SVB FINANCIAL GROUP ANNOUNCES 2021 SECOND QUARTER FINANCIAL RESULTS
Board of Directors declared a quarterly dividend on Series A, Series B and Series C Preferred Stock
SANTA CLARA, Calif. - July 22, 2021 - SVB Financial Group (NASDAQ: SIVB) today announced financial results for the second quarter ended June 30, 2021.
Consolidated net income available to common stockholders for the second quarter of 2021 was $502 million, or $9.09 per diluted common share, compared to $532 million, or $10.03 per diluted common share, for the first quarter of 2021 and $229 million, or $4.42 per diluted common share, for the second quarter of 2020. Consolidated net income available to common stockholders for the six months ended June 30, 2021 was $1.0 billion, or $19.10 per diluted common share, compared to $361 million, or $6.97 per diluted common share, for the comparable 2020 period.
'Thriving markets for our clients, an improving economy, and effective execution contributed to another quarter of exceptional performance and profitability,' said Greg Becker, President and CEO of SVB Financial Group. 'Our excellent results and improved full year growth outlook underscore the importance of our continued focus on the innovation economy, and further validate our ongoing investments in employee enablement, client experience, and infrastructure enhancement to drive and support our growth. In addition, we are investing opportunistically, as we said we would in expanding our capabilities through private banking, wealth management, and investment banking, to meet the full range of our clients' needs. The innovation economy offers tremendous opportunities for growth and we are focused on making the right decisions and investments now to benefit from that growth over the long-term.'
Highlights of our second quarter 2021 results (compared to first quarter 2021, unless otherwise noted) included:
•Average loans of $49.8 billion, an increase of $3.5 billion (or 7.6 percent).
•Period-end loans of $50.8 billion, an increase of $3.1 billion (or 6.5 percent).
•Average fixed income investment securities of $72.3 billion, an increase of $18.7 billion (or 35.0 percent).
•Period-end fixed income investment securities of $83.9 billion, an increase of $16.7 billion (or 24.9 percent).
•Average total client funds (on-balance sheet deposits and off-balance sheet client investment funds) increased $45.9 billion (or 17.5 percent) to $308.1 billion, which includes an increase in average on-balance sheet deposits of $23.2 billion (or 20.9 percent).
•Period-end total client funds increased $41.0 billion (or 14.2 percent) to $329.0 billion, which includes an increase in period-end on-balance sheet deposits of 21.7 billion (or 17.5 percent).
•Issuance and sale of additional 300,000 shares of common stock on April 14, 2021, under the full exercise of the underwriters' over-allotment option of our previous underwritten public offering in the first quarter of 2021, resulting in additional net proceeds of approximately $146 million.
•Issuance of $1.0 billion in depositary shares representing an ownership interests in shares of Series C Preferred Stock resulting in net proceeds of approximately $988 million.
•Issuance of $500 million of 2.100% Senior Notes due May 2028.
•Net interest income (fully taxable equivalent basis) of $735 million, an increase of $70 million (or 10.5 percent).
•Provision for credit losses was $35 million, compared to $19 million.
•Net loan charge-offs of $12 million, or 10 basis points of average total loans (annualized) compared to $90 million, or 79 basis points. The first quarter of 2021 included an $80 million pre-tax charge-off related to potentially fraudulent activity discussed in previous filings.
•Net gains on investment securities of $305 million compared to $167 million. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $192 million, compared to $142 million. (See non-GAAP reconciliation under the section 'Use of Non-GAAP Financial Measures.')
•Net gains on equity warrant assets of $122 million, compared to $222 million.
•Noninterest income of $761 million, an increase of $17 million (or 2.3 percent). Non-GAAP core fee income increased $13 million (or 8.2 percent) to $172 million. Non-GAAP SVB Leerink revenue decreased $46 million (or 27.7 percent) to $120 million. (See non-GAAP reconciliation under the section 'Use of Non-GAAP Financial Measures.')
•Noninterest expense of $653 million, an increase of $17 million (or 2.7 percent).
