|
|
|
|
||||||
Funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing checking and savings accounts
|
|
$
|
581,399
|
|
|
$
|
222
|
|
|
0.08
|
%
|
|
$
|
409,579
|
|
|
$
|
156
|
|
|
0.08
|
%
|
Money market deposits
|
|
6,301,677
|
|
|
9,876
|
|
|
0.32
|
|
|
5,608,069
|
|
|
3,465
|
|
|
0.12
|
|
||||
Money market deposits in foreign offices
|
|
200,922
|
|
|
39
|
|
|
0.04
|
|
|
180,934
|
|
|
38
|
|
|
0.04
|
|
||||
Time deposits
|
|
51,919
|
|
|
36
|
|
|
0.14
|
|
|
50,576
|
|
|
32
|
|
|
0.13
|
|
||||
Sweep deposits in foreign offices
|
|
1,020,487
|
|
|
194
|
|
|
0.04
|
|
|
1,130,906
|
|
|
223
|
|
|
0.04
|
|
||||
Total interest-bearing deposits
|
|
8,156,404
|
|
|
10,367
|
|
|
0.26
|
|
|
7,380,064
|
|
|
3,914
|
|
|
0.11
|
|
||||
Short-term borrowings
|
|
116,605
|
|
|
1,014
|
|
|
1.75
|
|
|
34,902
|
|
|
131
|
|
|
0.76
|
|
||||
3.50% Senior Notes
|
|
347,373
|
|
|
6,291
|
|
|
3.65
|
|
|
347,047
|
|
|
6,285
|
|
|
3.65
|
|
||||
5.375% Senior Notes
|
|
348,321
|
|
|
9,721
|
|
|
5.63
|
|
|
347,711
|
|
|
9,704
|
|
|
5.63
|
|
||||
Junior Subordinated Debentures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,456
|
|
|
1,663
|
|
|
6.16
|
|
||||
6.05% Subordinated Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,673
|
|
|
467
|
|
|
2.44
|
|
||||
Total interest-bearing liabilities
|
|
8,968,703
|
|
|
27,393
|
|
|
0.62
|
|
|
8,202,853
|
|
|
22,164
|
|
|
0.54
|
|
||||
Portion of noninterest-bearing funding sources
|
|
42,471,403
|
|
|
|
|
|
|
36,631,298
|
|
|
|
|
|
||||||||
Total funding sources
|
|
51,440,106
|
|
|
27,393
|
|
|
0.11
|
|
|
44,834,151
|
|
|
22,164
|
|
|
0.10
|
|
||||
Noninterest-bearing funding sources
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
38,887,766
|
|
|
|
|
|
|
33,674,549
|
|
|
|
|
|
||||||||
Other liabilities
|
|
930,193
|
|
|
|
|
|
|
614,961
|
|
|
|
|
|
||||||||
SVBFG stockholders’ equity
|
|
4,473,729
|
|
|
|
|
|
|
3,803,902
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
139,225
|
|
|
|
|
|
|
135,145
|
|
|
|
|
|
||||||||
Portion used to fund interest-earning assets
|
|
(42,471,403
|
)
|
|
|
|
|
|
(36,631,298
|
)
|
|
|
|
|
||||||||
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity
|
|
$
|
53,399,616
|
|
|
|
|
|
|
$
|
46,431,410
|
|
|
|
|
|
||||||
Net interest income and margin
|
|
|
|
$
|
889,697
|
|
|
3.49
|
%
|
|
|
|
$
|
653,513
|
|
|
2.94
|
%
|
||||
Total deposits
|
|
$
|
47,044,170
|
|
|
|
|
|
|
$
|
41,054,613
|
|
|
|
|
|
||||||
Reconciliation to reported net interest income
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustments for taxable equivalent basis
|
|
|
|
(3,391
|
)
|
|
|
|
|
|
(824
|
)
|
|
|
||||||||
Net interest income, as reported
|
|
|
|
$
|
886,306
|
|
|
|
|
|
|
$
|
652,689
|
|
|
|
|
(1)
|
Includes average interest-earning deposits in other financial institutions of
$1.1 billion
and
$0.9 billion
for the
six months ended
June 30, 2018
, and
2017
, respectively. The balance also includes
$1.3 billion
and
$2.2 billion
deposited at the FRB, earning interest at the Federal Funds target rate for the
six months ended
June 30, 2018
, and
2017
, respectively.
|
(2)
|
Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.
|
(3)
|
Interest income on non-taxable available-for-sale securities is presented on a fully taxable-equivalent basis using the federal statutory income tax rate of 21.0 percent for the six months ended June 30, 2018, and 35.0 percent for the six months ended June 30, 2017.
|
(4)
|
Nonaccrual loans are reflected in the average balances of loans.
|
(5)
|
Interest income includes loan fees of
$68 million
and
$60 million
for the
six months ended
June 30, 2018
, and
2017
, respectively.
|
(6)
|
Average investment securities of
$780 million
and
$661 million
for the
six months ended
June 30, 2018
, and
2017
, respectively, were classified as other assets as they were noninterest-earning assets. These investments consisted primarily of non-marketable securities.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands, except ratios)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Allowance for loan losses, beginning balance
|
|
$
|
274,294
|
|
|
$
|
243,130
|
|
|
$
|
255,024
|
|
|
$
|
225,366
|
|
Provision for loan losses
|
|
27,656
|
|
|
15,185
|
|
|
54,652
|
|
|
44,864
|
|
||||
Gross loan charge-offs
|
|
(15,428
|
)
|
|
(25,081
|
)
|
|
(26,015
|
)
|
|
(39,111
|
)
|
||||
Loan recoveries
|
|
1,926
|
|
|
2,535
|
|
|
3,714
|
|
|
4,327
|
|
||||
Foreign currency translation adjustments
|
|
(1,739
|
)
|
|
727
|
|
|
(666
|
)
|
|
1,050
|
|
||||
Allowance for loan losses, ending balance
|
|
$
|
286,709
|
|
|
$
|
236,496
|
|
|
$
|
286,709
|
|
|
$
|
236,496
|
|
Allowance for unfunded credit commitments, beginning balance
|
|
$
|
52,823
|
|
|
$
|
46,335
|
|
|
$
|
51,770
|
|
|
$
|
45,265
|
|
Provision for unfunded credit commitments
|
|
1,424
|
|
|
621
|
|
|
2,400
|
|
|
1,676
|
|
||||
Foreign currency translation adjustments
|
|
(143
|
)
|
|
44
|
|
|
(66
|
)
|
|
59
|
|
||||
Allowance for unfunded credit commitments, ending balance (1)
|
|
$
|
54,104
|
|
|
$
|
47,000
|
|
|
$
|
54,104
|
|
|
$
|
47,000
|
|
Ratios and other information:
|
|
|
|
|
|
|
|
|
||||||||
Provision for loan losses as a percentage of period-end total gross loans (annualized)
|
|
0.42
|
%
|
|
0.29
|
%
|
|
0.42
|
%
|
|
0.43
|
%
|
||||
Gross loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.25
|
|
|
0.49
|
|
|
0.21
|
|
|
0.39
|
|
||||
Net loan charge-offs as a percentage of average total gross loans (annualized)
|
|
0.22
|
|
|
0.44
|
|
|
0.18
|
|
|
0.34
|
|
||||
Allowance for loan losses as a percentage of period-end total gross loans
|
|
1.10
|
|
|
1.12
|
|
|
1.10
|
|
|
1.12
|
|
||||
Provision for credit losses
|
|
$
|
29,080
|
|
|
$
|
15,806
|
|
|
$
|
57,052
|
|
|
$
|
46,540
|
|
Period-end total gross loans
|
|
26,160,782
|
|
|
21,103,946
|
|
|
26,160,782
|
|
|
21,103,946
|
|
||||
Average total gross loans
|
|
25,014,587
|
|
|
20,632,237
|
|
|
24,488,608
|
|
|
20,412,123
|
|
|
(1)
|
The “allowance for unfunded credit commitments” is included as a component of “other liabilities.”
