Delaware
|
|
91-1962278
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Exchange on Which Registered
|
Common Stock, par value $0.001 per share
|
|
SIVB
|
|
The Nasdaq Stock Market LLC
|
Depositary shares, each representing a 1/40th ownership interest in a share of 5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A
|
|
SIVBP
|
|
The Nasdaq Stock Market LLC
|
|
|
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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||
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Item 5.
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||
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Item 6.
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||
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(Dollars in thousands, except par value and share data)
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
14,202,106
|
|
|
$
|
6,781,783
|
|
Available-for-sale securities, at fair value (cost of $17,800,589 and $13,894,348, respectively)
|
|
18,451,913
|
|
|
14,014,919
|
|
||
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $222 and $0 (fair value of $13,541,461 and $14,115,272, respectively) (1)
|
|
12,858,823
|
|
|
13,842,946
|
|
||
Non-marketable and other equity securities
|
|
1,270,578
|
|
|
1,213,829
|
|
||
Total investment securities
|
|
32,581,314
|
|
|
29,071,694
|
|
||
Loans, amortized cost
|
|
36,727,222
|
|
|
33,164,636
|
|
||
Allowance for credit losses: loans
|
|
(589,828
|
)
|
|
(304,924
|
)
|
||
Net loans
|
|
36,137,394
|
|
|
32,859,712
|
|
||
Premises and equipment, net of accumulated depreciation and amortization
|
|
169,313
|
|
|
161,876
|
|
||
Goodwill
|
|
137,823
|
|
|
137,823
|
|
||
Other intangible assets, net
|
|
46,726
|
|
|
49,417
|
|
||
Lease right-of-use assets
|
|
215,319
|
|
|
197,365
|
|
||
Accrued interest receivable and other assets
|
|
2,240,990
|
|
|
1,745,233
|
|
||
Total assets
|
|
$
|
85,730,985
|
|
|
$
|
71,004,903
|
|
Liabilities and total equity:
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Noninterest-bearing demand deposits
|
|
$
|
49,160,880
|
|
|
$
|
40,841,570
|
|
Interest-bearing deposits
|
|
25,344,884
|
|
|
20,916,237
|
|
||
Total deposits
|
|
74,505,764
|
|
|
61,757,807
|
|
||
Short-term borrowings
|
|
50,924
|
|
|
17,430
|
|
||
Lease liabilities
|
|
239,357
|
|
|
218,847
|
|
||
Other liabilities
|
|
2,623,407
|
|
|
2,041,752
|
|
||
Long-term debt
|
|
843,220
|
|
|
347,987
|
|
||
Total liabilities
|
|
78,262,672
|
|
|
64,383,823
|
|
||
Commitments and contingencies (Note 15 and Note 18)
|
|
|
|
|
|
|||
SVBFG stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 350,000 shares issued and outstanding
|
|
340,138
|
|
|
340,138
|
|
||
Common stock, $0.001 par value, 150,000,000 shares authorized; 51,740,714 shares and 51,655,607 shares issued and outstanding, respectively
|
|
52
|
|
|
52
|
|
||
Additional paid-in capital
|
|
1,522,728
|
|
|
1,470,071
|
|
||
Retained earnings
|
|
4,841,720
|
|
|
4,575,601
|
|
||
Accumulated other comprehensive income
|
|
614,735
|
|
|
84,445
|
|
||
Total SVBFG stockholders’ equity
|
|
7,319,373
|
|
|
6,470,307
|
|
||
Noncontrolling interests
|
|
148,940
|
|
|
150,773
|
|
||
Total equity
|
|
7,468,313
|
|
|
6,621,080
|
|
||
Total liabilities and total equity
|
|
$
|
85,730,985
|
|
|
$
|
71,004,903
|
|
|
(1)
|
Prior to our adoption of Accounting Standard Update (ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments) on January 1, 2020, the allowance for credit losses (ACL) related to held-to-maturity (HTM) securities was not applicable and is therefore presented as $0 at December 31, 2019. 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 in thousands, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
$
|
365,110
|
|
|
$
|
414,077
|
|
|
$
|
747,679
|
|
|
$
|
808,221
|
|
Investment securities:
|
|
|
|
|
|
|
|
|
||||||||
Taxable
|
|
141,547
|
|
|
134,395
|
|
|
295,932
|
|
|
261,112
|
|
||||
Non-taxable
|
|
14,464
|
|
|
10,931
|
|
|
27,288
|
|
|
21,868
|
|
||||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities
|
|
2,402
|
|
|
26,364
|
|
|
20,026
|
|
|
45,580
|
|
||||
Total interest income
|
|
523,523
|
|
|
585,767
|
|
|
1,090,925
|
|
|
1,136,781
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
5,694
|
|
|
47,150
|
|
|
43,092
|
|
|
75,057
|
|
||||
Borrowings
|
|
4,902
|
|
|
9,214
|
|
|
10,769
|
|
|
19,435
|
|
||||
Total interest expense
|
|
10,596
|
|
|
56,364
|
|
|
53,861
|
|
|
94,492
|
|
||||
Net interest income
|
|
512,927
|
|
|
529,403
|
|
|
1,037,064
|
|
|
1,042,289
|
|
||||
Provision for credit losses
|
|
66,481
|
|
|
23,946
|
|
|
309,961
|
|
|
52,497
|
|
||||
Net interest income after provision for credit losses
|
|
446,446
|
|
|
505,457
|
|
|
727,103
|
|
|
989,792
|
|
||||
Noninterest income:
|
|
|
|
|
|
|
|
|
||||||||
Gains on investment securities, net
|
|
34,868
|
|
|
47,698
|
|
|
80,923
|
|
|
76,726
|
|
||||
Gains on equity warrant assets, net
|
|
26,506
|
|
|
48,347
|
|
|
39,901
|
|
|
69,652
|
|
||||
Client investment fees
|
|
31,885
|
|
|
45,744
|
|
|
75,278
|
|
|
90,226
|
|
||||
Foreign exchange fees
|
|
36,256
|
|
|
38,506
|
|
|
83,761
|
|
|
76,554
|
|
||||
Credit card fees
|
|
21,288
|
|
|
28,790
|
|
|
49,592
|
|
|
56,273
|
|
||||
Deposit service charges
|
|
20,511
|
|
|
22,075
|
|
|
45,100
|
|
|
43,014
|
|
||||
Lending related fees
|
|
11,164
|
|
|
11,213
|
|
|
24,289
|
|
|
25,150
|
|
||||
Letters of credit and standby letters of credit fees
|
|
11,421
|
|
|
11,009
|
|
|
22,963
|
|
|
20,363
|
|
||||
Investment banking revenue
|
|
141,503
|
|
|
48,694
|
|
|
188,370
|
|
|
98,489
|
|
||||
Commissions
|
|
16,918
|
|
|
14,429
|
|
|
32,940
|
|
|
28,537
|
|
||||
Other
|
|
16,528
|
|
|
17,245
|
|
|
27,665
|
|
|
29,142
|
|
||||
Total noninterest income
|
|
368,848
|
|
|
333,750
|
|
|
670,782
|
|
|
614,126
|
|
||||
Noninterest expense:
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
319,797
|
|
|
243,172
|
|
|
575,383
|
|
|
481,233
|
|
||||
Professional services
|
|
63,828
|
|
|
40,830
|
|
|
102,533
|
|
|
77,816
|
|
||||
Premises and equipment
|
|
27,708
|
|
|
23,911
|
|
|
54,648
|
|
|
45,611
|
|
||||
Net occupancy
|
|
18,845
|
|
|
16,687
|
|
|
37,191
|
|
|
32,735
|
|
||||
Business development and travel
|
|
2,992
|
|
|
17,022
|
|
|
17,063
|
|
|
32,376
|
|
||||
FDIC and state assessments
|
|
6,819
|
|
|
4,483
|
|
|
12,053
|
|
|
8,462
|
|
||||
Other
|
|
39,647
|
|
|
37,417
|
|
|
80,350
|
|
|
70,953
|
|
||||
Total noninterest expense
|
|
479,636
|
|
|
383,522
|
|
|
879,221
|
|
|
749,186
|
|
||||
Income before income tax expense
|
|
335,658
|
|
|
455,685
|
|
|
518,664
|
|
|
854,732
|
|
||||
Income tax expense
|
|
87,869
|
|
|
119,114
|
|
|
137,226
|
|
|
226,549
|
|
||||
Net income before noncontrolling interests
|
|
247,789
|
|
|
336,571
|
|
|
381,438
|
|
|
628,183
|
|
||||
Net income attributable to noncontrolling interests
|
|
(14,260
|
)
|
|
(18,584
|
)
|
|
(12,287
|
)
|
|
(21,464
|
)
|
||||
Preferred stock dividends
|
|
(4,594
|
)
|
|
—
|
|
|
(7,963
|
)
|
|
—
|
|
||||
Net income available to common stockholders
|
|
$
|
228,935
|
|
|
$
|
317,987
|
|
|
$
|
361,188
|
|
|
$
|
606,719
|
|
Earnings per common share—basic
|
|
$
|
4.44
|
|
|
$
|
6.12
|
|
|
$
|
7.00
|
|
|
$
|
11.61
|
|
Earnings per common share—diluted
|
|
4.42
|
|
|
6.08
|
|
|
6.97
|
|
|
11.51
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income before noncontrolling interests
|
|
$
|
247,789
|
|
|
$
|
336,571
|
|
|
$
|
381,438
|
|
|
$
|
628,183
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency cumulative translation gains and losses:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
|
164
|
|
|
(2,900
|
)
|
|
(8,956
|
)
|
|
(94
|
)
|
||||
Related tax (expense) benefit
|
|
(204
|
)
|
|
808
|
|
|
2,352
|
|
|
26
|
|
||||
Change in unrealized gains and losses on available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains
|
|
46,738
|
|
|
119,182
|
|
|
590,619
|
|
|
166,018
|
|
||||
Related tax expense
|
|
(12,954
|
)
|
|
(33,194
|
)
|
|
(163,700
|
)
|
|
(46,239
|
)
|
||||
Reclassification adjustment for losses (gains) included in net income
|
|
—
|
|
|
275
|
|
|
(61,165
|
)
|
|
3,905
|
|
||||
Related tax (benefit) expense
|
|
—
|
|
|
(77
|
)
|
|
16,953
|
|
|
(1,087
|
)
|
||||
Amortization of unrealized holding gains on securities transferred from available-for-sale to held-to-maturity
|
|
(138
|
)
|
|
(719
|
)
|
|
(690
|
)
|
|
(1,393
|
)
|
||||
Related tax benefit
|
|
38
|
|
|
200
|
|
|
191
|
|
|
388
|
|
||||
Change in unrealized gains and losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains
|
|
—
|
|
|
17,554
|
|
|
231,920
|
|
|
18,656
|
|
||||
Related tax expense
|
|
—
|
|
|
(4,890
|
)
|
|
(64,281
|
)
|
|
(5,197
|
)
|
||||
Reclassification adjustment for (gains) losses included in net income
|
|
(15,831
|
)
|
|
508
|
|
|
(17,920
|
)
|
|
511
|
|
||||
Related tax expense (benefit)
|
|
4,388
|
|
|
(141
|
)
|
|
4,967
|
|
|
(142
|
)
|
||||
Other comprehensive income, net of tax
|
|
22,201
|
|
|
96,606
|
|
|
530,290
|
|
|
135,352
|
|
||||
Comprehensive income
|
|
269,990
|
|
|
433,177
|
|
|
911,728
|
|
|
763,535
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
|
(14,260
|
)
|
|
(18,584
|
)
|
|
(12,287
|
)
|
|
(21,464
|
)
|
||||
Comprehensive income attributable to SVBFG
|
|
$
|
255,730
|
|
|
$
|
414,593
|
|
|
$
|
899,441
|
|
|
$
|
742,071
|
|
|
|
Preferred Stock
|
|
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, 2018
|
|
$
|
—
|
|
|
52,586,498
|
|
|
$
|
53
|
|
|
$
|
1,378,438
|
|
|
$
|
3,791,838
|
|
|
$
|
(54,120
|
)
|
|
$
|
5,116,209
|
|
|
$
|
148,634
|
|
|
$
|
5,264,843
|
|
Cumulative adjustment for the adoption of premium amortization on purchased callable debt securities, net of tax (ASU 2017-08) (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(583
|
)
|
|
—
|
|
|
(583
|
)
|
|
—
|
|
|
(583
|
)
|
||||||||
Acquisition of SVB Leerink
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,256
|
|
|
5,256
|
|
||||||||
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
—
|
|
|
467,427
|
|
|
—
|
|
|
7,853
|
|
|
—
|
|
|
—
|
|
|
7,853
|
|
|
—
|
|
|
7,853
|
|
||||||||
Common stock issued under ESOP
|
|
—
|
|
|
14,442
|
|
|
—
|
|
|
3,506
|
|
|
—
|
|
|
—
|
|
|
3,506
|
|
|
—
|
|
|
3,506
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
606,719
|
|
|
—
|
|
|
606,719
|
|
|
21,464
|
|
|
628,183
|
|
||||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,222
|
)
|
|
(23,222
|
)
|
||||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,597
|
|
|
122,597
|
|
|
—
|
|
|
122,597
|
|
||||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,005
|
)
|
|
(1,005
|
)
|
|
—
|
|
|
(1,005
|
)
|
||||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
(68
|
)
|
|
—
|
|
|
(68
|
)
|
||||||||
Net change in unrealized gains and losses on cash flow hedges, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,828
|
|
|
13,828
|
|
|
—
|
|
|
13,828
|
|
||||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,768
|
|
|
—
|
|
|
—
|
|
|
31,768
|
|
|
—
|
|
|
31,768
|
|
||||||||
Common stock repurchases
|
|
—
|
|
|
(1,506,648
|
)
|
|
(1
|
)
|
|
—
|
|
|
(346,780
|
)
|
|
—
|
|
|
(346,781
|
)
|
|
—
|
|
|
(346,781
|
)
|
||||||||
Balance at June 30, 2019
|
|
$
|
—
|
|
|
51,561,719
|
|
|
$
|
52
|
|
|
$
|
1,421,565
|
|
|
$
|
4,051,194
|
|
|
$
|
81,232
|
|
|
$
|
5,554,043
|
|
|
$
|
152,132
|
|
|
$
|
5,706,175
|
|
Balance at December 31, 2019
|
|
$
|
340,138
|
|
|
51,655,607
|
|
|
$
|
52
|
|
|
$
|
1,470,071
|
|
|
$
|
4,575,601
|
|
|
$
|
84,445
|
|
|
$
|
6,470,307
|
|
|
$
|
150,773
|
|
|
$
|
6,621,080
|
|
Cumulative adjustment for the day one adoption of ASC 326, net of tax (1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,049
|
)
|
|
—
|
|
|
(35,049
|
)
|
|
—
|
|
|
(35,049
|
)
|
||||||||
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
—
|
|
|
317,236
|
|
|
—
|
|
|
10,894
|
|
|
—
|
|
|
—
|
|
|
10,894
|
|
|
—
|
|
|
10,894
|
|
||||||||
Common stock issued under ESOP
|
|
—
|
|
|
12,094
|
|
|
—
|
|
|
2,447
|
|
|
—
|
|
|
—
|
|
|
2,447
|
|
|
—
|
|
|
2,447
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
369,151
|
|
|
—
|
|
|
369,151
|
|
|
12,287
|
|
|
381,438
|
|
||||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,120
|
)
|
|
(14,120
|
)
|
||||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
382,707
|
|
|
382,707
|
|
|
—
|
|
|
382,707
|
|
||||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(499
|
)
|
|
(499
|
)
|
|
—
|
|
|
(499
|
)
|
||||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,604
|
)
|
|
(6,604
|
)
|
|
—
|
|
|
(6,604
|
)
|
||||||||
Net change in unrealized gains and losses on cash flow hedges, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154,686
|
|
|
154,686
|
|
|
—
|
|
|
154,686
|
|
||||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,325
|
|
|
—
|
|
|
—
|
|
|
39,325
|
|
|
—
|
|
|
39,325
|
|
||||||||
Common stock repurchases
|
|
—
|
|
|
(244,223
|
)
|
|
—
|
|
|
—
|
|
|
(60,020
|
)
|
|
—
|
|
|
(60,020
|
)
|
|
—
|
|
|
(60,020
|
)
|
||||||||
Dividends on preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,963
|
)
|
|
—
|
|
|
(7,963
|
)
|
|
—
|
|
|
(7,963
|
)
|
||||||||
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
||||||||
Balance at June 30, 2020
|
|
$
|
340,138
|
|
|
51,740,714
|
|
|
$
|
52
|
|
|
$
|
1,522,728
|
|
|
$
|
4,841,720
|
|
|
$
|
614,735
|
|
|
$
|
7,319,373
|
|
|
$
|
148,940
|
|
|
$
|
7,468,313
|
|
|
(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)
|
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income before noncontrolling interests
|
|
$
|
381,438
|
|
|
$
|
628,183
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Provision for credit losses
|
|
309,961
|
|
|
52,497
|
|
||
Changes in fair values of equity warrant assets, net of proceeds from exercises
|
|
20,632
|
|
|
(825
|
)
|
||
Changes in fair values of derivatives, net
|
|
(58,776
|
)
|
|
(9,958
|
)
|
||
Gains on investment securities, net
|
|
(80,923
|
)
|
|
(76,726
|
)
|
||
Distributions of earnings from non-marketable and other equity securities
|
|
49,125
|
|
|
40,584
|
|
||
Depreciation and amortization
|
|
49,650
|
|
|
40,824
|
|
||
Amortization of premiums and discounts on investment securities, net
|
|
29,633
|
|
|
4,993
|
|
||
Amortization of share-based compensation
|
|
39,325
|
|
|
31,768
|
|
||
Amortization of deferred loan fees
|
|
(78,042
|
)
|
|
(76,712
|
)
|
||
Deferred income tax benefit
|
|
(72,755
|
)
|
|
(3,854
|
)
|
||
Excess tax benefit from exercise of stock options and vesting of restricted shares
|
|
(2,181
|
)
|
|
(7,369
|
)
|
||
Losses from the write-off of premises and equipment
|
|
—
|
|
|
185
|
|
||
Changes in other assets and liabilities:
|
|
|
|
|
||||
Accrued interest receivable and payable, net
|
|
16,606
|
|
|
(3,850
|
)
|
||
Accounts receivable and payable, net
|
|
2,770
|
|
|
22,308
|
|
||
Income tax receivable and payable, net
|
|
131,253
|
|
|
(87,097
|
)
|
||
Accrued compensation
|
|
(115,203
|
)
|
|
(175,469
|
)
|
||
Foreign exchange spot contracts, net
|
|
(5,900
|
)
|
|
108,307
|
|
||
Proceeds from termination of interest rate swaps
|
|
227,500
|
|
|
—
|
|
||
Other, net
|
|
(98,635
|
)
|
|
(37,218
|
)
|
||
Net cash provided by operating activities
|
|
745,478
|
|
|
450,571
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of available-for-sale securities
|
|
(8,071,014
|
)
|
|
(2,553,326
|
)
|
||
Proceeds from sales of available-for-sale securities
|
|
2,654,212
|
|
|
2,189,087
|
|
||
Proceeds from maturities and paydowns of available-for-sale securities
|
|
1,550,220
|
|
|
382,054
|
|
||
Purchases of held-to-maturity securities
|
|
(568,002
|
)
|
|
(277,889
|
)
|
||
Proceeds from maturities and paydowns of held-to-maturity securities
|
|
1,543,942
|
|
|
888,943
|
|
||
Purchases of non-marketable and other equity securities
|
|
(118,737
|
)
|
|
(39,287
|
)
|
||
Proceeds from sales and distributions of capital of non-marketable and other equity securities
|
|
57,745
|
|
|
59,187
|
|
||
Net increase in loans
|
|
(3,530,020
|
)
|
|
(844,830
|
)
|
||
Purchases of premises and equipment
|
|
(51,214
|
)
|
|
(18,632
|
)
|
||
Acquisition of SVB Leerink, net of cash acquired
|
|
—
|
|
|
(102,328
|
)
|
||
Net cash used for investing activities
|
|
(6,532,868
|
)
|
|
(317,021
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net increase in deposits
|
|
12,747,957
|
|
|
6,281,640
|
|
||
Net increase (decrease) in short-term borrowings
|
|
33,494
|
|
|
(607,160
|
)
|
||
Proceeds from issuance of 3.125% Senior Notes
|
|
495,024
|
|
|
—
|
|
||
(Distributions to noncontrolling interests), net of contributions from noncontrolling interests
|
|
(14,120
|
)
|
|
(23,222
|
)
|
||
Payment of preferred stock dividend
|
|
(7,963
|
)
|
|
—
|
|
||
Common stock repurchases
|
|
(60,020
|
)
|
|
(346,781
|
)
|
||
Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards
|
|
13,341
|
|
|
11,359
|
|
||
Net cash provided by financing activities
|
|
13,207,713
|
|
|
5,315,836
|
|
||
Net increase in cash and cash equivalents
|
|
7,420,323
|
|
|
5,449,386
|
|
||
Cash and cash equivalents at beginning of period
|
|
6,781,783
|
|
|
3,571,539
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
14,202,106
|
|
|
$
|
9,020,925
|
|
Supplemental disclosures:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest
|
|
$
|
67,493
|
|
|
$
|
94,851
|
|
Income taxes
|
|
57,539
|
|
|
310,604
|
|
||
Noncash items during the period:
|
|
|
|
|
||||
Changes in unrealized gains and losses on available-for-sale securities, net of tax
|
|
$
|
382,707
|
|
|
$
|
122,597
|
|
Distributions of stock from investments
|
|
11,093
|
|
|
6,747
|
|
1.
|
Basis of Presentation
|
(i)
|
Investor Dependent - Accelerator (Early-Stage) and Growth (Mid-Stage and Later-Stage)
|
(ii)
|
Cash Flow Dependent
|
(iv)
|
Private Equity/Venture Capital
|
(v)
|
Private Bank
|
(vi)
|
Premium Wine and Other
|
(vii)
|
SBA lending
|
•
|
Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;
|
•
|
Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;
|
•
|
Changes in the nature and volume of the portfolio and in the terms of loans;
|
•
|
Changes in the experience, ability and depth of lending management and other relevant staff;
|
•
|
Changes in the volume and severity of past due loans, the volume of nonaccrual loans and the volume and severity of adversely classified or graded loans;
|
•
|
Changes in the quality of the institution’s loan review system;
|
•
|
Changes in the value of underlying collateral for collateral-dependent loans;
|
•
|
The existence and effect of any concentrations of credit, and changes in the level of such concentrations;
|
•
|
The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio; and
|
•
|
The effect of limitations of available data, model imprecision and recent macro-economic factors that may not be reflected in the forecast information.
|
(Dollars in thousands)
|
|
Balance at December 31, 2019
|
|
Adjustments Due to Adoption of ASC 326
|
|
Balance at
January 1, 2020
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Allowance for credit losses: loans
|
|
$
|
304,924
|
|
|
$
|
25,464
|
|
|
$
|
330,388
|
|
Allowance for credit losses: held-to-maturity securities
|
|
—
|
|
|
174
|
|
|
174
|
|
|||
Deferred tax assets
|
|
28,433
|
|
|
13,415
|
|
|
41,848
|
|
|||
Other liabilities:
|
|
|
|
|
|
|
||||||
Allowance for credit losses: unfunded credit commitments
|
|
67,656
|
|
|
22,826
|
|
|
90,482
|
|
|||
Stockholders' equity:
|
|
|
|
|
|
|
||||||
Retained earnings, net of tax
|
|
4,575,601
|
|
|
(35,049
|
)
|
|
4,540,552
|
|
2.
|
Stockholders' Equity and EPS
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
Income Statement Location
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Reclassification adjustment for losses (gains) on available-for-sale securities included in net income
|
|
Gains on investment securities, net
|
|
$
|
—
|
|
|
$
|
275
|
|
|
$
|
(61,165
|
)
|
|
$
|
3,905
|
|
Related tax (benefit) expense
|
|
Income tax expense
|
|
—
|
|
|
(77
|
)
|
|
16,953
|
|
|
(1,087
|
)
|
||||
Reclassification adjustment for (gains) losses on cash flow hedges included in net income
|
|
Net interest income
|
|
(15,831
|
)
|
|
508
|
|
|
(17,920
|
)
|
|
511
|
|
||||
Related tax expense (benefit)
|
|
Income tax expense
|
|
4,388
|
|
|
(141
|
)
|
|
4,967
|
|
|
(142
|
)
|
||||
Total reclassification adjustment for (gains) losses included in net income, net of tax
|
|
|
|
$
|
(11,443
|
)
|
|
$
|
565
|
|
|
$
|
(57,165
|
)
|
|
$
|
3,187
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Balance, beginning of period, net of tax
|
|
$
|
163,999
|
|
|
$
|
797
|
|
|
$
|
(2,130
|
)
|
|
$
|
—
|
|
Net increase in fair value, net of tax
|
|
—
|
|
|
12,664
|
|
|
167,639
|
|
|
13,459
|
|
||||
Net realized (gain) loss reclassified to net income, net of tax
|
|
(11,443
|
)
|
|
367
|
|
|
(12,953
|
)
|
|
369
|
|
||||
Balance, end of period, net of tax
|
|
$
|
152,556
|
|
|
$
|
13,828
|
|
|
$
|
152,556
|
|
|
$
|
13,828
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars and shares in thousands, except per share amounts)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders
|
|
$
|
228,935
|
|
|
$
|
317,987
|
|
|
$
|
361,188
|
|
|
$
|
606,719
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding—basic
|
|
51,581
|
|
|
51,955
|
|
|
51,573
|
|
|
52,269
|
|
||||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options and ESPP
|
|
114
|
|
|
235
|
|
|
140
|
|
|
254
|
|
||||
Restricted stock units and awards
|
|
100
|
|
|
146
|
|
|
135
|
|
|
192
|
|
||||
Weighted average common shares outstanding—diluted
|
|
51,795
|
|
|
52,336
|
|
|
51,848
|
|
|
52,715
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
4.44
|
|
|
$
|
6.12
|
|
|
$
|
7.00
|
|
|
$
|
11.61
|
|
Diluted
|
|
4.42
|
|
|
6.08
|
|
|
6.97
|
|
|
11.51
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
(Shares in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Stock options
|
|
288
|
|
|
166
|
|
|
247
|
|
|
128
|
|
Restricted stock units
|
|
312
|
|
|
333
|
|
|
310
|
|
|
228
|
|
Total
|
|
600
|
|
|
499
|
|
|
557
|
|
|
356
|
|
Series
|
|
Description
|
|
Amount outstanding (in millions)
|
|
Carrying value
(in millions)
|
|
Shares issued and outstanding
|
|
Par Value
|
|
Ownership interest per depository share
|
|
Liquidation preference per depository share
|
|
2020 dividends paid per depository share
|
||||||||||
Series A
|
|
5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock
|
|
$
|
350
|
|
|
$
|
340.1
|
|
|
350,000
|
|
$
|
0.001
|
|
|
1/40th
|
|
$
|
25
|
|
|
$
|
0.57
|
|
|
|
Preferred Stock
|
|
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 March 31, 2019
|
|
$
|
—
|
|
|
52,322,105
|
|
|
$
|
52
|
|
|
$
|
1,394,130
|
|
|
$
|
3,963,965
|
|
|
$
|
(15,374
|
)
|
|
$
|
5,342,773
|
|
|
$
|
141,050
|
|
|
$
|
5,483,823
|
|
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
—
|
|
|
257,684
|
|
|
—
|
|
|
10,789
|
|
|
—
|
|
|
—
|
|
|
10,789
|
|
|
—
|
|
|
10,789
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
317,987
|
|
|
—
|
|
|
317,987
|
|
|
18,584
|
|
|
336,571
|
|
||||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,502
|
)
|
|
(7,502
|
)
|
||||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,186
|
|
|
86,186
|
|
|
—
|
|
|
86,186
|
|
||||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(519
|
)
|
|
(519
|
)
|
|
—
|
|
|
(519
|
)
|
||||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,092
|
)
|
|
(2,092
|
)
|
|
—
|
|
|
(2,092
|
)
|
||||||||
Net change in unrealized gains and losses on cash flow hedges, net of tax
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
13,031
|
|
|
13,031
|
|
|
|
|
13,031
|
|
||||||||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,646
|
|
|
—
|
|
|
—
|
|
|
16,646
|
|
|
—
|
|
|
16,646
|
|
||||||||
Common stock repurchases
|
|
|
|
(1,018,070
|
)
|
|
|
|
|
|
(230,758
|
)
|
|
|
|
(230,758
|
)
|
|
|
|
(230,758
|
)
|
|||||||||||||
Balance at June 30, 2019
|
|
$
|
—
|
|
|
51,561,719
|
|
|
$
|
52
|
|
|
$
|
1,421,565
|
|
|
$
|
4,051,194
|
|
|
$
|
81,232
|
|
|
$
|
5,554,043
|
|
|
$
|
152,132
|
|
|
$
|
5,706,175
|
|
Balance at March 31, 2020
|
|
$
|
340,138
|
|
|
51,490,342
|
|
|
$
|
52
|
|
|
$
|
1,489,240
|
|
|
$
|
4,612,785
|
|
|
$
|
592,534
|
|
|
$
|
7,034,749
|
|
|
$
|
148,472
|
|
|
$
|
7,183,221
|
|
Common stock issued under employee benefit plans, net of restricted stock cancellations
|
|
—
|
|
|
250,372
|
|
|
—
|
|
|
13,925
|
|
|
—
|
|
|
—
|
|
|
13,925
|
|
|
—
|
|
|
13,925
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233,529
|
|
|
—
|
|
|
233,529
|
|
|
14,260
|
|
|
247,789
|
|
||||||||
Capital calls and distributions, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,792
|
)
|
|
(13,792
|
)
|
||||||||
Net change in unrealized gains and losses on AFS securities, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,784
|
|
|
33,784
|
|
|
—
|
|
|
33,784
|
|
||||||||
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
(100
|
)
|
|
—
|
|
|
(100
|
)
|
||||||||
Foreign currency translation adjustments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||||
Net change in unrealized gains and losses on cash flow hedges, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,443
|
)
|
|
(11,443
|
)
|
|
—
|
|
|
(11,443
|
)
|
||||||||
Share-based compensation, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,154
|
|
|
—
|
|
|
—
|
|
|
20,154
|
|
|
—
|
|
|
20,154
|
|
||||||||
Preferred stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,594
|
)
|
|
—
|
|
|
(4,594
|
)
|
|
—
|
|
|
(4,594
|
)
|
||||||||
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(591
|
)
|
|
—
|
|
|
—
|
|
|
(591
|
)
|
|
—
|
|
|
(591
|
)
|
||||||||
Balance at June 30, 2020
|
|
$
|
340,138
|
|
|
51,740,714
|
|
|
$
|
52
|
|
|
$
|
1,522,728
|
|
|
$
|
4,841,720
|
|
|
$
|
614,735
|
|
|
$
|
7,319,373
|
|
|
$
|
148,940
|
|
|
$
|
7,468,313
|
|
3.
|
Share-Based Compensation
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Share-based compensation expense
|
|
$
|
20,154
|
|
|
$
|
16,646
|
|
|
$
|
39,325
|
|
|
$
|
31,768
|
|
Income tax benefit related to share-based compensation expense
|
|
(4,727
|
)
|
|
(3,817
|
)
|
|
(9,167
|
)
|
|
(7,144
|
)
|
(Dollars in thousands)
|
|
Unrecognized
Expense
|
|
Weighted Average Expected
Recognition Period
- in Years
|
||
Stock options
|
|
$
|
17,048
|
|
|
2.78
|
Restricted stock units and awards
|
|
134,908
|
|
|
2.85
|
|
Total unrecognized share-based compensation expense
|
|
$
|
151,956
|
|
|
|
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average Remaining Contractual Life - in Years
|
|
Aggregate
Intrinsic Value
of In-The-
Money
Options
|
|||||
Outstanding at December 31, 2019
|
|
625,407
|
|
|
$
|
169.33
|
|
|
|
|
|
||
Granted
|
|
119,472
|
|
|
185.52
|
|
|
|
|
|
|||
Exercised
|
|
(82,896
|
)
|
|
89.71
|
|
|
|
|
|
|||
Forfeited
|
|
(11,585
|
)
|
|
226.95
|
|
|
|
|
|
|||
Expired
|
|
(1,030
|
)
|
|
71.11
|
|
|
|
|
|
|||
Outstanding at June 30, 2020
|
|
649,368
|
|
|
181.60
|
|
|
4.11
|
|
$
|
32,958,101
|
|
|
Vested and expected to vest at June 30, 2020
|
|
622,501
|
|
|
180.01
|
|
|
4.02
|
|
32,492,850
|
|
||
Exercisable at June 30, 2020
|
|
367,008
|
|
|
148.46
|
|
|
2.67
|
|
28,597,666
|
|
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at December 31, 2019
|
|
847,972
|
|
|
$
|
236.54
|
|
Granted
|
|
402,546
|
|
|
188.64
|
|
|
Vested
|
|
(238,460
|
)
|
|
207.50
|
|
|
Forfeited
|
|
(39,817
|
)
|
|
227.23
|
|
|
Nonvested at June 30, 2020
|
|
972,241
|
|
|
224.21
|
|
4.