•GAAP operating efficiency ratio of 43.9 percent, compared to 45.3 percent. Non-GAAP core operating efficiency ratio of 56.4 percent, compared to 58.5 percent. (See non-GAAP reconciliation under the section 'Use of Non-GAAP Financial Measures.')OurGAAP and non-GAAP core operating efficiency ratios improved primarily as a result of higher GAAP total revenue and non-GAAP taxable equivalent revenue, driven by higher net interest income, relative to the increase in expenses.
Boston Private Financial Holdings, Inc. Acquisition
On July 1, 2021 we completed the acquisition of Boston Private Financial Holdings, Inc. ('Boston Private') for approximately $1.2 billion in consideration. Under the terms of the merger agreement each share of Boston Private common stock was converted into the right to receive 0.228 shares of SIVB common stock and $2.10 in cash. For the transaction, we issued approximately 1.9 million shares of SIVB common stock and registered an additional 99,000 shares of SIVB common stock issuable upon the exercise, vesting or settlement of converted legacy Boston Private equity awards. As a result of this acquisition, we recognized merger-related charges in our income statement attributable to the merger and integration of Boston Private. For more information on our merger-related charges, see the section titled 'Noninterest Expense' in this release.
Our full year 2021 outlook has been updated to reflect the acquisition of Boston Private and is included in this release under the section 'Financial Outlook.'
Coronavirus Disease 2019 ('COVID-19') Pandemic Update
During the second quarter of 2021, the economic environment improved with the increase in vaccine rates resulting in the lifting of business restrictions and increased business activity. Our overall credit trends have also continued to remain stable. Throughout the pandemic, our business and clients have demonstrated remarkable resilience and growth even while most of our employees and partners continue to work from home.We continue to carefully monitor the trajectory of the economic recovery, which could be impacted by the emergence of new variants and prolonged spread of COVID-19, delays in vaccination programs and potential government lockdowns. We continue to support our clients, employees and communities.
2
Second Quarter 2021 Summary
|
(Dollars in millions, except share data, employees and ratios)
|
Three months ended
|
Six months ended
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Income statement:
|
Diluted earnings per common share
|
$
|
9.09
|
$
|
10.03
|
$
|
7.40
|
$
|
8.47
|
$
|
4.42
|
$
|
19.10
|
$
|
6.97
|
Net income available to common stockholders
|
502
|
532
|
388
|
442
|
229
|
1,034
|
361
|
Net interest income
|
728
|
660
|
592
|
528
|
513
|
1,388
|
1,037
|
Provision (reduction) for credit losses (1)
|
35
|
19
|
(38)
|
(52)
|
66
|
54
|
310
|
Noninterest income
|
761
|
744
|
622
|
547
|
369
|
1,505
|
670
|
Noninterest expense
|
653
|
636
|
665
|
491
|
480
|
1,289
|
879
|
Non-GAAP core fee income (2)
|
172
|
159
|
156
|
146
|
132
|
331
|
301
|
Non-GAAP core fee income plus SVB Leerink revenue (2)
|
292
|
325
|
307
|
254
|
291
|
617
|
522
|
Non-GAAP SVB Leerink revenue (2)
|
120
|
166
|
151
|
108
|
159
|
286
|
221
|
Non-GAAP noninterest income, net of noncontrolling interests (2)
|
648
|
719
|
576
|
519
|
355
|
1,367
|
658
|
Non-GAAP noninterest expense, net of noncontrolling interests (2)
|
653
|
636
|
665
|