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
GAAP noninterest income
|
|
$
|
192,689
|
|
|
$
|
128,528
|
|
|
49.9
|
%
|
|
$
|
348,207
|
|
|
$
|
246,187
|
|
|
41.4
|
%
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
9,445
|
|
|
9,536
|
|
|
(1.0
|
)
|
|
22,469
|
|
|
16,095
|
|
|
39.6
|
|
||||
Non-GAAP noninterest income, net of noncontrolling interests
|
|
$
|
183,244
|
|
|
$
|
118,992
|
|
|
54.0
|
|
|
$
|
325,738
|
|
|
$
|
230,092
|
|
|
41.6
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
GAAP noninterest income
|
|
$
|
192,689
|
|
|
$
|
128,528
|
|
|
49.9
|
%
|
|
$
|
348,207
|
|
|
$
|
246,187
|
|
|
41.4
|
%
|
Less: gains on investment securities, net
|
|
36,114
|
|
|
17,630
|
|
|
104.8
|
|
|
45,172
|
|
|
33,600
|
|
|
34.4
|
|
||||
Less: gains on equity warrant assets, net
|
|
19,061
|
|
|
10,820
|
|
|
76.2
|
|
|
38,252
|
|
|
17,510
|
|
|
118.5
|
|
||||
Less: other noninterest income
|
|
14,390
|
|
|
12,811
|
|
|
12.3
|
|
|
26,649
|
|
|
25,232
|
|
|
5.6
|
|
||||
Non-GAAP core fee income (1)
|
|
$
|
123,124
|
|
|
$
|
87,267
|
|
|
41.1
|
|
|
$
|
238,134
|
|
|
$
|
169,845
|
|
|
40.2
|
|
|
(1)
|
Non-GAAP core fee income represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and includes foreign exchange fees, credit card fees, deposit service charges, lending related fees, client investment fees and letters of credit and standby letters of credit fees.
|
•
|
Gains of
$18.1 million
from our strategic and other investments portfolio, comprised primarily of net unrealized valuation increases in both private and public company investments held in our strategic venture capital funds, and
|
•
|
Gains of
$7.7 million
from our managed funds of funds portfolio, related primarily to net unrealized valuation increases in the public company investments held by the funds in this portfolio.
|
•
|
Gains of
$30.8 million
from our strategic and other investments portfolio, attributable primarily to net unrealized valuation increases in both private and public company investments held in our strategic venture capital funds,
|
•
|
Losses of
$22.1 million
from our public equity securities portfolio primarily reflective of net losses on sales of shares of Roku, Inc. ("Roku"), from exercised warrants in 2017, which were sold in the first quarter of 2018, and
|
•
|
Gains of
$14.6 million
from our managed funds of funds portfolio, related primarily to net unrealized valuation increases in the public company investments held by the funds in the portfolio.
|
(Dollars in thousands)
|
|
Managed
Funds of Funds |
|
Managed
Direct Venture Funds |
|
Public Equity Securities (1)
|
|
Debt
Funds
|
|
Sales of AFS Securities (1)
|
|
Strategic
and Other
Investments
|
|
Total
|
||||||||||||||
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
17,531
|
|
|
$
|
(405
|
)
|
|
$
|
140
|
|
|
$
|
726
|
|
|
$
|
—
|
|
|
$
|
18,122
|
|
|
$
|
36,114
|
|
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation
|
|
9,793
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,672
|
|
|||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
7,738
|
|
|
$
|
(284
|
)
|
|
$
|
140
|
|
|
$
|
726
|
|
|
$
|
—
|
|
|
$
|
18,122
|
|
|
$
|
26,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
36,604
|
|
|
$
|
1,514
|
|
|
$
|
(22,142
|
)
|
|
$
|
(1,573
|
)
|
|
$
|
—
|
|
|
$
|
30,769
|
|
|
$
|
45,172
|
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
21,990
|
|
|
587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,577
|
|
|||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
14,614
|
|
|
$
|
927
|
|
|
$
|
(22,142
|
)
|
|
$
|
(1,573
|
)
|
|
$
|
—
|
|
|
$
|
30,769
|
|
|
$
|
22,595
|
|
|
(1)
|
Effective January 1, 2018, we adopted Accounting Standard update ("ASU") 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, resulting in the reclassification of public equity securities out of our AFS securities portfolio into our non-marketable and other equity securities portfolio. This guidance was adopted using the modified retrospective method with a cumulative adjustment to opening retained earnings. As such, prior period amounts have not been restated.
|
(Dollars in thousands)
|
|
Managed
Funds of Funds |
|
Managed
Direct Venture Funds |
|
Debt
Funds |
|
Sales of AFS Securities
|
|
Strategic
and Other Investments |
|
Total
|
||||||||||||
Three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
12,145
|
|
|
$
|
69
|
|
|
$
|
682
|
|
|
$
|
(123
|
)
|
|
$
|
4,857
|
|
|
$
|
17,630
|
|
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation
|
|
9,490
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,465
|
|
||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
2,655
|
|
|
$
|
94
|
|
|
$
|
682
|
|
|
$
|
(123
|
)
|
|
$
|
4,857
|
|
|
$
|
8,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total gains on investment securities, net
|
|
$
|
22,178
|
|
|
$
|
165
|
|
|
$
|
251
|
|
|
$
|
485
|
|
|
$
|
10,521
|
|
|
$
|
33,600
|
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
15,910
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,927
|
|
||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests
|
|
$
|
6,268
|
|
|
$
|
148
|
|
|
$
|
251
|
|
|
$
|
485
|
|
|
$
|
10,521
|
|
|
$
|
17,673
|
|
•
|
Net gains of
$11.0 million
from changes in warrant valuation increases compared to net gains of
$8.3 million
, driven by our private company warrant portfolio and reflective of increased M&A exit activity and comparable market valuations during the three months ended June 30, 2018, and
|
•
|
Net gains of
$8.9 million
from the exercise of equity warrant assets compared to net gains of
$3.1 million
, primarily driven by increased IPO and M&A activity during the three months ended June 30, 2018.
|
•
|
Net gains of
$20.5 million
from the exercise of equity warrant assets compared to net gains of
$11.3 million
, reflective primarily of increased IPO and M&A activity during the
six months ended
June 30, 2018
, and
|
•
|
Net gains of
$19.5 million
from changes in warrant valuation increases compared to net gains of
$7.3 million
, driven by our private company warrant portfolio and reflective of increased M&A activity during the
six months ended
June 30, 2018
.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Equity warrant assets (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gains on exercises, net
|
|
$
|
8,875
|
|
|
$
|
3,121
|
|
|
184.4
|
%
|
|
$
|
20,509
|
|
|
$
|
11,345
|
|
|
80.8
|
%
|
Cancellations and expirations
|
|
(826
|
)
|
|
(571
|
)
|
|
44.7
|
|
|
(1,726
|
)
|
|
(1,129
|
)
|
|
52.9
|
|
||||
Changes in fair value, net
|
|
11,012
|
|
|
8,270
|
|
|
33.2
|
|
|
19,469
|
|
|
7,294
|
|
|
166.9
|
|
||||
Gains on equity warrant assets, net
|
|
$
|
19,061
|
|
|
$
|
10,820
|
|
|
76.2
|
|
|
$
|
38,252
|
|
|
$
|
17,510
|
|
|
118.5
|
|
|
(1)
|
At
June 30, 2018
, we held warrants in
1,967
companies, compared to
1,808
companies at
June 30, 2017
. The total fair value of our warrant portfolio was
$143.7 million
at
June 30, 2018
and $131.8 million at
June 30, 2017
. Warrants in 15 companies each had fair values greater than $1.0 million and collectively represented $38.6 million, or 26.8 percent, of the fair value
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Non-GAAP core fee income (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange fees
|
|
$
|
34,077
|
|
|
$
|
26,108
|
|
|
30.5
|
%
|
|
$
|
67,904
|
|
|
$
|
52,355
|
|
|
29.7
|
%
|
Credit card fees
|
|
22,926
|
|
|
18,099
|
|
|
26.7
|
|
|
44,618
|
|
|
35,829
|
|
|
24.5
|
|
||||
Deposit service charges
|
|
18,794
|
|
|
14,563
|
|
|
29.1
|
|
|
36,493
|
|
|
28,538
|
|
|
27.9
|
|
||||
Client investment fees
|
|
29,452
|
|
|
12,982
|
|
|
126.9
|
|
|
52,327
|
|
|
22,008
|
|
|
137.8
|
|
||||
Lending related fees
|
|
9,528
|
|
|
8,509
|
|
|
12.0
|
|
|
20,263
|
|
|
17,470
|
|
|
16.0
|
|
||||
Letters of credit and standby letters of credit fees
|
|
8,347
|
|
|
7,006
|
|
|
19.1
|
|
|
16,529
|
|
|
13,645
|
|
|