|
Variable Interest Entities
|
(Dollars in thousands)
|
|
Consolidated VIEs
|
|
Unconsolidated VIEs
|
|
Maximum Exposure to Loss in Unconsolidated VIEs
|
||||||
June 30, 2020:
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
9,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other equity securities (1)
|
|
274,685
|
|
|
726,879
|
|
|
726,879
|
|
|||
Accrued interest receivable and other assets
|
|
607
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
|
$
|
284,655
|
|
|
$
|
726,879
|
|
|
$
|
726,879
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Other liabilities (1)
|
|
1,447
|
|
|
332,935
|
|
|
—
|
|
|||
Total liabilities
|
|
$
|
1,447
|
|
|
$
|
332,935
|
|
|
$
|
—
|
|
December 31, 2019:
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
7,629
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-marketable and other equity securities (1)
|
|
270,057
|
|
|
689,360
|
|
|
689,360
|
|
|||
Accrued interest receivable and other assets
|
|
1,117
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
|
$
|
278,803
|
|
|
$
|
689,360
|
|
|
$
|
689,360
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Other liabilities (1)
|
|
2,854
|
|
|
302,031
|
|
|
—
|
|
|||
Total liabilities
|
|
$
|
2,854
|
|
|
$
|
302,031
|
|
|
$
|
—
|
|
|
(1)
|
Included in our unconsolidated non-marketable and other equity securities portfolio at June 30, 2020 and December 31, 2019 are investments in qualified affordable housing projects of $533.2 million and $458.5 million, respectively, and related other liabilities consisting of unfunded commitments of $332.9 million and $302.0 million, respectively.
|
5.
|
Cash and Cash Equivalents
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Cash and due from banks (1)
|
|
$
|
13,885,058
|
|
|
$
|
6,492,443
|
|
Securities purchased under agreements to resell (2)
|
|
317,048
|
|
|
289,340
|
|
||
Total cash and cash equivalents
|
|
$
|
14,202,106
|
|
|
$
|
6,781,783
|
|
|
(1)
|
At June 30, 2020 and December 31, 2019, $11.0 billion and $3.7 billion, 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 $2.0 billion and $2.1 billion, respectively.
|
(2)
|
At June 30, 2020 and December 31, 2019, securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of $323.5 million and $295.3 million, respectively. None of these securities were sold or repledged as of June 30, 2020 and December 31, 2019.
|
6.
|
Investment Securities
|
|
|
June 30, 2020
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
4,229,988
|
|
|
$
|
305,252
|
|
|
$
|
(5
|
)
|
|
$
|
4,535,235
|
|
U.S. agency debentures
|
|
100,000
|
|
|
2,659
|
|
|
—
|
|
|
102,659
|
|
||||
Foreign government debt securities
|
|
22,540
|
|
|
—
|
|
|
(15
|
)
|
|
22,525
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
7,465,130
|
|
|
193,484
|
|
|
(3,058
|
)
|
|
7,655,556
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,949,805
|
|
|
31,229
|
|
|
(1,494
|
)
|
|
2,979,540
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
3,033,126
|
|
|
123,276
|
|
|
(4
|
)
|
|
3,156,398
|
|
||||
Total available-for-sale securities
|
|
$
|
17,800,589
|
|
|
$
|
655,900
|
|
|
$
|
(4,576
|
)
|
|
$
|
18,451,913
|
|
|
|
December 31, 2019
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Carrying
Value
|
||||||||
Available-for-sale securities, at fair value:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
6,815,874
|
|
|
$
|
82,267
|
|
|
$
|
(4,131
|
)
|
|
$
|
6,894,010
|
|
U.S. agency debentures
|
|
100,000
|
|
|
—
|
|
|
(453
|
)
|
|
99,547
|
|
||||
Foreign government debt securities
|
|
9,037
|
|
|
1
|
|
|
—
|
|
|
9,038
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
4,109,372
|
|
|
39,438
|
|
|
(19
|
)
|
|
4,148,791
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,520,414
|
|
|
17,929
|
|
|
—
|
|
|
1,538,343
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
1,339,651
|
|
|
1,078
|
|
|
(15,539
|
)
|
|
1,325,190
|
|
||||
Total available-for-sale securities
|
|
$
|
13,894,348
|
|
|
$
|
140,713
|
|
|
$
|
(20,142
|
)
|
|
$
|
14,014,919
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Sales proceeds
|
|
$
|
—
|
|
|
$
|
1,017,523
|
|
|
$
|
2,654,212
|
|
|
$
|
2,189,087
|
|
Net realized gains and losses:
|
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
|
—
|
|
|
1,250
|
|
|
61,165
|
|
|
1,250
|
|
||||
Gross realized losses
|
|
—
|
|
|
(1,525
|
)
|
|
—
|
|
|
(5,155
|
)
|
||||
Net realized gains (losses)
|
|
$
|
—
|
|
|
$
|
(275
|
)
|
|
$
|
61,165
|
|
|
$
|
(3,905
|
)
|
|
|
June 30, 2020
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer (1)
|
|
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
|
|
$
|
10,057
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,057
|
|
|
$
|
(5
|
)
|
Foreign government debt securities
|
|
22,525
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
22,525
|
|
|
(15
|
)
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
1,424,857
|
|
|
(3,058
|
)
|
|
—
|
|
|
—
|
|
|
1,424,857
|
|
|
(3,058
|
)
|
||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
474,025
|
|
|
(1,494
|
)
|
|
—
|
|
|
—
|
|
|
474,025
|
|
|
(1,494
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
101,480
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
101,480
|
|
|
(4
|
)
|
||||||
Total available-for-sale securities (1)
|
|
$
|
2,032,944
|
|
|
$
|
(4,576
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,032,944
|
|
|
$
|
(4,576
|
)
|
|
(1)
|
As of June 30, 2020, we identified a total of 50 investments that were in unrealized loss positions with no investment in an unrealized loss position for a period of time greater than 12 months. Based on our analysis of the securities in an unrealized loss position as of June 30, 2020, the decline in value is unrelated to credit loss and is related to changes in market interest rates since purchase and therefore changes in value for securities are included in other comprehensive income. Market valuations and credit loss analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis. As of June 30, 2020, we do not intend to sell any of our securities in an unrealized loss position prior to recovery of our amortized 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 amortized cost basis. None of the investments in our available-for-sale securities portfolio were past due as of June 30, 2020.
|
|
|
December 31, 2019
|
||||||||||||||||||||||
|
|
Less than 12 months
|
|
12 months or longer (1)
|
|
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
|
|
$
|
971,572
|
|
|
$
|
(3,996
|
)
|
|
$
|
449,850
|
|
|
$
|
(135
|
)
|
|
$
|
1,421,422
|
|
|
$
|
(4,131
|
)
|
U.S. agency debentures
|
|
99,547
|
|
|
(453
|
)
|
|
—
|
|
|
—
|
|
|
99,547
|
|
|
(453
|
)
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency-issued mortgage-backed securities
|
|
4,014
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
4,014
|
|
|
(19
|
)
|
||||||
Agency-issued commercial mortgage-backed securities
|
|
1,027,232
|
|
|
(15,539
|
)
|
|
—
|
|
|
—
|
|
|
1,027,232
|
|
|
(15,539
|
)
|
||||||
Total available-for-sale securities (1)
|
|
$
|
2,102,365
|
|
|
$
|
(20,007
|
)
|
|
$
|
449,850
|
|
|
$
|
(135
|
)
|
|
$
|
2,552,215
|
|
|
$
|
(20,142
|
)
|
|
(1)
|
As of December 31, 2019, we identified a total of 58 investments that were in unrealized loss positions, of which 12 investments totaling $0.4 billion with unrealized losses of $0.1 million have been in an unrealized loss position for a period of time greater than 12 months.
|
|
|
June 30, 2020
|
||||||||||||||||||
(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
|
|
$
|
4,535,235
|
|
|
$
|
85,518
|
|
|
$
|
2,613,342
|
|
|
$
|
1,836,375
|
|
|
$
|
—
|
|
U.S. agency debentures
|
|
102,659
|
|
|
—
|
|
|
—
|
|
|
102,659
|
|
|
—
|
|
|||||
Foreign government debt securities
|
|
22,525
|
|
|
22,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency-issued mortgage-backed securities
|
|
7,655,556
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,655,556
|
|
|||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,979,540
|
|
|
—
|
|
|
491
|
|
|
—
|
|
|
2,979,049
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
3,156,398
|
|
|
—
|
|
|
—
|
|
|
1,347,235
|
|
|
1,809,163
|
|
|||||
Total
|
|
$
|
18,451,913
|
|
|
$
|
108,043
|
|
|
$
|
2,613,833
|
|
|
$
|
3,286,269
|
|
|
$
|
12,443,768
|
|
|
|
June 30, 2020
|
||||||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Allowance for Credit Losses (2)
|
||||||||||
Held-to-maturity securities, at cost:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. agency debentures (1)
|
|
$
|
453,280
|
|
|
$
|
20,657
|
|
|
$
|
—
|
|
|
$
|
473,937
|
|
|
$
|
—
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency-issued mortgage-backed securities
|
|
6,086,154
|
|
|
310,266
|
|
|
(46
|
)
|
|
6,396,374
|
|
|
—
|
|
|||||
Agency-issued collateralized mortgage obligations —fixed rate
|
|
1,518,848
|
|
|
26,124
|
|
|
—
|
|
|
1,544,972
|
|
|
—
|
|
|||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
162,250
|
|
|
1,403
|
|
|
(223
|
)
|
|
163,430
|
|
|
—
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
2,484,072
|
|
|
162,042
|
|
|
—
|
|
|
2,646,114
|
|
|
—
|
|
|||||
Municipal bonds and notes
|
|
2,154,441
|
|
|
162,193
|
|
|
—
|
|
|
2,316,634
|
|
|
222
|
|
|||||
Total held-to-maturity securities
|
|
$
|
12,859,045
|
|
|
$
|
682,685
|
|
|
$
|
(269
|
)
|
|
$
|
13,541,461
|
|
|
$
|
222
|
|
|
(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, 2019
|
||||||||||||||
(Dollars in thousands)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||
Held-to-maturity securities, at amortized cost:
|
|
|
|
|
|
|
|
|
||||||||
U.S. agency debentures (1)
|
|
$
|
518,728
|
|
|
$
|
6,640
|
|
|
$
|
(668
|
)
|
|
$
|
524,700
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
6,992,009
|
|
|
142,209
|
|
|
(2,066
|
)
|
|
7,132,152
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,608,032
|
|
|
592
|
|
|
(8,502
|
)
|
|
1,600,122
|
|
||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
178,611
|
|
|
94
|
|
|
(259
|
)
|
|
178,446
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
2,759,615
|
|
|
56,914
|
|
|
(4,508
|
)
|
|
2,812,021
|
|
||||
Municipal bonds and notes
|
|
1,785,951
|
|
|
83,314
|
|
|
(1,434
|
)
|
|
1,867,831
|
|
||||
Total held-to-maturity securities
|
|
$
|
13,842,946
|
|
|
$
|
289,763
|
|
|
$
|
(17,437
|
)
|
|
$
|
14,115,272
|
|
|
(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.
|
Three months ended June 30, 2020
|
|
Beginning Balance March 31, 2020
|
|
Day One Impact of adopting ASC 326
|
|
Provision for Credit Losses
|
|
Ending Balance June 30, 2020
|
||||||||
(Dollars in thousands)
|
|
|
|
|
||||||||||||
Municipal bonds and notes
|
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
222
|
|
Total allowance for credit losses
|
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
222
|
|
Six months ended June 30, 2020
|
|
Beginning Balance December 31, 2019
|
|
Day One Impact of adopting ASC 326
|
|
Provision for Credit Losses
|
|
Ending Balance June 30, 2020
|
||||||||
(Dollars in thousands)
|
|
|
|
|
||||||||||||
Municipal bonds and notes
|
|
$
|
—
|
|
|
$
|
174
|
|
|
$
|
48
|
|
|
$
|
222
|
|
Total allowance for credit losses
|
|
$
|
—
|
|
|
$
|
174
|
|
|
$
|
48
|
|
|
$
|
222
|
|
(Dollars in thousands)
|
|
June 30, 2020
|
||
Municipal bonds and notes:
|
|
|
||
Aaa
|
|
$
|
1,456,716
|
|
Aa1
|
|
475,395
|
|
|
Aa2
|
|
220,960
|
|
|
Aa3
|
|
1,370
|
|
|
Total
|
|
$
|
2,154,441
|
|
|
|
June 30, 2020
|
||||||||||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
453,280
|
|
|
$
|
473,937
|
|
|
$
|
2,622
|
|
|
$
|
2,666
|
|
|
$
|
142,917
|
|
|
$
|
147,089
|
|
|
$
|
307,741
|
|
|
$
|
324,182
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Agency-issued mortgage-backed securities
|
|
6,086,154
|
|
|
6,396,374
|
|
|
8,369
|
|
|
8,467
|
|
|
40,337
|
|
|
41,199
|
|
|
640,876
|
|
|
664,186
|
|
|
5,396,572
|
|
|
5,682,522
|
|
||||||||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,518,848
|
|
|
1,544,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612,478
|
|
|
625,694
|
|
|
906,370
|
|
|
919,278
|
|
||||||||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
162,250
|
|
|
163,430
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162,250
|
|
|
163,430
|
|
||||||||||
Agency-issued commercial mortgage-backed securities
|
|
2,484,072
|
|
|
2,646,114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,497
|
|
|
120,165
|
|
|
2,381,575
|
|
|
2,525,949
|
|
||||||||||
Municipal bonds and notes
|
|
2,154,441
|
|
|
2,316,634
|
|
|
31,814
|
|
|
32,094
|
|
|
142,152
|
|
|
147,934
|
|
|
479,079
|
|
|
517,215
|
|
|
1,501,396
|
|
|
1,619,391
|
|
||||||||||
Total
|
|
$
|
12,859,045
|
|
|
$
|
13,541,461
|
|
|
$
|
42,805
|
|
|
$
|
43,227
|
|
|
$
|
325,406
|
|
|
$
|
336,222
|
|
|
$
|
2,142,671
|
|
|
$
|
2,251,442
|
|
|
$
|
10,348,163
|
|
|
$
|
10,910,570
|
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Non-marketable and other equity securities:
|
|
|
|
|
||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
||||
Consolidated venture capital and private equity fund investments (1)
|
|
68,214
|
|
|
$
|
87,180
|
|
|
Unconsolidated venture capital and private equity fund investments (2)
|
|
145,122
|
|
|
178,217
|
|
||
Other investments without a readily determinable fair value (3)
|
|
56,206
|
|
|
55,255
|
|
||
Other equity securities in public companies (fair value accounting) (4)
|
|
45,288
|
|
|
59,200
|
|
||
Non-marketable securities (equity method accounting) (5):
|
|
|
|
|
||||
Venture capital and private equity fund investments
|
|
233,996
|
|
|
215,367
|
|
||
Debt funds
|
|
7,004
|
|
|
7,271
|
|
||
Other investments
|
|
181,543
|
|
|
152,863
|
|
||
Investments in qualified affordable housing projects, net (6)
|
|
533,205
|
|
|
458,476
|
|
||
Total non-marketable and other equity securities
|
|
$
|
1,270,578
|
|
|
$
|
1,213,829
|
|
|
(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, 2020 and December 31, 2019 (fair value accounting):
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Strategic Investors Fund, LP
|
|
$
|
4,414
|
|
|
12.6
|
%
|
|
$
|
5,729
|
|
|
12.6
|
%
|
Capital Preferred Return Fund, LP
|
|
36,890
|
|
|
20.0
|
|
|
45,341
|
|
|
20.0
|
|
||
Growth Partners, LP
|
|
26,776
|
|
|
33.0
|
|
|
35,976
|
|
|
33.0
|
|
||
CP I, LP
|
|
134
|
|
|
10.7
|
|
|
134
|
|
|
10.7
|
|
||
Total consolidated venture capital and private equity fund investments
|
|
$
|
68,214
|
|
|
|
|
$
|
87,180
|
|
|
|
(2)
|
The carrying value represents investments in 191 and 205 funds (primarily venture capital funds) at June 30, 2020 and December 31, 2019, 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. We 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 31st for our June 30th consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.
|
(3)
|
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.
|
(Dollars in thousands)
|
|
Six months ended June 30, 2020
|
|
Cumulative Adjustments
|
||||
Measurement alternative:
|
|
|
|
|
||||
Carrying value at June 30, 2020
|
|
$
|
56,206
|
|
|
|
||
Carrying value adjustments:
|
|
|
|
|
||||
Impairment
|
|
$
|
—
|
|
|
$
|
(460
|
)
|
Upward changes for observable prices
|
|
—
|
|
|
1,810
|
|
||
Downward changes for observable prices
|
|
(3,076
|
)
|
|
(7,671
|
)
|
(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. Changes in equity securities measured at fair value are recognized through net income.
|
(5)
|
The following table shows the carrying value and our ownership percentage of each investment at June 30, 2020 and December 31, 2019 (equity method accounting):
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Ownership %
|
|
Amount
|
|
Ownership %
|
||||||
Venture capital and private equity fund investments:
|
|
|
|
|
|
|
|
|
||||||
Strategic Investors Fund II, LP
|
|
$
|
3,083
|
|
|
8.6
|
%
|
|
$
|
3,612
|
|
|
8.6
|
%
|
Strategic Investors Fund III, LP
|
|
14,211
|
|
|
5.9
|
|
|
15,668
|
|
|
5.9
|
|
||
Strategic Investors Fund IV, LP
|
|
24,743
|
|
|
5.0
|
|
|
27,064
|
|
|
5.0
|
|
||
Strategic Investors Fund V funds
|
|
47,734
|
|
|
Various
|
|
|
46,830
|
|
|
Various
|
|
||
CP II, LP (i)
|
|
4,646
|
|
|
5.1
|
|
|
5,907
|
|
|
5.1
|
|
||
Other venture capital and private equity fund investments
|
|
139,579
|
|
|
Various
|
|
|
116,286
|
|
|
Various
|
|
||
Total venture capital and private equity fund investments
|
|
$
|
233,996
|
|
|
|
|
$
|
215,367
|
|
|
|
||
Debt funds:
|
|
|
|
|
|
|
|
|
||||||
Gold Hill Capital 2008, LP (ii)
|
|
$
|
5,334
|
|
|
15.5
|
%
|
|
$
|
5,525
|
|
|
15.5
|
%
|
Other debt funds
|
|
1,670
|
|
|
Various
|
|
|
1,746
|
|
|
Various
|
|
||
Total debt funds
|
|
$
|
7,004
|
|
|
|
|
$
|
7,271
|
|
|
|
||
Other investments:
|
|
|
|
|
|
|
|
|
||||||
SPD Silicon Valley Bank Co., Ltd.
|
|
$
|
105,863
|
|
|
50.0
|
%
|
|
$
|
74,190
|
|
|
50.0
|
%
|
Other investments
|
|
75,680
|
|
|
Various
|
|
|
78,673
|
|
|
Various
|
|
||
Total other investments
|
|
$
|
181,543
|
|
|
|
|
$
|
152,863
|
|
|
|
|
(i)
|
Our ownership includes direct ownership interest 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, 2020 and December 31, 2019:
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Investments in qualified affordable housing projects, net
|
|
$
|
533,205
|
|
|
$
|
458,476
|
|
Other liabilities
|
|
332,935
|
|
|
302,031
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Tax credits and other tax benefits recognized
|
|
$
|
19,723
|
|
|
$
|
10,988
|
|
|
$
|
31,482
|
|
|
$
|
20,245
|
|
Amortization expense included in provision for income taxes (i)
|
|
10,388
|
|
|
6,758
|
|
|
21,859
|
|
|
14,394
|
|
|
(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)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net gains (losses) on non-marketable and other equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Consolidated venture capital and private equity fund investments
|
|
$
|
1,277
|
|
|
$
|
14,830
|
|
|
$
|
4,390
|
|
|
$
|
18,119
|
|
Unconsolidated venture capital and private equity fund investments
|
|
(2,465
|
)
|
|
10,152
|
|
|
(1,213
|
)
|
|
18,158
|
|
||||
Other investments without a readily determinable fair value
|
|
(893
|
)
|
|
167
|
|
|
(3,836
|
)
|
|
5,172
|
|
||||
Other equity securities in public companies (fair value accounting)
|
|
12,988
|
|
|
282
|
|
|
5,484
|
|
|
12,085
|
|
||||
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
26,393
|
|
|
22,351
|
|
|
18,347
|
|
|
25,140
|
|
||||
Debt funds
|
|
94
|
|
|
1,342
|
|
|
(268
|
)
|
|
1,342
|
|
||||
Other investments
|
|
(2,526
|
)
|
|
(1,151
|
)
|
|
(3,146
|
)
|
|
615
|
|
||||
Total net gains on non-marketable and other equity securities
|
|
$
|
34,868
|
|
|
$
|
47,973
|
|
|
$
|
19,758
|
|
|
$
|
80,631
|
|
Less: realized net gains on sales of non-marketable and other equity securities
|
|
264
|
|
|
2,524
|
|
|
215
|
|
|
12,359
|
|
||||
Net gains on non-marketable and other equity securities still held
|
|
$
|
34,604
|
|
|
$
|
45,449
|
|
|
$
|
19,543
|
|
|
$
|
68,272
|
|
7.
|
Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Private equity/venture capital
|
|
$
|
17,901,117
|
|
|
$
|
17,696,794
|
|
Investor dependent:
|
|
|
|
|
||||
Early stage
|
|
1,797,576
|
|
|
1,624,221
|
|
||
Mid stage
|
|
1,435,772
|
|
|
1,047,398
|
|
||
Later stage
|
|
1,905,528
|
|
|
1,663,576
|
|
||
Total investor dependent
|
|
5,138,876
|
|
|
4,335,195
|
|
||
Cash flow dependent:
|
|
|
|
|
||||
Sponsor led buyout
|
|
2,057,439
|
|
|
2,185,497
|
|
||
Other
|
|
2,787,807
|
|
|
2,238,741
|
|
||
Total cash flow dependent
|
|
4,845,246
|
|
|
4,424,238
|
|
||
Private bank (4)
|
|
3,816,277
|
|
|
3,492,269
|
|
||
Balance sheet dependent
|
|
1,693,071
|
|
|
1,286,153
|
|
||
Premium wine (4)
|
|
1,039,456
|
|
|
1,062,264
|
|
||
Other (4)
|
|
457,234
|
|
|
867,723
|
|
||
SBA loans
|
|
1,835,945
|
|
|
—
|
|
||
Total loans (1) (2) (3)
|
|
$
|
36,727,222
|
|
|
$
|
33,164,636
|
|
Allowance for credit losses
|
|
(589,828
|
)
|
|
(304,924
|
)
|
||
Net loans
|
|
$
|
36,137,394
|
|
|
$
|
32,859,712
|
|
|
(1)
|
Total loans at amortized cost is net of unearned income of $220 million and $163 million at June 30, 2020 and December 31, 2019, respectively.
|
(2)
|
Included within our total loan portfolio are credit card loans of $280 million and $395 million at June 30, 2020 and December 31, 2019, respectively.
|
(3)
|
Included within our total loan portfolio are construction loans of $147 million and $183 million at June 30, 2020 and December 31, 2019, respectively.