491
|
480
|
1,289
|
879
|
Fully taxable equivalent:
|
Net interest income (2) (3)
|
$
|
735
|
665
|
$
|
597
|
$
|
532
|
$
|
517
|
$
|
1,400
|
$
|
1,044
|
Net interest margin
|
2.06
|
%
|
2.29
|
%
|
2.40
|
%
|
2.53
|
%
|
2.80
|
%
|
2.16
|
%
|
2.95
|
%
|
Balance sheet:
|
Average total assets
|
$
|
150,717
|
$
|
124,815
|
$
|
103,754
|
$
|
88,348
|
$
|
78,433
|
$
|
137,837
|
$
|
75,419
|
Average loans, amortized cost
|
49,812
|
46,281
|
41,525
|
37,319
|
36,512
|
48,056
|
35,086
|
Average available-for-sale securities
|
24,358
|
28,248
|
28,114
|
20,027
|
12,784
|
26,292
|
13,175
|
Average held-to-maturity securities
|
47,914
|
25,295
|
13,289
|
12,553
|
13,040
|
36,667
|
13,308
|
Average noninterest-bearing demand deposits
|
91,530
|
73,233
|
61,663
|
51,544
|
46,088
|
82,432
|
43,712
|
Average interest-bearing deposits
|
42,230
|
37,375
|
30,774
|
26,136
|
21,829
|
39,816
|
21,151
|
Average total deposits
|
133,760
|
110,608
|
92,437
|
77,680
|
67,916
|
122,248
|
64,862
|
Average short-term borrowings
|
39
|
12
|
10
|
16
|
618
|
26
|
794
|
Average long-term debt
|
1,604
|
1,162
|
843
|
843
|
490
|
1,384
|
419
|
Period-end total assets
|
163,399
|
142,347
|
115,511
|
96,917
|
85,731
|
163,399
|
85,731
|
Period-end loans, amortized cost
|
50,754
|
47,675
|
45,181
|
38,414
|
36,727
|
50,754
|
36,727
|
Period-end available-for-sale securities
|
23,876
|
25,986
|
30,913
|
25,904
|
18,452
|
23,876
|
18,452
|
Period-end held-to-maturity securities
|
59,992
|
41,165
|
16,592
|
12,982
|
12,859
|
59,992
|
12,859
|
Period-end non-marketable and other equity securities
|
1,943
|
1,858
|
1,802
|
1,548
|
1,271
|
1,943
|
1,271
|
Period-end noninterest-bearing demand deposits
|
101,259
|
84,440
|
66,519
|
57,508
|
49,161
|
101,259
|
49,161
|
Period-end interest-bearing deposits
|
44,579
|
39,710
|
35,463
|
27,265
|
25,345
|
44,579
|
25,345
|
Period-end total deposits
|
145,838
|
124,150
|
101,982
|
84,773
|
74,506
|
145,838
|
74,506
|
Period-end short-term borrowings
|
34
|
39
|
20
|
19
|
51
|
34
|
51
|
Period-end long-term debt
|
1,834
|
1,338
|
844
|
844
|
843
|
1,834
|
843
|
Off-balance sheet:
|
Average client investment funds
|
$
|
174,327
|
$
|
151,579
|
$
|
133,105
|
$
|
123,564
|
$
|
109,260
|
$
|
162,954
|
$
|
106,374
|
Period-end client investment funds
|
183,167
|
163,882
|
141,053
|
126,781
|
115,921
|
183,167
|
115,921
|
Total unfunded credit commitments
|
36,385
|
33,987
|
31,982
|
30,330
|
28,127
|
36,385
|
28,127
|
Earnings ratios:
|
Return on average assets (annualized) (4)
|
1.34
|
%
|
1.73
|
%
|
1.49
|
%
|
1.99
|
%
|
1.17
|
%
|
1.51
|
%
|
0.96
|
%
|
Return on average SVBFG common stockholders' equity (annualized) (5)
|
21.69
|
27.04
|
20.23
|
24.19
|
13.36
|
24.14
|
10.83
|
Asset quality ratios:
|
Allowance for credit losses for loans as a % of total loans
|
0.78
|
%
|
0.82
|
%
|
0.99
|
%
|
1.34
|
%
|
1.61
|
%
|
0.78
|
%
|
1.61
|
%
|
Allowance for credit losses for performing loans as a % of total performing loans
|
0.71
|
0.74
|
0.87
|
1.17
|
1.46
|
0.71
|
1.46
|
Gross loan charge-offs as a % of average total loans (annualized) (1)
|
0.12
|
0.83
|
0.22
|
0.30
|
0.17
|
0.46
|
0.30
|
Net loan charge-offs as a % of average total loans (annualized) (1)
|
0.10
|
0.79
|
0.09
|
0.26
|
0.12
|
0.43
|
0.23
|
Other ratios:
|
Operating efficiency ratio (6)
|
43.85
|
%
|
45.31
|
%
|
54.79
|
%
|
45.66
|
%
|
54.39
|
%
|
44.56
|
%
|
51.48
|
%
|
Non-GAAP core operating efficiency ratio (2)
|
56.38
|
58.52
|