21.1
|
|
||||
Total non-GAAP core fee income (1)
|
|
$
|
123,124
|
|
|
$
|
87,267
|
|
|
41.1
|
|
|
$
|
238,134
|
|
|
$
|
169,845
|
|
|
40.2
|
|
|
(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. See “Use of Non-GAAP Measures” above.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Foreign exchange fees by instrument type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Spot contract commissions
|
|
$
|
31,548
|
|
|
$
|
23,583
|
|
|
33.8
|
%
|
|
$
|
62,750
|
|
|
$
|
46,007
|
|
|
36.4
|
%
|
Forward contract commissions
|
|
2,455
|
|
|
2,470
|
|
|
(0.6
|
)
|
|
4,940
|
|
|
6,071
|
|
|
(18.6
|
)
|
||||
Option premium fees
|
|
74
|
|
|
55
|
|
|
34.5
|
|
|
214
|
|
|
277
|
|
|
(22.7
|
)
|
||||
Total foreign exchange fees
|
|
$
|
34,077
|
|
|
$
|
26,108
|
|
|
30.5
|
|
|
$
|
67,904
|
|
|
$
|
52,355
|
|
|
29.7
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Credit card fees by instrument type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Card interchange fees, net
|
|
$
|
18,137
|
|
|
$
|
14,033
|
|
|
29.2
|
%
|
|
$
|
35,697
|
|
|
$
|
28,003
|
|
|
27.5
|
%
|
Merchant service fees
|
|
3,425
|
|
|
2,883
|
|
|
18.8
|
|
|
6,331
|
|
|
5,623
|
|
|
12.6
|
|
||||
Card service fees
|
|
1,364
|
|
|
1,183
|
|
|
15.3
|
|
|
2,590
|
|
|
2,203
|
|
|
17.6
|
|
||||
Total credit card fees
|
|
$
|
22,926
|
|
|
$
|
18,099
|
|
|
26.7
|
|
|
$
|
44,618
|
|
|
$
|
35,829
|
|
|
24.5
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Client investment fees by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sweep money market fees
|
|
$
|
17,178
|
|
|
$
|
6,474
|
|
|
165.3
|
%
|
|
$
|
29,500
|
|
|
$
|
10,870
|
|
|
171.4
|
%
|
Asset management fees
|
|
5,730
|
|
|
4,111
|
|
|
39.4
|
|
|
11,088
|
|
|
7,490
|
|
|
48.0
|
|
||||
Repurchase agreement fees
|
|
6,544
|
|
|
2,397
|
|
|
173.0
|
|
|
11,739
|
|
|
3,648
|
|
|
NM
|
|
||||
Total client investment fees
|
|
$
|
29,452
|
|
|
$
|
12,982
|
|
|
126.9
|
|
|
$
|
52,327
|
|
|
$
|
22,008
|
|
|
137.8
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Sweep money market funds
|
|
$
|
30,164
|
|
|
$
|
18,464
|
|
|
63.4
|
%
|
|
$
|
28,148
|
|
|
$
|
18,091
|
|
|
55.6
|
%
|
Client investment assets under management(1)
|
|
33,443
|
|
|
24,423
|
|
|
36.9
|
|
|
32,071
|
|
|
23,735
|
|
|
35.1
|
|
||||
Repurchase agreements
|
|
7,705
|
|
|
6,223
|
|
|
23.8
|
|
|
7,626
|
|
|
5,794
|
|
|
31.6
|
|
||||
Total average client investment funds (2)
|
|
$
|
71,312
|
|
|
$
|
49,110
|
|
|
45.2
|
|
|
$
|
67,845
|
|
|
$
|
47,620
|
|
|
42.5
|
|
|
(1)
|
These funds represent investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.
|
(2)
|
Client investment funds are maintained at third-party financial institutions and are not recorded on our balance sheet.
|
(Dollars in millions)
|
|
June 30, 2018
|
|
December 31, 2017
|
|
% Change
|
|||||
Sweep money market funds
|
|
$
|
31,859
|
|
|
$
|
23,911
|
|
|
33.2
|
%
|
Client investment assets under management (1)
|
|
35,509
|
|
|
29,344
|
|
|
21.0
|
|
||
Repurchase agreements
|
|
8,406
|
|
|
7,074
|
|
|
18.8
|
|
||
Total period-end client investment funds (2)
|
|
$
|
75,774
|
|
|
$
|
60,329
|
|
|
25.6
|
|
|
(1)
|
These funds represent investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.
|
(2)
|
Client investment funds are maintained at third-party financial institutions and are not recorded on our balance sheet.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Compensation and benefits
|
|
$
|
181,955
|
|
|
$
|
148,973
|
|
|
22.1
|
%
|
|
$
|
347,761
|
|
|
$
|
296,149
|
|
|
17.4
|
%
|
Professional services
|
|
46,813
|
|
|
27,925
|
|
|
67.6
|
|
|
75,538
|
|
|
53,344
|
|
|
41.6
|
|
||||
Premises and equipment
|
|
19,173
|
|
|
18,958
|
|
|
1.1
|
|
|
37,718
|
|
|
34,816
|
|
|
8.3
|
|
||||
Net occupancy
|
|
13,288
|
|
|
11,126
|
|
|
19.4
|
|
|
26,904
|
|
|
22,777
|
|
|
18.1
|
|
||||
Business development and travel
|
|
12,095
|
|
|
11,389
|
|
|
6.2
|
|
|
23,286
|
|
|
20,584
|
|
|
13.1
|
|
||||
FDIC and state assessments
|
|
10,326
|
|
|
9,313
|
|
|
10.9
|
|
|
19,756
|
|
|
17,995
|
|
|
9.8
|
|
||||
Correspondent bank fees
|
|
3,277
|
|
|
3,163
|
|
|
3.6
|
|
|
6,687
|
|
|
6,608
|
|
|
1.2
|
|
||||
Other
|
|
18,812
|
|
|
20,399
|
|
|
(7.8
|
)
|
|
33,506
|
|
|
36,606
|
|
|
(8.5
|
)
|
||||
Total noninterest expense
|
|
$
|
305,739
|
|
|
$
|
251,246
|
|
|
21.7
|
|
|
$
|
571,156
|
|
|
$
|
488,879
|
|
|
16.8
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands, except ratios)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
GAAP noninterest expense
|
|
$
|
305,739
|
|
|
$
|
251,246
|
|
|
21.7
|
%
|
|
$
|
571,156
|
|
|
$
|
488,879
|
|
|
16.8
|
%
|
Less: amounts attributable to noncontrolling interests
|
|
227
|
|
|
223
|
|
|
1.8
|
|
|
195
|
|
|
392
|
|
|
(50.3
|
)
|
||||
Non-GAAP noninterest expense, net of noncontrolling interests
|
|
$
|
305,512
|
|
|
$
|
251,023
|
|
|
21.7
|
|
|
$
|
570,961
|
|
|
$
|
488,487
|
|
|
16.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net interest income
|
|
$
|
466,443
|
|
|
$
|
342,696
|
|
|
36.1
|
|
|
$
|
886,306
|
|
|
$
|
652,689
|
|
|
35.8
|
|
Adjustments for taxable equivalent basis
|
|
2,037
|
|
|
476
|
|
|
NM
|
|
|
3,391
|
|
|
824
|
|
|
NM
|
|
||||
Non-GAAP taxable equivalent net interest income
|
|
$
|
468,480
|
|
|
$
|
343,172
|
|
|
36.5
|
|
|
$
|
889,697
|
|
|
$
|
653,513
|
|
|
36.1
|
|
Less: income attributable to noncontrolling interests
|
|
10
|
|
|
10
|
|
|
—
|
|
|
19
|
|
|
17
|
|
|
11.8
|
|
||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests
|
|
$
|
468,470
|
|
|
$
|
343,162
|
|
|
36.5
|
|
|
$
|
889,678
|
|
|
$
|
653,496
|
|
|
36.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP noninterest income
|
|
$
|
192,689
|
|
|
$
|
128,528
|
|
|
49.9
|
|
|
$
|
348,207
|
|
|
$
|
246,187
|
|
|
41.4
|
|
Less: income attributable to noncontrolling interests
|
|
9,445
|
|
|
9,536
|
|
|
(1.0
|
)
|
|
22,469
|
|
|
16,095
|
|
|
39.6
|
|
||||
Non-GAAP noninterest income, net of noncontrolling interests
|
|
$
|
183,244
|
|
|
$
|
118,992
|
|
|
54.0
|
|
|
$
|
325,738
|
|
|
$
|
230,092
|
|
|
41.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP total revenue
|
|
$
|
659,132
|
|
|
$
|
471,224
|
|
|
39.9
|
|
|
$
|
1,234,513
|
|
|
$
|
898,876
|
|
|
37.3
|
|
Non-GAAP taxable equivalent revenue, net of noncontrolling interests
|
|
$
|
651,714
|
|
|
$
|
462,154
|
|
|
41.0
|
|
|
$
|
1,215,416
|
|
|
$
|
883,588
|
|
|
37.6
|
|
GAAP operating efficiency ratio
|
|
46.39
|
%
|
|
53.32
|
%
|
|
(13.0
|
)
|
|
46.27
|
%
|
|
54.39
|
%
|
|
(14.9
|
)
|
||||
Non-GAAP operating efficiency ratio (1)
|
|
46.88
|
|
|
54.32
|
|
|
(13.7
|
)
|
|
46.98
|
|
|
55.28
|
|
|
(15.0
|
)
|
|
(1)
|
The non-GAAP operating efficiency ratio is calculated by dividing non-GAAP noninterest expense, net of noncontrolling interests, by non-GAAP taxable-equivalent revenue, net of noncontrolling interests.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands, except employees)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Compensation and benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and wages
|
|
$
|
76,831
|
|
|
$
|
68,029
|
|
|
12.9
|
%
|
|
$
|
149,870
|
|
|
$
|
134,888
|
|
|
11.1
|
%
|
Incentive compensation & ESOP
|
|
54,382
|
|
|
36,824
|
|
|
47.7
|
|
|
98,015
|
|
|
70,642
|
|
|
38.7
|
|
||||
Other employee incentives and benefits (1)
|
|
50,742
|
|
|
44,120
|
|
|
15.0
|
|
|
99,876
|
|
|
90,619
|
|
|
10.2
|
|
||||
Total compensation and benefits
|
|
$
|
181,955
|
|
|
$
|
148,973
|
|
|
22.1
|
|
|
$
|
347,761
|
|
|
$
|
296,149
|
|
|
17.4
|
|
Period-end full-time equivalent employees
|
|
2,626
|
|
|
2,380
|
|
|
10.3
|
|
|
2,626
|
|
|
2,380
|
|
|
10.3
|
|
||||
Average full-time equivalent employees
|
|
2,591
|
|
|
2,372
|
|
|
9.2
|
|
|
2,545
|
|
|
2,358
|
|
|
7.9
|
|
|
(1)
|
Other employee incentives and benefits includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), warrant and retention plans, agency fees and other employee-related expenses.