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Real estate secured loans:
|
|
|
|
|
||||
Private bank:
|
|
|
|
|
||||
Loans for personal residence
|
|
$
|
2,714,069
|
|
|
$
|
2,829,880
|
|
Loans to eligible employees
|
|
439,006
|
|
|
401,396
|
|
||
Home equity lines of credit
|
|
58,284
|
|
|
55,461
|
|
||
Other
|
|
42,464
|
|
|
38,880
|
|
||
Total private bank loans secured by real estate
|
|
$
|
3,253,823
|
|
|
$
|
3,325,617
|
|
Premium wine
|
|
777,560
|
|
|
820,730
|
|
||
Other
|
|
470,567
|
|
|
—
|
|
||
Total real estate secured loans
|
|
$
|
4,501,950
|
|
|
$
|
4,146,347
|
|
(Dollars in thousands)
|
|
Pass
|
|
Criticized
|
|
Nonperforming (Nonaccrual)
|
|
Total
|
||||||||
June 30, 2020:
|
|
|
|
|
|
|
|
|
||||||||
Private equity/venture capital
|
|
$
|
17,892,840
|
|
|
$
|
8,268
|
|
|
$
|
9
|
|
|
$
|
17,901,117
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
||||||||
Early stage
|
|
1,549,222
|
|
|
223,932
|
|
|
24,422
|
|
|
1,797,576
|
|
||||
Mid stage
|
|
1,259,442
|
|
|
168,211
|
|
|
8,119
|
|
|
1,435,772
|
|
||||
Later stage
|
|
1,719,152
|
|
|
175,878
|
|
|
10,498
|
|
|
1,905,528
|
|
||||
Total investor dependent
|
|
4,527,816
|
|
|
568,021
|
|
|
43,039
|
|
|
5,138,876
|
|
||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
||||||||
Sponsor led buyout
|
|
1,819,253
|
|
|
216,528
|
|
|
21,658
|
|
|
2,057,439
|
|
||||
Other
|
|
2,441,376
|
|
|
341,114
|
|
|
5,317
|
|
|
2,787,807
|
|
||||
Total cash flow dependent
|
|
4,260,629
|
|
|
557,642
|
|
|
26,975
|
|
|
4,845,246
|
|
||||
Private bank
|
|
3,787,830
|
|
|
21,930
|
|
|
6,517
|
|
|
3,816,277
|
|
||||
Balance sheet dependent
|
|
1,588,207
|
|
|
93,022
|
|
|
11,842
|
|
|
1,693,071
|
|
||||
Premium wine
|
|
926,549
|
|
|
111,226
|
|
|
1,681
|
|
|
1,039,456
|
|
||||
Other
|
|
456,947
|
|
|
226
|
|
|
61
|
|
|
457,234
|
|
||||
SBA loans
|
|
1,688,030
|
|
|
143,713
|
|
|
4,202
|
|
|
1,835,945
|
|
||||
Total loans (1)
|
|
$
|
35,128,848
|
|
|
$
|
1,504,048
|
|
|
$
|
94,326
|
|
|
$
|
36,727,222
|
|
December 31, 2019:
|
|
|
|
|
|
|
|
|
||||||||
Private equity/venture capital
|
|
$
|
17,708,550
|
|
|
$
|
4,247
|
|
|
$
|
—
|
|
|
$
|
17,712,797
|
|
Investor dependent
|
|
|
|
|
|
|
|
|
||||||||
Early stage
|
|
1,436,022
|
|
|
206,310
|
|
|
11,093
|
|
|
1,653,425
|
|
||||
Mid stage
|
|
924,002
|
|
|
125,451
|
|
|
17,330
|
|
|
1,066,783
|
|
||||
Later stage
|
|
1,490,561
|
|
|
201,819
|
|
|
6,296
|
|
|
1,698,676
|
|
||||
Total investor dependent
|
|
3,850,585
|
|
|
533,580
|
|
|
34,719
|
|
|
4,418,884
|
|
||||
Cash flow dependent
|
|
|
|
|
|
|
|
|
||||||||
Sponsor led buyout
|
|
2,039,847
|
|
|
118,588
|
|
|
44,585
|
|
|
2,203,020
|
|
||||
Other
|
|
2,141,766
|
|
|
93,400
|
|
|
17,681
|
|
|
2,252,847
|
|
||||
Total cash flow dependent
|
|
4,181,613
|
|
|
211,988
|
|
|
62,266
|
|
|
4,455,867
|
|
||||
Private bank
|
|
3,472,138
|
|
|
11,601
|
|
|
5,480
|
|
|
3,489,219
|
|
||||
Balance sheet dependent
|
|
1,231,961
|
|
|
65,343
|
|
|
—
|
|
|
1,297,304
|
|
||||
Premium wine
|
|
1,026,973
|
|
|
36,335
|
|
|
204
|
|
|
1,063,512
|
|
||||
Other
|
|
890,059
|
|
|
62
|
|
|
—
|
|
|
890,121
|
|
||||
Total loans (1)
|
|
$
|
32,361,879
|
|
|
$
|
863,156
|
|
|
$
|
102,669
|
|
|
$
|
33,327,704
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
|
|
Term Loans by Origination Year
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term Loans
|
|
Total
|
||||||||||||||||||
Private equity/venture capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
339,398
|
|
|
$
|
188,421
|
|
|
$
|
71,803
|
|
|
$
|
39,857
|
|
|
$
|
3,577
|
|
|
$
|
16,055
|
|
|
$
|
17,228,948
|
|
|
$
|
4,781
|
|
|
$
|
17,892,840
|
|
Criticized
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,214
|
|
|
—
|
|
|
8,268
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||||
Total private equity/venture capital
|
|
$
|
339,452
|
|
|
$
|
188,430
|
|
|
$
|
71,803
|
|
|
$
|
39,857
|
|
|
$
|
3,577
|
|
|
$
|
16,055
|
|
|
$
|
17,237,162
|
|
|
$
|
4,781
|
|
|
$
|
17,901,117
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Early stage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
576,597
|
|
|
$
|
614,464
|
|
|
$
|
216,902
|
|
|
$
|
53,103
|
|
|
$
|
4,304
|
|
|
$
|
355
|
|
|
$
|
83,497
|
|
|
$
|
—
|
|
|
$
|
1,549,222
|
|
Criticized
|
|
38,123
|
|
|
93,416
|
|
|
53,065
|
|
|
12,949
|
|
|
6,555
|
|
|
5,702
|
|
|
14,122
|
|
|
—
|
|
|
223,932
|
|
|||||||||
Nonperforming
|
|
2,085
|
|
|
8,670
|
|
|
7,542
|
|
|
2,771
|
|
|
2,197
|
|
|
—
|
|
|
1,157
|
|
|
—
|
|
|
24,422
|
|
|||||||||
Total early stage
|
|
$
|
616,805
|
|
|
$
|
716,550
|
|
|
$
|
277,509
|
|
|
$
|
68,823
|
|
|
$
|
13,056
|
|
|
$
|
6,057
|
|
|
$
|
98,776
|
|
|
$
|
—
|
|
|
$
|
1,797,576
|
|
Mid stage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
527,905
|
|
|
$
|
342,149
|
|
|
$
|
194,287
|
|
|
$
|
59,075
|
|
|
$
|
1,502
|
|
|
$
|
4,448
|
|
|
$
|
130,076
|
|
|
$
|
—
|
|
|
$
|
1,259,442
|
|
Criticized
|
|
32,514
|
|
|
53,500
|
|
|
48,379
|
|
|
13,833
|
|
|
3,345
|
|
|
2,907
|
|
|
13,733
|
|
|
—
|
|
|
168,211
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
210
|
|
|
5,646
|
|
|
2,041
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
—
|
|
|
8,119
|
|
|||||||||
Total mid stage
|
|
$
|
560,419
|
|
|
$
|
395,859
|
|
|
$
|
248,312
|
|
|
$
|
74,949
|
|
|
$
|
4,847
|
|
|
$
|
7,355
|
|
|
$
|
144,031
|
|
|
$
|
—
|
|
|
$
|
1,435,772
|
|
Later stage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
495,546
|
|
|
$
|
564,400
|
|
|
$
|
188,404
|
|
|
$
|
73,703
|
|
|
$
|
6,539
|
|
|
$
|
7,860
|
|
|
$
|
382,700
|
|
|
$
|
—
|
|
|
$
|
1,719,152
|
|
Criticized
|
|
32,347
|
|
|
25,890
|
|
|
53,707
|
|
|
7,074
|
|
|
—
|
|
|
6,506
|
|
|
50,354
|
|
|
—
|
|
|
175,878
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
1,435
|
|
|
2,374
|
|
|
3,885
|
|
|
—
|
|
|
—
|
|
|
2,804
|
|
|
—
|
|
|
10,498
|
|
|||||||||
Total later stage
|
|
$
|
527,893
|
|
|
$
|
591,725
|
|
|
$
|
244,485
|
|
|
$
|
84,662
|
|
|
$
|
6,539
|
|
|
$
|
14,366
|
|
|
$
|
435,858
|
|
|
$
|
—
|
|
|
$
|
1,905,528
|
|
Total investor dependent
|
|
$
|
1,705,117
|
|
|
$
|
1,704,134
|
|
|
$
|
770,306
|
|
|
$
|
228,434
|
|
|
$
|
24,442
|
|
|
$
|
27,778
|
|
|
$
|
678,665
|
|
|
$
|
—
|
|
|
$
|
5,138,876
|
|
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Sponsor led buyout:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
374,547
|
|
|
$
|
637,287
|
|
|
$
|
357,322
|
|
|
$
|
262,844
|
|
|
$
|
58,014
|
|
|
$
|
—
|
|
|
$
|
129,239
|
|
|
$
|
—
|
|
|
$
|
1,819,253
|
|
Criticized
|
|
33,714
|
|
|
69,764
|
|
|
51,479
|
|
|
31,801
|
|
|
11,958
|
|
|
—
|
|
|
17,812
|
|
|
—
|
|
|
216,528
|
|
|||||||||
Nonperforming
|
|
19
|
|
|
11,937
|
|
|
—
|
|
|
7,218
|
|
|
—
|
|
|
—
|
|
|
2,484
|
|
|
—
|
|
|
21,658
|
|
|||||||||
Total sponsor led buyout
|
|
$
|
408,280
|
|
|
$
|
718,988
|
|
|
$
|
408,801
|
|
|
$
|
301,863
|
|
|
$
|
69,972
|
|
|
$
|
—
|
|
|
$
|
149,535
|
|
|
$
|
—
|
|
|
$
|
2,057,439
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
339,862
|
|
|
$
|
639,167
|
|
|
$
|
193,797
|
|
|
$
|
114,650
|
|
|
$
|
41,605
|
|
|
$
|
347
|
|
|
$
|
1,111,948
|
|
|
$
|
—
|
|
|
$
|
2,441,376
|
|
Criticized
|
|
14,326
|
|
|
71,911
|
|
|
88,065
|
|
|
2,807
|
|
|
581
|
|
|
—
|
|
|
163,424
|
|
|
—
|
|
|
341,114
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,177
|
|
|
—
|
|
|
5,317
|
|
|||||||||
Total other
|
|
$
|
354,188
|
|
|
$
|
711,078
|
|
|
$
|
283,002
|
|
|
$
|
117,457
|
|
|
$
|
42,186
|
|
|
$
|
347
|
|
|
$
|
1,279,549
|
|
|
$
|
—
|
|
|
$
|
2,787,807
|
|
Total cash flow dependent
|
|
$
|
762,468
|
|
|
$
|
1,430,066
|
|
|
$
|
691,803
|
|
|
$
|
419,320
|
|
|
$
|
112,158
|
|
|
$
|
347
|
|
|
$
|
1,429,084
|
|
|
$
|
—
|
|
|
$
|
4,845,246
|
|
Private bank:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
596,908
|
|
|
$
|
1,062,779
|
|
|
$
|
443,164
|
|
|
$
|
440,490
|
|
|
$
|
363,380
|
|
|
$
|
531,090
|
|
|
$
|
277,942
|
|
|
$
|
72,077
|
|
|
$
|
3,787,830
|
|
Criticized
|
|
—
|
|
|
5,859
|
|
|
2,926
|
|
|
1,805
|
|
|
2,500
|
|
|
8,238
|
|
|
602
|
|
|
—
|
|
|
21,930
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,570
|
|
|
—
|
|
|
2,901
|
|
|
2,046
|
|
|
—
|
|
|
6,517
|
|
|||||||||
Total private bank
|
|
$
|
596,908
|
|
|
$
|
1,068,638
|
|
|
$
|
446,090
|
|
|
$
|
443,865
|
|
|
$
|
365,880
|
|
|
$
|
542,229
|
|
|
$
|
280,590
|
|
|
$
|
72,077
|
|
|
$
|
3,816,277
|
|
Balance sheet dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
216,879
|
|
|
$
|
221,481
|
|
|
$
|
247,818
|
|
|
$
|
33,048
|
|
|
$
|
4,545
|
|
|
$
|
—
|
|
|
$
|
864,436
|
|
|
$
|
—
|
|
|
$
|
1,588,207
|
|
Criticized
|
|
—
|
|
|
8,627
|
|
|
2,494
|
|
|
1,464
|
|
|
—
|
|
|
—
|
|
|
80,437
|
|
|
—
|
|
|
93,022
|
|
|||||||||
Nonperforming
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,828
|
|
|
—
|
|
|
11,842
|
|
|||||||||
Total balance sheet dependent
|
|
$
|
216,893
|
|
|
$
|
230,108
|
|
|
$
|
250,312
|
|
|
$
|
34,512
|
|
|
$
|
4,545
|
|
|
$
|
—
|
|
|
$
|
956,701
|
|
|
$
|
—
|
|
|
$
|
1,693,071
|
|
Premium wine:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
85,177
|
|
|
$
|
237,520
|
|
|
$
|
73,632
|
|
|
$
|
92,594
|
|
|
$
|
93,214
|
|
|
$
|
177,246
|
|
|
$
|
167,166
|
|
|
$
|
—
|
|
|
$
|
926,549
|
|
Criticized
|
|
2,042
|
|
|
12,674
|
|
|
35,964
|
|
|
353
|
|
|
3,980
|
|
|
13,327
|
|
|
42,886
|
|
|
—
|
|
|
111,226
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,668
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
1,681
|
|
|||||||||
Total Premium wine
|
|
$
|
87,219
|
|
|
$
|
250,194
|
|
|
$
|
109,596
|
|
|
$
|
92,947
|
|
|
$
|
98,862
|
|
|
$
|
190,573
|
|
|
$
|
210,065
|
|
|
$
|
—
|
|
|
$
|
1,039,456
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
21,785
|
|
|
$
|
240,902
|
|
|
$
|
40,279
|
|
|
$
|
38,752
|
|
|
$
|
58,554
|
|
|
$
|
33,212
|
|
|
$
|
23,256
|
|
|
$
|
207
|
|
|
$
|
456,947
|
|
Criticized
|
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
226
|
|
|||||||||
Nonperforming
|
|
—
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||||||
Total other
|
|
$
|
21,885
|
|
|
$
|
240,963
|
|
|
$
|
40,279
|
|
|
$
|
38,752
|
|
|
$
|
58,554
|
|
|
$
|
33,212
|
|
|
$
|
23,382
|
|
|
$
|
207
|
|
|
$
|
457,234
|
|
SBA loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Risk rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass
|
|
$
|
1,688,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,688,030
|
|
Criticized
|
|
143,713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143,713
|
|
|||||||||
Nonperforming
|
|
4,202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,202
|
|
|||||||||
Total SBA loans
|
|
$
|
1,835,945
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,835,945
|
|
Total loans
|
|
$
|
5,565,887
|
|
|
$
|
5,112,533
|
|
|
$
|
2,380,189
|
|
|
$
|
1,297,687
|
|
|
$
|
668,018
|
|
|
$
|
810,194
|
|
|
$
|
20,815,649
|
|
|
$
|
77,065
|
|
|
$
|
36,727,222
|
|
Three months ended June 30, 2020
|
|
Beginning Balance March 31, 2020
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for (Reduction of) Credit Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2020
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Private equity/venture capital
|
|
$
|
56,774
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,051
|
)
|
|
$
|
—
|
|
|
$
|
53,723
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Early stage
|
|
127,189
|
|
|
(1,764
|
)
|
|
2,390
|
|
|
20,451
|
|
|
4
|
|
|
148,270
|
|
||||||
Mid stage
|
|
51,962
|
|
|
(3,653
|
)
|
|
1,269
|
|
|
6,861
|
|
|
(46
|
)
|
|
56,393
|
|
||||||
Later stage
|
|
96,550
|
|
|
—
|
|
|
—
|
|
|
(8,950
|
)
|
|
4
|
|
|
87,604
|
|
||||||
Total investor dependent
|
|
275,701
|
|
|
(5,417
|
)
|
|
3,659
|
|
|
18,362
|
|
|
(38
|
)
|
|
292,267
|
|
||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sponsor led buyout
|
|
42,091
|
|
|
—
|
|
|
—
|
|
|
12,763
|
|
|
(1
|
)
|
|
54,853
|
|
||||||
Other
|
|
39,416
|
|
|
(3,385
|
)
|
|
1
|
|
|
7,068
|
|
|
—
|
|
|
43,100
|
|
||||||
Total cash flow dependent
|
|
81,507
|
|
|
(3,385
|
)
|
|
1
|
|
|
19,831
|
|
|
(1
|
)
|
|
97,953
|
|
||||||
Private bank
|
|
87,795
|
|
|
(1,035
|
)
|
|
—
|
|
|
4,585
|
|
|
—
|
|
|
91,345
|
|
||||||
Balance sheet dependent
|
|
23,235
|
|
|
(4,900
|
)
|
|
—
|
|
|
6,393
|
|
|
—
|
|
|
24,728
|
|
||||||
Premium wine
|
|
12,377
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
|
12,319
|
|
||||||
Other
|
|
11,574
|
|
|
(318
|
)
|
|
413
|
|
|
1,979
|
|
|
(13
|
)
|
|
13,635
|
|
||||||
SBA loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,858
|
|
|
—
|
|
|
3,858
|
|
||||||
Total allowance for credit losses
|
|
$
|
548,963
|
|
|
$
|
(15,055
|
)
|
|
$
|
4,073
|
|
|
$
|
51,899
|
|
|
$
|
(52
|
)
|
|
$
|
589,828
|
|
Three months ended June 30, 2019
|
|
Beginning Balance March 31, 2019
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for (Reduction of) Credit Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2019
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Private equity/venture capital
|
|
$
|
95,311
|
|
|
$
|
(2,047
|
)
|
|
$
|
—
|
|
|
$
|
8,336
|
|
|
$
|
(347
|
)
|
|
$
|
101,253
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Early stage
|
|
26,730
|
|
|
(7,627
|
)
|
|
3,357
|
|
|
8,878
|
|
|
(369
|
)
|
|
30,969
|
|
||||||
Mid stage
|
|
38,163
|
|
|
(13,395
|
)
|
|
900
|
|
|
2,708
|
|
|
(112
|
)
|
|
28,264
|
|
||||||
Later stage
|
|
30,163
|
|
|
—
|
|
|
1,133
|
|
|
6,932
|
|
|
(288
|
)
|
|
37,940
|
|
||||||
Total investor dependent
|
|
95,056
|
|
|
(21,022
|
)
|
|
5,390
|
|
|
18,518
|
|
|
(769
|
)
|
|
97,173
|
|
||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sponsor led buyout
|
|
40,933
|
|
|
(2,402
|
)
|
|
—
|
|
|
(6,677
|
)
|
|
277
|
|
|
32,131
|
|
||||||
Other
|
|
20,514
|
|
|
—
|
|
|
4,397
|
|
|
(376
|
)
|
|
16
|
|
|
24,551
|
|
||||||
Total cash flow dependent
|
|
61,447
|
|
|
(2,402
|
)
|
|
4,397
|
|
|
(7,053
|
)
|
|
293
|
|
|
56,682
|
|
||||||
Private Bank
|
|
19,964
|
|
|
(960
|
)
|
|
15
|
|
|
1,438
|
|
|
(60
|
)
|
|
20,397
|
|
||||||
Balance sheet dependent
|
|
21,632
|
|
|
—
|
|
|
—
|
|
|
(4,566
|
)
|
|
190
|
|
|
17,256
|
|
||||||
Premium wine
|
|
3,949
|
|
|
—
|
|
|
—
|
|
|
290
|
|
|
(12
|
)
|
|
4,227
|
|
||||||
Other
|
|
2,792
|
|
|
(4
|
)
|
|
18
|
|
|
2,185
|
|
|
(91
|
)
|
|
4,900
|
|
||||||
Total allowance for credit losses
|
|
$
|
300,151
|
|
|
$
|
(26,435
|
)
|
|
$
|
9,820
|
|
|
$
|
19,148
|
|
|
$
|
(796
|
)
|
|
$
|
301,888
|
|
Six months ended June 30, 2020
|
|
Beginning Balance December 31, 2019
|
|
Impact of adopting ASC 326
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for (Reduction of) Credit Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2020
|
||||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Private equity/venture capital
|
|
$
|
107,285
|
|
|
$
|
(69,888
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,506
|
|
|
$
|
(180
|
)
|
|
$
|
53,723
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Early stage
|
|
26,245
|
|
|
39,911
|
|
|
(11,947
|
)
|
|
3,963
|
|
|
90,665
|
|
|
(567
|
)
|
|
148,270
|
|
|||||||
Mid stage
|
|
15,936
|
|
|
6,963
|
|
|
(12,985
|
)
|
|
4,606
|
|
|
42,006
|
|
|
(133
|
)
|
|
56,393
|
|
|||||||
Later stage
|
|
40,189
|
|
|
24,750
|
|
|
(13,984
|
)
|
|
—
|
|
|
37,088
|
|
|
(439
|
)
|
|
87,604
|
|
|||||||
Total investor dependent
|
|
82,370
|
|
|
71,624
|
|
|
(38,916
|
)
|
|
8,569
|
|
|
169,759
|
|
|
(1,139
|
)
|
|
292,267
|
|
|||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sponsor led buyout
|
|
42,939
|
|
|
3,151
|
|
|
(2,624
|
)
|
|
2,845
|
|
|
8,675
|
|
|
(133
|
)
|
|
54,853
|
|
|||||||
Other
|
|
25,159
|
|
|
(3,056
|
)
|
|
(3,385
|
)
|
|
1
|
|
|
24,506
|
|
|
(125
|
)
|
|
43,100
|
|
|||||||
Total cash flow dependent
|
|
68,098
|
|
|
95
|
|
|
(6,009
|
)
|
|
2,846
|
|
|
33,181
|
|
|
(258
|
)
|
|
97,953
|
|
|||||||
Private bank
|
|
21,551
|
|
|
12,615
|
|
|
(1,616
|
)
|
|
—
|
|
|
59,075
|
|
|
(280
|
)
|
|
91,345
|
|
|||||||
Balance sheet dependent
|
|
12,722
|
|
|
(1,364
|
)
|
|
(4,900
|
)
|
|
—
|
|
|
18,344
|
|
|
(74
|
)
|
|
24,728
|
|
|||||||
Premium wine
|
|
5,296
|
|
|
3,650
|
|
|
(192
|
)
|
|
—
|
|
|
3,605
|
|
|
(40
|
)
|
|
12,319
|
|
|||||||
Other
|
|
7,602
|
|
|
8,732
|
|
|
(318
|
)
|
|
413
|
|
|
(3,528
|
)
|
|
734
|
|
|
13,635
|
|
|||||||
SBA loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,858
|
|
|
—
|
|
|
3,858
|
|
|||||||
Total allowance for credit losses
|
|
$
|
304,924
|
|
|
$
|
25,464
|
|
|
$
|
(51,951
|
)
|
|
$
|
11,828
|
|
|
$
|
300,800
|
|
|
$
|
(1,237
|
)
|
|
$
|
589,828
|
|
Six months ended June 30, 2019
|
|
Beginning Balance December 31, 2018
|
|
Charge-offs
|
|
Recoveries
|
|
Provision for (Reduction of) Credit Losses
|
|
Foreign Currency Translation Adjustments
|
|
Ending Balance June 30, 2019
|
||||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
||||||||||||||||||
Private equity/venture capital
|
|
$
|
93,781
|
|
|
$
|
(2,047
|
)
|
|
$
|
—
|
|
|
$
|
9,819
|
|
|
$
|
(300
|
)
|
|
$
|
101,253
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Early stage
|
|
25,885
|
|
|
(9,295
|
)
|
|
3,925
|
|
|
10,764
|
|
|
(310
|
)
|
|
30,969
|
|
||||||
Mid stage
|
|
20,999
|
|
|
(19,911
|
)
|
|
903
|
|
|
25,665
|
|
|
608
|
|
|
28,264
|
|
||||||
Later stage
|
|
25,217
|
|
|
—
|
|
|
1,777
|
|
|
11,103
|
|
|
(157
|
)
|
|
37,940
|
|
||||||
Total investor dependent
|
|
72,101
|
|
|
(29,206
|
)
|
|
6,605
|
|
|
47,532
|
|
|
141
|
|
|
97,173
|
|
||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sponsor led buyout
|
|
44,274
|
|
|
(2,402
|
)
|
|
—
|
|
|
(9,916
|
)
|
|
175
|
|
|
32,131
|
|
||||||
Other
|
|
21,754
|
|
|
(716
|
)
|
|
4,397
|
|
|
(884
|
)
|
|
—
|
|
|
24,551
|
|
||||||
Total cash flow dependent
|
|
66,028
|
|
|
(3,118
|
)
|
|
4,397
|
|
|
(10,800
|
)
|
|
175
|
|
|
56,682
|
|
||||||
Private Bank
|
|
20,583
|
|
|
(1,019
|
)
|
|
225
|
|
|
692
|
|
|
(84
|
)
|
|
20,397
|
|
||||||
Balance sheet dependent
|
|
21,707
|
|
|
—
|
|
|
—
|
|
|
(4,639
|
)
|
|
188
|
|
|
17,256
|
|
||||||
Premium wine
|
|
3,646
|
|
|
—
|
|
|
—
|
|
|
584
|
|
|
(3
|
)
|
|
4,227
|
|
||||||
Other
|
|
3,057
|
|
|
(45
|
)
|
|
18
|
|
|
1,781
|
|
|
89
|
|
|
4,900
|
|
||||||
Total allowance for credit losses
|
|
$
|
280,903
|
|
|
$
|
(35,435
|
)
|
|
$
|
11,245
|
|
|
$
|
44,969
|
|
|
$
|
206
|
|
|
$
|
301,888
|
|
(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
|
|
Total
|
|
Loans Past Due
90 Days or
More Still
Accruing
Interest
|
||||||||||||||
June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Private equity/venture capital
|
|
$
|
54
|
|
|
$
|
10
|
|
|
$
|
9
|
|
|
$
|
73
|
|
|
$
|
17,901,044
|
|
|
$
|
17,901,117
|
|
|
$
|
—
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Early stage
|
|
742
|
|
|
316
|
|
|
2,809
|
|
|
3,867
|
|
|
1,793,709
|
|
|
1,797,576
|
|
|
73
|
|
|||||||
Mid stage
|
|
4,190
|
|
|
3,157
|
|
|
5,493
|
|
|
12,840
|
|
|
1,422,932
|
|
|
1,435,772
|
|
|
—
|
|
|||||||
Later stage
|
|
2,502
|
|
|
3,900
|
|
|
—
|
|
|
6,402
|
|
|
1,899,126
|
|
|
1,905,528
|
|
|
—
|
|
|||||||
Total investor dependent
|
|
7,434
|
|
|
7,373
|
|
|
8,302
|
|
|
23,109
|
|
|
5,115,767
|
|
|
5,138,876
|
|
|
73
|
|
|||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sponsor led buyout
|
|
46
|
|
|
14
|
|
|
—
|
|
|
60
|
|
|
2,057,379
|
|
|
2,057,439
|
|
|
—
|
|
|||||||
Other
|
|
2,316
|
|
|
183
|
|
|
3,988
|
|
|
6,487
|
|
|
2,781,320
|
|
|
2,787,807
|
|
|
—
|
|
|||||||
Total cash flow dependent
|
|
2,362
|
|
|
197
|
|
|
3,988
|
|
|
6,547
|
|
|
4,838,699
|
|
|
4,845,246
|
|
|
—
|
|
|||||||
Private bank
|
|
601
|
|
|
—
|
|
|
2,749
|
|
|
3,350
|
|
|
3,812,927
|
|
|
3,816,277
|
|
|
—
|
|
|||||||
Balance sheet dependent
|
|
4,777
|
|
|
255
|
|
|
—
|
|
|
5,032
|
|
|
1,688,039
|
|
|
1,693,071
|
|
|
—
|
|
|||||||
Premium wine
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1,039,455
|
|
|
1,039,456
|
|
|
—
|
|
|||||||
Other
|
|
1
|
|
|
39
|
|
|
82
|
|
|
122
|
|
|
457,112
|
|
|
457,234
|
|
|
3
|
|
|||||||
SBA loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,835,945
|
|
|
1,835,945
|
|
|
—
|
|
|||||||
Total loans (1)
|
|
$
|
15,230
|
|
|
$
|
7,874
|
|
|
$
|
15,130
|
|
|
$
|
38,234
|
|
|
$
|
36,688,988
|
|
|
$
|
36,727,222
|
|
|
$
|
76
|
|
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Private equity/venture capital
|
|
$
|
97,739
|
|
|
$
|
383
|
|
|
$
|
3,150
|
|
|
$
|
101,272
|
|
|
$
|
17,611,525
|
|
|
17,712,797
|
|
|
$
|
3,150
|
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Early stage
|
|
1,307
|
|
|
22,062
|
|
|
723
|
|
|
24,092
|
|
|
1,629,333
|
|
|
1,653,425
|
|
|
—
|
|
|||||||
Mid stage
|
|
10,025
|
|
|
6,999
|
|
|
—
|
|
|
17,024
|
|
|
1,049,759
|
|
|
1,066,783
|
|
|
—
|
|
|||||||
Later stage
|
|
8,113
|
|
|
500
|
|
|
10,569
|
|
|
19,182
|
|
|
1,679,494
|
|
|
1,698,676
|
|
|
—
|
|
|||||||
Total investor dependent
|
|
19,445
|
|
|
29,561
|
|
|
11,292
|
|
|
60,298
|
|
|
4,358,586
|
|
|
4,418,884
|
|
|
—
|
|
|||||||
Cash flow dependent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sponsor led buyout
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,203,020
|
|
|
2,203,020
|
|
|
—
|
|
|||||||
Other
|
|
2,426
|
|
|
3,061
|
|
|
2
|
|
|
5,489
|
|
|
2,247,358
|
|
|
2,252,847
|
|
|
—
|
|
|||||||
Total cash flow dependent
|
|
2,426
|
|
|
3,061
|
|
|
2
|
|
|
5,489
|
|
|
4,450,378
|
|
|
4,455,867
|
|
|
—
|
|
|||||||
Private bank
|
|
6,582
|
|
|
2,049
|
|
|
1,544
|
|
|
10,175
|
|
|
3,479,044
|
|
|
3,489,219
|
|
|
365
|
|
|||||||
Balance sheet dependent
|
|
2,731
|
|
|
—
|
|
|
—
|
|
|
2,731
|
|
|
1,294,573
|
|
|
1,297,304
|
|
|
—
|
|
|||||||
Premium wine
|
|
8,435
|
|
|
3,170
|
|
|
—
|
|
|
11,605
|
|
|
1,051,907
|
|
|
1,063,512
|
|
|
—
|
|
|||||||
Other
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
890,104
|
|
|
890,121
|
|
|
—
|
|
|||||||
Total loans (1)
|
|
$
|
137,375
|
|
|
$
|
38,224
|
|
|
$
|
15,988
|
|
|
$
|
191,587
|
|
|
$
|
33,136,117
|
|
|
$
|
33,327,704
|
|
|
$
|
3,515
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
Three months ended June 30, 2020
|
|
Beginning Balance March 31, 2020
|
|
Additions
|
|
Paydowns and Other Reductions
|
|
Charge-offs
|
|
Ending Balance June 30, 2020
|
||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|||||||||||||||
Private equity/venture capital
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Early stage
|
|
18,414
|
|
|
9,606
|
|
|
(3,141
|
)
|
|
(457
|
)
|
|
24,422
|
|
|||||
Mid stage
|
|
12,180
|
|
|
494
|
|
|
(399
|
)
|
|
(4,156
|
)
|
|
8,119
|
|
|||||
Later stage
|
|
14,443
|
|
|
959
|
|
|
(4,904
|
)
|
|
—
|
|
|
10,498
|
|
|||||
Total investor dependent
|
|
45,037
|
|
|
11,059
|
|
|
(8,444
|
)
|
|
(4,613
|
)
|
|
43,039
|
|
|||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sponsor led buyout
|
|
—
|
|
|
21,658
|
|
|
—
|
|
|
—
|
|
|
21,658
|
|
|||||
Other
|
|
13
|
|
|
8,580
|
|
|
(3,276
|
)
|
|
—
|
|
|
5,317
|
|
|||||
Total cash flow dependent
|
|
13
|
|
|
30,238
|
|
|
(3,276
|
)
|
|
—
|
|
|
26,975
|
|
|||||
Private bank
|
|
4,857
|
|
|
2,634
|
|
|
(974
|
)
|
|
—
|
|
|
6,517
|
|
|||||
Balance sheet dependent
|
|
—
|
|
|
16,742
|
|
|
(4,900
|
)
|
|
—
|
|
|
11,842
|
|
|||||
Premium wine
|
|
700
|
|
|
998
|
|
|
(17
|
)
|
|
—
|
|
|
1,681
|
|
|||||
Other
|
|
—
|
|
|
234
|
|
|
(173
|
)
|
|
—
|
|
|
61
|
|
|||||
SBA loans
|
|
—
|
|
|
4,202
|
|
|
—
|
|
|
—
|
|
|
4,202
|
|
|||||
Total nonaccrual loans
|
|
$
|
50,607
|
|
|
$
|
66,116
|
|
|
$
|
(17,784
|
)
|
|
$
|
(4,613
|
)
|
|
$
|
94,326
|
|
Three months ended June 30, 2019
|
|
Beginning Balance March 31, 2019
|
|
Additions
|
|
Paydowns and Other Reductions
|
|
Charge-offs
|
|
Ending Balance June 30, 2019
|
||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|||||||||||||||
Private equity/venture capital
|
|
$
|
5,947
|
|
|
$
|
—
|
|
|
$
|
(3,900
|
)
|
|
$
|
(2,047
|
)
|
|
$
|
—
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Early stage
|
|
8,697
|
|
|
8,379
|
|
|
(5,231
|
)
|
|
(1,555
|
)
|
|
10,290
|
|
|||||
Mid stage
|
|
32,099
|
|
|
10,392
|
|
|
(869
|
)
|
|
(12,923
|
)
|
|
28,699
|
|
|||||
Later stage
|
|
23,140
|
|
|
18,507
|
|
|
(3,301
|
)
|
|
—
|
|
|
38,346
|
|
|||||
Total investor dependent
|
|
63,936
|
|
|
37,278
|
|
|
(9,401
|
)
|
|
(14,478
|
)
|
|
77,335
|
|
|||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sponsor led buyout
|
|
38,237
|
|
|
—
|
|
|
(27,470
|
)
|
|
(2,402
|
)
|
|
8,365
|
|
|||||
Other
|
|
16,690
|
|
|
79
|
|
|
(16,690
|
)
|
|
—
|
|
|
79
|
|
|||||
Total cash flow dependent
|
|
54,927
|
|
|
79
|
|
|
(44,160
|
)
|
|
(2,402
|
)
|
|
8,444
|
|
|||||
Private bank
|
|
3,809
|
|
|
1,865
|
|
|
(22
|
)
|
|
(8
|
)
|
|
5,644
|
|
|||||
Balance sheet dependent
|
|
4,736
|
|
|
238
|
|
|
—
|
|
|
—
|
|
|
4,974
|
|
|||||
Premium wine
|
|
268
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
244
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total nonaccrual loans (1)
|
|
$
|
133,623
|
|
|
$
|
39,460
|
|
|
$
|
(57,507
|
)
|
|
$
|
(18,935
|
)
|
|
$
|
96,641
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
Six months ended June 30, 2020
|
|
Beginning Balance December 31, 2019
|
|
Additions
|
|
Paydowns and Other Reductions
|
|
Charge-offs
|
|
Ending Balance June 30, 2020
|
||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|||||||||||||||
Private equity/venture capital
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Early stage
|
|
11,093
|
|
|
21,949
|
|
|
(5,905
|
)
|
|
(2,715
|
)
|
|
24,422
|
|
|||||
Mid stage
|
|
17,330
|
|
|
12,585
|
|
|
(787
|
)
|
|
(21,009
|
)
|
|
8,119
|
|
|||||
Later stage
|
|
6,296
|
|
|
12,183
|
|
|
(4,776
|
)
|
|
(3,205
|
)
|
|
10,498
|
|
|||||
Total investor dependent
|
|
34,719
|
|
|
46,717
|
|
|
(11,468
|
)
|
|
(26,929
|
)
|
|
43,039
|
|
|||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sponsor led buyout
|
|
44,585
|
|
|
21,658
|
|
|
(41,961
|
)
|
|
(2,624
|
)
|
|
21,658
|
|
|||||
Other
|
|
17,681
|
|
|
8,580
|
|
|
(20,926
|
)
|
|
(18
|
)
|
|
5,317
|
|
|||||
Total cash flow dependent
|
|
62,266
|
|
|
30,238
|
|
|
(62,887
|
)
|
|
(2,642
|
)
|
|
26,975
|
|
|||||
Private bank
|
|
5,480
|
|
|
2,634
|
|
|
(1,016
|
)
|
|
(581
|
)
|
|
6,517
|
|
|||||
Balance sheet dependent
|
|
—
|
|
|
16,742
|
|
|
(4,900
|
)
|
|
—
|
|
|
11,842
|
|
|||||
Premium wine
|
|
204
|
|
|
1,686
|
|
|
(17
|
)
|
|
(192
|
)
|
|
1,681
|
|
|||||
Other
|
|
—
|
|
|
234
|
|
|
(173
|
)
|
|
—
|
|
|
61
|
|
|||||
SBA loans
|
|
—
|
|
|
4,202
|
|
|
—
|
|
|
—
|
|
|
4,202
|
|
|||||
Total nonaccrual loans (1)
|
|
$
|
102,669
|
|
|
$
|
102,462
|
|
|
$
|
(80,461
|
)
|
|
$
|
(30,344
|
)
|
|
$
|
94,326
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
Six months ended June 30, 2019
|
|
Beginning Balance December 31, 2018
|
|
Additions
|
|
Paydowns and Other Reductions
|
|
Charge-offs
|
|
Ending Balance June 30, 2019
|
||||||||||
(Dollars in thousands)
|
|
|
|
|
|
|||||||||||||||
Private equity/venture capital
|
|
$
|
3,700
|
|
|
$
|
2,247
|
|
|
$
|
(3,900
|
)
|
|
$
|
(2,047
|
)
|
|
$
|
—
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Early stage
|
|
7,616
|
|
|
12,812
|
|
|
(8,443
|
)
|
|
(1,695
|
)
|
|
10,290
|
|
|||||
Mid stage
|
|
4,751
|
|
|
42,491
|
|
|
(1,390
|
)
|
|
(17,153
|
)
|
|
28,699
|
|
|||||
Later stage
|
|
11,385
|
|
|
30,570
|
|
|
(3,609
|
)
|
|
—
|
|
|
38,346
|
|
|||||
Total investor dependent
|
|
23,752
|
|
|
85,873
|
|
|
(13,442
|
)
|
|
(18,848
|
)
|
|
77,335
|
|
|||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sponsor led buyout
|
|
39,534
|
|
|
—
|
|
|
(28,767
|
)
|
|
(2,402
|
)
|
|
8,365
|
|
|||||
Other
|
|
17,156
|
|
|
79
|
|
|
(16,690
|
)
|
|
(466
|
)
|
|
79
|
|
|||||
Total cash flow dependent
|
|
56,690
|
|
|
79
|
|
|
(45,457
|
)
|
|
(2,868
|
)
|
|
8,444
|
|
|||||
Private bank
|
|
3,919
|
|
|
1,880
|
|
|
(88
|
)
|
|
(67
|
)
|
|
5,644
|
|
|||||
Balance sheet dependent
|
|
5,004
|
|
|
238
|
|
|
(268
|
)
|
|
—
|
|
|
4,974
|
|
|||||
Premium wine
|
|
285
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
244
|
|
|||||
Other
|
|
792
|
|
|
—
|
|
|
(792
|
)
|
|
—
|
|
|
—
|
|
|||||
Total nonaccrual loans (1)
|
|
$
|
94,142
|
|
|
$
|
90,317
|
|
|
$
|
(63,988
|
)
|
|
$
|
(23,830
|
)
|
|
$
|
96,641
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||
(Dollars in thousands)
|
|
Nonaccrual Loans
|
|
Nonaccrual Loans with no Allowance for Credit Loss
|
|
Nonaccrual Loans
|
|
Nonaccrual Loans with no Allowance for Credit Loss
|
||||||||
Private equity/venture capital
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
||||||||
Early stage
|
|
24,422
|
|
|
—
|
|
|
11,093
|
|
|
460
|
|
||||
Mid stage
|
|
8,119
|
|
|
368
|
|
|
17,330
|
|
|
274
|
|
||||
Later stage
|
|
10,498
|
|
|
4
|
|
|
6,296
|
|
|
—
|
|
||||
Total investor dependent
|
|
43,039
|
|
|
372
|
|
|
34,719
|
|
|
734
|
|
||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
||||||||
Sponsor led buyout
|
|
21,658
|
|
|
—
|
|
|
44,585
|
|
|
—
|
|
||||
Other
|
|
5,317
|
|
|
—
|
|
|
17,681
|
|
|
2,782
|
|
||||
Total cash flow dependent
|
|
26,975
|
|
|
—
|
|
|
62,266
|
|
|
2,782
|
|
||||
Private bank
|
|
6,517
|
|
|
6,517
|
|
|
5,480
|
|
|
3,714
|
|
||||
Balance sheet dependent
|
|
11,842
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Premium wine
|
|
1,681
|
|
|
997
|
|
|
204
|
|
|
—
|
|
||||
Other
|
|
61
|
|
|
61
|
|
|
—
|
|
|
—
|
|
||||
SBA loans
|
|
4,202
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total nonaccrual loans (1)
|
|
$
|
94,326
|
|
|
$
|
7,956
|
|
|
$
|
102,669
|
|
|
$
|
7,230
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Loans modified in TDRs:
|
|
|
|
|
||||
Private equity/venture capital
|
|
$
|
—
|
|
|
$
|
—
|
|
Investor dependent
|
|
|
|
|
||||
Early stage
|
|
5,354
|
|
|
9,471
|
|
||
Mid stage
|
|
11,130
|
|
|
5,189
|
|
||
Later stage
|
|
10,595
|
|
|
23,318
|
|
||
Total investor dependent
|
|
27,079
|
|
|
37,978
|
|
||
Cash flow dependent
|
|
|
|
|
||||
Sponsor led buyout
|
|
10,350
|
|
|
55,443
|
|
||
Other
|
|
5,326
|
|
|
—
|
|
||
Total cash flow dependent
|
|
15,676
|
|
|
55,443
|
|
||
Private bank
|
|
1,318
|
|
|
2,104
|
|
||
Balance sheet dependent
|
|
—
|
|
|
—
|
|
||
Premium wine
|
|
12,208
|
|
|
13,457
|
|
||
Other
|
|
—
|
|
|
—
|
|
||
SBA loans
|
|
—
|
|
|
—
|
|
||
Total loans modified in TDRs (1)
|
|
$
|
56,281
|
|
|
$
|
108,982
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Loans modified in TDRs during the period:
|
|
|
|
|
|
|
|
|
||||||||
Private equity/venture capital
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investor dependent
|
|
|
|
|
|
|
|
|
||||||||
Early stage
|
|
93
|
|
|
—
|
|
|
93
|
|
|
616
|
|
||||
Mid stage
|
|
5,281
|
|
|
3,521
|
|
|
11,130
|
|
|
3,521
|
|
||||
Later stage
|
|
3,966
|
|
|
14,214
|
|
|
6,710
|
|
|
14,214
|
|
||||
Total investor dependent
|
|
9,340
|
|
|
17,735
|
|
|
17,933
|
|
|
18,351
|
|
||||
Cash flow dependent
|
|
|
|
|
|
|
|
|
||||||||
Sponsor led buyout
|
|
—
|
|
|
48,557
|
|
|
—
|
|
|
48,557
|
|
||||
Other
|
|
3,986
|
|
|
—
|
|
|
3,986
|
|
|
—
|
|
||||
Total cash flow dependent
|
|
3,986
|
|
|
48,557
|
|
|
3,986
|
|
|
48,557
|
|
||||
Private bank
|
|
—
|
|
|
1,865
|
|
|
—
|
|
|
1,865
|
|
||||
Balance sheet dependent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Premium wine
|
|
997
|
|
|
—
|
|
|
998
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
SBA loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total loans modified in TDRs during the period (1) (2)
|
|
$
|
14,323
|
|
|
$
|
68,157
|
|
|
$
|
22,917
|
|
|
$
|
68,773
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
(2)
|
There were $5.0 million and $17.5 million of partial charge-offs for the three and six months ended June 30, 2020, respectively and $3.4 million and $5.6 million of partial charge-offs for the three and six months ended June 30, 2019.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
TDRs modified within the previous 12 months that defaulted during the period:
|
|
|
|
|
|
|
|
|
||||||||
Private equity/venture capital
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investor dependent
|
|
|
|
|
|
|
|
|
||||||||
Early stage
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Mid stage
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Later stage
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total investor dependent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash flow dependent
|
|
|
|
|
|
|
|
|
||||||||
Sponsor led buyout
|
|
10,350
|
|
|
—
|
|
|
10,350
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cash flow dependent
|
|
10,350
|
|
|
—
|
|
|
10,350
|
|
|
—
|
|
||||
Private bank
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance sheet dependent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Premium wine
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
SBA loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total TDRs modified within the previous 12 months that defaulted in the period (1)
|
|
$
|
10,350
|
|
|
$
|
—
|
|
|
$
|
10,350
|
|
|
$
|
—
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Allowance for credit losses: unfunded credit commitments, beginning balance
|
|
$
|
84,690
|
|
|
$
|
57,970
|
|
|
$
|
67,656
|
|
|
$
|
55,183
|
|
Impact of adopting ASC 326
|
|
—
|
|
|
—
|
|
|
22,826
|
|
|
—
|
|
||||
Provision for credit losses
|
|
14,590
|
|
|
4,798
|
|
|
9,113
|
|
|
7,528
|
|
||||
Foreign currency translation adjustments
|
|
14
|
|
|
(104
|
)
|
|
(301
|
)
|
|
(47
|
)
|
||||
Allowance for credit losses: unfunded credit commitments, ending balance (1)
|
|
$
|
99,294
|
|
|
$
|
62,664
|
|
|
$
|
99,294
|
|
|
$
|
62,664
|
|
|
(1)
|
The “allowance for credit losses: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 15 — “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.