62.67
|
56.86
|
55.70
|
57.40
|
51.59
|
Total cost of deposits (annualized) (7)
|
0.04
|
0.04
|
0.04
|
0.04
|
0.03
|
0.04
|
0.13
|
SVBFG CET 1 risk-based capital ratio
|
11.93
|
12.18
|
11.04
|
12.31
|
12.63
|
11.93
|
12.63
|
3
|
Bank CET 1 risk-based capital ratio
|
13.66
|
12.93
|
10.70
|
10.75
|
11.08
|
13.66
|
11.08
|
SVBFG tier 1 risk-based capital ratio
|
14.95
|
14.01
|
11.89
|
13.25
|
13.62
|
14.95
|
13.62
|
Bank tier 1 risk-based capital ratio
|
13.66
|
12.93
|
10.70
|
10.75
|
11.08
|
13.66
|
11.08
|
SVBFG total risk-based capital ratio
|
15.53
|
14.62
|
12.64
|
14.19
|
14.77
|
15.53
|
14.77
|
Bank total risk-based capital ratio
|
14.26
|
13.56
|
11.49
|
11.75
|
12.28
|
14.26
|
12.28
|
SVBFG tier 1 leverage ratio
|
7.77
|
8.01
|
7.45
|
8.26
|
8.68
|
7.77
|
8.68
|
Bank tier 1 leverage ratio
|
6.96
|
7.20
|
6.43
|
6.45
|
6.91
|
6.96
|
6.91
|
Period-end loans, amortized cost, to deposits ratio
|
34.80
|
38.40
|
44.30
|
45.31
|
49.29
|
34.80
|
49.29
|
Average loans, amortized cost, to average deposits ratio
|
37.24
|
41.84
|
44.92
|
48.04
|
53.76
|
39.31
|
54.09
|
Book value per common share (8)
|
$
|
176.10
|
$
|
163.25
|
$
|
151.86
|
$
|
143.91
|
$
|
134.89
|
$
|
176.10
|
$
|
134.89
|
Tangible book value per common share (2) (9)
|
172.44
|
159.50
|
147.92
|
140.37
|
131.32
|
172.44
|
131.32
|
Other statistics:
|
Average full-time equivalent ('FTE') employees
|
4,808
|
4,601
|
4,419
|
4,216
|
3,855
|
4,705
|
3,764
|
Period-end full-time equivalent ('FTE') employees
|
4,932
|
4,656
|
4,461
|
4,336
|
3,984
|
4,932
|
3,984
|
(1)This metric for the quarter ended March 31, 2021 and six months ended June 30, 2021 includes the impact of an $80 million charge-off related to potentially fraudulent activity discussed in previous filings.
(2)To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States ('GAAP'), we use certain non-GAAP measures. A reconciliation of these non-GAAP measures to the most closely related GAAP measures is provided at the end of this release under the section 'Use of Non-GAAP Financial Measures.'
(3)Interest income on non-taxable investments is presented on a fully taxable equivalent basis using the federal statutory income tax rate of 21.0 percent. The taxable equivalent adjustments were $7 million for the quarter ended June 30, 2021, $6 million for the quarter ended March 31, 2021, $5 million for the quarter ended December 31, 2020, $4 million for the quarter ended September 30, 2020 and $4 million for the quarter ended June 30, 2020. The taxable equivalent adjustments were $12 million and $7 million for the six months ended June 30, 2021 and June 30, 2020, respectively.
(4)Ratio represents annualized consolidated net income available to common stockholders divided by average assets.
(5)Ratio represents annualized consolidated net income available to common stockholders divided by average SVB Financial Group ('SVBFG') common stockholders' equity.
(6)Ratio is calculated by dividing noninterest expense by total net interest income plus noninterest income.
(7)Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.
(8)Book value per common share is calculated by dividing total SVBFG common stockholders' equity by total outstanding common shares.
(9)Tangible book value per common share is calculated by dividing tangible common equity by total outstanding common shares. Tangible common equity is a non-GAAP measure defined under the section 'Use of Non-GAAP Financial Measures.'