|
•
|
An increase of $17.6 million in incentive compensation and ESOP expense reflective primarily of our strong 2018 full-year expected performance as compared to 2017 as well as an increase in the number of average FTE since June 30, 2017,
|
•
|
An increase of $8.8 million in salaries and wages reflective primarily of the increase in the number of average FTE by 219 to 2,591 for the second quarter of 2018 compared to the same period in 2017, as well as merit increases, and
|
•
|
An increase of $6.6 million in other employee incentives and benefits primarily driven by an increase in employer payroll taxes of $2.7 million, reflective of the increase in the number of average FTE since the second quarter of 2017, as well as an increase of $2.1 million in share-based compensation expense, primarily due to our accruals based on our performance expectations for our outstanding performance-based restricted stock awards compared to our estimate for the second quarter of 2017, reflective of the increase in our stock price relative to our peers.
|
•
|
An increase of $27.4 million in incentive compensation and ESOP expense reflective primarily of our strong 2018 full-year expected performance as compared to 2017 as well as an increase in the number of average FTE since June 30, 2017,
|
•
|
An increase of $15.0 million in salaries and wages reflective primarily of the increase in the number of average FTE by 187 to 2,545 for the second half of 2018 compared to the same period in 2017, as well as merit increases, and
|
•
|
An increase of $9.3 million in other employee incentives and benefits primarily driven by an increase in employer payroll taxes of $3.9 million, reflective of the increase in the number of average FTE since the second half of 2017, as well as an increase of $3.4 million in share-based compensation expense, primarily due to our accruals based on our performance expectations for our outstanding performance-based restricted stock awards compared to our estimate for the second half of 2017, reflective of the increase in our stock price relative to our peers.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Lending and other client related processing costs
|
|
$
|
7,403
|
|
|
$
|
6,332
|
|
|
16.9
|
%
|
|
$
|
10,603
|
|
|
$
|
11,871
|
|
|
(10.7
|
)%
|
Data processing services
|
|
2,703
|
|
|
2,428
|
|
|
11.3
|
|
|
5,195
|
|
|
5,010
|
|
|
3.7
|
|
||||
Telephone
|
|
2,378
|
|
|
2,671
|
|
|
(11.0
|
)
|
|
4,756
|
|
|
5,374
|
|
|
(11.5
|
)
|
||||
Dues and publications
|
|
845
|
|
|
677
|
|
|
24.8
|
|
|
1,694
|
|
|
1,472
|
|
|
15.1
|
|
||||
Postage and supplies
|
|
813
|
|
|
652
|
|
|
24.7
|
|
|
1,480
|
|
|
1,401
|
|
|
5.6
|
|
||||
Other
|
|
4,670
|
|
|
7,639
|
|
|
(38.9
|
)
|
|
9,778
|
|
|
11,478
|
|
|
(14.8
|
)
|
||||
Total other noninterest expense
|
|
$
|
18,812
|
|
|
$
|
20,399
|
|
|
(7.8
|
)
|
|
$
|
33,506
|
|
|
$
|
36,606
|
|
|
(8.5
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Net interest income (1)
|
|
$
|
(10
|
)
|
|
$
|
(10
|
)
|
|
—
|
%
|
|
$
|
(19
|
)
|
|
$
|
(17
|
)
|
|
11.8
|
%
|
Noninterest income (1)
|
|
(7,856
|
)
|
|
(9,264
|
)
|
|
(15.2
|
)
|
|
(17,378
|
)
|
|
(14,718
|
)
|
|
18.1
|
|
||||
Noninterest expense (1)
|
|
227
|
|
|
223
|
|
|
1.8
|
|
|
195
|
|
|
392
|
|
|
(50.3
|
)
|
||||
Carried interest allocation (2)
|
|
(1,589
|
)
|
|
(272
|
)
|
|
NM
|
|
|
(5,091
|
)
|
|
(1,377
|
)
|
|
NM
|
|
||||
Net income attributable to noncontrolling interests
|
|
$
|
(9,228
|
)
|
|
$
|
(9,323
|
)
|
|
(1.0
|
)
|
|
$
|
(22,293
|
)
|
|
$
|
(15,720
|
)
|
|
41.8
|
|
|
(1)
|
Represents noncontrolling interests’ share in net interest income, noninterest income or loss and noninterest expense.
|
(2)
|
Represents the preferred allocation of income (or change in income) earned by us as the general partner of certain consolidated funds.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
409,057
|
|
|
$
|
311,051
|
|
|
31.5
|
%
|
|
$
|
778,924
|
|
|
$
|
586,929
|
|
|
32.7
|
%
|
Provision for credit losses
|
|
(27,356
|
)
|
|
(14,856
|
)
|
|
84.1
|
|
|
(52,630
|
)
|
|
(43,745
|
)
|
|
20.3
|
|
||||
Noninterest income
|
|
113,245
|
|
|
83,904
|
|
|
35.0
|
|
|
212,591
|
|
|
163,423
|
|
|
30.1
|
|
||||
Noninterest expense
|
|
(197,695
|
)
|
|
(176,702
|
)
|
|
11.9
|
|
|
(382,261
|
)
|
|
(349,548
|
)
|
|
9.4
|
|
||||
Income before income tax expense
|
|
$
|
297,251
|
|
|
$
|
203,397
|
|
|
46.1
|
|
|
$
|
556,624
|
|
|
$
|
357,059
|
|
|
55.9
|
|
Total average loans, net of unearned income
|
|
$
|
21,714,870
|
|
|
$
|
17,907,635
|
|
|
21.3
|
|
|
$
|
21,199,897
|
|
|
$
|
17,778,065
|
|
|
19.2
|
|
Total average assets
|
|
52,540,865
|
|
|
45,478,211
|
|
|
15.5
|
|
|
51,252,398
|
|
|
44,188,162
|
|
|
16.0
|
|
||||
Total average deposits
|
|
45,991,701
|
|
|
40,477,823
|
|
|
13.6
|
|
|
45,022,054
|
|
|
39,393,219
|
|
|
14.3
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
15,645
|
|
|
$
|
14,742
|
|
|
6.1
|
%
|
|
$
|
31,892
|
|
|
$
|
28,352
|
|
|
12.5
|
%
|
Provision for credit losses
|
|
(300
|
)
|
|
(329
|
)
|
|
(8.8
|
)
|
|
(2,022
|
)
|
|
(1,119
|
)
|
|
80.7
|
|
||||
Noninterest income
|
|
564
|
|
|
536
|
|
|
5.2
|
|
|
1,072
|
|
|
1,254
|
|
|
(14.5
|
)
|
||||
Noninterest expense
|
|
(5,927
|
)
|
|
(4,050
|
)
|
|
46.3
|
|
|
(11,969
|
)
|
|
(7,968
|
)
|
|
50.2
|
|
||||
Income before income tax expense
|
|
$
|
9,982
|
|
|
$
|
10,899
|
|
|
(8.4
|
)
|
|
$
|
18,973
|
|
|
$
|
20,519
|
|
|
(7.5
|
)
|
Total average loans, net of unearned income
|
|
$
|
2,777,617
|
|
|
$
|
2,365,464
|
|
|
17.4
|
|
|
$
|
2,722,444
|
|
|
$
|
2,305,723
|
|
|
18.1
|
|
Total average assets
|
|
2,515,984
|
|
|
2,397,188
|
|
|
5.0
|
|
|
2,553,024
|
|
|
2,335,350
|
|
|
9.3
|
|
||||
Total average deposits
|
|
1,480,162
|
|
|
1,302,890
|
|
|
13.6
|
|
|
1,526,038
|
|
|
1,319,776
|
|
|
15.6
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
9
|
|
|
$
|
16
|
|
|
(43.8
|
)%
|
|
$
|
16
|
|
|
$
|
16
|
|
|
—
|
%
|
Noninterest income
|
|
28,498
|
|
|
15,019
|
|
|
89.7
|
|
|
57,409
|
|
|
31,794
|
|
|
80.6
|
|
||||
Noninterest expense
|
|
(5,666
|
)
|
|
(6,192
|
)
|
|
(8.5
|
)
|
|
(10,713
|
)
|
|
(9,664
|
)
|
|
10.9
|
|
||||
Income before income tax expense
|
|
$
|
22,841
|
|
|
$
|
8,843
|
|
|
158.3
|
|
|
$
|
46,712
|
|
|
$
|
22,146
|
|
|
110.9
|
|
Total average assets
|
|
$
|
369,841
|
|
|
$
|
355,292
|
|
|
4.1
|
|
|
$
|
371,572
|
|
|
$
|
364,036
|
|
|
2.1
|
|
•
|
Net gains on investment securities of $20.9 million for the three months ended
June 30, 2018
, compared to net gains of $9.1 million for the comparable
2017
period. The increase in net gains on investment securities for the three months ended June 30, 2018, was related primarily to gains from our strategic venture capital fund investments reflective of gains from net unrealized valuation increases in public company investments held in our strategic venture capital funds and net unrealized valuation increases in the public company investments held by our managed funds of funds, and
|
•
|
Fund management fees of
$5.9 million
compared to $5.5 million for the comparable 2017 period.