|
8.
|
Leases
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Assets:
|
|
|
|
|
||||
Right-of-use assets - operating leases
|
|
$
|
215,319
|
|
|
$
|
197,365
|
|
Liabilities:
|
|
|
|
|
||||
Lease liabilities - operating leases
|
|
239,357
|
|
|
218,847
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Operating lease cost
|
|
$
|
11,605
|
|
|
$
|
9,462
|
|
|
$
|
22,969
|
|
|
$
|
18,980
|
|
Short-term lease cost
|
|
420
|
|
|
582
|
|
|
759
|
|
|
845
|
|
||||
Variable lease cost
|
|
1,198
|
|
|
933
|
|
|
1,791
|
|
|
1,779
|
|
||||
Less: sublease income
|
|
(155
|
)
|
|
(1,115
|
)
|
|
(1,287
|
)
|
|
(2,223
|
)
|
||||
Total lease cost, net
|
|
$
|
13,068
|
|
|
$
|
9,862
|
|
|
$
|
24,232
|
|
|
$
|
19,381
|
|
Supplemental cash flows information:
|
|
|
|
|
|
|
|
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Cash paid for operating leases
|
|
$
|
12,130
|
|
|
10,884
|
|
|
$
|
24,351
|
|
|
$
|
21,238
|
|
|
Noncash items during the period:
|
|
|
|
|
|
|
|
|
||||||||
Lease obligations in exchange for obtaining Right-of-use assets
|
|
|
|
|
|
|
|
|
||||||||
Operating leases
|
|
$
|
18,850
|
|
|
—
|
|
|
$
|
40,463
|
|
|
$
|
—
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||
Weighted-average remaining term (in years) - operating leases
|
|
6.00
|
|
|
6.29
|
|
Weighted-average discount rate - operating leases (1)
|
|
2.64
|
%
|
|
2.92
|
%
|
|
(1)
|
The incremental borrowing rate used to calculate the lease liability was determined based on the facts and circumstances of the economic environment and the Company’s credit standing as of the effective date of ASC 842. Additionally, the total lease term and total lease payments were also considered in determining the rate. Based on these considerations the Company identified credit terms available under its existing credit lines which represent a collateralized borrowing rate that has varying credit terms that could be matched to total lease terms and total lease payments in ultimately determining the implied borrowing rate in each lease contract.
|
Years ended December 31,
(Dollars in thousands)
|
|
Operating Leases
|
||
2020 (excluding the six months ended June 30, 2020)
|
|
$
|
24,477
|
|
2021
|
|
48,887
|
|
|
2022
|
|
43,698
|
|
|
2023
|
|
42,602
|
|
|
2024
|
|
36,648
|
|
|
2025 and thereafter
|
|
63,684
|
|
|
Total future lease payments (1)
|
|
$
|
259,996
|
|
Less: imputed interest
|
|
(20,639
|
)
|
|
Total lease liabilities
|
|
$
|
239,357
|
|
|
(1)
|
As of June 30, 2020, we have additional leases that have not yet commenced. We estimate that we will record additional lease liabilities of $18.5 million upon commencement. These leases will commence in 2020 with lease terms of two years to ten years.
|
9.
|
Goodwill and Other Intangible Assets
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
Other intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$
|
42,000
|
|
|
$
|
5,727
|
|
|
$
|
36,273
|
|
|
$
|
42,000
|
|
|
$
|
3,818
|
|
|
$
|
38,182
|
|
Other
|
|
18,900
|
|
|
8,447
|
|
|
10,453
|
|
|
18,900
|
|
|
7,665
|
|
|
11,235
|
|
||||||
Total other intangible assets
|
|
$
|
60,900
|
|
|
$
|
14,174
|
|
|
$
|
46,726
|
|
|
$
|
60,900
|
|
|
$
|
11,483
|
|
|
$
|
49,417
|
|
Years ended December 31,
(Dollars in thousands)
|
|
Other
Intangible Assets
|
||
2020 (excluding the six months ended June 30, 2020)
|
|
$
|
2,691
|
|
2021
|
|
4,732
|
|
|
2022
|
|
4,732
|
|
|
2023
|
|
4,732
|
|
|
2024
|
|
4,732
|
|
|
2025 and thereafter
|
|
25,107
|
|
|
Total future amortization expense
|
|
$
|
46,726
|
|
10.
|
Short-Term Borrowings and Long-Term Debt
|
|
|
|
|
|
|
Carrying Value
|
||||||||
(Dollars in thousands)
|
|
Maturity
|
|
Principal value at June 30, 2020
|
|
June 30,
2020 |
|
December 31,
2019 |
||||||
Short-term borrowings:
|
|
|
|
|
|
|
|
|
||||||
Other short-term borrowings
|
|
(1)
|
|
$
|
50,924
|
|
|
50,924
|
|
|
17,430
|
|
||
Total short-term borrowings
|
|
|
|
|
|
$
|
50,924
|
|
|
$
|
17,430
|
|
||
Long-term debt:
|
|
|
|
|
|
|
|
|
||||||
3.50% Senior Notes
|
|
January 29, 2025
|
|
$
|
350,000
|
|
|
$
|
348,166
|
|
|
$
|
347,987
|
|
3.125% Senior Notes
|
|
June 5, 2030
|
|
500,000
|
|
|
495,054
|
|
|
—
|
|
|||
Total long-term debt
|
|
|
|
|
|
$
|
843,220
|
|
|
$
|
347,987
|
|
|
(1)
|
Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.
|
11.
|
Derivative Financial Instruments
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
|
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 designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate risks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,915,000
|
|
|
$
|
22,676
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,085,000
|
|
|
—
|
|
|
25,623
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency exchange risks:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
|
|
308,975
|
|
|
—
|
|
|
10,471
|
|
|
300,250
|
|
|
—
|
|
|
2,154
|
|
||||||
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity warrant assets
|
|
249,399
|
|
|
171,082
|
|
|
—
|
|
|
225,893
|
|
|
165,473
|
|
|
—
|
|
||||||
Client foreign exchange forwards
|
|
6,937,993
|
|
|
179,166
|
|
|
—
|
|
|
4,661,517
|
|
|
114,546
|
|
|
—
|
|
||||||
Client foreign exchange forwards
|
|
6,339,390
|
|
|
—
|
|
|
139,140
|
|
|
4,326,059
|
|
|
—
|
|
|
94,745
|
|
||||||
Client foreign currency options
|
|
155,412
|
|
|
2,927
|
|
|
—
|
|
|
154,985
|
|
|
1,308
|
|
|
—
|
|
||||||
Client foreign currency options
|
|
155,412
|
|
|
—
|
|
|
2,927
|
|
|
154,985
|
|
|
—
|
|
|
1,308
|
|
||||||
Client interest rate derivatives
|
|
870,885
|
|
|
87,255
|
|
|
—
|
|
|
1,275,190
|
|
|
28,811
|
|
|
—
|
|
||||||
Client interest rate derivatives (2)
|
|
977,084
|
|
|
—
|
|
|
28,676
|
|
|
1,372,914
|
|
|
—
|
|
|
14,154
|
|
||||||
Total derivatives not designated as hedging instruments
|
|
|
|
440,430
|
|
|
181,214
|
|
|
|
|
310,138
|
|
|
112,361
|
|
||||||||
Total derivatives
|
|
|
|
$
|
440,430
|
|
|
$
|
181,214
|
|
|
|
|
$
|
332,814
|
|
|
$
|
137,984
|
|
|
(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 reflects reductions of approximately $65.1 million and $17.4 million of derivative liabilities at June 30, 2020 and December 31, 2019, respectively, reflecting variation margin treated as settlement of the related derivative fair values for legal and accounting purposes as required by central clearing houses.
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
Statement of income location
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate risks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive income into income
|
|
Interest income - loans
|
|
$
|
15,831
|
|
|
$
|
(508
|
)
|
|
$
|
17,920
|
|
|
$
|
(511
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Currency exchange risks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gains on revaluations of internal foreign currency instruments, net
|
|
Other noninterest income
|
|
$
|
11,428
|
|
|
$
|
2,491
|
|
|
$
|
3,053
|
|
|
$
|
3,541
|
|
Losses on internal foreign exchange forward contracts, net
|
|
Other noninterest income
|
|
(9,334
|
)
|
|
(3,274
|
)
|
|
(666
|
)
|
|
(3,743
|
)
|
||||
Net gains (losses) associated with internal currency risk
|
|
|
|
$
|
2,094
|
|
|
$
|
(783
|
)
|
|
$
|
2,387
|
|
|
$
|
(202
|
)
|
Other derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) on revaluations of client foreign currency instruments, net
|
|
Other noninterest income
|
|
$
|
4,911
|
|
|
$
|
959
|
|
|
$
|
(3,373
|
)
|
|
$
|
(12,612
|
)
|
(Losses) gains on client foreign exchange forward contracts, net
|
|
Other noninterest income
|
|
(6,806
|
)
|
|
411
|
|
|
941
|
|
|
13,065
|
|
||||
Net (losses) gains associated with client currency risk
|
|
|
|
$
|
(1,895
|
)
|
|
$
|
1,370
|
|
|
$
|
(2,432
|
)
|
|
$
|
453
|
|
Net gains on equity warrant assets
|
|
Gains on equity warrant assets, net
|
|
$
|
26,506
|
|
|
$
|
48,347
|
|
|
$
|
39,901
|
|
|
$
|
69,652
|
|
Net losses on other derivatives
|
|
Other noninterest income
|
|
$
|
(273
|
)
|
|
$
|
(1,131
|
)
|
|
$
|
(4,618
|
)
|
|
$
|
(1,496
|
)
|
|
|
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, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange forwards
|
|
179,166
|
|
|
—
|
|
|
179,166
|
|
|
(76,065
|
)
|
|
(49,755
|
)
|
|
53,346
|
|
||||||
Foreign currency options
|
|
2,927
|
|
|
—
|
|
|
2,927
|
|
|
(1,055
|
)
|
|
(1,169
|
)
|
|
703
|
|
||||||
Client interest rate derivatives
|
|
87,255
|
|
|
—
|
|
|
87,255
|
|
|
(87,255
|
)
|
|
—
|
|
|
—
|
|
||||||
Total derivative assets
|
|
269,348
|
|
|
—
|
|
|
269,348
|
|
|
(164,375
|
)
|
|
(50,924
|
)
|
|
54,049
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
317,048
|
|
|
—
|
|
|
317,048
|
|
|
(317,048
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
586,396
|
|
|
$
|
—
|
|
|
$
|
586,396
|
|
|
$
|
(481,423
|
)
|
|
$
|
(50,924
|
)
|
|
$
|
54,049
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
22,676
|
|
|
$
|
—
|
|
|
$
|
22,676
|
|
|
$
|
(22,598
|
)
|
|
$
|
—
|
|
|
$
|
78
|
|
Foreign exchange forwards
|
|
114,546
|
|
|
—
|
|
|
114,546
|
|
|
(36,855
|
)
|
|
(17,095
|
)
|
|
60,596
|
|
||||||
Foreign currency options
|
|
1,308
|
|
|
—
|
|
|
1,308
|
|
|
(848
|
)
|
|
(335
|
)
|
|
125
|
|
||||||
Client interest rate derivatives
|
|
28,811
|
|
|
—
|
|
|
28,811
|
|
|
(28,811
|
)
|
|
—
|
|
|
—
|
|
||||||
Total derivative assets
|
|
167,341
|
|
|
—
|
|
|
167,341
|
|
|
(89,112
|
)
|
|
(17,430
|
)
|
|
60,799
|
|
||||||
Reverse repurchase, securities borrowing, and similar arrangements
|
|
289,340
|
|
|
—
|
|
|
289,340
|
|
|
(289,340
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
456,681
|
|
|
$
|
—
|
|
|
$
|
456,681
|
|
|
$
|
(378,452
|
)
|
|
$
|
(17,430
|
)
|
|
$
|
60,799
|
|
|
(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, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange forwards
|
|
149,611
|
|
|
—
|
|
|
149,611
|
|
|
(54,867
|
)
|
|
(14,031
|
)
|
|
80,713
|
|
||||||
Foreign currency options
|
|
2,927
|
|
|
—
|
|
|
2,927
|
|
|
(987
|
)
|
|
—
|
|
|
1,940
|
|
||||||
Client interest rate derivatives
|
|
28,676
|
|
|
—
|
|
|
28,676
|
|
|
(6,566
|
)
|
|
(21,376
|
)
|
|
734
|
|
||||||
Total derivative liabilities
|
|
181,214
|
|
|
—
|
|
|
181,214
|
|
|
(62,420
|
)
|
|
(35,407
|
)
|
|
83,387
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
181,214
|
|
|
$
|
—
|
|
|
$
|
181,214
|
|
|
$
|
(62,420
|
)
|
|
$
|
(35,407
|
)
|
|
$
|
83,387
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
25,623
|
|
|
—
|
|
|
25,623
|
|
|
(22,676
|
)
|
|
(2,947
|
)
|
|
—
|
|
||||||
Foreign exchange forwards
|
|
96,899
|
|
|
—
|
|
|
96,899
|
|
|
(33,314
|
)
|
|
(22,030
|
)
|
|
41,555
|
|
||||||
Foreign currency options
|
|
1,308
|
|
|
—
|
|
|
1,308
|
|
|
(531
|
)
|
|
—
|
|
|
777
|
|
||||||
Client interest rate derivatives
|
|
14,154
|
|
|
—
|
|
|
14,154
|
|
|
—
|
|
|
(13,936
|
)
|
|
218
|
|
||||||
Total derivative liabilities
|
|
137,984
|
|
|
—
|
|
|
137,984
|
|
|
(56,521
|
)
|
|
(38,913
|
)
|
|
42,550
|
|
||||||
Repurchase, securities lending, and similar arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
137,984
|
|
|
$
|
—
|
|
|
$
|
137,984
|
|
|
$
|
(56,521
|
)
|
|
$
|
(38,913
|
)
|
|
$
|
42,550
|
|
|
(1)
|
Cash collateral pledged to our counterparties in relation to market value exposures of derivative contracts in a liability position and repurchase agreements are recorded as a component of “cash and cash equivalents" on our consolidated balance sheets.
|
12.
|
Noninterest Income
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Noninterest income:
|
|
|
|
|
|
|
|
|
||||||||
Gains on investment securities, net
|
|
$
|
34,868
|
|
|
$
|
47,698
|
|
|
$
|
80,923
|
|
|
$
|
76,726
|
|
Gains on equity warrant assets, net
|
|
26,506
|
|
|
48,347
|
|
|
39,901
|
|
|
69,652
|
|
||||
Client investment fees
|
|
31,885
|
|
|
45,744
|
|
|
75,278
|
|
|
90,226
|
|
||||
Foreign exchange fees
|
|
36,256
|
|
|
38,506
|
|
|
83,761
|
|
|
76,554
|
|
||||
Credit card fees
|
|
21,288
|
|
|
28,790
|
|
|
49,592
|
|
|
56,273
|
|
||||
Deposit service charges
|
|
20,511
|
|
|
22,075
|
|
|
45,100
|
|
|
43,014
|
|
||||
Lending related fees
|
|
11,164
|
|
|
11,213
|
|
|
24,289
|
|
|
25,150
|
|
||||
Letters of credit and standby letters of credit fees
|
|
11,421
|
|
|
11,009
|
|
|
22,963
|
|
|
20,363
|
|
||||
Investment banking revenue
|
|
141,503
|
|
|
48,694
|
|
|
188,370
|
|
|
98,489
|
|
||||
Commissions
|
|
16,918
|
|
|
14,429
|
|
|
32,940
|
|
|
28,537
|
|
||||
Other
|
|
16,528
|
|
|
17,245
|
|
|
27,665
|
|
|
29,142
|
|
||||
Total noninterest income
|
|
$
|
368,848
|
|
|
$
|
333,750
|
|
|
$
|
670,782
|
|
|
$
|
614,126
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Gains on non-marketable and other equity securities, net
|
|
$
|
34,868
|
|
|
$
|
47,973
|
|
|
$
|
19,758
|
|
|
$
|
80,631
|
|
(Losses) gains on sales of available-for-sale securities, net
|
|
—
|
|
|
(275
|
)
|
|
61,165
|
|
|
(3,905
|
)
|
||||
Total gains on investment securities, net
|
|
$
|
34,868
|
|
|
$
|
47,698
|
|
|
$
|
80,923
|
|
|
$
|
76,726
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Equity warrant assets:
|
|
|
|
|
|
|
|
|
||||||||
Gains on exercises, net
|
|
$
|
9,435
|
|
|
$
|
40,226
|
|
|
$
|
32,730
|
|
|
$
|
49,180
|
|
Terminations
|
|
(439
|
)
|
|
(1,045
|
)
|
|
(872
|
)
|
|
(1,884
|
)
|
||||
Changes in fair value, net
|
|
17,510
|
|
|
9,166
|
|
|
8,043
|
|
|
22,356
|
|
||||
Total net gains on equity warrant assets
|
|
$
|
26,506
|
|
|
$
|
48,347
|
|
|
$
|
39,901
|
|
|
$
|
69,652
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Client investment fees by type:
|
|
|
|
|
|
|
|
|
||||||||
Sweep money market fees
|
|
$
|
19,413
|
|
|
$
|
26,952
|
|
|
$
|
42,462
|
|
|
$
|
53,496
|
|
Asset management fees (1)
|
|
11,596
|
|
|
6,956
|
|
|
20,733
|
|
|
13,628
|
|
||||
Repurchase agreement fees
|
|
876
|
|
|
11,836
|
|
|
12,083
|
|
|
23,102
|
|
||||
Total client investment fees (2)
|
|
$
|
31,885
|
|
|
$
|
45,744
|
|
|
$
|
75,278
|
|
|
$
|
90,226
|
|
|
(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 that 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)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Foreign exchange fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Spot contract commissions
|
|
$
|
33,093
|
|
|
$
|
34,696
|
|
|
$
|
74,027
|
|
|
$
|
69,725
|
|
Forward contract commissions
|
|
3,052
|
|
|
3,778
|
|
|
9,391
|
|
|
6,773
|
|
||||
Option premium fees
|
|
111
|
|
|
32
|
|
|
343
|
|
|
56
|
|
||||
Total foreign exchange fees
|
|
$
|
36,256
|
|
|
$
|
38,506
|
|
|
$
|
83,761
|
|
|
$
|
76,554
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Credit card fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Card interchange fees, net
|
|
$
|
15,314
|
|
|
$
|
22,855
|
|
|
$
|
37,089
|
|
|
$
|
44,248
|
|
Merchant service fees
|
|
5,030
|
|
|
4,286
|
|
|
10,057
|
|
|
8,821
|
|
||||
Card service fees
|
|
944
|
|
|
1,649
|
|
|
2,446
|
|
|
3,204
|
|
||||
Total credit card fees
|
|
$
|
21,288
|
|
|
$
|
28,790
|
|
|
$
|
49,592
|
|
|
$
|
56,273
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Lending related fees by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Unused commitment fees
|
|
$
|
8,324
|
|
|
$
|
7,051
|
|
|
$
|
16,730
|
|
|
$
|
16,721
|
|
Other
|
|
2,840
|
|
|
4,162
|
|
|
7,559
|
|
|
8,429
|
|
||||
Total lending related fees
|
|
$
|
11,164
|
|
|
$
|
11,213
|
|
|
$
|
24,289
|
|
|
$
|
25,150
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Investment banking revenue:
|
|
|
|
|
|
|
|
|
||||||||
Underwriting fees
|
|
$
|
131,085
|
|
|
$
|
42,584
|
|
|
$
|
162,375
|
|
|
$
|
78,356
|
|
Advisory fees
|
|
8,922
|
|
|
5,315
|
|
|
24,409
|
|
|
17,588
|
|
||||
Private placements and other
|
|
1,496
|
|
|
795
|
|
|
1,586
|
|
|
2,545
|
|
||||
Total investment banking revenue
|
|
$
|
141,503
|
|
|
$
|
48,694
|
|
|
$
|
188,370
|
|
|
$
|
98,489
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Other noninterest income by instrument type:
|
|
|
|
|
|
|
|
|
||||||||
Fund management fees
|
|
$
|
8,845
|
|
|
$
|
7,758
|
|
|
$
|
16,753
|
|
|
$
|
15,799
|
|
Net gains (losses) on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)
|
|
199
|
|
|
587
|
|
|
(45
|
)
|
|
251
|
|
||||
Other service revenue
|
|
7,484
|
|
|
8,900
|
|
|
10,957
|
|
|
13,092
|
|
||||
Total other noninterest income
|
|
$
|
16,528
|
|
|
$
|
17,245
|
|
|
$
|
27,665
|
|
|
$
|
29,142
|
|
|
(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, 2020
(Dollars in thousands)
|
|
Global
Commercial Bank (2) |
|
SVB Private
Bank |
|
SVB Capital (2)
|
|
SVB
Leerink (2) |
|
Other Items
|
|
Total
|
||||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client investment fees
|
|
$
|
31,308
|
|
|
$
|
577
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,885
|
|
Spot contract commissions
|
|
32,865
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
33,093
|
|
||||||
Card interchange fees, gross
|
|
25,930
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
291
|
|
|
26,226
|
|
||||||
Merchant service fees
|
|
5,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,030
|
|
||||||
Deposit service charges
|
|
20,460
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
20,511
|
|
||||||
Investment banking revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141,503
|
|
|
—
|
|
|
141,503
|
|
||||||
Commissions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,918
|
|
|
—
|
|
|
16,918
|
|
||||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
7,415
|
|
|
1,430
|
|
|
—
|
|
|
8,845
|
|
||||||
Correspondent bank rebates
|
|
1,371
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,371
|
|
||||||
Total revenue from contracts with customers
|
|
$
|
116,964
|
|
|
$
|
693
|
|
|
$
|
7,415
|
|
|
$
|
159,851
|
|
|
$
|
459
|
|
|
$
|
285,382
|
|
Revenues outside the scope of ASC 606 (1)
|
|
16,510
|
|
|
(23
|
)
|
|
14,035
|
|
|
3,966
|
|
|
48,978
|
|
|
83,466
|
|
||||||
Total noninterest income
|
|
$
|
133,474
|
|
|
$
|
670
|
|
|
$
|
21,450
|
|
|
$
|
163,817
|
|
|
$
|
49,437
|
|
|
$
|
368,848
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
(2)
|
Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."
|
Three months ended June 30, 2019
(Dollars in thousands)
|
|
Global
Commercial Bank (2) |
|
SVB Private
Bank |
|
SVB Capital (2)
|
|
SVB
Leerink (2) |
|
Other Items
|
|
Total
|
||||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client investment fees (3)
|
|
$
|
45,278
|
|
|
$
|
466
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,744
|
|
Spot contract commissions
|
|
34,428
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
103
|
|
|
34,696
|
|
||||||
Card interchange fees, gross
|
|
41,887
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
42,077
|
|
||||||
Merchant service fees
|
|
4,286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,286
|
|
||||||
Deposit service charges
|
|
21,750
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
292
|
|
|
22,075
|
|
||||||
Investment banking revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,694
|
|
|
—
|
|
|
48,694
|
|
||||||
Commissions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,429
|
|
|
—
|
|
|
14,429
|
|
||||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
6,328
|
|
|
1,430
|
|
|
—
|
|
|
7,758
|
|
||||||
Correspondent bank rebates
|
|
1,612
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,612
|
|
||||||
Total revenue from contracts with customers
|
|
$
|
149,241
|
|
|
$
|
664
|
|
|
$
|
6,328
|
|
|
$
|
64,553
|
|
|
$
|
585
|
|
|
$
|
221,371
|
|
Revenues outside the scope of ASC 606 (1)
|
|
8,364
|
|
|
22
|
|
|
33,731
|
|
|
2,447
|
|
|
67,815
|
|
|
112,379
|
|
||||||
Total noninterest income
|
|
$
|
157,605
|
|
|
$
|
686
|
|
|
$
|
40,059
|
|
|
$
|
67,000
|
|
|
$
|
68,400
|
|
|
$
|
333,750
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
(2)
|
Global Commercial Bank’s and SVB Capital’s components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."
|
(3)
|
For the three months ended June 30, 2019, the amount of client investment fees previously reported as "Other Items" has been correctly allocated to the reportable segment "Global Commercial Bank" to properly reflect the source of such revenue. The correction of this immaterial error had no impact on the "Total" amount of client investment fees.
|
Six months ended June 30, 2020
(Dollars in thousands)
|
|
Global
Commercial Bank (2) |
|
SVB Private
Bank |
|
SVB Capital (2)
|
|
SVB
Leerink (2) |
|
Other Items
|
|
Total
|
||||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client investment fees
|
|
$
|
74,044
|
|
|
$
|
1,234
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,278
|
|
Spot contract commissions
|
|
73,540
|
|
|
259
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
74,027
|
|
||||||
Card interchange fees, gross
|
|
61,654
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
857
|
|
|
62,523
|
|
||||||
Merchant service fees
|
|
10,057
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,057
|
|
||||||
Deposit service charges
|
|
44,698
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|
45,100
|
|
||||||
Investment banking revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188,370
|
|
|
—
|
|
|
188,370
|
|
||||||
Commissions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,940
|
|
|
—
|
|
|
32,940
|
|
||||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
13,893
|
|
|
2,860
|
|
|
—
|
|
|
16,753
|
|
||||||
Correspondent bank rebates
|
|
2,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,774
|
|
||||||
Total revenue from contracts with customers
|
|
$
|
266,767
|
|
|
$
|
1,545
|
|
|
$
|
13,893
|
|
|
$
|
224,170
|
|
|
$
|
1,447
|
|
|
$
|
507,822
|
|
Revenues outside the scope of ASC 606 (1)
|
|
33,541
|
|
|
25
|
|
|
12,475
|
|
|
2,324
|
|
|
114,595
|
|
|
162,960
|
|
||||||
Total noninterest income
|
|
$
|
300,308
|
|
|
$
|
1,570
|
|
|
$
|
26,368
|
|
|
$
|
226,494
|
|
|
$
|
116,042
|
|
|
$
|
670,782
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
(2)
|
Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."
|
Six months ended June 30, 2019
(Dollars in thousands)
|
|
Global
Commercial Bank (2) |
|
SVB Private
Bank |
|
SVB Capital (2)
|
|
SVB
Leerink (2) |
|
Other Items
|
|
Total
|
||||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client investment fees (3)
|
|
$
|
89,380
|
|
|
$
|
846
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90,226
|
|
Spot contract commissions
|
|
69,233
|
|
|
288
|
|
|
—
|
|
|
—
|
|
|
204
|
|
|
69,725
|
|
||||||
Card interchange fees, gross
|
|
80,601
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
337
|
|
|
80,938
|
|
||||||
Merchant service fees
|
|
8,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,821
|
|
||||||
Deposit service charges
|
|
42,543
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
403
|
|
|
43,014
|
|
||||||
Investment banking revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,489
|
|
|
—
|
|
|
98,489
|
|
||||||
Commissions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,537
|
|
|
—
|
|
|
28,537
|
|
||||||
Fund management fees
|
|
—
|
|
|
—
|
|
|
12,987
|
|
|
2,812
|
|
|
—
|
|
|
15,799
|
|
||||||
Correspondent bank rebates
|
|
3,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,079
|
|
||||||
Total revenue from contracts with customers
|
|
$
|
293,657
|
|
|
$
|
1,202
|
|
|
$
|
12,987
|
|
|
$
|
129,838
|
|
|
$
|
944
|
|
|
$
|
438,628
|
|
Revenues outside the scope of ASC 606 (1)
|
|
16,808
|
|
|
(6
|
)
|
|
51,917
|
|
|
5,279
|
|
|
101,500
|
|
|
175,498
|
|
||||||
Total noninterest income
|
|
$
|
310,465
|
|
|
$
|
1,196
|
|
|
$
|
64,904
|
|
|
$
|
135,117
|
|
|
$
|
102,444
|
|
|
$
|
614,126
|
|
|
(1)
|
Amounts are accounted for under separate guidance than ASC 606.
|
(2)
|
Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."
|
(3)
|
For the six months ended June 30, 2019, the amount of client investment fees previously reported as "Other Items" has been correctly allocated to the reportable segment "Global Commercial Bank" to properly reflect the source of such revenue. The correction of this immaterial error had no impact on the "Total" amount of client investment fees.
|
13.
|
Other Noninterest Expense
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Lending and other client related processing costs
|
|
$
|
6,803
|
|
|
$
|
8,763
|
|
|
$
|
15,961
|
|
|
$
|
13,940
|
|
Correspondent bank fees
|
|
3,833
|
|
|
3,569
|
|
|
7,819
|
|
|
7,313
|
|
||||
Investment banking activities
|
|
7,768
|
|
|
3,869
|
|
|
10,798
|
|
|
8,054
|
|
||||
Trade order execution costs
|
|
2,614
|
|
|
2,828
|
|
|
5,359
|
|
|
5,344
|
|
||||
Data processing services
|
|
3,507
|
|
|
2,659
|
|
|
6,961
|
|
|
5,558
|
|
||||
Telephone
|
|
1,889
|
|
|
2,422
|
|
|
4,116
|
|
|
5,163
|
|
||||
Dues and publications
|
|
910
|
|
|
860
|
|
|
2,040
|
|
|
2,384
|
|
||||
Postage and supplies
|
|
723
|
|
|
678
|
|
|
1,579
|
|
|
1,448
|
|
||||
Other
|
|
11,600
|
|
|
11,769
|
|
|
25,717
|
|
|
21,749
|
|
||||
Total other noninterest expense
|
|
$
|
39,647
|
|
|
$
|
37,417
|
|
|
$
|
80,350
|
|
|
$
|
70,953
|
|
14.