4
Investment Securities
Our investment securities portfolio is comprised of: (i) our available-for-sale ('AFS') and held-to-maturity ('HTM') securities portfolios, each consisting of fixed income investments which are managed to earn an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and addressing our asset/liability management objectives; and (ii) our non-marketable and other equity securities portfolio, which represents investments managed as part of our funds management business as well as public equity securities held as a result of equity warrant assets exercised. Our total average fixed income investment securities portfolio increased $18.7 billion, or 35.0 percent, to $72.3 billion for the quarter ended June 30, 2021. Our total period-end fixed income investment securities portfolio increased $16.7 billion, or 24.9 percent, to $83.9 billion at June 30, 2021. Our period-end non-marketable and other equity securities portfolio remained relatively flat at $1.9 billion ($1.6 billion net of noncontrolling interests) at June 30, 2021, compared to the first quarter of 2021.
The weighted-average duration of our total fixed income securities portfolio was 4.5 years at June 30, 2021 and 4.8 years at March 31, 2021. In the second quarter of 2021, we entered into additional pay-fixed, receive-floating interest rate swap fair value hedge contracts for AFS securities to protect the fair value of these securities against potential increases in interest rates. As of June 30, 2021, the total notional balance of our interest rate swap contracts on our AFS securities portfolio was $12.8 billion. The weighted-average duration of our total fixed income securities portfolio, including the impact of our fair value swaps, was 3.9 years at June 30, 2021 and 4.3 years at March 31, 2021.
AFS Securities
Average AFS securities were $24.4 billionfor the second quarter of June 30, 2021 compared to $28.2 billion for the first quarter of March 31, 2021. Period-end AFS securities were $23.9 billionat June 30, 2021 compared to $26.0 billion at March 31, 2021. The decreasein both average and period-end AFS securities was driven by a $2.8 billion re-designation of AFS securities to HTM securities, paydowns and maturities of $1.3 billion,partially offset by purchases of$1.8 billion, and an increase in fair value of $0.2 billionreflective of the decrease in interest ratesduring the quarter. The weighted-average duration of our AFS securities portfolio was 4.2 years at June 30, 2021 and 5.1 years at March 31, 2021. The weighted-average duration of AFS securities portfolio including the impact of our fair value swaps was 2.4 years at June 30, 2021 and 3.7 years at March 31, 2021.
HTM Securities
Average HTM securities were $47.9 billionfor the second quarter of June 30, 2021, compared to $25.3 billion for the first quarter of March 31, 2021. Period-end HTM securities were $60.0 billion at June 30, 2021 compared to $41.2 billion at March 31, 2021. The increase in both average and period-end HTM securities were driven by purchases of $19.4 billion and the re-designation of $2.8 billion as mentioned above, partially offset by $3.4 billion in paydowns and maturities during the quarter. The weighted-average duration of our HTM securities portfolio was 4.6 years at both June 30, 2021 and March 31, 2021.
Loans
Average loans increased by $3.5 billion to $49.8 billion for the second quarter of 2021, compared to $46.3 billion for the first quarter of 2021. Period-end loans increased $3.1 billion to $50.8 billion at June 30, 2021, compared to $47.7 billion at March 31, 2021. Average and period-end loan growth came primarily from our Global Fund Banking and Technology and Life Science/Healthcare portfolios, while Private Bank also saw healthy growth. This growth was partially offset by a decrease in our SBA loans driven by an acceleration of forgiveness of these loans during the second quarter.
5
The following table provides a summary of our loans at amortized cost basis broken out by risk-based segment:
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
Global fund banking
|
$
|
30,630
|
$
|
27,307
|
$
|
17,901
|
Investor dependent
|
Early stage
|
1,565
|
1,523
|
1,798
|
Mid stage
|
1,708
|
1,588
|
1,436
|
Later stage
|
2,055
|
2,056
|
1,906
|
Total investor dependent
|
5,328
|
5,167
|
5,140
|
Cash flow dependent
|
Sponsor led buyout
|
1,917
|
1,984
|
2,057
|
Other
|
2,926
|
2,960
|
2,788
|
Total cash flow dependent
|
4,843
|
4,944
|
4,845
|
Private bank (1)
|
5,297
|
5,064
|
3,816
|
Balance sheet dependent
|
2,804
|
2,501
|
1,693
|
Premium wine (1)
|
1,002
|
1,040
|
1,039
|
Other (1)
|
7
|
46
|
457
|
SBA loans
|
843
|
1,606
|
1,836
|
Total loans
|
$
|
50,754
|
$
|
47,675
|
$
|
36,727
|
(1)As of June 30, 2021 and March 31, 2021, as a result of enhanced portfolio characteristic definitions for our risk-based segments, loans in the amounts of $484 million and $65 million and $493 million and $80 million,respectively, that would have been reported in Other under historical definitions, are now being reported in our Private Bank and Premium Wine risk-based segments, respectively.