|
•
|
Net gains on investment securities of $43.8 million for the
six months ended
June 30, 2018
, compared to net gains of $19.9 million for the comparable
2017
period. The net gains on investment securities of $43.8 million were related to gains from our strategic venture capital fund investments reflective of net unrealized valuation increases in both public and private company investments held in our strategic venture capital funds and gains from net unrealized valuation increases in public company investments held by our managed funds of funds, offset by losses from our public equity securities portfolio reflective of net losses on sales of shares of Roku, from exercised warrants in 2017, which were sold in the first quarter of 2018, and
|
•
|
Fund management fees of
$11.7 million
compared to
$10.7 million
for the comparable 2017 period.
|
|
|
June 30, 2018
|
|||||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
5,733,070
|
|
|
1.67
|
%
|
|
$
|
2,037,522
|
|
|
1.39
|
%
|
|
$
|
3,349,925
|
|
|
1.71
|
%
|
|
$
|
345,623
|
|
|
2.99
|
%
|
|
$
|
—
|
|
|
—
|
%
|
U.S. agency debentures
|
|
1,485,864
|
|
|
1.75
|
|
|
555,737
|
|
|
1.51
|
|
|
930,127
|
|
|
1.89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency-issued collateralized mortgage obligations
—
fixed rate
|
|
2,038,134
|
|
|
2.59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,098
|
|
|
2.63
|
|
|
1,991,036
|
|
|
2.58
|
|
|||||
Agency-issued collateralized mortgage obligations
—
variable rate
|
|
336,298
|
|
|
0.71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
336,298
|
|
|
0.71
|
|
||||||
Total
|
|
$
|
9,593,366
|
|
|
1.84
|
|
|
$
|
2,593,259
|
|
|
1.42
|
|
|
$
|
4,280,052
|
|
|
1.75
|
|
|
$
|
392,721
|
|
|
2.95
|
|
|
$
|
2,327,334
|
|
|
2.31
|
|
|
|
June 30, 2018
|
|||||||||||||||||||||||||||||||||
|
|
Total
|
|
One Year
or Less
|
|
After One Year to
Five Years
|
|
After Five Years to
Ten Years
|
|
After
Ten Years
|
|||||||||||||||||||||||||
(Dollars in thousands)
|
|
Amortized Cost
|
|
Weighted-
Average
Yield
|
|
Amortized Cost
|
|
Weighted-
Average
Yield
|
|
Amortized Cost
|
|
Weighted-
Average
Yield
|
|
Amortized Cost
|
|
Weighted-
Average
Yield
|
|
Amortized Cost
|
|
Weighted-
Average
Yield
|
|||||||||||||||
U.S. agency debentures
|
|
$
|
713,809
|
|
|
2.67
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
122,040
|
|
|
2.61
|
%
|
|
$
|
591,769
|
|
|
2.68
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency-issued mortgage-backed securities
|
|
8,588,483
|
|
|
2.87
|
|
|
707
|
|
|
7.52
|
|
|
172,594
|
|
|
2.17
|
|
|
672,564
|
|
|
2.40
|
|
|
7,742,618
|
|
|
2.93
|
|
|||||
Agency-issued collateralized mortgage obligations
—
fixed rate
|
|
2,494,834
|
|
|
1.78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
412,530
|
|
|
1.48
|
|
|
2,082,304
|
|
|
1.84
|
|
|||||
Agency-issued collateralized mortgage obligations
—
variable rate
|
|
233,285
|
|
|
0.74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233,285
|
|
|
0.74
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
2,335,971
|
|
|
2.79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,335,971
|
|
|
2.79
|
|
|||||
Municipal bonds and notes
|
|
1,531,881
|
|
|
3.57
|
|
|
7,257
|
|
|
2.84
|
|
|
75,946
|
|
|
2.14
|
|
|
259,085
|
|
|
2.64
|
|
|
1,189,593
|
|
|
3.87
|
|
|||||
Total
|
|
$
|
15,898,263
|
|
|
2.71
|
|
|
$
|
7,964
|
|
|
3.26
|
|
|
$
|
370,580
|
|
|
2.31
|
|
|
$
|
1,935,948
|
|
|
2.32
|
|
|
$
|
13,583,771
|
|
|
2.78
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Consolidated venture capital and private equity fund investments (1)
|
|
$
|
133,007
|
|
|
$
|
34,331
|
|
|
$
|
128,111
|
|
|
$
|
33,044
|
|
Unconsolidated venture capital and private equity fund investments (2)
|
|
211,113
|
|
|
211,113
|
|
|
98,548
|
|
|
98,548
|
|
||||
Other investments without a readily determinable fair value (3)
|
|
24,015
|
|
|
24,015
|
|
|
27,680
|
|
|
27,680
|
|
||||
Other equity securities in public companies (4)
|
|
4,412
|
|
|
3,968
|
|
|
310
|
|
|
103
|
|
||||
Non-marketable securities (equity method accounting) (5):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
102,838
|
|
|
71,742
|
|
|
89,809
|
|
|
64,675
|
|
||||
Debt funds
|
|
14,215
|
|
|
14,215
|
|
|
21,183
|
|
|
21,183
|
|
||||
Other investments
|
|
111,426
|
|
|
111,426
|
|
|
111,198
|
|
|
111,198
|
|
||||
Investments in qualified affordable housing projects, net
|
|
251,479
|
|
|
251,479
|
|
|
174,214
|
|
|
174,214
|
|
||||
Total non-marketable and other equity securities
|
|
$
|
852,505
|
|
|
$
|
722,289
|
|
|
$
|
651,053
|
|
|
$
|
530,645
|
|
|
(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
June 30, 2018
and
December 31, 2017
:
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
||||||||
Strategic Investors Fund, LP
|
|
$
|
13,972
|
|
|
$
|
1,755
|
|
|
$
|
14,673
|
|
|
$
|
1,843
|
|
Capital Preferred Return Fund, LP
|
|
58,148
|
|
|
12,532
|
|
|
54,147
|
|
|
11,670
|
|
||||
Growth Partners, LP
|
|
59,886
|
|
|
19,937
|
|
|
58,372
|
|
|
19,432
|
|
||||
CP I, LP
|
|
1,001
|
|
|
107
|
|
|
919
|
|
|
99
|
|
||||
Total consolidated venture capital and private equity fund investments
|
|
$
|
133,007
|
|
|
$
|
34,331
|
|
|
$
|
128,111
|
|
|
$
|
33,044
|
|
(2)
|
The carrying value represents investments in
226
and
235
funds (primarily venture capital funds) at
June 30, 2018
and
December 31, 2017
, 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. Effective January 1, 2018, we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which eliminated the concept of cost method accounting. On a prospective basis we will carry our unconsolidated venture capital and private equity fund investments at fair value based on the fund investments' net asset values per share as obtained from the general partners of the funds. We will adjust the net asset value per share for differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example, March 31
st
, for our June 30
th
consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period. We recorded a cumulative adjustment to opening retained earnings on January 1, 2018 for the difference between fair value and cost for these fund investments. The estimated fair value and carrying value of these venture capital and private equity fund investments was
$211.1 million
as of
June 30, 2018
. As of December 31, 2017, these investments were carried at cost and had a carrying value of $98.5 million.