|
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, treasury management, foreign exchange, trade finance, and other services. We broadly serve clients within the U.S., 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 Global Funds Banking (formerly Private Equity) Division provides banking products and services primarily to our private equity and venture capital clients.
|
◦
|
SVB Wine provides banking products and services to our premium wine industry clients, including vineyard development loans.
|
◦
|
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 products, as well as cash and wealth management services. In addition, we provide real estate secured loans to eligible employees through our Employee Home Ownership Program.
|
•
|
SVB Capital is the funds management business of SVB Financial Group, 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.
|
•
|
SVB Leerink is an investment bank specializing in the equity and convertible capital markets, mergers and acquisitions, equity research and sales and trading for growth and innovation-minded healthcare and life science companies and operates as a wholly-owned subsidiary of SVB Financial. SVB Leerink provides investment banking services across all subsectors of healthcare including: biotechnology, pharmaceuticals, medical devices, diagnostic and life science tools, healthcare services and digital health. SVB Leerink focuses on two primary lines of business: (i) investment banking focused on providing companies with capital-raising services, financial advice on mergers and acquisitions, sales and trading services and equity research, and (ii) sponsorship of private investment funds.
|
(Dollars in thousands)
|
|
Global
Commercial
Bank (1)
|
|
SVB Private
Bank
|
|
SVB Capital (1)
|
|
SVB
Leerink (1)
|
|
Other Items (2)
|
|
Total
|
||||||||||||
Three months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income (loss)
|
|
$
|
484,969
|
|
|
$
|
18,644
|
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
|
$
|
9,312
|
|
|
$
|
512,927
|
|
Provision for credit losses
|
|
(43,456
|
)
|
|
(4,585
|
)
|
|
—
|
|
|
—
|
|
|
(18,440
|
)
|
|
(66,481
|
)
|
||||||
Noninterest income (7)
|
|
133,474
|
|
|
670
|
|
|
21,450
|
|
|
163,817
|
|
|
49,437
|
|
|
368,848
|
|
||||||
Noninterest expense (3)
|
|
(241,343
|
)
|
|
(10,164
|
)
|
|
(8,256
|
)
|
|
(108,650
|
)
|
|
(111,223
|
)
|
|
(479,636
|
)
|
||||||
Income (loss) before income tax expense (4)
|
|
$
|
333,644
|
|
|
$
|
4,565
|
|
|
$
|
13,199
|
|
|
$
|
55,164
|
|
|
$
|
(70,914
|
)
|
|
$
|
335,658
|
|
Total average loans, amortized cost
|
|
$
|
30,472,414
|
|
|
$
|
4,035,940
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,003,805
|
|
|
$
|
36,512,159
|
|
Total average assets (5) (6) (8)
|
|
67,936,486
|
|
|
4,071,648
|
|
|
430,272
|
|
|
454,603
|
|
|
5,538,993
|
|
|
78,432,002
|
|
||||||
Total average deposits
|
|
65,090,982
|
|
|
2,119,983
|
|
|
—
|
|
|
—
|
|
|
705,416
|
|
|
67,916,381
|
|
||||||
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
461,752
|
|
|
$
|
12,277
|
|
|
$
|
6
|
|
|
$
|
242
|
|
|
$
|
55,126
|
|
|
$
|
529,403
|
|
Provision for credit losses
|
|
(18,295
|
)
|
|
(853
|
)
|
|
—
|
|
|
—
|
|
|
(4,798
|
)
|
|
(23,946
|
)
|
||||||
Noninterest income (7)
|
|
157,605
|
|
|
686
|
|
|
40,059
|
|
|
67,000
|
|
|
68,400
|
|
|
333,750
|
|
||||||
Noninterest expense (3)
|
|
(206,902
|
)
|
|
(9,526
|
)
|
|
(7,883
|
)
|
|
(61,935
|
)
|
|
(97,276
|
)
|
|
(383,522
|
)
|
||||||
Income before income tax expense (4)
|
|
$
|
394,160
|
|
|
$
|
2,584
|
|
|
$
|
32,182
|
|
|
$
|
5,307
|
|
|
$
|
21,452
|
|
|
$
|
455,685
|
|
Total average loans, amortized cost
|
|
$
|
25,724,704
|
|
|
$
|
3,217,597
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
464,319
|
|
|
$
|
29,406,620
|
|
Total average assets (5) (6) (8)
|
|
53,965,699
|
|
|
3,247,557
|
|
|
373,167
|
|
|
410,279
|
|
|
2,703,784
|
|
|
60,700,486
|
|
||||||
Total average deposits
|
|
51,126,806
|
|
|
1,394,905
|
|
|
—
|
|
|
—
|
|
|
440,497
|
|
|
52,962,208
|
|
||||||
Six months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
948,805
|
|
|
$
|
33,808
|
|
|
$
|
26
|
|
|
$
|
198
|
|
|
$
|
54,227
|
|
|
$
|
1,037,064
|
|
Provision for credit losses
|
|
(237,867
|
)
|
|
(59,075
|
)
|
|
—
|
|
|
—
|
|
|
(13,019
|
)
|
|
(309,961
|
)
|
||||||
Noninterest income (7)
|
|
300,308
|
|
|
1,570
|
|
|
26,368
|
|
|
226,494
|
|
|
116,042
|
|
|
670,782
|
|
||||||
Noninterest expense (3)
|
|
(466,198
|
)
|
|
(20,254
|
)
|
|
(16,842
|
)
|
|
(170,687
|
)
|
|
(205,240
|
)
|
|
(879,221
|
)
|
||||||
Income (loss) before income tax expense (4)
|
|
$
|
545,048
|
|
|
$
|
(43,951
|
)
|
|
$
|
9,552
|
|
|
$
|
56,005
|
|
|
$
|
(47,990
|
)
|
|
$
|
518,664
|
|
Total average loans, net of unearned income
|
|
$
|
29,804,949
|
|
|
$
|
3,946,709
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,334,786
|
|
|
$
|
35,086,444
|
|
Total average assets (5) (6) (8)
|
|
64,870,536
|
|
|
3,982,024
|
|
|
438,737
|
|
|
469,126
|
|
|
5,659,162
|
|
|
75,419,585
|
|
||||||
Total average deposits
|
|
62,153,426
|
|
|
2,021,323
|
|
|
—
|
|
|
—
|
|
|
687,557
|
|
|
64,862,306
|
|
||||||
Six months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
907,628
|
|
|
$
|
24,258
|
|
|
$
|
12
|
|
|
$
|
684
|
|
|
$
|
109,707
|
|
|
$
|
1,042,289
|
|
(Provision for) reduction of credit losses
|
|
(45,100
|
)
|
|
131
|
|
|
—
|
|
|
—
|
|
|
(7,528
|
)
|
|
(52,497
|
)
|
||||||
Noninterest income (7)
|
|
310,465
|
|
|
1,196
|
|
|
64,904
|
|
|
135,117
|
|
|
102,444
|
|
|
614,126
|
|
||||||
Noninterest expense (3)
|
|
(404,147
|
)
|
|
(18,378
|
)
|
|
(13,665
|
)
|
|
(122,475
|
)
|
|
(190,521
|
)
|
|
(749,186
|
)
|
||||||
Income before income tax expense (4)
|
|
$
|
768,846
|
|
|
$
|
7,207
|
|
|
$
|
51,251
|
|
|
$
|
13,326
|
|
|
$
|
14,102
|
|
|
$
|
854,732
|
|
Total average loans, net of unearned income
|
|
$
|
25,264,010
|
|
|
$
|
3,152,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
484,046
|
|
|
$
|
28,900,160
|
|
Total average assets (5) (6) (8)
|
|
52,068,609
|
|
|
3,179,064
|
|
|
375,934
|
|
|
355,609
|
|
|
3,144,018
|
|
|
59,123,234
|
|
||||||
Total average deposits
|
|
49,371,589
|
|
|
1,442,803
|
|
|
—
|
|
|
—
|
|
|
532,788
|
|
|
51,347,180
|
|
|
(1)
|
Global Commercial Bank’s, SVB Capital’s and SVB Leerink'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 or losses on equity warrant assets, gains or losses on the sale of AFS securities and gains or losses on equity securities from exercised warrant assets. Noninterest expense consists primarily of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses.
|
(3)
|
The Global Commercial Bank segment includes direct depreciation and amortization of $5.8 million and $4.8 million for the three months ended June 30, 2020 and 2019, respectively, and $11.3 million and $9.6 million for the six months ended June 30, 2020 and 2019.
|
(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.
|
(6)
|
Included in the total average assets for SVB Leerink is goodwill of $137.8 million for the three and six months ended June 30, 2020 and 2019.
|
(7)
|
For the three and six months ended June 30, 2019, amounts of client investment fees included in the line item "Noninterest Income" previously reported as "Other Items" have been correctly allocated to our reportable segment "Global Commercial Bank" to properly reflect the source of such revenue. The correction of this immaterial error had no impact on the "Total" amount of noninterest income.
|
(8)
|
For the three and six months ended June 30, 2019, amounts for average assets previously reported as "Other Items" have been correctly allocated to the reportable segments "Global Commercial Bank" and “Private Bank” to properly reflect the greater of total average assets or the sum of total average liabilities and total average stockholders’ equity for “Global Commercial Bank” and “Private Bank.” The correction of this immaterial error had no impact on the "Total" amount of average assets.
|
15.
|
Off-Balance Sheet Arrangements, Guarantees and Other Commitments
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Loan commitments available for funding: (1)
|
|
|
|
|
||||
Fixed interest rate commitments
|
|
$
|
2,298,264
|
|
|
$
|
2,434,042
|
|
Variable interest rate commitments
|
|
22,895,069
|
|
|
19,309,317
|
|
||
Total loan commitments available for funding
|
|
25,193,333
|
|
|
21,743,359
|
|
||
Commercial and standby letters of credit (2)
|
|
2,933,896
|
|
|
2,778,561
|
|
||
Total unfunded credit commitments
|
|
$
|
28,127,229
|
|
|
$
|
24,521,920
|
|
Commitments unavailable for funding (3)
|
|
$
|
2,412,910
|
|
|
$
|
3,051,075
|
|
Allowance for unfunded credit commitments (4)
|
|
99,294
|
|
|
67,656
|
|
|
(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 credit losses 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
|
|
$
|
2,723,597
|
|
|
$
|
80,267
|
|
|
$
|
2,803,864
|
|
|
$
|
2,803,864
|
|
Performance standby letters of credit
|
|
109,279
|
|
|
17,787
|
|
|
127,066
|
|
|
127,066
|
|
||||
Commercial letters of credit
|
|
2,870
|
|
|
96
|
|
|
2,966
|
|
|
2,966
|
|
||||
Total
|
|
$
|
2,835,746
|
|
|
$
|
98,150
|
|
|
$
|
2,933,896
|
|
|
$
|
2,933,896
|
|
(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
|
|
||
Capital Preferred Return Fund, LP
|
|
12,688
|
|
|
—
|
|
|
20.0
|
|
||
Growth Partners, LP
|
|
24,670
|
|
|
1,340
|
|
|
33.0
|
|
||
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
|
|
|
2,235
|
|
|
5.0
|
|
||
Strategic Investors Fund V funds
|
|
515
|
|
|
131
|
|
|
Various
|
|
||
Other venture capital and private equity fund investments (equity method accounting)
|
|
21,789
|
|
|
5,514
|
|
|
Various
|
|
||
Debt funds (equity method accounting)
|
|
58,493
|
|
|
—
|
|
|
Various
|
|
||
Other fund investments (2)
|
|
281,508
|
|
|
5,951
|
|
|
Various
|
|
||
Total
|
|
$
|
464,402
|
|
|
$
|
18,616
|
|
|
|
|
(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 197 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 investments in “covered funds”. Under revised regulations that will become effective on October 1, 2020, venture capital and credit funds that meet certain criteria will no longer be considered covered funds. We believe that, as a result of these changes, we will not be required to sell or otherwise conform certain of our fund investments. See the “Volcker Rule” section under Part I, Item 2 of this report for additional details.
|
(Dollars in thousands)
|
|
Unfunded Commitments
|
||
Strategic Investors Fund, LP
|
|
$
|
376
|
|
Capital Preferred Return Fund, LP
|
|
1,517
|
|
|
Growth Partners, LP
|
|
2,504
|
|
|
Total
|
|
$
|
4,397
|
|
16.
|
Income Taxes
|
17.
|
Fair Value of Financial Instruments
|
(Dollars in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance at June 30, 2020
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
4,535,235
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,535,235
|
|
U.S. agency debentures
|
|
—
|
|
|
102,659
|
|
|
—
|
|
|
102,659
|
|
||||
Foreign government debt securities
|
|
22,525
|
|
|
—
|
|
|
—
|
|
|
22,525
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
—
|
|
|
7,655,556
|
|
|
—
|
|
|
7,655,556
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
—
|
|
|
2,979,540
|
|
|
—
|
|
|
2,979,540
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
—
|
|
|
3,156,398
|
|
|
—
|
|
|
3,156,398
|
|
||||
Total available-for-sale securities
|
|
4,557,760
|
|
|
13,894,153
|
|
|
—
|
|
|
18,451,913
|
|
||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments measured at net asset value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213,201
|
|
||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
—
|
|
|
—
|
|
|
134
|
|
|
134
|
|
||||
Other equity securities in public companies
|
|
25,233
|
|
|
20,055
|
|
|
—
|
|
|
45,288
|
|
||||
Total non-marketable and other equity securities (fair value accounting)
|
|
25,233
|
|
|
20,055
|
|
|
134
|
|
|
258,623
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
182,093
|
|
|
—
|
|
|
182,093
|
|
||||
Equity warrant assets
|
|
—
|
|
|
5,857
|
|
|
165,225
|
|
|
171,082
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
87,255
|
|
|
—
|
|
|
87,255
|
|
||||
Total assets
|
|
$
|
4,582,993
|
|
|
$
|
14,189,413
|
|
|
$
|
165,359
|
|
|
$
|
19,150,966
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
152,538
|
|
|
$
|
—
|
|
|
$
|
152,538
|
|
Client interest rate derivatives
|
|
—
|
|
|
28,676
|
|
|
—
|
|
|
28,676
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
181,214
|
|
|
$
|
—
|
|
|
$
|
181,214
|
|
|
(1)
|
Included in Level 3 assets is $120 thousand 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, 2019
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
6,894,010
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,894,010
|
|
U.S. agency debentures
|
|
—
|
|
|
99,547
|
|
|
—
|
|
|
99,547
|
|
||||
Foreign government debt securities
|
|
9,038
|
|
|
—
|
|
|
—
|
|
|
9,038
|
|
||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency-issued mortgage-backed securities
|
|
—
|
|
|
4,148,791
|
|
|
—
|
|
|
4,148,791
|
|
||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
—
|
|
|
1,538,343
|
|
|
—
|
|
|
1,538,343
|
|
||||
Agency-issued commercial mortgage-backed securities
|
|
—
|
|
|
1,325,190
|
|
|
—
|
|
|
1,325,190
|
|
||||
Total available-for-sale securities
|
|
6,903,048
|
|
|
7,111,871
|
|
|
—
|
|
|
14,014,919
|
|
||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments measured at net asset value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
265,263
|
|
||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
—
|
|
|
—
|
|
|
134
|
|
|
134
|
|
||||
Other equity securities in public companies
|
|
17,290
|
|
|
41,910
|
|
|
—
|
|
|
59,200
|
|
||||
Total non-marketable and other equity securities (fair value accounting)
|
|
17,290
|
|
|
41,910
|
|
|
134
|
|
|
324,597
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
—
|
|
|
115,854
|
|
|
—
|
|
|
115,854
|
|
||||
Equity warrant assets
|
|
—
|
|
|
4,435
|
|
|
161,038
|
|
|
165,473
|
|
||||
Interest rate swaps
|
|
—
|
|
|
22,676
|
|
|
—
|
|
|
22,676
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
28,811
|
|
|
—
|
|
|
28,811
|
|
||||
Total assets
|
|
$
|
6,920,338
|
|
|
$
|
7,325,557
|
|
|
$
|
161,172
|
|
|
$
|
14,672,330
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward and option contracts
|
|
$
|
—
|
|
|
$
|
98,207
|
|
|
$
|
—
|
|
|
$
|
98,207
|
|
Interest rate swaps
|
|
—
|
|
|
25,623
|
|
|
—
|
|
|
25,623
|
|
||||
Client interest rate derivatives
|
|
—
|
|
|
14,154
|
|
|
—
|
|
|
14,154
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
137,984
|
|
|
$
|
—
|
|
|
$
|
137,984
|
|
|
(1)
|
Included in Level 3 assets is $120 thousand attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.
|
(Dollars in thousands)
|
|
Beginning Balance
|
|
Total Net Gains (Losses) Included in
Net Income
|
|
Purchases
|
|
Sales/Exits
|
|
Issuances
|
|
Distributions and Other Settlements
|
|
Transfers Out of Level 3
|
|
Ending Balance
|
||||||||||||||||
Three months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity warrant assets (2)
|
|
149,858
|
|
|
24,086
|
|
|
—
|
|
|
(15,316
|
)
|
|
6,770
|
|
|
—
|
|
|
(173
|
)
|
|
165,225
|
|
||||||||
Total assets
|
|
$
|
149,992
|
|
|
$
|
24,086
|
|
|
$
|
—
|
|
|
$
|
(15,316
|
)
|
|
$
|
6,770
|
|
|
$
|
—
|
|
|
$
|
(173
|
)
|
|
$
|
165,359
|
|
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
1,035
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(596
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
441
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity warrant assets (2)
|
|
156,749
|
|
|
46,645
|
|
|
—
|
|
|
(55,568
|
)
|
|
3,041
|
|
|
—
|
|
|
(3,097
|
)
|
|
147,770
|
|
||||||||
Total assets
|
|
$
|
157,784
|
|
|
$
|
46,647
|
|
|
$
|
—
|
|
|
$
|
(56,164
|
)
|
|
$
|
3,041
|
|
|
$
|
—
|
|
|
$
|
(3,097
|
)
|
|
$
|
148,211
|
|
Six months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
134
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
134
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity warrant assets (2)
|
|
161,038
|
|
|
38,687
|
|
|
—
|
|
|
(45,350
|
)
|
|
11,289
|
|
|
—
|
|
|
(439
|
)
|
|
165,225
|
|
||||||||
Total assets
|
|
$
|
161,172
|
|
|
$
|
38,692
|
|
|
$
|
—
|
|
|
$
|
(45,355
|
)
|
|
$
|
11,289
|
|
|
$
|
—
|
|
|
$
|
(439
|
)
|
|
$
|
165,359
|
|
Six months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
1,079
|
|
|
$
|
(45
|
)
|
|
$
|
—
|
|
|
$
|
(596
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
441
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity warrant assets (2)
|
|
145,199
|
|
|
65,811
|
|
|
575
|
|
|
(67,873
|
)
|
|
7,584
|
|
|
—
|
|
|
(3,526
|
)
|
|
147,770
|
|
||||||||
Total assets
|
|
$
|
146,278
|
|
|
$
|
65,766
|
|
|
$
|
575
|
|
|
$
|
(68,469
|
)
|
|
$
|
7,584
|
|
|
$
|
3
|
|
|
$
|
(3,526
|
)
|
|
$
|
148,211
|
|
|
(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)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Non-marketable and other equity securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments not measured at net asset value (1)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
Other assets:
|
|
|
|
|
|
|
|
|
||||||||
Equity warrant assets (2)
|
|
11,267
|
|
|
4,416
|
|
|
7,122
|
|
|
19,188
|
|
||||
Total unrealized (losses) gains, net
|
|
$
|
11,267
|
|
|
$
|
4,418
|
|
|
$
|
7,122
|
|
|
$
|
19,143
|
|
Unrealized losses attributable to noncontrolling interests (1)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
(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
|
|
Input Range
|
|
Weighted
Average
|
|||
June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|||
Venture capital and private equity fund investments (fair value accounting)
|
|
$
|
134
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1)
|
|
(1
|
)
|
Equity warrant assets (public portfolio)
|
|
1,085
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
56.6%
|
|
56.6
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
0.7
|
|
0.7
|
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
10.0 - 20.0
|
|
14.4
|
|
||||
Equity warrant assets (private portfolio)
|
|
164,140
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
23.1% - 56.6%
|
|
43.1
|
|
|
|
|
|
|
Risk-Free interest rate
|
|
0.01 - 0.66
|
|
0.2
|
|
||||
|
|
|
|
Marketability discount (3)
|
|
21.8
|
|
21.8
|
|
||||
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
|
45.0
|
|
||||
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||
Venture capital and private equity fund investments (fair value accounting)
|
|
$
|
134
|
|
|
Private company equity pricing
|
|
(1)
|
|
(1)
|
|
(1
|
)
|
Equity warrant assets (public portfolio)
|
|
346
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
39.2% - 54.8%
|
|
50.7
|
%
|
|
|
|
|
|
Risk-Free interest rate
|
|
1.9
|
|
1.9
|
|
||||
|
|
|
|
Sales restrictions discount (2)
|
|
10.0 - 20.0
|
|
13.6
|
|
||||
Equity warrant assets (private portfolio)
|
|
160,692
|
|
|
Black-Scholes option pricing model
|
|
Volatility
|
|
23.6% - 54.8%
|
|
38.2
|
|
|
|
|
|
|
Risk-Free interest rate
|
|
0.5 - 1.9
|
|
1.6
|
|
||||
|
|
|
|
Marketability discount (3)
|
|
17.5
|
|
17.5
|
|
||||
|
|
|
|
Remaining life assumption (4)
|
|
45.0
|
|
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
|
(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 terminations and exercises. At June 30, 2020, the weighted average contractual remaining term was 6.2 years, compared to our estimated remaining life of 2.8 years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.
|
|
|
|
|
Estimated Fair Value
|
||||||||||||||||
(Dollars in thousands)
|
|
Carrying Amount
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
14,202,106
|
|
|
$
|
14,202,106
|
|
|
$
|
14,202,106
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
|
12,858,823
|
|
|
13,541,461
|
|
|
—
|
|
|
13,541,461
|
|
|
—
|
|
|||||
Non-marketable securities not measured at net asset value
|
|
226,236
|
|
|
226,236
|
|
|
—
|
|
|
—
|
|
|
226,236
|
|
|||||
Non-marketable securities measured at net asset value
|
|
252,513
|
|
|
252,513
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net commercial loans
|
|
32,412,462
|
|
|
32,728,159
|
|
|
—
|
|
|
—
|
|
|
32,728,159
|
|
|||||
Net consumer loans
|
|
3,724,932
|
|
|
3,761,539
|
|
|
—
|
|
|
—
|
|
|
3,761,539
|
|
|||||
FHLB and Federal Reserve Bank stock
|
|
60,673
|
|
|
60,673
|
|
|
—
|
|
|
—
|
|
|
60,673
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
50,924
|
|
|
50,924
|
|
|
—
|
|
|
50,924
|
|
|
—
|
|
|||||
Non-maturity deposits (1)
|
|
74,128,263
|
|
|
74,128,263
|
|
|
74,128,263
|
|
|
—
|
|
|
—
|
|
|||||
Time deposits
|
|
377,501
|
|
|
376,762
|
|
|
—
|
|
|
376,762
|
|
|
—
|
|
|||||
3.50% Senior Notes
|
|
348,166
|
|
|
380,314
|
|
|
—
|
|
|
380,314
|
|
|
—
|
|
|||||
3.125% Senior Notes
|
|
495,054
|
|
|
537,115
|
|
|
—
|
|
|
537,115
|
|
|
—
|
|
|||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commitments to extend credit
|
|
—
|
|
|
31,432
|
|
|
—
|
|
|
—
|
|
|
31,432
|
|
|||||
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
6,781,783
|
|
|
$
|
6,781,783
|
|
|
$
|
6,781,783
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Held-to-maturity securities
|
|
13,842,946
|
|
|
14,115,272
|
|
|
—
|
|
|
14,115,272
|
|
|
—
|
|
|||||
Non-marketable securities not measured at net asset value
|
|
195,405
|
|
|
195,405
|
|
|
—
|
|
|
—
|
|
|
195,405
|
|
|||||
Non-marketable securities measured at net asset value
|
|
235,351
|
|
|
235,351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net commercial loans
|
|
29,104,532
|
|
|
29,615,176
|
|
|
—
|
|
|
—
|
|
|
29,615,176
|
|
|||||
Net consumer loans
|
|
3,755,180
|
|
|
3,820,804
|
|
|
—
|
|
|
—
|
|
|
3,820,804
|
|
|||||
FHLB and Federal Reserve Bank stock
|
|
60,258
|
|
|
60,258
|
|
|
—
|
|
|
—
|
|
|
60,258
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
17,430
|
|
|
17,430
|
|
|
—
|
|
|
17,430
|
|
|
—
|
|
|||||
Non-maturity deposits (1)
|
|
61,569,714
|
|
|
61,569,714
|
|
|
61,569,714
|
|
|
—
|
|
|
—
|
|
|||||
Time deposits
|
|
188,093
|
|
|
187,980
|
|
|
—
|
|
|
187,980
|
|
|
—
|
|
|||||
3.50% Senior Notes
|
|
347,987
|
|
|
366,856
|
|
|
—
|
|
|
366,856
|
|
|
—
|
|
|||||
Off-balance sheet financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commitments to extend credit
|
|
—
|
|
|
27,197
|
|
|
—
|
|
|
—
|
|
|
27,197
|
|
|
(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)
|
|
$
|
213,201
|
|
|
$
|
213,201
|
|
|
$
|
9,462
|
|
Non-marketable securities (equity method accounting):
|
|
|
|
|
|
|
||||||
Venture capital and private equity fund investments (2)
|
|
233,996
|
|
|
233,996
|
|
|
10,457
|
|
|||
Debt funds (2)
|
|
7,004
|
|
|
7,004
|
|
|
—
|
|
|||
Other investments (2)
|
|
11,513
|
|
|
11,513
|
|
|
886
|
|
|||
Total
|
|
$
|
465,714
|
|
|
$
|
465,714
|
|
|
$
|
20,805
|
|
|
(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 $50.7 million and $3.2 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.
|
18.
|
Legal Matters
|
19.
|
Related Parties
|
20.
|
Subsequent Events
|
•
|
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 credit losses, nonperforming loans, loan growth and client funds;
|
•
|
The potential effects of the COVID-19 pandemic; 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 COVID-19 pandemic and its effects on the economic and business environments in which we operate;
|
•
|
The adequacy of our allowance for credit losses and the need to make provisions for credit 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 regulations promulgated by the Board of Governors of the Federal Reserve System (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;
|
•
|
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, including through the integration of SVB Leerink; and
|
•
|
Other factors as discussed in “Risk Factors” under Part I, Item 1A in our 2019 Form 10-K and under Part II, Item 1A of this report.
|
BALANCE SHEET
|
|
EARNINGS
|
Assets. $78.4 billion in average total assets (up 29.2%). $85.7 billion in period-end total assets (up 34.4%).
Loans. $36.5 billion in average total loan balances (up 24.2%). $36.7 billion in period-end total loan balances (up 25.7%).
Total Client Funds. (on-balance sheet deposits and off-balance sheet client investment funds). $177.2 billion in average total client fund balances (up 24.2%). $190.4 billion in period-end total client fund balances (up 29.4%).
AFS/HTM Fixed Income Investments. $25.8 billion in average fixed income investment securities (up 11.7%). $31.3 billion in period-end fixed income investment securities (up 37.3%).
|
|
EPS. Earnings per diluted share of $4.42 (down 27.3%).
Net Income. Consolidated net income available to common stockholders of $228.9 million (down 28.0%).
- Net interest income of $512.9 million (down 3.1%).
- Net interest margin of 2.80% (down 88 bps).
- Noninterest income of $368.8 million (up 10.5%), non-GAAP core fee income+ of $132.5 million (down 15.8%) and non-GAAP core fee income plus investment
banking revenue and commissions++ of $290.9 million (up 32.0%).
- Noninterest expense of $479.6 million (up 25.1%).
ROE. Return on average equity (annualized) (“ROE”) performance of 13.36%.
Operating Efficiency Ratio. Operating efficiency ratio of 54.39% with a non-GAAP core operating efficiency ratio of 55.70%+++.
|
|
|
|
CAPITAL
|
|
CREDIT QUALITY
|
Capital++++. Continued strong capital, with all capital ratios considered “well-capitalized” under banking regulations. SVB Financial and Bank capital ratios, respectively, were:
- CET 1 risk-based capital ratio of 12.63% and 11.08%.
- Tier 1 risk-based capital ratio of 13.62% and 11.08%.
- Total risk-based capital ratio of 14.77% and 12.28%.
- Tier 1 leverage ratio of 8.68% and 6.91%.
|
|
Credit Quality. Continued reserve build with low credit losses in an uncertain market environment.
- Allowance for credit losses for loans of 1.61% as a percentage of period-end total loans.
- Provision for loans of 0.57% as a percentage of period-end total loans (annualized).
- Net loan charge-offs of 0.12% as a percentage of average total loans (annualized).