Net Interest Income and Margin
Net interest income, on a fully taxable equivalent basis, was $735 million for the second quarter of 2021, compared to $665 million for the first quarter of 2021. The $70 million increasefrom the first quarter of 2021 to the second quarter of 2021 was attributable primarily to the following:
•An increase in interest income from loans of $42 million to $472 million for the second quarter of 2021 due primarily to a $29 million increase in loan interest reflective of $3.5 billion in average loan growth, an $11 million increase in loan fee income primarily driven by an increase in prepayments as well as accelerated recognition of loan fees from PPP loan forgiveness and a $4 million increase due to the impact of one additional day in the second quarter of 2021.
◦Overall loan yields increased three basis points to 3.80 percent, primarily due to an increase in loan fee yields reflective of an increase in early payoffs in the second quarter of 2021 as compared to the first quarter of 2021 as well as accelerated recognition of loan fees from loan forgiveness on PPP loans during the second quarter of 2021, partially offset by a decrease in gross loan yields driven by lower LIBOR rates.
•An increase of $31 million in interest income from our fixed income investment securities reflective primarily of an $18.7 billion increase in average fixed income securities, partially offset by lower yields.
◦Overall we had a decrease in fixed income investment securities yields of 34 basis points due primarily to lower yields on $21.3 billion of purchased securities during the second quarter of 2021 as well as a decrease in yields from our interest rate swap hedges.
Net interest margin, on a fully taxable equivalent basis, was 2.06 percent for the second quarter of 2021, compared to 2.29 percent for the first quarter of 2021. The 23 basis point decrease in our net interest margin was due primarilyto lower yields on fixed income investment securities as well as overall balance sheet growth resulting in a shift in the mix of interest earning assets from higher yielding loans to lower yielding cash and investments as a percentage of total interest earning assets.
For the second quarter of 2021, approximately 94 percent, or $46.8 billion, of our average loans were variable-rate loans that adjust at prescribed measurement dates. Of our variable-rate loans, approximately 67 percent are tied to prime-lending rates and 33 percent are tied to LIBOR. As a result of the discontinuation of LIBOR at the end of 2021, we are preparing for the transition to an alternate reference rate and expect the percent of LIBOR loans to decrease over time.
6
Credit Quality
The following table provides a summary of our allowance for credit losses for loans, unfunded credit commitments and HTM securities:
|
|
Three months ended
|
Six months ended
|
(Dollars in millions, except ratios)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Allowance for credit losses for loans, beginning balance
|
$
|
392
|
$
|
448
|
$
|
549
|
$
|
448
|
$
|
305
|
Day one impact of adopting CECL
|
-
|
-
|
-
|
-
|
25
|
Provision for loans
|
16
|
34
|
52
|
50
|
301
|
Gross loan charge-offs (1)
|
(15)
|
(95)
|
(15)
|
(110)
|
(52)
|
Loan recoveries
|
3
|
5
|
4
|
8
|
12
|
Foreign currency translation adjustments
|
-
|
-
|
-
|
-
|
(1)
|
Allowance for credit losses for loans, ending balance
|
$
|
396
|
$
|
392
|
$
|
590
|
$
|
396
|
$
|
590
|
Allowance for credit losses for unfunded credit commitments, beginning balance
|
105
|
121
|
85
|
121
|
67
|
Day one impact of adopting CECL
|
-
|
-
|
-
|
-
|
23
|
Provision (reduction) for unfunded credit commitments
|
15
|
(16)
|
14
|
(1)
|
9
|
Allowance for credit losses for unfunded credit commitments, ending balance (2)
|
$
|
120
|
$
|
105
|
$
|
99
|
$
|
120
|
$
|
99
|
Allowance for credit losses for HTM securities, beginning balance
|
1
|
-
|
-
|
-
|
-
|
Provision for HTM securities
|
4
|
1
|
-
|
5
|
-
|
Allowance for credit losses for HTM securities, ending balance (3)
|
$
|
5
|
$
|
1
|
$
|
-
|
$
|
5
|
$
|
-
|
Ratios and other information:
|
Provision for loans as a percentage of period-end total loans (annualized)