|
(3)
|
Effective January 1, 2018, we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which eliminated the concept of cost method accounting. On a prospective basis we will report our other investments in the line item "Other investments without a readily determinable fair value". These investments include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted. For further details on the carrying value of these investments refer to
Note 6—“Investment Securities" of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report
.
|
(4)
|
Investments classified as other equity securities (fair value accounting) represent shares held in public companies as a result of exercising public equity warrant assets and direct equity investments in public companies held by our consolidated funds. Effective January 1, 2018 we adopted ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities which requires equity securities to be measured at fair value with changes in the fair value recognized through net income. Prior to January 1, 2018 we reported equity securities in public companies that we held as a result of exercising public equity warrant assets in available-for-sale securities. On a prospective basis, these equity securities will be reported in non-marketable and other equity securities.
|
(5)
|
The following table shows the carrying value and amount attributable to SVBFG of each investment at
June 30, 2018
and
December 31, 2017
(equity method accounting):
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
||||||||
Venture capital and private equity fund investments:
|
|
|
|
|
|
|
|
|
||||||||
Strategic Investors Fund II, LP
|
|
$
|
5,003
|
|
|
$
|
4,692
|
|
|
$
|
6,342
|
|
|
$
|
5,971
|
|
Strategic Investors Fund III, LP
|
|
18,858
|
|
|
15,266
|
|
|
18,758
|
|
|
15,211
|
|
||||
Strategic Investors Fund IV, LP
|
|
29,152
|
|
|
24,657
|
|
|
25,551
|
|
|
21,739
|
|
||||
Strategic Investors Fund V, LP
|
|
21,247
|
|
|
11,155
|
|
|
16,856
|
|
|
8,849
|
|
||||
CP II, LP (i)
|
|
6,792
|
|
|
4,110
|
|
|
6,700
|
|
|
4,056
|
|
||||
Other venture capital and private equity fund investments
|
|
21,786
|
|
|
11,862
|
|
|
15,602
|
|
|
8,849
|
|
||||
Total venture capital and private equity fund investments
|
|
$
|
102,838
|
|
|
$
|
71,742
|
|
|
$
|
89,809
|
|
|
$
|
64,675
|
|
Debt funds:
|
|
|
|
|
|
|
|
|
||||||||
Gold Hill Capital 2008, LP (ii)
|
|
$
|
11,153
|
|
|
$
|
11,153
|
|
|
$
|
18,690
|
|
|
$
|
18,690
|
|
Other debt funds
|
|
3,062
|
|
|
3,062
|
|
|
2,493
|
|
|
2,493
|
|
||||
Total debt funds
|
|
$
|
14,215
|
|
|
$
|
14,215
|
|
|
$
|
21,183
|
|
|
$
|
21,183
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
SPD Silicon Valley Bank Co., Ltd.
|
|
$
|
75,837
|
|
|
$
|
75,837
|
|
|
$
|
75,337
|
|
|
$
|
75,337
|
|
Other investments
|
|
35,589
|
|
|
35,589
|
|
|
35,861
|
|
|
35,861
|
|
||||
Total other investments
|
|
$
|
111,426
|
|
|
$
|
111,426
|
|
|
$
|
111,198
|
|
|
$
|
111,198
|
|
|
(i)
|
Our ownership includes direct ownership of 1.3 percent and indirect ownership interest of 3.8 percent through our investments in Strategic Investors Fund II, LP.
|
(ii)
|
Our ownership includes 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.
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||
Commercial loans:
|
|
|
|
|
|
|
|
|
||||||
Software/internet
|
|
$
|
6,291,788
|
|
|
24.0
|
%
|
|
$
|
6,232,725
|
|
|
26.8
|
%
|
Hardware
|
|
1,281,433
|
|
|
4.9
|
|
|
1,200,900
|
|
|
5.2
|
|
||
Private equity/venture capital
|
|
12,233,005
|
|
|
46.8
|
|
|
9,961,121
|
|
|
42.8
|
|
||
Life science/healthcare
|
|
2,158,336
|
|
|
8.3
|
|
|
1,867,960
|
|
|
8.0
|
|
||
Premium wine
|
|
198,809
|
|
|
0.8
|
|
|
204,257
|
|
|
0.9
|
|
||
Other
|
|
329,260
|
|
|
1.2
|
|
|
379,431
|
|
|
1.6
|
|
||
Total commercial loans
|
|
22,492,631
|
|
|
86.0
|
|
|
19,846,394
|
|
|
85.3
|
|
||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
||||||
Premium wine
|
|
686,241
|
|
|
2.6
|
|
|
670,112
|
|
|
2.9
|
|
||
Consumer
|
|
2,477,871
|
|
|
9.5
|
|
|
2,297,857
|
|
|
9.9
|
|
||
Other
|
|
41,477
|
|
|
0.2
|
|
|
42,230
|
|
|
0.2
|
|
||
Total real estate secured loans
|
|
3,205,589
|
|
|
12.3
|
|
|
3,010,199
|
|
|
13.0
|
|
||
Construction loans
|
|
65,286
|
|
|
0.2
|
|
|
69,108
|
|
|
0.3
|
|
||
Consumer loans
|
|
397,276
|
|
|
1.5
|
|
|
328,452
|
|
|
1.4
|
|
||
Total gross loans
|
|
$
|
26,160,782
|
|
|
100.0
|
|
|
$
|
23,254,153
|
|
|
100.0
|
|
|
|
June 30, 2018
|
||||||||||||||||||||||
(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/internet
|
|
$
|
1,539,475
|
|
|
$
|
1,008,935
|
|
|
$
|
1,632,610
|
|
|
$
|
1,311,264
|
|
|
$
|
799,504
|
|
|
$
|
6,291,788
|
|
Hardware
|
|
280,723
|
|
|
156,107
|
|
|
222,416
|
|
|
335,955
|
|
|
286,232
|
|
|
1,281,433
|
|
||||||
Private equity/venture capital
|
|
805,821
|
|
|
979,953
|
|
|
1,720,124
|
|
|
1,395,524
|
|
|
7,331,583
|
|
|
12,233,005
|
|
||||||
Life science/healthcare
|
|
304,936
|
|
|
468,496
|
|
|
579,664
|
|
|
437,771
|
|
|
367,469
|
|
|
2,158,336
|
|
||||||
Premium wine
|
|
66,605
|
|
|
31,382
|
|
|
41,388
|
|
|
59,434
|
|
|
—
|
|
|
198,809
|
|
||||||
Other
|
|
218,862
|
|
|
16,769
|
|
|
58,901
|
|
|
—
|
|
|
34,728
|
|
|
329,260
|
|
||||||
Commercial loans
|
|
3,216,422
|
|
|
2,661,642
|
|
|
4,255,103
|
|
|
3,539,948
|
|
|
8,819,516
|
|
|
22,492,631
|
|
||||||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premium wine
|
|
166,024
|
|
|
183,678
|
|
|
225,818
|
|
|
110,721
|
|
|
—
|
|
|
686,241
|
|
||||||
Consumer
|
|
2,120,801
|
|
|
257,917
|
|
|
99,153
|
|
|
—
|
|
|
—
|
|
|
2,477,871
|
|
||||||
Other
|
|
7,635
|
|
|
—
|
|
|
33,842
|
|
|
—
|
|
|
—
|
|
|
41,477
|
|
||||||
Real estate secured loans
|
|
2,294,460
|
|
|
441,595
|
|
|
358,813
|
|
|
110,721
|
|
|
—
|
|
|
3,205,589
|
|
||||||
Construction loans
|
|
12,257
|
|
|
39,472
|
|
|
13,557
|
|
|
—
|
|
|
—
|
|
|
65,286
|
|
||||||
Consumer loans
|
|
144,545
|
|
|
45,198
|
|
|
50,204
|
|
|
120,974
|
|
|
36,355
|
|
|
397,276
|
|
||||||
Total gross loans
|
|
$
|
5,667,684
|
|
|
$
|
3,187,907
|
|
|
$
|
4,677,677
|
|
|
$
|
3,771,643
|
|
|
$
|
8,855,871
|
|
|
$
|
26,160,782
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(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/internet
|
|
$
|
1,558,717
|
|
|
$
|
974,959
|
|
|
$
|
1,545,194
|
|
|
$
|
1,190,247
|
|
|
$
|
963,608
|
|
|
$
|
6,232,725
|
|
Hardware
|
|
258,586
|
|
|
138,254
|
|
|
253,978
|
|
|
217,425
|
|
|
332,657
|
|
|
1,200,900
|
|
||||||
Private equity/venture capital
|
|
697,427
|
|
|
807,596
|
|
|
1,617,121
|
|
|
1,142,818