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
(Dollars in thousands, except per share data, employees and ratios)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||||
Income Statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
|
$
|
4.42
|
|
|
$
|
6.08
|
|
|
(27.3
|
)
|
%
|
|
$
|
6.97
|
|
|
$
|
11.51
|
|
|
(39.4
|
)
|
%
|
Net income available to common stockholders
|
|
228,935
|
|
|
317,987
|
|
|
(28.0
|
)
|
|
|
361,188
|
|
|
606,719
|
|
|
(40.5
|
)
|
|
||||
Net interest income
|
|
512,927
|
|
|
529,403
|
|
|
(3.1
|
)
|
|
|
1,037,064
|
|
|
1,042,289
|
|
|
(0.5
|
)
|
|
||||
Net interest margin
|
|
2.80
|
%
|
|
3.68
|
%
|
|
(88
|
)
|
bps
|
|
2.95
|
%
|
|
3.74
|
%
|
|
(79
|
)
|
bps
|
||||
Provision for credit losses
|
|
$
|
66,481
|
|
|
$
|
23,946
|
|
|
177.6
|
|
%
|
|
$
|
309,961
|
|
|
$
|
52,497
|
|
|
490.4
|
|
%
|
Noninterest income
|
|
368,848
|
|
|
333,750
|
|
|
10.5
|
|
|
|
670,782
|
|
|
614,126
|
|
|
9.2
|
|
|
||||
Noninterest expense
|
|
479,636
|
|
|
383,522
|
|
|
25.1
|
|
|
|
879,221
|
|
|
749,186
|
|
|
17.4
|
|
|
||||
Non-GAAP core fee income (1)
|
|
132,525
|
|
|
157,337
|
|
|
(15.8
|
)
|
|
|
300,983
|
|
|
311,580
|
|
|
(3.4
|
)
|
|
||||
Non-GAAP core fee income, plus investment banking revenue and commissions (1)
|
|
290,946
|
|
|
220,460
|
|
|
32.0
|
|
|
|
522,293
|
|
|
438,606
|
|
|
19.1
|
|
|
||||
Non-GAAP noninterest income, net of noncontrolling interests (1)
|
|
354,463
|
|
|
315,014
|
|
|
12.5
|
|
|
|
658,251
|
|
|
592,142
|
|
|
11.2
|
|
|
||||
Non-GAAP noninterest expense, net of noncontrolling interests (2)
|
|
479,506
|
|
|
383,354
|
|
|
25.1
|
|
|
|
878,951
|
|
|
748,639
|
|
|
17.4
|
|
|
||||
Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average available-for-sale securities
|
|
$
|
12,784,271
|
|
|
$
|
8,205,333
|
|
|
55.8
|
|
%
|
|
$
|
13,175,090
|
|
|
$
|
7,541,439
|
|
|
74.7
|
|
%
|
Average held-to-maturity securities
|
|
13,039,430
|
|
|
14,922,589
|
|
|
(12.6
|
)
|
|
|
13,307,746
|
|
|
15,072,441
|
|
|
(11.7
|
)
|
|
||||
Average loans, amortized cost
|
|
36,512,159
|
|
|
29,406,620
|
|
|
24.2
|
|
|
|
35,086,444
|
|
|
28,900,160
|
|
|
21.4
|
|
|
||||
Average noninterest-bearing demand deposits
|
|
46,086,948
|
|
|
38,117,893
|
|
|
20.9
|
|
|
|
43,711,466
|
|
|
38,170,001
|
|
|
14.5
|
|
|
||||
Average interest-bearing deposits
|
|
21,829,433
|
|
|
14,844,315
|
|
|
47.1
|
|
|
|
21,150,840
|
|
|
13,177,179
|
|
|
60.5
|
|
|
||||
Average total deposits
|
|
67,916,381
|
|
|
52,962,208
|
|
|
28.2
|
|
|
|
64,862,306
|
|
|
51,347,180
|
|
|
26.3
|
|
|
||||
Earnings Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets (annualized) (3)
|
|
1.17
|
%
|
|
2.10
|
%
|
|
(44.3
|
)
|
%
|
|
0.96
|
%
|
|
2.07
|
%
|
|
(53.6
|
)
|
%
|
||||
Return on average SVBFG stockholders’ equity (annualized) (4)
|
|
13.36
|
|
|
23.29
|
|
|
(42.6
|
)
|
|
|
10.84
|
|
|
22.74
|
|
|
(52.3
|
)
|
|
||||
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for credit losses for loans as a % of total period-end loans (5)
|
|
1.61
|
%
|
|
1.03
|
%
|
|
58
|
|
bps
|
|
1.61
|
%
|
|
1.03
|
%
|
|
58
|
|
bps
|
||||
Allowance for credit losses for performing loans as a % of total performing loans (5)
|
|
1.46
|
|
|
0.85
|
|
|
61
|
|
|
|
1.46
|
|
|
0.85
|
|
|
61
|
|
|
||||
Gross loan charge-offs as a % of average total loans (annualized) (5)
|
|
0.17
|
|
|
0.36
|
|
|
(19
|
)
|
|
|
0.30
|
|
|
0.25
|
|
|
5
|
|
|
||||
Net loan charge-offs as a % of average total loans (annualized) (5)
|
|
0.12
|
|
|
0.23
|
|
|
(11
|
)
|
|
|
0.23
|
|
|
0.17
|
|
|
6
|
|
|
||||
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SVBFG CET 1 risk-based capital ratio
|
|
12.63
|
%
|
|
12.92
|
%
|
|
(29
|
)
|
bps
|
|
12.63
|
%
|
|
12.92
|
%
|
|
(29
|
)
|
bps
|
||||
SVBFG tier 1 risk-based capital ratio
|
|
13.62
|
|
|
13.08
|
|
|
54
|
|
|
|
13.62
|
|
|
13.08
|
|
|
54
|
|
|
||||
SVBFG total risk-based capital ratio
|
|
14.77
|
|
|
13.97
|
|
|
80
|
|
|
|
14.77
|
|
|
13.97
|
|
|
80
|
|
|
||||
SVBFG tier 1 leverage ratio
|
|
8.68
|
|
|
8.82
|
|
|
(14
|
)
|
|
|
8.68
|
|
|
8.82
|
|
|
(14
|
)
|
|
||||
SVBFG tangible common equity to tangible assets (6)
|
|
7.94
|
|
|
8.43
|
|
|
(49
|
)
|
|
|
7.94
|
|
|
8.43
|
|
|
(49
|
)
|
|
||||
SVBFG tangible common equity to risk-weighted assets (6)
|
|
13.68
|
|
|
13.13
|
|
|
55
|
|
|
|
13.68
|
|
|
13.13
|
|
|
55
|
|
|
||||
Bank CET 1 risk-based capital ratio
|
|
11.08
|
|
|
12.50
|
|
|
(142
|
)
|
|
|
11.08
|
|
|
12.50
|
|
|
(142
|
)
|
|
||||
Bank tier 1 risk-based capital ratio
|
|
11.08
|
|
|
12.50
|
|
|
(142
|
)
|
|
|
11.08
|
|
|
12.50
|
|
|
(142
|
)
|
|
||||
Bank total risk-based capital ratio
|
|
12.28
|
|
|
13.44
|
|
|
(116
|
)
|
|
|
12.28
|
|
|
13.44
|
|
|
(116
|
)
|
|
||||
Bank tier 1 leverage ratio
|
|
6.91
|
|
|
8.17
|
|
|
(126
|
)
|
|
|
6.91
|
|
|
8.17
|
|
|
(126
|
)
|
|
||||
Bank tangible common equity to tangible assets (6)
|
|
6.91
|
|
|
7.91
|
|
|
(100
|
)
|
|
|
6.91
|
|
|
7.91
|
|
|
(100
|
)
|
|
||||
Bank tangible common equity to risk-weighted assets (6)
|
|
12.17
|
|
|
12.72
|
|
|
(55
|
)
|
|
|
12.17
|
|
|
12.72
|
|
|
(55
|
)
|
|
||||
Other Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating efficiency ratio (7)
|
|
54.39
|
%
|
|
44.43
|
%
|
|
22.4
|
|
%
|
|
51.48
|
%
|
|
45.23
|
%
|
|
13.8
|
|
%
|
||||
Non-GAAP core operating efficiency ratio (2)
|
|
55.70
|
|
|
45.49
|
|
|
22.4
|
|
|
|
51.59
|
|
|
45.11
|
|
|
14.4
|
|
|
||||
Total costs of deposits (annualized) (8)
|
|
0.03
|
|
|
0.36
|
|
|
(91.7
|
)
|
|
|
0.13
|
|
|
0.29
|
|
|
(55.2
|
)
|
|
||||
Book value per common share (9)
|
|
$
|
134.89
|
|
|
$
|
107.72
|
|
|
25.2
|
|
|
|
$
|
134.89
|
|
|
$
|
107.72
|
|
|
25.2
|
|
|
Other Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average full-time equivalent employees
|
|
3,855
|
|
|
3,287
|
|
|
17.3
|
|
%
|
|
3,764
|
|
|
3,257
|
|
|
15.6
|
|
%
|
||||
Period-end full-time equivalent employees
|
|
3,984
|
|
|
3,314
|
|
|
20.2
|
|
|
|
3,984
|
|
|
3,314
|
|
|
20.2
|
|
|
|
(1)
|
See “Results of Operations–Noninterest Income” for a description and reconciliation of non-GAAP core fee income and non-GAAP core fee income plus investment banking revenue and commissions.
|
(2)
|
See “Results of Operations–Noninterest Expense” for a description and reconciliation of non-GAAP noninterest expense and non-GAAP core 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)
|
For the three and six months ended June 30, 2020, the ratios are calculated using the amortized cost basis for total loans as a result of the adoption of CECL. Prior period ratios were calculated using total gross loans in accordance with previous methodology.
|
(6)
|
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.
|
(7)
|
The operating efficiency ratio is calculated by dividing total noninterest expense by total net interest income plus noninterest income.
|
(8)
|
Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.
|
(9)
|
Book value per common share is calculated by dividing total SVBFG common stockholders’ equity by total outstanding common shares at period-end.
|
|
|
2020 Compared to 2019
|
|
2020 Compared to 2019
|
||||||||||||||||||||
|
|
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 and other short-term investment securities
|
|
$
|
1,316
|
|
|
$
|
(25,278
|
)
|
|
$
|
(23,962
|
)
|
|
$
|
9,730
|
|
|
$
|
(35,284
|
)
|
|
$
|
(25,554
|
)
|
Fixed income investment portfolio (taxable)
|
|
8,443
|
|
|
(1,291
|
)
|
|
7,152
|
|
|
33,539
|
|
|
1,281
|
|
|
34,820
|
|
||||||
Fixed income investment portfolio (non-taxable)
|
|
4,937
|
|
|
(465
|
)
|
|
4,472
|
|
|
7,742
|
|
|
(881
|
)
|
|
6,861
|
|
||||||
Loans, amortized cost
|
|
70,873
|
|
|
(119,840
|
)
|
|
(48,967
|
)
|
|
132,298
|
|
|
(192,840
|
)
|
|
(60,542
|
)
|
||||||
Increase (decrease) in interest income, net
|
|
85,569
|
|
|
(146,874
|
)
|
|
(61,305
|
)
|
|
183,309
|
|
|
(227,724
|
)
|
|
(44,415
|
)
|
||||||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest bearing checking and savings accounts
|
|
1,302
|
|
|
248
|
|
|
1,550
|
|
|
1,109
|
|
|
433
|
|
|
1,542
|
|
||||||
Money market deposits
|
|
992
|
|
|
(38,670
|
)
|
|
(37,678
|
)
|
|
13,917
|
|
|
(40,413
|
)
|
|
(26,496
|
)
|
||||||
Money market deposits in foreign offices
|
|
11
|
|
|
(1
|
)
|
|
10
|
|
|
22
|
|
|
(3
|
)
|
|
19
|
|
||||||
Time deposits
|
|
206
|
|
|
(30
|
)
|
|
176
|
|
|
496
|
|
|
80
|
|
|
576
|
|
||||||
Sweep deposits in foreign offices
|
|
10
|
|
|
(5,524
|
)
|
|
(5,514
|
)
|
|
421
|
|
|
(8,027
|
)
|
|
(7,606
|
)
|
||||||
Total increase (decrease) in deposits expense
|
|
2,521
|
|
|
(43,977
|
)
|
|
(41,456
|
)
|
|
15,965
|
|
|
(47,930
|
)
|
|
(31,965
|
)
|
||||||
Short-term borrowings
|
|
410
|
|
|
(1,014
|
)
|
|
(604
|
)
|
|
2,177
|
|
|
(2,270
|
)
|
|
(93
|
)
|
||||||
3.125% Senior Notes
|
|
1,159
|
|
|
—
|
|
|
1,159
|
|
|
1,159
|
|
|
—
|
|
|
1,159
|
|
||||||
3.50% Senior Notes
|
|
3
|
|
|
—
|
|
|
3
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
5.375% Senior Notes
|
|
(4,870
|
)
|
|
—
|
|
|
(4,870
|
)
|
|
(9,738
|
)
|
|
—
|
|
|
(9,738
|
)
|
||||||
Total decrease in borrowings expense
|
|
(3,298
|
)
|
|
(1,014
|
)
|
|
(4,312
|
)
|
|
(6,396
|
)
|
|
(2,270
|
)
|
|
(8,666
|
)
|
||||||
(Decrease) increase in interest expense, net
|
|
(777
|
)
|
|
(44,991
|
)
|
|
(45,768
|
)
|
|
9,569
|
|
|
(50,200
|
)
|
|
(40,631
|
)
|
||||||
Increase (decrease) in net interest income
|
|
$
|
86,346
|
|
|
$
|
(101,883
|
)
|
|
$
|
(15,537
|
)
|
|
$
|
173,740
|
|
|
$
|
(177,524
|
)
|
|
$
|
(3,784
|
)
|
•
|
Interest income for the three months ended June 30, 2020 decreased by $61.3 million due primarily to:
|
◦
|
A $49.0 million decrease in interest income on loans to $365.1 million for the three months ended June 30, 2020, compared to $414.1 million for the comparable 2019 period. The decrease was reflective of a decrease in the overall loan yields of 163 basis points to 4.02 percent from 5.65 percent partially offset by an increase in average loan balances of $7.1 billion. Gross loan yields, excluding loan interest recoveries and loan fees, decreased 153 basis points to 3.48 percent from 5.01 percent, reflective primarily of the impact of the decreases in Federal Funds rates as discussed above, partially offset by an increase reflective of the impact of the reclassification of unrealized gains on interest rate swap cash flow hedges that were terminated in the first quarter of 2020 and effective loan floors.
|
◦
|
A $23.9 million decrease in interest income from our short-term investment securities. The decrease was due primarily to the decrease in Federal Funds rates as discussed above, partially offset by
|
◦
|
An $11.6 million increase in interest income from our fixed income investment securities. The increase was due primarily to the increase of $2.7 billion in average fixed income investment securities.
|
•
|
Interest expense for the three months ended June 30, 2020 decreased by $45.8 million due primarily to:
|
◦
|
A $41.5 million decrease in interest expense on deposits due primarily to a decrease in interest paid on our interest-bearing money market deposits due to the decreases in market rates, and
|
◦
|
A $4.3 million decrease in interest expense on borrowings due primarily to the extinguishment of our 5.375% Senior Notes in December 2019.
|
•
|
Interest income for the six months ended June 30, 2020 decreased by $44.4 million due primarily to:
|
◦
|
A $60.5 million decrease in interest income on loans to $747.7 million for the six months ended June 30, 2020, compared to $808.2 million for the comparable 2019 period. The decrease was reflective of a decrease in the overall loan yields of 135 basis points to 4.29 percent from 5.64 percent partially offset by an increase in average loan balances of $6.2 billion. Gross loan yields, excluding loan interest recoveries and loan fees, decreased 126 basis points to 3.79 percent from 5.05 percent, reflective primarily of the impact of the decreases in Federal Funds rates as discussed above, partially offset by an increase reflective of the impact of the reclassification of unrealized gains on interest rate swap cash flow hedges that were terminated in the first quarter of 2020 and effective loan floors, and
|
◦
|
A $25.6 million decrease in interest income from our interest earning cash and short-term investment securities. The decrease was due primarily to the decrease in Federal Funds interest rates as discussed above, partially offset by
|
◦
|
An $41.7 million increase in interest income from our fixed income investment securities. The increase was due primarily to the increase of $3.9 billion in average fixed income investment securities.
|
•
|
Interest expense for the six months ended June 30, 2020 decreased by $40.6 million primarily due to:
|
◦
|
A $32.0 million decrease in interest expense on deposits due primarily to a decrease in interest paid on our interest-bearing money market deposits due to the decreases in market rates.
|
•
|
Our net interest margin decreased by 88 basis points to 2.80 percent for the three months ended June 30, 2020, compared to 3.68 percent for the comparable 2019 period. The lower margin for the three months ended June 30, 2020 was due primarily to a decrease in yields on loans reflective of the Federal Funds rate decreases as discussed above, as well as a shift in the mix of the growth in our interest-earning assets to lower-yielding short-term investment securities portfolio from our loan portfolio. The decrease in our net interest margin was partially offset by increases from our interest rate swap cash flow hedges which were terminated in the first quarter of 2020 and effective loan floors. Average loans represented 49.3 percent of average interest earnings assets for the three months ended June 30, 2020, compared to 50.8 percent for the comparable 2019 period.
|
•
|
Our net interest margin decreased by 79 basis points to 2.95 percent for the six months ended June 30, 2020, compared to 3.74 percent for the comparable 2019 period. The lower margin for the six months ended June 30, 2020 was reflective primarily of the decreases in the Federal Funds as discussed above, as well as a shift in the mix of the growth in our interest-earning assets to lower-yielding short-term investment securities portfolio from our loan portfolio, partially offset by increases from our interest rate swap cash flow hedges which were terminated in the first quarter of 2020 and effective loan floors. Average loans represented 49.3 percent of year-to-date average interest earnings assets, compared to 51.2 percent for the comparable 2019 period.
|
|
|
Three months ended June 30,
|
||||||||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||||||||
(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)
|
|
$
|
11,919,819
|
|
|
$
|
2,402
|
|
|
0.08
|
%
|
|
$
|
5,405,899
|
|
|
$
|
26,364
|
|
|
1.96
|
%
|
Investment securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
12,784,271
|
|
|
69,251
|
|
|
2.18
|
|
|
8,205,333
|
|
|
45,347
|
|
|
2.22
|
|
||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
10,886,944
|
|
|
72,296
|
|
|
2.67
|
|
|
13,350,533
|
|
|
89,048
|
|
|
2.68
|
|
||||
Non-taxable (3)
|
|
2,152,486
|
|
|
18,308
|
|
|
3.42
|
|
|
1,572,056
|
|
|
13,836
|
|
|
3.53
|
|
||||
Total loans, amortized cost (4) (5)
|
|
36,512,159
|
|
|
365,110
|
|
|
4.02
|
|
|
29,406,620
|
|
|
414,077
|
|
|
5.65
|
|
||||
Total interest-earning assets
|
|
74,255,679
|
|
|
527,367
|
|
|
2.85
|
|
|
57,940,441
|
|
|
588,672
|
|
|
4.07
|
|
||||
Cash and due from banks
|
|
894,412
|
|
|
|
|
|
|
542,345
|
|
|
|
|
|
||||||||
Allowance for credit losses for loans
|
|
(560,650
|
)
|
|
|
|
|
|
(311,709
|
)
|
|
|
|
|
||||||||
Other assets (6)
|
|
3,842,561
|
|
|
|
|
|
|
2,529,409
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
78,432,002
|
|
|
|
|
|
|
$
|
60,700,486
|
|
|
|
|
|
||||||
Funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing checking and savings accounts
|
|
$
|
2,175,316
|
|
|
$
|
1,650
|
|
|
0.31
|
%
|
|
$
|
459,972
|
|
|
$
|
100
|
|
|
0.09
|
%
|
Money market deposits
|
|
17,530,821
|
|
|
3,571
|
|
|
0.08
|
|
|
12,669,422
|
|
|
41,249
|
|
|
1.31
|
|
||||
Money market deposits in foreign offices
|
|
290,992
|
|
|
26
|
|
|
0.04
|
|
|
162,586
|
|
|
16
|
|
|
0.04
|
|
||||
Time deposits
|
|
186,894
|
|
|
347
|
|
|
0.75
|
|
|
75,721
|
|
|
171
|
|
|
0.91
|
|
||||
Sweep deposits in foreign offices
|
|
1,645,410
|
|
|
100
|
|
|
0.02
|
|
|
1,476,614
|
|
|
5,614
|
|
|
1.52
|
|
||||
Total interest-bearing deposits
|
|
21,829,433
|
|
|
5,694
|
|
|
0.10
|
|
|
14,844,315
|
|
|
47,150
|
|
|
1.27
|
|
||||
Short-term borrowings
|
|
618,099
|
|
|
591
|
|
|
0.38
|
|
|
188,998
|
|
|
1,195
|
|
|
2.54
|
|
||||
3.125% Senior Notes
|
|
141,509
|
|
|
1,159
|
|
|
3.29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
3.50% Senior Notes
|
|
348,107
|
|
|
3,152
|
|
|
3.64
|
|
|
347,755
|
|
|
3,149
|
|
|
3.63
|
|
||||
5.375% Senior Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
349,048
|
|
|
4,870
|
|
|
5.60
|
|
||||
Total interest-bearing liabilities
|
|
22,937,148
|
|
|
10,596
|
|
|
0.19
|
|
|
15,730,116
|
|
|
56,364
|
|
|
1.44
|
|
||||
Portion of noninterest-bearing funding sources
|
|
51,318,531
|
|
|
|
|
|
|
42,210,325
|
|
|
|
|
|
||||||||
Total funding sources
|
|
74,255,679
|
|
|
10,596
|
|
|
0.05
|
|
|
57,940,441
|
|
|
56,364
|
|
|
0.39
|
|
||||
Noninterest-bearing funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
46,086,948
|
|
|
|
|
|
|
38,117,893
|
|
|
|
|
|
||||||||
Other liabilities
|
|
2,024,098
|
|
|
|
|
|
|
1,232,464
|
|
|
|
|
|
||||||||
Preferred stock
|
|
340,138
|
|
|
|
|
|
|
—
|
|
|
|
|
|
||||||||
SVBFG common stockholders’ equity
|
|
6,893,986
|
|
|
|
|
|
|
5,477,148
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
149,684
|
|
|
|
|
|
|
142,865
|
|
|
|
|
|
||||||||
Portion used to fund interest-earning assets
|
|
(51,318,531
|
)
|
|
|
|
|
|
(42,210,325
|
)
|
|
|
|
|
||||||||
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity
|
|
$
|
78,432,002
|
|
|
|
|
|
|
$
|
60,700,486
|
|
|
|
|
|
||||||
Net interest income and margin
|
|
|
|
$
|
516,771
|
|
|
2.80
|
%
|
|
|
|
$
|
532,308
|
|
|
3.68
|
%
|
||||
Total deposits
|
|
$
|
67,916,381
|
|
|
|
|
|
|
$
|
52,962,208
|
|
|
|
|
|
||||||
Reconciliation to reported net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustments for taxable equivalent basis
|
|
|
|
(3,844
|
)
|
|
|
|
|
|
(2,905
|
)
|
|
|
||||||||
Net interest income, as reported
|
|
|
|
$
|
512,927
|
|
|
|
|
|
|
$
|
529,403
|
|
|
|
|
(1)
|
Includes average interest-earning deposits in other financial institutions of $0.9 billion and $0.9 billion for the three months ended June 30, 2020 and 2019, respectively. For the three months ended June 30, 2020 and 2019, balances also include $10.0 billion and $3.7 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 all periods presented.
|
(4)
|
Nonaccrual loans are reflected in the average balances of loans.
|
(5)
|
Interest income includes loan fees of $49.6 million and $44.1 million for the three months ended June 30, 2020 and 2019, respectively.
|
(6)
|
Average investment securities of $1.9 billion and $1.0 billion for the three months ended June 30, 2020 and 2019, respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable and other equity securities.
|
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
|
2020
|
|
2019
|
||||||||||||||||||
(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)
|
|
$
|
9,614,262
|
|
|
$
|
20,026
|
|
|
0.42
|
%
|
|
$
|
4,935,751
|
|
|
$
|
45,580
|
|
|
1.86
|
%
|
Investment securities: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
13,175,090
|
|
|
146,274
|
|
|
2.23
|
|
|
7,541,439
|
|
|
80,769
|
|
|
2.16
|
|
||||
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
11,281,183
|
|
|
149,658
|
|
|
2.67
|
|
|
13,500,091
|
|
|
180,343
|
|
|
2.69
|
|
||||
Non-taxable (3)
|
|
2,026,563
|
|
|
34,541
|
|
|
3.43
|
|
|
1,572,350
|
|
|
27,680
|
|
|
3.55
|
|
||||
Total loans, amortized cost (4) (5)
|
|
35,086,444
|
|
|
747,679
|
|
|
4.29
|
|
|
28,900,160
|
|
|
808,221
|
|
|
5.64
|
|
||||
Total interest-earning assets
|
|
71,183,542
|
|
|
1,098,178
|
|
|
3.10
|
|
|
56,449,791
|
|
|
1,142,593
|
|
|
4.08
|
|
||||
Cash and due from banks
|
|
845,945
|
|
|
|
|
|
|
534,769
|
|
|
|
|
|
||||||||
Allowance for credit losses for loans
|
|
(444,231
|
)
|
|
|
|
|
|
(300,381
|
)
|
|
|
|
|
||||||||
Other assets (6)
|
|
3,834,329
|
|
|
|
|
|
|
2,439,055
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
75,419,585
|
|
|
|
|
|
|
$
|
59,123,234
|
|
|
|
|
|
||||||
Funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest bearing checking and savings accounts
|
|
$
|
1,360,871
|
|
|
$
|
1,758
|
|
|
0.26
|
%
|
|
$
|
502,369
|
|
|
$
|
216
|
|
|
0.09
|
%
|
Money market deposits
|
|
17,572,200
|
|
|
36,584
|
|
|
0.42
|
|
|
10,881,455
|
|
|
63,080
|
|
|
1.17
|
|
||||
Money market deposits in foreign offices
|
|
278,518
|
|
|
50
|
|
|
0.04
|
|
|
155,503
|
|
|
31
|
|
|
0.04
|
|
||||
Time deposits
|
|
175,119
|
|
|
776
|
|
|
0.89
|
|
|
63,275
|
|
|
200
|
|
|
0.64
|
|
||||
Sweep deposits in foreign offices
|
|
1,764,132
|
|
|
3,924
|
|
|
0.45
|
|
|
1,574,577
|
|
|
11,530
|
|
|
1.48
|
|
||||
Total interest-bearing deposits
|
|
21,150,840
|
|
|
43,092
|
|
|
0.41
|
|
|
13,177,179
|
|
|
75,057
|
|
|
1.15
|
|
||||
Short-term borrowings
|
|
793,998
|
|
|
3,306
|
|
|
0.84
|
|
|
270,740
|
|
|
3,399
|
|
|
2.53
|
|
||||
3.125% Senior Notes
|
|
70,755
|
|
|
1,159
|
|
|
3.29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
3.50% Senior Notes
|
|
348,063
|
|
|
6,304
|
|
|
3.64
|
|
|
347,712
|
|
|
6,298
|
|
|
3.65
|
|
||||
5.375% Senior Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
348,966
|
|
|
9,738
|
|
|
5.63
|
|
||||
Total interest-bearing liabilities
|
|
22,363,656
|
|
|
53,861
|
|
|
0.48
|
|
|
14,144,597
|
|
|
94,492
|
|
|
1.35
|
|
||||
Portion of noninterest-bearing funding sources
|
|
48,819,886
|
|
|
|
|
|
|
42,305,194
|
|
|
|
|
|
||||||||
Total funding sources
|
|
71,183,542
|
|
|
53,861
|
|
|
0.15
|
|
|
56,449,791
|
|
|
94,492
|
|
|
0.34
|
|
||||
Noninterest-bearing funding sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand deposits
|
|
43,711,466
|
|
|
|
|
|
|
38,170,001
|
|
|
|
|
|
||||||||
Other liabilities
|
|
2,150,563
|
|
|
|
|
|
|
1,280,981
|
|
|
|
|
|
||||||||
Preferred stock
|
|
340,154
|
|
|
|
|
|
|
—
|
|
|
|
|
|
||||||||
SVBFG common stockholders’ equity
|
|
6,703,466
|
|
|
|
|
|
|
5,381,022
|
|
|
|
|
|
||||||||
Noncontrolling interests
|
|
150,280
|
|
|
|
|
|
|
146,633
|
|
|
|
|
|
||||||||
Portion used to fund interest-earning assets
|
|
(48,819,886
|
)
|
|
|
|
|
|
(42,305,194
|
)
|
|
|
|
|
||||||||
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity
|
|
$
|
75,419,585
|
|
|
|
|
|
|
$
|
59,123,234
|
|
|
|
|
|
||||||
Net interest income and margin
|
|
|
|
$
|
1,044,317
|
|
|
2.95
|
%
|
|
|
|
$
|
1,048,101
|
|
|
3.74
|
%
|
||||
Total deposits
|
|
$
|
64,862,306
|
|
|
|
|
|
|
$
|
51,347,180
|
|
|
|
|
|
||||||
Reconciliation to reported net interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjustments for taxable equivalent basis
|
|
|
|
(7,253
|
)
|
|
|
|
|
|
(5,812
|
)
|
|
|
||||||||
Net interest income, as reported
|
|
|
|
$
|
1,037,064
|
|
|
|
|
|
|
$
|
1,042,289
|
|
|
|
|
(1)
|
Includes average interest-earning deposits in other financial institutions of $0.9 billion and $0.8 billion six months ended June 30, 2020 and 2019, respectively. The balance also includes $7.8 billion and $3.3 billion deposited at the FRB, earning interest at the Federal Funds target rate for the six months ended June 30, 2020 and 2019, 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 tax rate of 21.0 percent for all periods presented.
|
(4)
|
Nonaccrual loans are reflected in the average balances of loans.
|
(5)
|
Interest income includes loan fees of $86.2 million and $80.8 million for the six months ended June 30, 2020 and 2019, respectively.
|
(6)
|
Average investment securities of $1.7 billion and $1.0 billion for the six months ended June 30, 2020 and 2019, 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)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Allowance for credit losses for loans, beginning balance
|
|
$
|
548,963
|
|
|
$
|
300,151
|
|
|
$
|
304,924
|
|
|
$
|
280,903
|
|
Day one impact of adopting ASC 326
|
|
—
|
|
|
—
|
|
|
25,464
|
|
|
—
|
|
||||
Provision for loans
|
|
51,899
|
|
|
19,148
|
|
|
300,800
|
|
|
44,969
|
|
||||
Gross loan charge-offs
|
|
(15,055
|
)
|
|
(26,435
|
)
|
|
(51,951
|
)
|
|
(35,435
|
)
|
||||
Loan recoveries
|
|
4,073
|
|
|
9,820
|
|
|
11,828
|
|
|
11,245
|
|
||||
Foreign currency translation adjustments
|
|
(52
|
)
|
|
(796
|
)
|
|
(1,237
|
)
|
|
206
|
|
||||
Allowance for credit losses for loans, ending balance
|
|
$
|
589,828
|
|
|
$
|
301,888
|
|
|
$
|
589,828
|
|
|
$
|
301,888
|
|
Allowance for credit losses for unfunded credit commitments, beginning balance
|
|
84,690
|
|
|
57,970
|
|
|
67,656
|
|
|
55,183
|
|
||||
Day one impact of adopting ASC 326
|
|
—
|
|
|
—
|
|
|
22,826
|
|
|
—
|
|
||||
Provision for unfunded credit commitments
|
|
14,590
|
|
|
4,798
|
|
|
9,113
|
|
|
7,528
|
|
||||
Foreign currency translation adjustments
|
|
14
|
|
|
(104
|
)
|
|
(301
|
)
|
|
(47
|
)
|
||||
Allowance for credit losses for unfunded credit commitments, ending balance (1)
|
|
$
|
99,294
|
|
|
$
|
62,664
|
|
|
$
|
99,294
|
|
|
$
|
62,664
|
|
Allowance for credit losses for HTM securities, beginning balance
|
|
230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Day one impact of adopting ASC 326
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
||||
(Reduction of) provision for HTM securities
|
|
(8
|
)
|
|
—
|
|
|
48
|
|
|
—
|
|
||||
Allowance for credit losses for HTM securities, ending balance (2)
|
|
$
|
222
|
|
|
$
|
—
|
|
|
$
|
222
|
|
|
$
|
—
|
|
Ratios and other information:
|
|
|
|
|
|
|
|
|
||||||||
Provision for loans as a percentage of period-end total loans (annualized) (3)
|
|
0.57
|
%
|
|
0.26
|
%
|
|
1.65
|
%
|
|
0.31
|
%
|
||||
Gross loan charge-offs as a percentage of average total loans (annualized)
|
|
0.17
|
|
|
0.36
|
|
|
0.30
|
|
|
0.25
|
|
||||
Net loan charge-offs as a percentage of average total loans (annualized)
|
|
0.12
|
|
|
0.23
|
|
|
0.23
|
|
|
0.17
|
|
||||
Allowance for credit losses for loans as a percentage of period-end total loans (3)
|
|
1.61
|
|
|
1.03
|
|
|
1.61
|
|
|
1.03
|
|
||||
Provision for credit losses
|
|
$
|
66,481
|
|
|
$
|
23,946
|
|
|
$
|
309,961
|
|
|
$
|
52,497
|
|
Period-end total loans (3)
|
|
36,727,222
|
|
|
29,370,403
|
|
|
36,727,222
|
|
|
29,370,403
|
|
||||
Average total loans (3)
|
|
36,512,159
|
|
|
29,568,968
|
|
|
35,086,444
|
|
|
29,065,111
|
|
||||
Allowance for loan losses for nonaccrual loans
|
|
54,383
|
|
|
53,067
|
|
|
54,383
|
|
|
53,067
|
|
||||
Nonaccrual loans
|
|
94,326
|
|
|
96,641
|
|
|
94,326
|
|
|
96,641
|
|
|
(1)
|
The “allowance for credit losses for unfunded credit commitments” is included as a component of “Other liabilities” on our consolidated balance sheets.
|
(2)
|
The "allowance for credit losses for HTM securities" is included as a component of HTM securities and presented net in our consolidated financial statements.
|
(3)
|
For the three and six months ended June 30, 2020, loan amounts are disclosed, and ratios are calculated, using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed, and ratios are calculated, using the gross basis.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
GAAP noninterest income
|
|
$
|
368,848
|
|
|
$
|
333,750
|
|
|
10.5
|
%
|
|
$
|
670,782
|
|
|
$
|
614,126
|
|
|
9.2
|
%
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
14,385
|
|
|
18,736
|
|
|
(23.2
|
)
|
|
12,531
|
|
|
21,984
|
|
|
(43.0
|
)
|
||||
Non-GAAP noninterest income, net of noncontrolling interests
|
|
$
|
354,463
|
|
|
$
|
315,014
|
|
|
12.5
|
|
|
$
|
658,251
|
|
|
$
|
592,142
|
|
|
11.2
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
GAAP noninterest income
|
|
$
|
368,848
|
|
|
$
|
333,750
|
|
|
10.5
|
%
|
|
$
|
670,782
|
|
|
$
|
614,126
|
|
|
9.2
|
%
|
Less: gains on investment securities, net
|
|
34,868
|
|
|
47,698
|
|
|
(26.9
|
)
|
|
80,923
|
|
|
76,726
|
|
|
5.5
|
|
||||
Less: gains on equity warrant assets, net
|
|
26,506
|
|
|
48,347
|
|
|
(45.2
|
)
|
|
39,901
|
|
|
69,652
|
|
|
(42.7
|
)
|
||||
Less: other noninterest income
|
|
16,528
|
|
|
17,245
|
|
|
(4.2
|
)
|
|
27,665
|
|
|
29,142
|
|
|
(5.1
|
)
|
||||
Non-GAAP core fee income plus investment banking revenue and commissions (1)
|
|
$
|
290,946
|
|
|
$
|
220,460
|
|
|
32.0
|
|
|
$
|
522,293
|
|
|
$
|
438,606
|
|
|
19.1
|
|
Less: investment banking revenue
|
|
141,503
|
|
|
48,694
|
|
|
190.6
|
|
|
188,370
|
|
|
98,489
|
|
|
91.3
|
|
||||
Less: commissions
|
|
16,918
|
|
|
14,429
|
|
|
17.2
|
|
|
32,940
|
|
|
28,537
|
|
|
15.4
|
|
||||
Non-GAAP core fee income (2)
|
|
$
|
132,525
|
|
|
$
|
157,337
|
|
|
(15.8
|
)
|
|
$
|
300,983
|
|
|
$
|
311,580
|
|
|
(3.4
|
)
|
|
(1)
|
Non-GAAP core fee income plus investment banking revenue and commissions represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control, and other noninterest income. Core fee income plus investment banking revenue and commissions is Non-GAAP core fee income (as defined in the subsequent footnote) with the addition of investment banking revenue and commissions.