|
0.13
|
%
|
0.29
|
%
|
0.57
|
%
|
0.20
|
%
|
1.65
|
%
|
Gross loan charge-offs as a percentage of average total loans (annualized)
|
0.12
|
0.83
|
0.17
|
0.46
|
0.30
|
Net loan charge-offs as a percentage of average total loans (annualized)
|
0.10
|
0.79
|
0.12
|
0.43
|
0.23
|
Allowance for credit losses for loans as a percentage of period-end total loans
|
0.78
|
0.82
|
1.61
|
0.78
|
1.61
|
Provision for credit losses
|
$
|
35
|
$
|
19
|
$
|
66
|
$
|
54
|
$
|
310
|
Period-end total loans
|
50,754
|
47,675
|
36,727
|
50,754
|
36,727
|
Average total loans
|
49,812
|
46,281
|
36,512
|
48,056
|
35,086
|
Allowance for credit losses for nonaccrual loans
|
38
|
42
|
54
|
38
|
54
|
Nonaccrual loans
|
79
|
90
|
94
|
79
|
94
|
(1)Gross loan charge-offs for the three months ended March 31, 2021 and six months ended June 30, 2021 includes the impact of an $80 million charge-off related to potentially fraudulent activity discussed in previous filings.
(2)The 'allowance for credit losses for unfunded credit commitments' is included as a component of 'other liabilities.'
(3)The 'allowance for credit losses for HTM securities' is included as a component of HTM securities and presented net in our consolidated financial statements.
Our allowance for credit losses forloans increased $4 million to $396 million at June 30, 2021, compared to $392 million at March 31, 2021.The$4 million increase was driven primarily by an increase of $15 million in our performing reserves for loan growth, partially offset by a decrease of $7 million in our performing loan portfolio for improved economic factors and a $4 million decrease in reserves for nonaccrual loans. As a percentage of total loans, our allowance for credit losses for loans decreased 4 basis points to 0.78 percent at June 30, 2021, compared to 0.82 percent at March 31, 2021. The 4 basis point decline, due primarily to the factors described above, was driven by a 2 basis point decrease in both our performing loans reserve as a percentage of total loans and our nonaccrual individually assessed loans as a percentage of total loans.
The provision for credit losses was $35 million for the second quarter of June 30, 2021, consisting of the following:
•A provision for credit loss for loans of $16 million, driven primarily by a $15 million provision for loan growth described above, as well as $4 million for charge-offs not specifically reserved for at March 31, 2021, and $7 million for new nonperforming loans. These provisions were partially offset by a $3 million reduction for recoveries and the $7 million reduction for improved economic factors described above;
•A provision for credit loss for unfunded credit commitments of $15 million, driven primarily by growth in our outstanding commitments, as well changes in our unfunded portfolio composition that resulted in a longer portfolio lifetime and a corresponding provision; and
7
•A provision for credit losses for HTM securities of $4 million, driven primarily by the continued growth of our corporate bond portfolio in the second quarter of 2021.
Gross loan charge-offs were $15 million for the second quarter of June 30, 2021, of which $4 million was not specifically reserved for at March 31, 2021, driven by clients in our Technology and Life Science/Healthcare portfolios. The remaining $11 million of gross loan charge-offs was driven primarily by a single Cash Flow Dependent client.
Nonaccrual loans were $79 million at June 30, 2021, compared to $90 million at March 31, 2021. Our nonaccrual loan balance decreased$11 million driven primarily by $9 million in repayments and $11 million in charge-offs, partially offset by new nonaccrual loans of $9 million.Repayments were driven primarily by clients in our Technology and Life Science/Healthcare portfolios. New nonaccrual loans were driven primarily by clients in our Investor Dependent portfolio. Nonperforming loans, which includes nonaccrual loans of $79 million as well as $3 million of loans past due 90 days or more still accruing interest, as a percentage of total loans decreased to 0.16 percent for the second quarter of 2021 compared to 0.20 percent for the first quarter of 2021.