|
|
|
5,696,159
|
|
|
9,961,121
|
|
||||||
Life science/healthcare
|
|
321,738
|
|
|
450,445
|
|
|
576,926
|
|
|
313,656
|
|
|
205,195
|
|
|
1,867,960
|
|
||||||
Premium wine
|
|
60,663
|
|
|
37,845
|
|
|
64,062
|
|
|
32,423
|
|
|
9,264
|
|
|
204,257
|
|
||||||
Other
|
|
149,825
|
|
|
23,096
|
|
|
103,989
|
|
|
25,599
|
|
|
76,922
|
|
|
379,431
|
|
||||||
Commercial loans
|
|
3,046,956
|
|
|
2,432,195
|
|
|
4,161,270
|
|
|
2,922,168
|
|
|
7,283,805
|
|
|
19,846,394
|
|
||||||
Real estate secured loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Premium wine
|
|
150,563
|
|
|
187,272
|
|
|
220,062
|
|
|
89,561
|
|
|
22,654
|
|
|
670,112
|
|
||||||
Consumer loans
|
|
1,989,973
|
|
|
224,825
|
|
|
83,059
|
|
|
—
|
|
|
—
|
|
|
2,297,857
|
|
||||||
Other
|
|
7,763
|
|
|
—
|
|
|
14,134
|
|
|
20,333
|
|
|
—
|
|
|
42,230
|
|
||||||
Real estate secured loans
|
|
2,148,299
|
|
|
412,097
|
|
|
317,255
|
|
|
109,894
|
|
|
22,654
|
|
|
3,010,199
|
|
||||||
Construction loans
|
|
12,178
|
|
|
34,029
|
|
|
—
|
|
|
22,901
|
|
|
—
|
|
|
69,108
|
|
||||||
Consumer loans
|
|
146,395
|
|
|
49,921
|
|
|
17,120
|
|
|
78,742
|
|
|
36,274
|
|
|
328,452
|
|
||||||
Total gross loans
|
|
$
|
5,353,828
|
|
|
$
|
2,928,242
|
|
|
$
|
4,495,645
|
|
|
$
|
3,133,705
|
|
|
$
|
7,342,733
|
|
|
$
|
23,254,153
|
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Gross nonaccrual, past due, and restructured loans:
|
|
|
|
|
||||
Nonaccrual loans
|
|
$
|
124,842
|
|
|
$
|
119,259
|
|
Loans past due 90 days or more still accruing interest
|
|
462
|
|
|
191
|
|
||
Total nonperforming loans
|
|
125,304
|
|
|
119,450
|
|
||
OREO and other foreclosed assets
|
|
—
|
|
|
—
|
|
||
Total nonperforming assets
|
|
$
|
125,304
|
|
|
$
|
119,450
|
|
Performing TDRs
|
|
$
|
42,408
|
|
|
$
|
71,468
|
|
Nonperforming loans as a percentage of total gross loans
|
|
0.48
|
%
|
|
0.51
|
%
|
||
Nonperforming assets as a percentage of total assets
|
|
0.22
|
|
|
0.23
|
|
||
Allowance for loan losses
|
|
$
|
286,709
|
|
|
$
|
255,024
|
|
As a percentage of total gross loans
|
|
1.10
|
%
|
|
1.10
|
%
|
||
As a percentage of total gross nonperforming loans
|
|
228.81
|
|
|
213.50
|
|
||
Allowance for loan losses for nonaccrual loans
|
|
$
|
53,677
|
|
|
$
|
41,793
|
|
As a percentage of total gross loans
|
|
0.21
|
%
|
|
0.18
|
%
|
||
As a percentage of total gross nonperforming loans
|
|
42.84
|
|
|
34.99
|
|
||
Allowance for loan losses for total gross performing loans
|
|
$
|
233,032
|
|
|
$
|
213,231
|
|
As a percentage of total gross loans
|
|
0.89
|
%
|
|
0.92
|
%
|
||
As a percentage of total gross performing loans
|
|
0.90
|
|
|
0.92
|
|
||
Total gross loans
|
|
$
|
26,160,782
|
|
|
$
|
23,254,153
|
|
Total gross performing loans
|
|
26,035,478
|
|
|
23,134,703
|
|
||
Allowance for unfunded credit commitments (1)
|
|
54,104
|
|
|
51,770
|
|
||
As a percentage of total unfunded credit commitments
|
|
0.29
|
%
|
|
0.30
|
%
|
||
Total unfunded credit commitments (2)
|
|
$
|
18,728,360
|
|
|
$
|
17,462,537
|
|
|
(1)
|
The “allowance for unfunded credit commitments” is included as a component of other liabilities and any provision is included in the “provision for credit losses” in the statement of income. See “Provision for credit losses” for a discussion of the changes to the allowance.
|
(2)
|
Includes unfunded loan commitments and letters of credit.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
|
$
|
116,667
|
|
|
$
|
138,764
|
|
|
$
|
119,259
|
|
|
$
|
118,979
|
|
Additions
|
|
28,960
|
|
|
22,015
|
|
|
50,763
|
|
|
56,339
|
|
||||
Paydowns
|
|
(16,411
|
)
|
|
(17,789
|
)
|
|
(33,659
|
)
|
|
(22,116
|
)
|
||||
Charge-offs
|
|
(4,467
|
)
|
|
(22,817
|
)
|
|
(11,579
|
)
|
|
(33,028
|
)
|
||||
Other reductions
|
|
—
|
|
|
(1
|
)
|
|
(35
|
)
|
|
(2
|
)
|
||||
Balance, end of period
|
|
$
|
124,749
|
|
|
$
|
120,172
|
|
|
$
|
124,749
|
|
|
$
|
120,172
|
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
|
% Change
|
|||||
Foreign exchange spot contract assets, gross
|
|
$
|
206,289
|
|
|
$
|
208,738
|
|
|
(1.2
|
)%
|
Derivative assets, gross (1)
|
|
249,505
|
|
|
232,152
|
|
|
7.5
|
|
||
Accrued interest receivable
|
|
169,649
|
|
|
141,773
|
|
|
19.7
|
|
||
FHLB and Federal Reserve Bank stock
|
|
58,864
|
|
|
60,020
|
|
|
(1.9
|
)
|
||
Net deferred tax assets
|
|
75,286
|
|
|
63,845
|
|
|
17.9
|
|
||
Accounts receivable
|
|
57,740
|
|
|
55,946
|
|
|
3.2
|
|
||
Other assets
|
|
167,091
|
|
|
113,772
|
|
|
46.9
|
|
||
Total accrued interest receivable and other assets
|
|
$
|
984,424
|
|
|
$
|
876,246
|
|
|
12.3
|
|
|
(1)
|
See “Derivatives” section below.
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
|
% Change
|
|||||
Assets:
|
|
|
|
|
|
|
|||||
Equity warrant assets
|
|
$
|
143,725
|
|
|
$
|
123,763
|
|
|
16.1
|
%
|
Foreign exchange forward and option contracts
|
|
99,358
|
|
|
96,636
|
|
|
2.8
|
|
||
Client interest rate derivatives
|
|
6,422
|
|
|
11,753
|
|
|
(45.4
|
)
|
||
Total derivative assets
|
|
$
|
249,505
|
|
|
$
|
232,152
|
|
|
7.5
|
|
Liabilities:
|
|
|
|
|
|
|
|||||
Foreign exchange forward and option contracts
|
|
$
|
84,672
|
|
|
$
|
96,641
|
|
|
(12.4
|
)
|
Client interest rate derivatives
|
|
12,532
|
|
|
11,940
|
|
|
5.0
|
|
||
Total derivative liabilities
|
|
$
|
97,204
|
|
|
$
|
108,581
|
|
|
(10.5
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Balance, beginning of period
|
|
$
|
135,669
|
|
|
$
|
124,233
|
|
|
$
|
123,763
|
|
|
$
|
131,123
|
|
New equity warrant assets
|
|
4,299
|
|
|
3,419
|
|
|
9,398
|
|
|
7,492
|
|
||||
Non-cash changes in fair value, net
|
|
11,012
|
|
|
8,270
|
|
|
19,469
|
|
|
7,294
|
|
||||
Exercised equity warrant assets
|
|
(6,429
|
)
|
|
(3,601
|
)
|
|
(7,179
|
)
|
|
(13,030
|
)
|
||||
Terminated equity warrant assets
|
|
(826
|
)
|
|
(571
|
)
|
|
(1,726
|
)
|
|
(1,129
|
)
|
||||
Balance, end of period
|
|
$
|
143,725
|
|
|
$
|
131,750
|
|
|
$
|
143,725
|
|
|
$
|
131,750
|
|
(Dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
|
% Change
|
|||||
Foreign exchange spot contract liabilities, gross
|
|
$
|
269,228
|
|
|
$
|
202,807
|
|
|
32.8
|
|
Accrued compensation
|
|
111,717
|
|
|
167,531
|
|
|
(33.3
|
)
|
||
Allowance for unfunded credit commitments
|
|
54,103
|
|
|
51,770
|
|
|
4.5
|
|
||
Derivative liabilities, gross (1)
|
|
97,204
|
|
|
108,581
|
|
|
(10.5
|
)
|
||
Other
|
|
530,139
|
|
|
381,066
|
|
|
39.1
|
|
||
Total other liabilities
|
|
$
|
1,062,391
|
|
|
$
|
911,755
|
|
|
16.5
|
|
|
(1)
|
See “Derivatives” section above.