|
(2)
|
Non-GAAP core fee income represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. Non-GAAP core fee income includes client investment fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees.
|
•
|
Gains of $8.5 million from our public equity securities investments, primarily driven by unrealized gains due to increases in the value of public equity securities held,
|
•
|
Gains of $7.2 million from our managed direct venture funds driven primarily by unrealized gains of $6.0 million from one portfolio company,
|
•
|
Gains of $6.5 million from our managed funds of funds portfolio related primarily to unrealized valuation gains, partially offset by
|
•
|
Losses of $4.9 million from our strategic and other investments, comprised primarily of net unrealized valuation decreases in private companies held in our strategic venture capital funds.
|
•
|
Gains of $61.2 million from our AFS debt securities portfolio, resulting from the sale of $2.6 billion of U.S. Treasury securities, and
|
•
|
Gains of $6.2 million from managed direct venture funds driven primarily by unrealized gains of $6.0 million from one portfolio company, partially offset by
|
•
|
Losses of $8.9 million from strategic and other investments, comprised primarily of net unrealized valuation decreases in private companies held in our strategic venture capital funds.
|
(Dollars in thousands)
|
|
Managed
Funds of Funds |
|
Managed
Direct Venture Funds |
|
Public Equity Securities
|
|
Debt
Funds
|
|
Sales of AFS Securities
|
|
Strategic
and Other
Investments
|
|
SVB Leerink
|
|
Total
|
||||||||||||||||
Three months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
13,347
|
|
|
$
|
14,743
|
|
|
$
|
8,533
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
(4,919
|
)
|
|
$
|
3,070
|
|
|
$
|
34,868
|
|
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation
|
|
6,818
|
|
|
7,576
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|
14,328
|
|
||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
6,529
|
|
|
$
|
7,167
|
|
|
$
|
8,533
|
|
|
$
|
94
|
|
|
$
|
—
|
|
|
$
|
(4,919
|
)
|
|
$
|
3,136
|
|
|
$
|
20,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
32,335
|
|
|
$
|
4,101
|
|
|
$
|
444
|
|
|
$
|
1,342
|
|
|
$
|
(275
|
)
|
|
$
|
7,311
|
|
|
$
|
2,440
|
|
|
$
|
47,698
|
|
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation
|
|
16,852
|
|
|
1,711
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
$
|
18,598
|
|
|||||||
Non-GAAP net gains (loss) on investment securities, net of noncontrolling interests
|
|
$
|
15,483
|
|
|
$
|
2,390
|
|
|
$
|
444
|
|
|
$
|
1,342
|
|
|
$
|
(275
|
)
|
|
$
|
7,311
|
|
|
$
|
2,405
|
|
|
$
|
29,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Six months ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
10,883
|
|
|
$
|
12,471
|
|
|
$
|
4,327
|
|
|
$
|
(268
|
)
|
|
$
|
61,165
|
|
|
$
|
(8,936
|
)
|
|
$
|
1,281
|
|
|
$
|
80,923
|
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
6,512
|
|
|
6,249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
12,793
|
|
||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
4,371
|
|
|
$
|
6,222
|
|
|
$
|
4,327
|
|
|
$
|
(268
|
)
|
|
$
|
61,165
|
|
|
$
|
(8,936
|
)
|
|
$
|
1,249
|
|
|
$
|
68,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Six months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total gains (losses) on investment securities, net
|
|
$
|
38,564
|
|
|
$
|
3,467
|
|
|
$
|
10,080
|
|
|
$
|
1,342
|
|
|
$
|
(3,905
|
)
|
|
$
|
22,313
|
|
|
$
|
4,865
|
|
|
$
|
76,726
|
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
|
20,597
|
|
|
1,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
22,034
|
|
||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests
|
|
$
|
17,967
|
|
|
$
|
2,065
|
|
|
$
|
10,080
|
|
|
$
|
1,342
|
|
|
$
|
(3,905
|
)
|
|
$
|
22,313
|
|
|
$
|
4,830
|
|
|
$
|
54,692
|
|
•
|
Net gains of $17.5 million from warrant valuations increases which includes the recovery of the $8.2 million downward market valuations adjustment recognized in the first quarter of 2020, reflective of the overall recovery of the market during the second quarter of 2020, and
|
•
|
Net gains of $9.4 million from the exercise of equity warrant assets driven by IPO and M&A activity.
|
•
|
Net gains of $32.7 million from the exercise of equity warrant assets during the six months ended June 30, 2020, and
|
•
|
Net gains of $8.0 million from changes in warrant valuation increases, driven primarily by valuation increases in our private company warrant portfolio during the six months ended June 30, 2020.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Equity warrant assets (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gains on exercises, net
|
|
$
|
9,435
|
|
|
$
|
40,226
|
|
|
(76.5
|
)%
|
|
$
|
32,730
|
|
|
$
|
49,180
|
|
|
(33.4
|
)%
|
Terminations
|
|
(439
|
)
|
|
(1,045
|
)
|
|
(58.0
|
)%
|
|
(872
|
)
|
|
(1,884
|
)
|
|
(53.7
|
)
|
||||
Changes in fair value, net
|
|
17,510
|
|
|
9,166
|
|
|
91.0
|
|
|
8,043
|
|
|
22,356
|
|
|
(64.0
|
)
|
||||
Total gains on equity warrant assets, net
|
|
$
|
26,506
|
|
|
$
|
48,347
|
|
|
(45.2
|
)
|
|
$
|
39,901
|
|
|
$
|
69,652
|
|
|
(42.7
|
)
|
|
(1)
|
At June 30, 2020, we held warrants in 2,419 companies, compared to 2,173 companies at June 30, 2019. The total fair value of our warrant portfolio was $171.1 million at June 30, 2020 and $158.0 million at June 30, 2019. Warrants in 20 companies each had fair values greater than $1.0 million and collectively represented $50.7 million, or 29.6 percent, of the fair value of the total warrant portfolio at June 30, 2020. Warrants in 22 companies each had fair values greater than $1.0 million and collectively represented $51.8 million, or 32.8 percent, of the fair value of the total warrant portfolio at June 30, 2019.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Non-GAAP core fee income (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Client investment fees
|
|
$
|
31,885
|
|
|
$
|
45,744
|
|
|
(30.3
|
)%
|
|
$
|
75,278
|
|
|
$
|
90,226
|
|
|
(16.6
|
)%
|
Foreign exchange fees
|
|
36,256
|
|
|
38,506
|
|
|
(5.8
|
)
|
|
83,761
|
|
|
76,554
|
|
|
9.4
|
|
||||
Credit card fees
|
|
21,288
|
|
|
28,790
|
|
|
(26.1
|
)
|
|
49,592
|
|
|
56,273
|
|
|
(11.9
|
)
|
||||
Deposit service charges
|
|
20,511
|
|
|
22,075
|
|
|
(7.1
|
)
|
|
45,100
|
|
|
43,014
|
|
|
4.8
|
|
||||
Lending related fees
|
|
11,164
|
|
|
11,213
|
|
|
(0.4
|
)
|
|
24,289
|
|
|
25,150
|
|
|
(3.4
|
)
|
||||
Letters of credit and standby letters of credit fees
|
|
11,421
|
|
|
11,009
|
|
|
3.7
|
|
|
22,963
|
|
|
20,363
|
|
|
12.8
|
|
||||
Total non-GAAP core fee income (1)
|
|
$
|
132,525
|
|
|
$
|
157,337
|
|
|
(15.8
|
)
|
|
$
|
300,983
|
|
|
$
|
311,580
|
|
|
(3.4
|
)
|
Investment banking revenue
|
|
141,503
|
|
|
48,694
|
|
|
190.6
|
|
|
188,370
|
|
|
98,489
|
|
|
91.3
|
|
||||
Commissions
|
|
16,918
|
|
|
14,429
|
|
|
17.2
|
|
|
32,940
|
|
|
28,537
|
|
|
15.4
|
|
||||
Total non-GAAP core fee income plus investment banking revenue and commissions (2)
|
|
$
|
290,946
|
|
|
$
|
220,460
|
|
|
32.0
|
|
|
$
|
522,293
|
|
|
$
|
438,606
|
|
|
19.1
|
|
|
(1)
|
This non-GAAP measure represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. See “Use of Non-GAAP Measures” above.
|
(2)
|
Non-GAAP core fee income plus investment banking revenue and commissions represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and other noninterest income. See “Use of Non-GAAP Measures” above.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Client investment fees by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sweep money market fees
|
|
$
|
19,413
|
|
|
$
|
26,952
|
|
|
(28.0
|
)%
|
|
$
|
42,462
|
|
|
$
|
53,496
|
|
|
(20.6
|
)%
|
Asset management fees
|
|
11,596
|
|
|
6,956
|
|
|
66.7
|
|
|
20,733
|
|
|
13,628
|
|
|
52.1
|
|
||||
Repurchase agreement fees
|
|
876
|
|
|
11,836
|
|
|
(92.6
|
)
|
|
12,083
|
|
|
23,102
|
|
|
(47.7
|
)
|
||||
Total client investment fees
|
|
$
|
31,885
|
|
|
$
|
45,744
|
|
|
(30.3
|
)
|
|
$
|
75,278
|
|
|
$
|
90,226
|
|
|
(16.6
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in millions)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Sweep money market funds
|
|
$
|
47,561
|
|
|
$
|
40,017
|
|
|
18.9
|
%
|
|
$
|
45,303
|
|
|
$
|
39,911
|
|
|
13.5
|
%
|
Client investment assets under management (1)
|
|
51,801
|
|
|
40,825
|
|
|
26.9
|
|
|
51,223
|
|
|
40,036
|
|
|
27.9
|
|
||||
Repurchase agreements
|
|
9,898
|
|
|
8,810
|
|
|
12.3
|
|
|
9,849
|
|
|
8,586
|
|
|
14.7
|
|
||||
Total average client investment funds (2)
|
|
$
|
109,260
|
|
|
$
|
89,652
|
|
|
21.9
|
|
|
$
|
106,375
|
|
|
$
|
88,533
|
|
|
20.2
|
|
|
(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, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||
Sweep money market funds
|
|
$
|
49,388
|
|
|
$
|
43,226
|
|
|
14.3
|
%
|
Client investment assets under management (1)
|
|
56,023
|
|
|
46,904
|
|
|
19.4
|
|
||
Repurchase agreements
|
|
10,510
|
|
|
9,062
|
|
|
16.0
|
|
||
Total period-end client investment funds (2)
|
|
$
|
115,921
|
|
|
$
|
99,192
|
|
|
16.9
|
|
|
(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)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Foreign exchange fees by instrument type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Spot contract commissions
|
|
$
|
33,093
|
|
|
$
|
34,696
|
|
|
(4.6
|
)%
|
|
$
|
74,027
|
|
|
$
|
69,725
|
|
|
6.2
|
%
|
Forward contract commissions
|
|
3,052
|
|
|
3,778
|
|
|
(19.2
|
)
|
|
9,391
|
|
|
6,773
|
|
|
38.7
|
|
||||
Option premium fees
|
|
111
|
|
|
32
|
|
|
NM
|
|
|
343
|
|
|
56
|
|
|
NM
|
|
||||
Total foreign exchange fees
|
|
$
|
36,256
|
|
|
$
|
38,506
|
|
|
(5.8
|
)
|
|
$
|
83,761
|
|
|
$
|
76,554
|
|
|
9.4
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Credit card fees by instrument type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Card interchange fees, net
|
|
$
|
15,314
|
|
|
$
|
22,855
|
|
|
(33.0
|
)%
|
|
$
|
37,089
|
|
|
$
|
44,248
|
|
|
(16.2
|
)%
|
Merchant service fees
|
|
5,030
|
|
|
4,286
|
|
|
17.4
|
|
|
10,057
|
|
|
8,821
|
|
|
14.0
|
|
||||
Card service fees
|
|
944
|
|
|
1,649
|
|
|
(42.8
|
)
|
|
2,446
|
|
|
3,204
|
|
|
(23.7
|
)
|
||||
Total credit card fees
|
|
$
|
21,288
|
|
|
$
|
28,790
|
|
|
(26.1
|
)
|
|
$
|
49,592
|
|
|
$
|
56,273
|
|
|
(11.9
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Lending related fees by instrument type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unused commitment fees
|
|
$
|
8,324
|
|
|
$
|
7,051
|
|
|
18.1
|
%
|
|
$
|
16,730
|
|
|
$
|
16,721
|
|
|
0.1
|
%
|
Other
|
|
2,840
|
|
|
4,162
|
|
|
(31.8
|
)
|
|
7,559
|
|
|
8,429
|
|
|
(10.3
|
)
|
||||
Total lending related fees
|
|
$
|
11,164
|
|
|
$
|
11,213
|
|
|
(0.4
|
)
|
|
$
|
24,289
|
|
|
$
|
25,150
|
|
|
(3.4
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
|||||||||
Investment banking revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underwriting fees
|
|
$
|
131,085
|
|
|
$
|
42,584
|
|
|
NM
|
|
$
|
162,375
|
|
|
$
|
78,356
|
|
|
107.2
|
%
|
Advisory fees
|
|
8,922
|
|
|
5,315
|
|
|
67.9
|
|
24,409
|
|
|
17,588
|
|
|
38.8
|
|
||||
Private placements and other
|
|
1,496
|
|
|
795
|
|
|
88.2
|
|
1,586
|
|
|
2,545
|
|
|
(37.7
|
)
|
||||
Total investment banking revenue
|
|
$
|
141,503
|
|
|
$
|
48,694
|
|
|
190.6
|
|
$
|
188,370
|
|
|
$
|
98,489
|
|
|
91.3
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Compensation and benefits
|
|
$
|
319,797
|
|
|
$
|
243,172
|
|
|
31.5
|
%
|
|
$
|
575,383
|
|
|
$
|
481,233
|
|
|
19.6
|
%
|
Professional services
|
|
63,828
|
|
|
40,830
|
|
|
56.3
|
|
|
102,533
|
|
|
77,816
|
|
|
31.8
|
|
||||
Premises and equipment
|
|
27,708
|
|
|
23,911
|
|
|
15.9
|
|
|
54,648
|
|
|
45,611
|
|
|
19.8
|
|
||||
Net occupancy
|
|
18,845
|
|
|
16,687
|
|
|
12.9
|
|
|
37,191
|
|
|
32,735
|
|
|
13.6
|
|
||||
Business development and travel
|
|
2,992
|
|
|
17,022
|
|
|
(82.4
|
)
|
|
17,063
|
|
|
32,376
|
|
|
(47.3
|
)
|
||||
FDIC and state assessments
|
|
6,819
|
|
|
4,483
|
|
|
52.1
|
|
|
12,053
|
|
|
8,462
|
|
|
42.4
|
|
||||
Other
|
|
39,647
|
|
|
37,417
|
|
|
6.0
|
|
|
80,350
|
|
|
70,953
|
|
|
13.2
|
|
||||
Total noninterest expense
|
|
$
|
479,636
|
|
|
$
|
383,522
|
|
|
25.1
|
|
|
$
|
879,221
|
|
|
$
|
749,186
|
|
|
17.4
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
Non-GAAP core operating efficiency ratio (Dollars in thousands, except ratios)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
GAAP noninterest expense
|
|
$
|
479,636
|
|
|
$
|
383,522
|
|
|
25.1
|
%
|
|
$
|
879,221
|
|
|
$
|
749,186
|
|
|
17.4
|
%
|
Less: expense attributable to noncontrolling interests
|
|
130
|
|
|
168
|
|
|
(22.6
|
)
|
|
270
|
|
|
547
|
|
|
(50.6
|
)
|
||||
Non-GAAP noninterest expense, net of noncontrolling interests
|
|
479,506
|
|
|
383,354
|
|
|
25.1
|
|
|
878,951
|
|
|
748,639
|
|
|
17.4
|
|
||||
Less: expense attributable to SVB Leerink
|
|
108,650
|
|
|
61,935
|
|
|
75.4
|
|
|
170,687
|
|
|
122,475
|
|
|
39.4
|
|
||||
Non-GAAP noninterest expense, net of noncontrolling interests and SVB Leerink
|
|
$
|
370,856
|
|
|
$
|
321,419
|
|
|
15.4
|
|
|
$
|
708,264
|
|
|
$
|
626,164
|
|
|
13.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net interest income
|
|
$
|
512,927
|
|
|
$
|
529,403
|
|
|
(3.1
|
)
|
|
$
|
1,037,064
|
|
|
$
|
1,042,289
|
|
|
(0.5
|
)
|
Adjustments for taxable equivalent basis
|
|
3,844
|
|
|
2,905
|
|
|
32.3
|
|
|
7,253
|
|
|
5,812
|
|
|
24.8
|
|
||||
Non-GAAP taxable equivalent net interest income
|
|
516,771
|
|
|
532,308
|
|
|
(2.9
|
)
|
|
1,044,317
|
|
|
1,048,101
|
|
|
(0.4
|
)
|
||||
Less: income attributable to noncontrolling interests
|
|
5
|
|
|
16
|
|
|
(68.8
|
)
|
|
26
|
|
|
27
|
|
|
(3.7
|
)
|
||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests
|
|
516,766
|
|
|
532,292
|
|
|
(2.9
|
)
|
|
1,044,291
|
|
|
1,048,074
|
|
|
(0.4
|
)
|
||||
Less: net interest income attributable to SVB Leerink
|
|
(3
|
)
|
|
242
|
|
|
(101.2
|
)
|
|
198
|
|
|
684
|
|
|
(71.1
|
)
|
||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests and SVB Leerink
|
|
$
|
516,769
|
|
|
$
|
532,050
|
|
|
(2.9
|
)
|
|
$
|
1,044,093
|
|
|
$
|
1,047,390
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP noninterest income
|
|
$
|
368,848
|
|
|
$
|
333,750
|
|
|
10.5
|
|
|
$
|
670,782
|
|
|
$
|
614,126
|
|
|
9.2
|
|
Less: (loss) income attributable to noncontrolling interests, including carried interest allocation
|
|
14,385
|
|
|
18,736
|
|
|
(23.2
|
)
|
|
12,531
|
|
|
21,984
|
|
|
(43.0
|
)
|
||||
Non-GAAP noninterest income, net of noncontrolling interests
|
|
354,463
|
|
|
315,014
|
|
|
12.5
|
|
|
658,251
|
|
|
592,142
|
|
|
11.2
|
|
||||
Less: non-GAAP net gains on investment securities, net of noncontrolling interests
|
|
20,540
|
|
|
29,100
|
|
|
(29.4
|
)
|
|
68,130
|
|
|
54,692
|
|
|
24.6
|
|
||||
Less: net gains on equity warrant assets
|
|
26,506
|
|
|
48,347
|
|
|
(45.2
|
)
|
|
39,901
|
|
|
69,652
|
|
|
(42.7
|
)
|
||||
Less: investment banking revenue
|
|
141,503
|
|
|
48,694
|
|
|
190.6
|
|
|
188,370
|
|
|
98,489
|
|
|
91.3
|
|
||||
Less: commissions
|
|
16,918
|
|
|
14,429
|
|
|
17.2
|
|
|
32,940
|
|
|
28,537
|
|
|
15.4
|
|
||||
Non-GAAP noninterest income, net of noncontrolling interests and net of net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions
|
|
$
|
148,996
|
|
|
$
|
174,444
|
|
|
(14.6
|
)
|
|
$
|
328,910
|
|
|
$
|
340,772
|
|
|
(3.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP total revenue
|
|
$
|
881,775
|
|
|
$
|
863,153
|
|
|
2.2
|
|
|
$
|
1,707,846
|
|
|
$
|
1,656,415
|
|
|
3.1
|
|
Non-GAAP taxable equivalent revenue, net of noncontrolling interests and SVB Leerink, net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions
|
|
$
|
665,765
|
|
|
$
|
706,494
|
|
|
(5.8
|
)
|
|
$
|
1,373,003
|
|
|
$
|
1,388,162
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating efficiency ratio
|
|
54.39
|
%
|
|
44.43
|
%
|
|
22.4
|
|
|
51.48
|
%
|
|
45.23
|
%
|
|
13.8
|
|
||||
Non-GAAP core operating efficiency ratio (1)
|
|
55.70
|
|
|
45.49
|
|
|
22.4
|
|
|
51.59
|
|
|
45.11
|
|
|
14.4
|
|
|
(1)
|
The non-GAAP core operating efficiency ratio is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink by total revenue after adjusting for net interest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets, investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands, except employees)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Compensation and benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Salaries and wages
|
|
$
|
124,525
|
|
|
$
|
105,799
|
|
|
17.7
|
%
|
|
$
|
240,139
|
|
|
$
|
206,999
|
|
|
16.0
|
%
|
Incentive compensation plans
|
|
120,529
|
|
|
71,492
|
|
|
68.6
|
|
|
187,203
|
|
|
140,881
|
|
|
32.9
|
|
||||
Other employee incentives and benefits (1)
|
|
74,743
|
|
|
65,881
|
|
|
13.5
|
|
|
148,041
|
|
|
133,353
|
|
|
11.0
|
|
||||
Total compensation and benefits
|
|
$
|
319,797
|
|
|
$
|
243,172
|
|
|
31.5
|
|
|
$
|
575,383
|
|
|
$
|
481,233
|
|
|
19.6
|
|
Period-end full-time equivalent employees
|
|
3,984
|
|
|
3,314
|
|
|
20.2
|
|
|
3,984
|
|
|
3,314
|
|
|
20.2
|
|
||||
Average full-time equivalent employees
|
|
3,855
|
|
|
3,287
|
|
|
17.3
|
|
|
3,764
|
|
|
3,257
|
|
|
15.6
|
|
|
(1)
|
Other employee incentives and benefits includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), ESOP, warrant incentive and retention plans, agency fees and other employee-related expenses.
|
•
|
An increase of $18.7 million in salaries and wages reflective primarily of the increase in the number of average FTE to 3,855 for the second quarter of 2020 compared to 3,287 for the second quarter of 2019, as well as annual pay raises,
|
•
|
An increase of $49.0 million in incentive compensation plans expense attributable primarily to an increase in SVB Leerink incentive compensation expense as a result of a strong second quarter performance as compared to the same period in 2019,
|
•
|
An increase of $8.9 million in other employee incentives and benefits primarily driven by an increase in agency fees of $4.1 million and an increase of $3.5 million in share-based compensation expense due to the increased restricted stock awards granted during 2020.
|
•
|
An increase of $33.1 million in salaries and wages reflective primarily of the increase in the number of average FTE to 3,764 for the six months ended June 30, 2020 from 3,257 for the six months ended June 30, 2019, as well as annual pay raises,
|
•
|
An increase of $46.3 million in incentive compensation reflective primarily of the Leerink incentive compensation for the six months ended June 30, 2020, and
|
•
|
An increase of $14.7 million in other employee incentives and benefits primarily driven by an increase in agency fees of $8.5 million and an increase of $7.6 million in share-based compensation expense due to the increased restricted stock awards granted during 2020.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Lending and other client related processing costs
|
|
$
|
6,803
|
|
|
$
|
8,763
|
|
|
(22.4
|
)%
|
|
$
|
15,961
|
|
|
$
|
13,940
|
|
|
14.5
|
%
|
Correspondent bank fees
|
|
3,833
|
|
|
3,569
|
|
|
7.4
|
|
|
7,819
|
|
|
7,313
|
|
|
6.9
|
|
||||
Investment banking activities
|
|
7,768
|
|
|
3,869
|
|
|
100.8
|
|
|
10,798
|
|
|
8,054
|
|
|
34.1
|
|
||||
Trade order execution costs
|
|
2,614
|
|
|
2,828
|
|
|
(7.6
|
)
|
|
5,359
|
|
|
5,344
|
|
|
0.3
|
|
||||
Data processing services
|
|
3,507
|
|
|
2,659
|
|
|
31.9
|
|
|
6,961
|
|
|
5,558
|
|
|
25.2
|
|
||||
Telephone
|
|
1,889
|
|
|
2,422
|
|
|
(22.0
|
)
|
|
4,116
|
|
|
5,163
|
|
|
(20.3
|
)
|
||||
Dues and publications
|
|
910
|
|
|
860
|
|
|
5.8
|
|
|
2,040
|
|
|
2,384
|
|
|
(14.4
|
)
|
||||
Postage and supplies
|
|
723
|
|
|
678
|
|
|
6.6
|
|
|
1,579
|
|
|
1,448
|
|
|
9.0
|
|
||||
Other
|
|
11,600
|
|
|
11,769
|
|
|
(1.4
|
)
|
|
25,717
|
|
|
21,749
|
|
|
18.2
|
|
||||
Total other noninterest expense
|
|
$
|
39,647
|
|
|
$
|
37,417
|
|
|
6.0
|
|
|
$
|
80,350
|
|
|
$
|
70,953
|
|
|
13.2
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Net interest income (1)
|
|
$
|
(5
|
)
|
|
$
|
(16
|
)
|
|
(68.8
|
)%
|
|
$
|
(26
|
)
|
|
$
|
(27
|
)
|
|
(3.7
|
)%
|
Noninterest income (1)
|
|
(5,904
|
)
|
|
(12,406
|
)
|
|
(52.4
|
)
|
|
(3,413
|
)
|
|
(14,676
|
)
|
|
(76.7
|
)
|
||||
Noninterest expense (1)
|
|
130
|
|
|
168
|
|
|
(22.6
|
)
|
|
270
|
|
|
547
|
|
|
(50.6
|
)
|
||||
Carried interest allocation (2)
|
|
(8,481
|
)
|
|
(6,330
|
)
|
|
34.0
|
|
|
(9,118
|
)
|
|
(7,308
|
)
|
|
24.8
|
|
||||
Net income attributable to noncontrolling interests
|
|
$
|
(14,260
|
)
|
|
$
|
(18,584
|
)
|
|
(23.3
|
)
|
|
$
|
(12,287
|
)
|
|
$
|
(21,464
|
)
|
|
(42.8
|
)
|
|
NM
|
Not meaningful
|
(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)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
484,969
|
|
|
$
|
461,752
|
|
|
5.0
|
%
|
|
$
|
948,805
|
|
|
$
|
907,628
|
|
|
4.5
|
%
|
Provision for credit losses
|
|
(43,456
|
)
|
|
(18,295
|
)
|
|
137.5
|
|
|
(237,867
|
)
|
|
(45,100
|
)
|
|
NM
|
|
||||
Noninterest income
|
|
133,474
|
|
|
157,605
|
|
|
(15.3
|
)
|
|
300,308
|
|
|
310,465
|
|
|
(3.3
|
)
|
||||
Noninterest expense
|
|
(241,343
|
)
|
|
(206,902
|
)
|
|
16.6
|
|
|
(466,198
|
)
|
|
(404,147
|
)
|
|
15.4
|
|
||||
Income before income tax expense
|
|
$
|
333,644
|
|
|
$
|
394,160
|
|
|
(15.4
|
)
|
|
$
|
545,048
|
|
|
$
|
768,846
|
|
|
(29.1
|
)
|
Total average loans, amortized cost
|
|
$
|
30,472,414
|
|
|
$
|
25,724,704
|
|
|
18.5
|
|
|
$
|
29,804,949
|
|
|
$
|
25,264,010
|
|
|
18.0
|
|
Total average assets
|
|
67,936,486
|
|
|
53,965,699
|
|
|
25.9
|
|
|
64,870,536
|
|
|
52,068,609
|
|
|
24.6
|
|
||||
Total average deposits
|
|
65,090,982
|
|
|
51,126,806
|
|
|
27.3
|
|
|
62,153,426
|
|
|
49,371,589
|
|
|
25.9
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
18,644
|
|
|
$
|
12,277
|
|
|
51.9
|
%
|
|
$
|
33,808
|
|
|
$
|
24,258
|
|
|
39.4
|
%
|
(Provision for) reduction of credit losses
|
|
(4,585
|
)
|
|
(853
|
)
|
|
NM
|
|
|
(59,075
|
)
|
|
131
|
|
|
NM
|
|
||||
Noninterest income
|
|
670
|
|
|
686
|
|
|
(2.3
|
)
|
|
1,570
|
|
|
1,196
|
|
|
31.3
|
|
||||
Noninterest expense
|
|
(10,164
|
)
|
|
(9,526
|
)
|
|
6.7
|
|
|
(20,254
|
)
|
|
(18,378
|
)
|
|
10.2
|
|
||||
Income (loss) before income tax expense
|
|
$
|
4,565
|
|
|
$
|
2,584
|
|
|
76.7
|
|
|
$
|
(43,951
|
)
|
|
$
|
7,207
|
|
|
NM
|
|
Total average loans, amortized cost
|
|
$
|
4,035,940
|
|
|
$
|
3,217,597
|
|
|
25.4
|
|
|
$
|
3,946,709
|
|
|
$
|
3,152,104
|
|
|
25.2
|
|
Total average assets
|
|
4,071,648
|
|
|
3,247,557
|
|
|
25.4
|
|
|
3,982,024
|
|
|
3,179,064
|
|
|
25.3
|
|
||||
Total average deposits
|
|
2,119,983
|
|
|
1,394,905
|
|
|
52.0
|
|
|
2,021,323
|
|
|
1,442,803
|
|
|
40.1
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Net interest income
|
|
$
|
5
|
|
|
$
|
6
|
|
|
(16.7
|
)%
|
|
$
|
26
|
|
|
$
|
12
|
|
|
116.7
|
%
|
Noninterest income
|
|
21,450
|
|
|
40,059
|
|
|
(46.5
|
)
|
|
26,368
|
|
|
64,904
|
|
|
(59.4
|
)
|
||||
Noninterest expense
|
|
(8,256
|
)
|
|
(7,883
|
)
|
|
4.7
|
|
|
(16,842
|
)
|
|
(13,665
|
)
|
|
23.2
|
|
||||
Income before income tax expense
|
|
$
|
13,199
|
|
|
$
|
32,182
|
|
|
(59.0
|
)
|
|
$
|
9,552
|
|
|
$
|
51,251
|
|
|
(81.4
|
)
|
Total average assets
|
|
$
|
430,272
|
|
|
$
|
373,167
|
|
|
15.3
|
|
|
$
|
438,737
|
|
|
$
|
375,934
|
|
|
16.7
|
|
•
|
Net gains on investment securities of $12.1 million for the three months ended June 30, 2020, compared to net gains of $27.9 million for the comparable 2019 period. The net gains on investment securities of $12.1 million were primarily driven by unrealized net valuation increases from private company investments held in our strategic venture capital funds as well as in our managed funds of funds portfolio.