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
(Dollars in thousands)
|
|
Total Balance
|
|
Level 3
|
|
Total Balance
|
|
Level 3
|
||||||||
Assets carried at fair value
|
|
$
|
10,191,403
|
|
|
$
|
138,754
|
|
|
$
|
11,481,237
|
|
|
$
|
122,250
|
|
As a percentage of total assets
|
|
18.2
|
%
|
|
0.2
|
%
|
|
22.4
|
%
|
|
0.2
|
%
|
||||
Liabilities carried at fair value
|
|
$
|
97,204
|
|
|
$
|
—
|
|
|
$
|
108,581
|
|
|
$
|
—
|
|
As a percentage of total liabilities
|
|
0.2
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
||||
As a percentage of assets carried at fair value
|
|
|
|
1.4
|
%
|
|
|
|
1.1
|
%
|
|
|
|
|
|
|
Minimum Ratios under Applicable Regulatory Capital Adequacy Requirements
|
||||||
|
|
June 30,
2018 |
|
December 31, 2017
|
|
“Well
Capitalized”
|
|
“Adequately
Capitalized”
|
||||
SVB Financial:
|
|
|
|
|
|
|
|
|
||||
CET 1 risk-based capital ratio
|
|
12.92
|
%
|
|
12.78
|
%
|
|
6.5
|
%
|
|
4.5
|
%
|
Tier 1 risk-based capital ratio
|
|
13.10
|
|
|
12.97
|
|
|
8.0
|
|
|
6.0
|
|
Total risk-based capital ratio
|
|
14.03
|
|
|
13.96
|
|
|
10.0
|
|
|
8.0
|
|
Tier 1 leverage ratio
|
|
8.81
|
|
|
8.34
|
|
|
N/A
|
|
|
4.0
|
|
Tangible common equity to tangible assets ratio (1)
|
|
8.34
|
|
|
8.16
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (1)
|
|
12.68
|
|
|
12.77
|
|
|
N/A
|
|
|
N/A
|
|
Bank:
|
|
|
|
|
|
|
|
|
||||
CET 1 risk-based capital ratio
|
|
11.76
|
%
|
|
12.06
|
%
|
|
6.5
|
%
|
|
4.5
|
%
|
Tier 1 risk-based capital ratio
|
|
11.76
|
|
|
12.06
|
|
|
8.0
|
|
|
6.0
|
|
Total risk-based capital ratio
|
|
12.72
|
|
|
13.04
|
|
|
10.0
|
|
|
8.0
|
|
Tier 1 leverage ratio
|
|
7.72
|
|
|
7.56
|
|
|
5.0
|
|
|
4.0
|
|
Tangible common equity to tangible assets ratio (1)
|
|
7.39
|
|
|
7.47
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (1)
|
|
11.52
|
|
|
11.98
|
|
|
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.
|
|
|
SVB Financial
|
|
Bank
|
||||||||||||
Non-GAAP tangible common equity and tangible assets
(Dollars in thousands, except ratios)
|
|
June 30,
2018 |
|
December 31,
2017 |
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
GAAP SVBFG stockholders’ equity
|
|
$
|
4,657,653
|
|
|
$
|
4,179,795
|
|
|
$
|
4,068,918
|
|
|
$
|
3,762,542
|
|
Tangible common equity
|
|
$
|
4,657,653
|
|
|
$
|
4,179,795
|
|
|
$
|
4,068,918
|
|
|
$
|
3,762,542
|
|
GAAP total assets
|
|
$
|
55,867,745
|
|
|
$
|
51,214,467
|
|
|
$
|
55,035,371
|
|
|
$
|
50,383,774
|
|
Tangible assets
|
|
$
|
55,867,745
|
|
|
$
|
51,214,467
|
|
|
$
|
55,035,371
|
|
|
$
|
50,383,774
|
|
Risk-weighted assets
|
|
$
|
36,727,118
|
|
|
$
|
32,736,959
|
|
|
$
|
35,326,564
|
|
|
$
|
31,403,489
|
|
Tangible common equity to tangible assets
|
|
8.34
|
%
|
|
8.16
|
%
|
|
7.39
|
%
|
|
7.47
|
%
|
||||
Tangible common equity to risk-weighted assets
|
|
12.68
|
|
|
12.77
|
|
|
11.52
|
|
|
11.98
|
|
|
|
Six months ended June 30,
|
||||||
(Dollars in thousands)
|
|
2018
|
|
2017
|
||||
Average cash and cash equivalents
|
|
$
|
2,997,338
|
|
|
$
|
3,562,811
|
|
Percentage of total average assets
|
|
5.6
|
%
|
|
7.7
|
%
|
||
Net cash provided by operating activities
|
|
$
|
347,380
|
|
|
$
|
396,721
|
|
Net cash used for investing activities
|
|
(4,570,107
|
)
|
|
(2,019,530
|
)
|
||
Net cash provided by financing activities
|
|
4,011,753
|
|
|
2,931,303
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(210,974
|
)
|
|
$
|
1,308,494
|
|
Change in interest rates (bps) (Dollars in thousands)
|
|
Estimated
|
|
Estimated Increase/(Decrease) in EVE
|
|
Estimated
|
|
Estimated Increase/(Decrease) in NII
|
||||||||||||||
|
EVE
|
|
Amount
|
|
Percent
|
|
NII
|
|
Amount
|
|
Percent
|
|||||||||||
June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
200
|
|
$
|
8,785,908
|
|
|
$
|
373,102
|
|
|
4.4
|
%
|
|
$
|
2,203,720
|
|
|
$
|
407,219
|
|
|
22.7
|
%
|
100
|
|
8,582,937
|
|
|
170,131
|
|
|
2.0
|
|
|
1,991,979
|
|
|
195,478
|
|
|
10.9
|
|
||||
—
|
|
8,412,806
|
|
|
—
|
|
|
—
|
|
|
1,796,501
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
8,079,862
|
|
|
(332,944
|
)
|
|
(4.0
|
)
|
|
1,549,652
|
|
|
(246,849
|
)
|
|
(13.7
|
)
|
||||
-200
|
|
7,258,778
|
|
|
(1,154,028
|
)
|
|
(13.7
|
)
|
|
1,311,789
|
|
|
(484,712
|
)
|
|
(27.0
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
200
|
|
$
|
8,091,107
|
|
|
$
|
805,624
|
|
|
11.1
|
%
|
|
$
|
1,885,885
|
|
|
$
|
400,127
|
|
|
26.9
|
%
|
100
|
|
7,716,066
|
|
|
430,583
|
|
|
5.9
|
|
|
1,683,742
|
|
|
197,984
|
|
|
13.3
|
|
||||
—
|
|
7,285,483
|
|
|
—
|
|
|
—
|
|
|
1,485,758
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
6,637,588
|
|
|
(647,895
|
)
|
|
(8.9
|
)
|
|
1,252,063
|
|
|
(233,695
|
)
|
|
(15.7
|
)
|
||||
-200
|
|
5,718,401
|
|
|
(1,567,082
|
)
|
|
(21.5
|
)
|
|
1,108,712
|
|
|
(377,046
|
)
|
|
(25.4
|
)
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
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
|
|
|
SVB Financial Group
|
|
|
|
Date: August 7, 2018
|
|
/s/ DANIEL BECK
|
|
|
Daniel Beck
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
SVB Financial Group
|
|
|
|
Date: August 7, 2018
|
|
/s/ KAMRAN HUSAIN
|
|
|
Kamran Husain
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
•
|
Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months;
|
•
|
Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees;
|
•
|
Participant is determined to be totally disabled by the Social Security Administration; or
|
•
|
Participant is determined to be disabled in accordance with the Company’s long-term disability insurance program, as may be in effect from time to time.
|
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 periods 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: August 7, 2018
|
|
/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 periods 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: August 7, 2018
|
|
/s/ DANIEL BECK
|
|
|
Daniel Beck
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: August 7, 2018
|
|
/s/ GREG BECKER
|
|
|
Greg Becker
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: August 7, 2018
|
|
/s/ DANIEL BECK
|
|
|
Daniel Beck
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|