|
•
|
Net gains on investment securities of $6.3 million for the six months ended June 30, 2020, compared to net gains of $44.0 million for the comparable 2019 period. The net gains on investment securities of $6.3 million were primarily driven by a downward valuation adjustment for illiquid investments held in the private managed funds and companies of our portfolios due to the current market volatility. The downward valuation adjustment was offset by unrealized net valuation increases from private company investments held in our strategic venture capital funds as well as in our managed funds of funds portfolio.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||||
Net interest (loss) income
|
|
$
|
(3
|
)
|
|
$
|
242
|
|
|
(101.2
|
)%
|
|
$
|
198
|
|
|
$
|
684
|
|
|
(71.1
|
)%
|
Noninterest income
|
|
163,817
|
|
|
67,000
|
|
|
144.5
|
|
|
226,494
|
|
|
135,117
|
|
|
67.6
|
|
||||
Noninterest expense
|
|
(108,650
|
)
|
|
(61,935
|
)
|
|
75.4
|
|
|
(170,687
|
)
|
|
(122,475
|
)
|
|
39.4
|
|
||||
Income before income tax expense
|
|
$
|
55,164
|
|
|
$
|
5,307
|
|
|
NM
|
|
|
$
|
56,005
|
|
|
$
|
13,326
|
|
|
NM
|
|
Total average assets
|
|
$
|
454,603
|
|
|
$
|
410,279
|
|
|
10.8
|
|
|
$
|
469,126
|
|
|
$
|
355,609
|
|
|
31.9
|
|
|
|
|
June 30, 2020
|
|||||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
4,535,235
|
|
|
1.87
|
%
|
|
$
|
85,518
|
|
|
1.57
|
%
|
|
$
|
2,613,342
|
|
|
1.84
|
%
|
|
$
|
1,836,375
|
|
|
1.94
|
%
|
|
$
|
—
|
|
|
—
|
%
|
U.S. agency debentures
|
|
102,659
|
|
|
2.28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,659
|
|
|
2.28
|
|
|
—
|
|
|
—
|
|
|||||
Foreign government debt securities
|
|
22,525
|
|
|
(0.82
|
)
|
|
22,525
|
|
|
(0.82
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency-issued mortgage-backed securities
|
|
7,655,556
|
|
|
2.13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,655,556
|
|
|
2.13
|
|
|||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
2,979,540
|
|
|
1.74
|
|
|
—
|
|
|
—
|
|
|
491
|
|
|
3.26
|
|
|
—
|
|
|
—
|
|
|
2,979,049
|
|
|
1.74
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
3,156,398
|
|
|
2.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,347,235
|
|
|
1.86
|
|
|
1,809,163
|
|
|
2.11
|
|
|||||
Total
|
|
$
|
18,451,913
|
|
|
1.98
|
|
|
$
|
108,043
|
|
|
1.07
|
|
|
$
|
2,613,833
|
|
|
1.84
|
|
|
$
|
3,286,269
|
|
|
1.91
|
|
|
$
|
12,443,768
|
|
|
2.04
|
|
|
|
June 30, 2020
|
|||||||||||||||||||||||||||||||||
|
|
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
|
|
$
|
453,280
|
|
|
2.62
|
%
|
|
$
|
2,622
|
|
|
4.07
|
%
|
|
$
|
142,917
|
|
|
2.52
|
%
|
|
$
|
307,741
|
|
|
2.69
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency-issued mortgage-backed securities
|
|
6,086,154
|
|
|
2.88
|
|
|
8,369
|
|
|
2.68
|
|
|
40,337
|
|
|
1.89
|
|
|
640,876
|
|
|
2.47
|
|
|
5,396,572
|
|
|
2.94
|
|
|||||
Agency-issued collateralized mortgage obligations—fixed rate
|
|
1,518,848
|
|
|
1.69
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612,478
|
|
|
1.62
|
|
|
906,370
|
|
|
1.74
|
|
|||||
Agency-issued collateralized mortgage obligations—variable rate
|
|
162,250
|
|
|
0.75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162,250
|
|
|
0.75
|
|
|||||
Agency-issued commercial mortgage-backed securities
|
|
2,484,072
|
|
|
3.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102,497
|
|
|
3.56
|
|
|
2,381,575
|
|
|
3.04
|
|
|||||
Municipal bonds and notes
|
|
2,154,441
|
|
|
3.54
|
|
|
31,814
|
|
|
2.22
|
|
|
142,152
|
|
|
2.66
|
|
|
479,079
|
|
|
3.11
|
|
|
1,501,396
|
|
|
3.79
|
|
|||||
Total
|
|
$
|
12,859,045
|
|
|
2.85
|
|
|
$
|
42,805
|
|
|
2.43
|
|
|
$
|
325,406
|
|
|
2.50
|
|
|
$
|
2,142,671
|
|
|
2.46
|
|
|
$
|
10,348,163
|
|
|
2.95
|
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||
(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:
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable securities (fair value accounting):
|
|
|
|
|
|
|
|
|
||||||||
Consolidated venture capital and private equity fund investments (1)
|
|
$
|
68,214
|
|
|
$
|
17,433
|
|
|
$
|
87,180
|
|
|
$
|
22,482
|
|
Unconsolidated venture capital and private equity fund investments (2)
|
|
145,122
|
|
|
145,122
|
|
|
178,217
|
|
|
178,217
|
|
||||
Other investments without a readily determinable fair value (3)
|
|
56,206
|
|
|
56,205
|
|
|
55,255
|
|
|
55,255
|
|
||||
Other equity securities in public companies (fair value accounting (4)
|
|
45,288
|
|
|
43,493
|
|
|
59,200
|
|
|
59,056
|
|
||||
Non-marketable securities (equity method accounting) (5):
|
|
|
|
|
|
|
|
|
||||||||
Venture capital and private equity fund investments
|
|
233,996
|
|
|
139,628
|
|
|
215,367
|
|
|
131,403
|
|
||||
Debt funds
|
|
7,004
|
|
|
7,004
|
|
|
7,271
|
|
|
7,271
|
|
||||
Other investments
|
|
181,543
|
|
|
181,543
|
|
|
152,863
|
|
|
152,863
|
|
||||
Investments in qualified affordable housing projects, net
|
|
533,205
|
|
|
533,205
|
|
|
458,476
|
|
|
458,476
|
|
||||
Total non-marketable and other equity securities
|
|
$
|
1,270,578
|
|
|
$
|
1,123,633
|
|
|
$
|
1,213,829
|
|
|
$
|
1,065,023
|
|
|
(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, 2020 and December 31, 2019:
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||
(Dollars in thousands)
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
|
Carrying value (as reported)
|
|
Amount attributable to SVBFG
|
||||||||
Strategic Investors Fund, LP
|
|
$
|
4,414
|
|
|
$
|
555
|
|
|
$
|
5,729
|
|
|
$
|
720
|
|
Capital Preferred Return Fund, LP
|
|
36,890
|
|
|
7,950
|
|
|
45,341
|
|
|
9,772
|
|
||||
Growth Partners, LP
|
|
26,776
|
|
|
8,914
|
|
|
35,976
|
|
|
11,976
|
|
||||
CP I, LP
|
|
134
|
|
|
14
|
|
|
134
|
|
|
14
|
|
||||
Total consolidated venture capital and private equity fund investments
|
|
$
|
68,214
|
|
|
$
|
17,433
|
|
|
$
|
87,180
|
|
|
$
|
22,482
|
|
(2)
|
The carrying value represents investments in 191 and 205 funds (primarily venture capital funds) at June 30, 2020 and December 31, 2019, 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
|
(3)
|
Investments classified as "Other investments without a readily determinable fair value" 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. Changes in the fair value recognized through net income.
|
(5)
|
The following table shows the carrying value and our ownership percentage of each investment at June 30, 2020 and December 31, 2019 (equity method accounting):
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||
(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
|
|
$
|
3,083
|
|
|
$
|
2,875
|
|
|
$
|
3,612
|
|
|
$
|
3,387
|
|
Strategic Investors Fund III, LP
|
|
14,211
|
|
|
11,518
|
|
|
15,668
|
|
|
12,701
|
|
||||
Strategic Investors Fund IV, LP
|
|
24,743
|
|
|
20,842
|
|
|
27,064
|
|
|
22,780
|
|
||||
Strategic Investors Fund V, LP
|
|
47,734
|
|
|
25,060
|
|
|
46,830
|
|
|
24,586
|
|
||||
CP II, LP (i)
|
|
4,646
|
|
|
2,798
|
|
|
5,907
|
|
|
3,567
|
|
||||
Other venture capital and private equity fund investments
|
|
139,579
|
|
|
76,535
|
|
|
116,286
|
|
|
64,382
|
|
||||
Total venture capital and private equity fund investments
|
|
$
|
233,996
|
|
|
$
|
139,628
|
|
|
$
|
215,367
|
|
|
$
|
131,403
|
|
Debt funds:
|
|
|
|
|
|
|
|
|
||||||||
Gold Hill Capital 2008, LP (ii)
|
|
$
|
5,334
|
|
|
$
|
5,334
|
|
|
$
|
5,525
|
|
|
$
|
5,525
|
|
Other debt funds
|
|
1,670
|
|
|
1,670
|
|
|
1,746
|
|
|
1,746
|
|
||||
Total debt funds
|
|
$
|
7,004
|
|
|
$
|
7,004
|
|
|
$
|
7,271
|
|
|
$
|
7,271
|
|
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
SPD Silicon Valley Bank Co., Ltd.
|
|
$
|
105,863
|
|
|
$
|
105,863
|
|
|
$
|
74,190
|
|
|
$
|
74,190
|
|
Other investments
|
|
75,680
|
|
|
75,680
|
|
|
78,673
|
|
|
78,673
|
|
||||
Total other investments
|
|
$
|
181,543
|
|
|
$
|
181,543
|
|
|
$
|
152,863
|
|
|
$
|
152,863
|
|
|
(i)
|
Our ownership includes direct ownership interest 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, 2020
|
|
December 31, 2019
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Percentage
|
|
Amount
|
|
Percentage
|
||||||
Private equity/venture capital
|
|
$
|
17,901,117
|
|
|
48.7
|
%
|
|
$
|
17,712,797
|
|
|
53.1
|
%
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
||||
Early stage
|
|
1,797,576
|
|
|
4.9
|
|
|
1,653,425
|
|
|
5.0
|
|
||
Mid stage
|
|
1,435,772
|
|
|
3.9
|
|
|
1,066,783
|
|
|
3.2
|
|
||
Later stage
|
|
1,905,528
|
|
|
5.2
|
|
|
1,698,676
|
|
|
5.1
|
|
||
Total investor dependent
|
|
5,138,876
|
|
|
14.0
|
|
|
4,418,884
|
|
|
13.3
|
|
||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsor led buyout
|
|
2,057,439
|
|
|
5.6
|
|
|
2,203,020
|
|
|
6.6
|
|
||
Other
|
|
2,787,807
|
|
|
7.6
|
|
|
2,252,847
|
|
|
6.8
|
|
||
Total cash flow dependent
|
|
4,845,246
|
|
|
13.2
|
|
|
4,455,867
|
|
|
13.4
|
|
||
Private bank
|
|
3,816,277
|
|
|
10.4
|
|
|
3,489,219
|
|
|
10.4
|
|
||
Balance sheet dependent
|
|
1,693,071
|
|
|
4.6
|
|
|
1,297,304
|
|
|
3.9
|
|
||
Premium wine
|
|
1,039,456
|
|
|
2.8
|
|
|
1,063,512
|
|
|
3.2
|
|
||
Other
|
|
457,234
|
|
|
1.3
|
|
|
890,121
|
|
|
2.7
|
|
||
SBA loans
|
|
1,835,945
|
|
|
5.0
|
|
|
—
|
|
|
—
|
|
||
Total loans (1)
|
|
$
|
36,727,222
|
|
|
100.0
|
|
|
$
|
33,327,704
|
|
|
100.0
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
|
|
June 30, 2020
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Less than Five Million
|
|
Five to Ten Million
|
|
Ten to Twenty Million
|
|
Twenty to Thirty Million
|
|
Thirty Million or More
|
|
Total
|
||||||||||||
Private equity/venture capital
|
|
$
|
1,069,179
|
|
|
$
|
1,284,736
|
|
|
$
|
2,427,604
|
|
|
$
|
1,830,511
|
|
|
$
|
11,297,045
|
|
|
$
|
17,909,075
|
|
Investor dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Early stage
|
|
2,156,040
|
|
|
321,585
|
|
|
122,008
|
|
|
29,150
|
|
|
114,919
|
|
|
2,743,702
|
|
||||||
Mid stage
|
|
814,360
|
|
|
512,861
|
|
|
199,537
|
|
|
122,545
|
|
|
94,770
|
|
|
1,744,073
|
|
||||||
Later stage
|
|
195,014
|
|
|
446,575
|
|
|
754,682
|
|
|
272,984
|
|
|
315,484
|
|
|
1,984,739
|
|
||||||
Total investor dependent
|
|
3,165,414
|
|
|
1,281,021
|
|
|
1,076,227
|
|
|
424,679
|
|
|
525,173
|
|
|
6,472,514
|
|
||||||
Cash flow dependent:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sponsor led buyout
|
|
12,892
|
|
|
62,777
|
|
|
480,219
|
|
|
674,082
|
|
|
837,197
|
|
|
2,067,167
|
|
||||||
Other
|
|
368,504
|
|
|
310,756
|
|
|
571,255
|
|
|
733,571
|
|
|
1,200,345
|
|
|
3,184,431
|
|
||||||
Total cash flow dependent
|
|
381,396
|
|
|
373,533
|
|
|
1,051,474
|
|
|
1,407,653
|
|
|
2,037,542
|
|
|
5,251,598
|
|
||||||
Private bank
|
|
3,034,081
|
|
|
405,009
|
|
|
213,509
|
|
|
51,387
|
|
|
112,527
|
|
|
3,816,513
|
|
||||||
Balance sheet dependent
|
|
222,058
|
|
|
379,156
|
|
|
390,410
|
|
|
279,684
|
|
|
470,059
|
|
|
1,741,367
|
|
||||||
Premium wine
|
|
254,698
|
|
|
240,736
|
|
|
329,758
|
|
|
95,536
|
|
|
146,973
|
|
|
1,067,701
|
|
||||||
Other
|
|
158,091
|
|
|
46,590
|
|
|
138,818
|
|
|
55,143
|
|
|
69,812
|
|
|
468,454
|
|
||||||
Total loans (1) (2)
|
|
$
|
8,284,917
|
|
|
$
|
4,010,781
|
|
|
$
|
5,627,800
|
|
|
$
|
4,144,593
|
|
|
$
|
14,659,131
|
|
|
$
|
36,727,222
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
(2)
|
Included in total loans at amortized cost is approximately $1.8 billion in PPP loans. The PPP loans consist of loans from all risk-based segments.
|
|
|
December 31, 2019
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Less than Five Million
|
|
Five to Ten Million
|
|
Ten to Twenty Million
|
|
Twenty to Thirty Million
|
|
Thirty Million or More
|
|
Total
|
||||||||||||
Private equity/venture capital
|
|
$
|
1,016,051
|
|
|
$
|
1,082,201
|
|
|
$
|
2,559,384
|
|
|
$
|
2,029,547
|
|
|
$
|
11,025,614
|
|
|
$
|
17,712,797
|
|
Investor dependent
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Early stage
|
|
1,090,852
|
|
|
260,685
|
|
|
191,661
|
|
|
76,542
|
|
|
33,685
|
|
|
1,653,425
|
|
||||||
Mid stage
|
|
544,167
|
|
|
316,617
|
|
|
156,418
|
|
|
49,581
|
|
|
—
|
|
|
1,066,783
|
|
||||||
Later stage
|
|
167,500
|
|
|
348,832
|
|
|
648,382
|
|
|
304,373
|
|
|
229,589
|
|
|
1,698,676
|
|
||||||
Total investor dependent
|
|
1,802,519
|
|
|
926,134
|
|
|
996,461
|
|
|
430,496
|
|
|
263,274
|
|
|
4,418,884
|
|
||||||
Cash flow dependent
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sponsor led buyout
|
|
16,034
|
|
|
97,458
|
|
|
550,753
|
|
|
723,737
|
|
|
815,038
|
|
|
2,203,020
|
|
||||||
Other
|
|
206,209
|
|
|
86,929
|
|
|
465,304
|
|
|
463,073
|
|
|
1,031,332
|
|
|
2,252,847
|
|
||||||
Total cash flow dependent
|
|
222,243
|
|
|
184,387
|
|
|
1,016,057
|
|
|
1,186,810
|
|
|
1,846,370
|
|
|
4,455,867
|
|
||||||
Private bank
|
|
2,791,587
|
|
|
359,429
|
|
|
191,979
|
|
|
49,996
|
|
|
96,228
|
|
|
3,489,219
|
|
||||||
Balance sheet dependent
|
|
256,247
|
|
|
269,744
|
|
|
404,356
|
|
|
78,197
|
|
|
288,760
|
|
|
1,297,304
|
|
||||||
Premium wine
|
|
243,094
|
|
|
267,389
|
|
|
261,951
|
|
|
148,469
|
|
|
142,609
|
|
|
1,063,512
|
|
||||||
Other
|
|
526,850
|
|
|
40,511
|
|
|
106,247
|
|
|
112,764
|
|
|
103,749
|
|
|
890,121
|
|
||||||
Total loans (1)
|
|
$
|
6,858,591
|
|
|
$
|
3,129,795
|
|
|
$
|
5,536,435
|
|
|
$
|
4,036,279
|
|
|
$
|
13,766,604
|
|
|
$
|
33,327,704
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
•
|
Venture debt: The venture debt relief program was offered to eligible borrowers during the month of April 2020. The program defers principal payments for six-months or, if the loan is in an interest-only period, extends the interest-only period for six-months. Interest continues to be accrued and billed. The maturity dates on the loans are extended and principal payments resume based on original payment schedules. Clients with investor dependent commercial term loans that were fully funded as of March 31, 2020, and with an aggregate commitment of less than or equal to $10 million, were eligible for the program. As of June 30, 2020, loans modified under this program had outstanding balances of $2.1 billion. This amount reflects repayments received as of June 30, 2020.
|
•
|
Private Bank: The Private Bank relief program was offered to eligible borrowers beginning April 1, 2020, through June 30, 2020. The program defers principal and interest payments for the lesser of three months or the remaining loan period. The maturity date of the loans is not extended, and deferred interest is not capitalized into principal but added to final payment upon maturity. The principal balance continues to accrue interest during the deferral period. Clients who were current, less than 30 days past due, as of March 31, 2020, were eligible for the program. As of June 30, 2020, loans modified under this program had outstanding balances of $204.3 million. This amount reflects repayments received as of June 30, 2020.
|
•
|
Wine: The wine relief program was offered to eligible borrowers during the month of April 2020. Depending on the loan structure, principal and interest payments are deferred for three months or principal is deferred for six months. Interest
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Nonperforming, past due, and restructured loans:
|
|
|
|
|
||||
Nonaccrual loans
|
|
$
|
94,326
|
|
|
$
|
102,669
|
|
Loans past due 90 days or more still accruing interest
|
|
76
|
|
|
3,515
|
|
||
Total nonperforming loans (1)
|
|
94,402
|
|
|
106,184
|
|
||
OREO and other foreclosed assets
|
|
—
|
|
|
—
|
|
||
Total nonperforming assets
|
|
$
|
94,402
|
|
|
$
|
106,184
|
|
Performing TDRs
|
|
$
|
56,281
|
|
|
$
|
31,990
|
|
Nonperforming loans as a percentage of total loans (1)
|
|
0.26
|
%
|
|
0.32
|
%
|
||
Nonperforming assets as a percentage of total assets
|
|
0.11
|
|
|
0.15
|
|
||
Allowance for credit losses for loans
|
|
$
|
589,828
|
|
|
$
|
304,924
|
|
As a percentage of total loans (1)
|
|
1.61
|
%
|
|
0.91
|
%
|
||
As a percentage of total nonperforming loans (1)
|
|
624.80
|
|
|
287.17
|
|
||
Allowance for credit losses for nonaccrual loans
|
|
$
|
54,383
|
|
|
$
|
44,859
|
|
As a percentage of total loans (1)
|
|
0.15
|
%
|
|
0.13
|
%
|
||
As a percentage of total nonperforming loans (1)
|
|
57.61
|
|
|
42.25
|
|
||
Allowance for credit losses for total performing loans
|
|
$
|
535,445
|
|
|
$
|
260,065
|
|
As a percentage of total loans (1)
|
|
1.46
|
%
|
|
0.78
|
%
|
||
As a percentage of total performing loans (1)
|
|
1.46
|
|
|
0.78
|
|
||
Total loans (1)
|
|
$
|
36,727,222
|
|
|
$
|
33,327,704
|
|
Total performing loans (1)
|
|
36,632,820
|
|
|
33,221,520
|
|
||
Allowance for credit losses for unfunded credit commitments (2)
|
|
99,294
|
|
|
67,656
|
|
||
As a percentage of total unfunded credit commitments
|
|
0.35
|
%
|
|
0.28
|
%
|
||
Total unfunded credit commitments (3)
|
|
$
|
28,127,229
|
|
|
$
|
24,521,920
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed, and ratios are calculated, using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed, and ratios calculated, using the gross basis.
|
(2)
|
The “allowance for credit losses 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.
|
(3)
|
Includes unfunded loan commitments and letters of credit.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Balance, beginning of period (1)
|
|
$
|
50,607
|
|
|
$
|
133,623
|
|
|
$
|
102,669
|
|
|
$
|
94,142
|
|
Additions
|
|
66,116
|
|
|
39,460
|
|
|
102,462
|
|
|
90,317
|
|
||||
Paydowns and other reductions
|
|
(17,784
|
)
|
|
(57,507
|
)
|
|
(80,461
|
)
|
|
(63,937
|
)
|
||||
Charge-offs
|
|
(4,613
|
)
|
|
(18,935
|
)
|
|
(30,344
|
)
|
|
(23,830
|
)
|
||||
Other reductions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
||||
Balance, end of period (1)
|
|
$
|
94,326
|
|
|
$
|
96,641
|
|
|
$
|
94,326
|
|
|
$
|
96,641
|
|
|
(1)
|
For the quarter ended June 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||
Derivative assets (1)
|
|
$
|
440,430
|
|
|
$
|
332,814
|
|
|
32.3
|
%
|
Foreign exchange spot contract assets, gross
|
|
1,205,821
|
|
|
810,275
|
|
|
48.8
|
|
||
Accrued interest receivable
|
|
201,274
|
|
|
216,962
|
|
|
(7.2
|
)
|
||
FHLB and Federal Reserve Bank stock
|
|
60,673
|
|
|
60,258
|
|
|
0.7
|
|
||
Net deferred tax assets (2)
|
|
577
|
|
|
28,433
|
|
|
(98.0
|
)
|
||
Accounts receivable
|
|
45,501
|
|
|
47,663
|
|
|
(4.5
|
)
|
||
Other assets
|
|
286,714
|
|
|
248,828
|
|
|
15.2
|
|
||
Total accrued interest receivable and other assets
|
|
$
|
2,240,990
|
|
|
$
|
1,745,233
|
|
|
28.4
|
|
|
(1)
|
See "Derivatives" section below.
|
(2)
|
See "Other Liabilities" section below.
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||
Assets:
|
|
|
|
|
|
|
|||||
Equity warrant assets
|
|
$
|
171,082
|
|
|
$
|
165,473
|
|
|
3.4
|
%
|
Foreign exchange forward and option contracts
|
|
182,093
|
|
|
115,854
|
|
|
57.2
|
|
||
Client interest rate derivatives
|
|
87,255
|
|
|
28,811
|
|
|
NM
|
|
||
Interest rate swaps
|
|
—
|
|
|
22,676
|
|
|
—
|
|
||
Total derivative assets
|
|
$
|
440,430
|
|
|
$
|
332,814
|
|
|
32.3
|
|
Liabilities:
|
|
|
|
|
|
|
|||||
Foreign exchange forward and option contracts
|
|
$
|
152,538
|
|
|
$
|
98,207
|
|
|
55.3
|
|
Client interest rate derivatives
|
|
28,676
|
|
|
14,154
|
|
|
102.6
|
|
||
Interest rate swaps
|
|
—
|
|
|
25,623
|
|
|
—
|
|
||
Total derivative liabilities
|
|
$
|
181,214
|
|
|
$
|
137,984
|
|
|
31.3
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Balance, beginning of period
|
|
$
|
152,710
|
|
|
$
|
162,215
|
|
|
$
|
165,473
|
|
|
$
|
149,238
|
|
New equity warrant assets
|
|
7,353
|
|
|
3,051
|
|
|
11,872
|
|
|
7,521
|
|
||||
Non-cash changes in fair value, net
|
|
17,510
|
|
|
9,166
|
|
|
8,043
|
|
|
22,356
|
|
||||
Exercised equity warrant assets
|
|
(6,052
|
)
|
|
(15,339
|
)
|
|
(13,434
|
)
|
|
(19,183
|
)
|
||||
Terminated equity warrant assets
|
|
(439
|
)
|
|
(1,045
|
)
|
|
(872
|
)
|
|
(1,884
|
)
|
||||
Balance, end of period
|
|
$
|
171,082
|
|
|
$
|
158,048
|
|
|
$
|
171,082
|
|
|
$
|
158,048
|
|
(Dollars in thousands)
|
|
June 30, 2020
|
|
December 31, 2019
|
|
% Change
|
|||||
Foreign exchange spot contract liabilities, gross
|
|
$
|
1,278,006
|
|
|
$
|
888,360
|
|
|
43.9
|
|
Accrued compensation
|
|
239,190
|
|
|
354,393
|
|
|
(32.5
|
)
|
||
Allowance for unfunded credit commitments
|
|
99,294
|
|
|
67,656
|
|
|
46.8
|
|
||
Derivative liabilities (1)
|
|
181,214
|
|
|
137,984
|
|
|
31.3
|
|
||
Net deferred tax liabilities
|
|
89,457
|
|
|
—
|
|
|
—
|
|
||
Other liabilities
|
|
736,246
|
|
|
593,359
|
|
|
24.1
|
|
||
Total other liabilities
|
|
$
|
2,623,407
|
|
|
$
|
2,041,752
|
|
|
28.5
|
|
|
(1)
|
See “Derivatives” section above.
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||||||||||
(Dollars in thousands)
|
|
Total Balance
|
|
Level 3
|
|
Total Balance
|
|
Level 3
|
||||||||
Assets carried at fair value
|
|
$
|
19,150,966
|
|
|
$
|
165,359
|
|
|
$
|
14,672,330
|
|
|
$
|
161,172
|
|
As a percentage of total assets
|
|
22.3
|
%
|
|
0.2
|
%
|
|
20.7
|
%
|
|
0.2
|
%
|
||||
As a percentage of assets carried at fair value
|
|
|
|
0.9
|
|
|
|
|
1.1
|
|
||||||
Liabilities carried at fair value
|
|
$
|
181,214
|
|
|
$
|
—
|
|
|
$
|
137,984
|
|
|
$
|
—
|
|
As a percentage of total liabilities
|
|
0.2
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
|
June 30,
2020 |
|
December 31, 2019
|
|
Required Minimum (1)
|
|
Well Capitalized Minimum
|
||||
SVB Financial:
|
|
|
|
|
|
|
|
|
||||
CET 1 risk-based capital ratio (2)(3)
|
|
12.63
|
%
|
|
12.58
|
%
|
|
7.0
|
%
|
|
N/A
|
|
Tier 1 risk-based capital ratio (3)
|
|
13.62
|
|
|
13.43
|
|
|
8.5
|
|
|
6.0
|
|
Total risk-based capital ratio (3)
|
|
14.77
|
|
|
14.23
|
|
|
10.5
|
|
|
10.0
|
|
Tier 1 leverage ratio (2)(3)
|
|
8.68
|
|
|
9.06
|
|
|
4.0
|
|
|
N/A
|
|
Tangible common equity to tangible assets ratio (4)(5)
|
|
7.94
|
|
|
8.39
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (4)(5)
|
|
13.68
|
|
|
12.76
|
|
|
N/A
|
|
|
N/A
|
|
Bank:
|
|
|
|
|
|
|
|
|
||||
CET 1 risk-based capital ratio (3)
|
|
11.08
|
%
|
|
11.12
|
%
|
|
7.0
|
%
|
|
6.5
|
%
|
Tier 1 risk-based capital ratio (3)
|
|
11.08
|
|
|
11.12
|
|
|
8.5
|
|
|
8.0
|
|
Total risk-based capital ratio (3)
|
|
12.28
|
|
|
11.96
|
|
|
10.5
|
|
|
10.0
|
|
Tier 1 leverage ratio (3)
|
|
6.91
|
|
|
7.30
|
|
|
4.0
|
|
|
5.0
|
|
Tangible common equity to tangible assets ratio (4)(5)
|
|
6.91
|
|
|
7.24
|
|
|
N/A
|
|
|
N/A
|
|
Tangible common equity to risk-weighted assets ratio (4)(5)
|
|
12.17
|
|
|
11.31
|
|
|
N/A
|
|
|
N/A
|
|
|
(1)
|
Percentages represent the minimum capital ratios plus, as applicable, the fully phased-in 2.5% CET1 capital conservation buffer under the Capital Rules.
|
(2)
|
"Well-Capitalized Minimum" CET 1 risk-based capital and Tier 1 leverage ratios are not formally defined under applicable banking regulations for bank holding companies.
|
(3)
|
Capital ratios include regulatory capital phase-in of the allowance for credit losses under the 2020 CECL Transition Rule for periods beginning March 31, 2020.
|
(4)
|
See below for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.
|
(5)
|
The Federal Reserve has not issued any minimum guidelines for the tangible common equity to tangible assets ratio or the tangible common equity to risk-weighted assets ratio, however, we believe these ratios provide meaningful supplemental information regarding our capital levels and are therefore provided above.
|
|
|
SVB Financial
|
|
Bank
|
||||||||||||
Non-GAAP tangible common equity and tangible assets
(Dollars in thousands, except ratios)
|
|
June 30,
2020 |
|
December 31,
2019 |
|
June 30,
2020 |
|
December 31,
2019 |
||||||||
GAAP SVBFG stockholders’ equity
|
|
$
|
7,319,373
|
|
|
$
|
6,470,307
|
|
|
$
|
5,821,224
|
|
|
$
|
5,034,095
|
|
Less: preferred stock
|
|
340,138
|
|
|
340,138
|
|
|
—
|
|
|
—
|
|
||||
Less: intangible assets
|
|
184,549
|
|
|
187,240
|
|
|
—
|
|
|
—
|
|
||||
Tangible common equity
|
|
$
|
6,794,686
|
|
|
$
|
5,942,929
|
|
|
$
|
5,821,224
|
|
|
$
|
5,034,095
|
|
GAAP total assets
|
|
$
|
85,730,985
|
|
|
$
|
71,004,903
|
|
|
$
|
84,214,926
|
|
|
$
|
69,563,817
|
|
Less: intangible assets
|
|
184,549
|
|
|
187,240
|
|
|
—
|
|
|
—
|
|
||||
Tangible assets
|
|
$
|
85,546,436
|
|
|
$
|
70,817,663
|
|
|
$
|
84,214,926
|
|
|
$
|
69,563,817
|
|
Risk-weighted assets
|
|
$
|
49,682,026
|
|
|
$
|
46,577,485
|
|
|
$
|
47,838,181
|
|
|
$
|
44,502,150
|
|
Non-GAAP tangible common equity to tangible assets
|
|
7.94
|
%
|
|
8.39
|
%
|
|
6.91
|
%
|
|
7.24
|
%
|
||||
Non-GAAP tangible common equity to risk-weighted assets
|
|
13.68
|
|
|
12.76
|
|
|
12.17
|
|
|
11.31
|
|
|
|
Six months ended June 30,
|
||||||
(Dollars in thousands)
|
|
2020
|
|
2019
|
||||
Average cash and cash equivalents
|
|
$
|
10,460,207
|
|
|
$
|
5,470,520
|
|
Percentage of total average assets
|
|
13.9
|
%
|
|
9.3
|
%
|
||
Net cash provided by operating activities
|
|
$
|
745,478
|
|
|
$
|
450,571
|
|
Net cash (used for) provided by investing activities
|
|
(6,532,868
|
)
|
|
(317,021
|
)
|
||
Net cash provided by financing activities
|
|
13,207,713
|
|
|
5,315,836
|
|
||
Net increase in cash and cash equivalents
|
|
$
|
7,420,323
|
|
|
$
|
5,449,386
|
|
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, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
+200
|
|
$
|
10,617,433
|
|
|
$
|
46,816
|
|
|
0.4
|
%
|
|
$
|
2,580,576
|
|
|
$
|
645,203
|
|
|
33.3
|
%
|
+100
|
|
10,686,185
|
|
|
115,568
|
|
|
1.1
|
|
|
2,251,632
|
|
|
316,259
|
|
|
16.3
|
|
||||
—
|
|
10,570,617
|
|
|
—
|
|
|
—
|
|
|
1,935,373
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
10,659,364
|
|
|
88,747
|
|
|
0.8
|
|
|
1,857,782
|
|
|
(77,591
|
)
|
|
(4.0
|
)
|
||||
-200
|
|
10,659,364
|
|
|
88,747
|
|
|
0.8
|
|
|
1,852,890
|
|
|
(82,483
|
)
|
|
(4.3
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
+200
|
|
$
|
9,930,270
|
|
|
$
|
(253,659
|
)
|
|
(2.5
|
)%
|
|
$
|
2,528,158
|
|
|
$
|
421,358
|
|
|
20.0
|
%
|
+100
|
|
10,056,711
|
|
|
(127,218
|
)
|
|
(1.2
|
)
|
|
2,314,686
|
|
|
207,886
|
|
|
9.9
|
|
||||
—
|
|
10,183,929
|
|
|
—
|
|
|
—
|
|
|
2,106,800
|
|
|
—
|
|
|
—
|
|
||||
-100
|
|
10,138,558
|
|
|
(45,371
|
)
|
|
(0.4
|
)
|
|
1,927,801
|
|
|
(178,999
|
)
|
|
(8.5
|
)
|
||||
-200
|
|
10,000,585
|
|
|
(183,344
|
)
|
|
(1.8
|
)
|
|
1,760,283
|
|
|
(346,517
|
)
|
|
(16.4
|
)
|
Period ended
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced programs
|
|
Maximum dollar value that may yet be purchased under the programs (1)
|
||||||
April 30, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
May 31, 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
June 30, 2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
—
|
|
|
$
|
—
|
|
|
244,223
|
|
|
$
|
289,979,534
|
|
|
(1)
|
On October 24, 2019, the Company announced that its Board of Directors had authorized a $350 million common stock repurchase program pursuant to which the Company may, from time to time and on or before the program’s expiration date, repurchase shares of its outstanding common stock in the open market, in privately-negotiated transactions, or otherwise, subject to applicable laws and regulations. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company. The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the program’s expiration, without any prior notice. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|||||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
104
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
SVB Financial Group
|
|
|
|
Date: August 7, 2020
|
|
/s/ DANIEL BECK
|
|
|
Daniel Beck
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
SVB Financial Group
|
|
|
|
Date: August 7, 2020
|
|
/s/ KAREN HON
|
|
|
Karen Hon
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting 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, 2020
|
|
/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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date: August 7, 2020
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/s/ DANIEL BECK
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Daniel Beck
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Chief Financial Officer
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(Principal Financial Officer)
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Date: August 7, 2020
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/s/ GREG BECKER
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Greg Becker
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date: August 7, 2020
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/s/ DANIEL BECK
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Daniel Beck
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Chief Financial Officer
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(Principal Financial Officer)
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