The allowance for credit losses for nonaccrual loans decreased $4 million to $38 million in the second quarter of 2021. The decrease was due primarily to $7 million in repayments and $11 million in charge-offs, partially offset by $14 million in additional reserves for nonaccrual loans, driven primarily from the new nonaccrual loans as noted above as well as $7 million for one Cash Flow Dependent - Sponsor Led Buyout client. Charge-offs and repayments were driven primarily by clients in our Technology and Life Science/Healthcare portfolio.
Client Funds
Our Total Client Funds consist of the sum of both our on-balance sheet deposits and off-balance sheet client investment funds. The following tables provide a summary of our average and period-end on-balance sheet deposits and off-balance sheet client investment funds:
Average On-Balance Sheet Deposits and Off-Balance Sheet Client Investment Funds (1)
|
Average balances for the
|
|
Three months ended
|
Six months ended
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Interest-bearing deposits
|
$
|
42,230
|
$
|
37,375
|
$
|
21,829
|
$
|
39,816
|
$
|
21,151
|
Noninterest bearing demand deposits
|
91,530
|
73,233
|
46,087
|
82,432
|
43,711
|
Total average on-balance sheet deposits
|
$
|
133,760
|
$
|
110,608
|
$
|
67,916
|
$
|
122,248
|
$
|
64,862
|
|
Sweep money market funds
|
$
|
82,573
|
$
|
67,138
|
$
|
47,561
|
$
|
74,856
|
$
|
45,303
|
Client investment assets under management (2)
|
77,733
|
72,478
|
51,801
|
75,106
|
51,223
|
Repurchase agreements
|
14,021
|
11,963
|
9,898
|
12,992
|
9,849
|
Total average off-balance sheet client investment funds
|
$
|
174,327
|
$
|
151,579
|
$
|
109,260
|
$
|
162,954
|
$
|
106,375
|
Period-end On-Balance Sheet Deposits and Off-Balance Sheet Client Investment Funds (1)
|
|
Period-end balances at
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
Interest-bearing deposits
|
$
|
44,579
|
$
|
39,710
|
$
|
35,463
|
$
|
27,265
|
$
|
25,345
|
Noninterest-bearing demand deposits
|
101,259
|
84,440
|
66,519
|
57,508
|
49,161
|
Total period-end on-balance sheet deposits
|
$
|
145,838
|
$
|
124,150
|
$
|
101,982
|
$
|
84,773
|
$
|
74,506
|
|
Sweep money market funds
|
$
|
90,402
|
$
|
75,328
|
$
|
59,844
|
$
|
56,395
|
$
|
49,388
|
Client investment assets under management (2)
|
78,698
|
75,970
|
70,671
|
60,773
|
56,023
|
Repurchase agreements
|
14,067
|
12,584
|
10,538
|
9,613
|
10,510
|
Total period-end off-balance sheet client investment funds
|
$
|
183,167
|
$
|
163,882
|
$
|
141,053
|
$
|
126,781
|
$
|
115,921
|
(1)Off-Balance sheet client investment funds are maintained at third-party financial institutions.
(2)These funds represent investments in third-party money market mutual funds and fixed income securities managed by SVB Asset Management.
8
The increases in our average and period-end Total Client Funds from the first quarter of 2021 to the second quarter of 2021 reflect growth in both on-balance sheet deposits and off-balance sheet client investments. We saw Total Client Funds growth across all portfolios with the primary contributors coming from our Technology and Life Science/Healthcare portfolios, driven by strong public and private fundraising, as well as from our Global Fund Banking portfolio.
Long-term Debt
Long-term debt increasedby $0.5 billion to $1.8 billion at June 30, 2021 compared to $1.3 billion at March 31, 2021. The increase in long term debt was driven by the issuance of $500 million of 2.100% Senior Notes on May 13, 2021, resulting in net proceeds of approximately $496 million after deducting underwriting discounts, commissions and issuance costs.
Noninterest Income
Noninterest income was $761 million for the second quarter of 2021, compared to $744 million for the first quarter of 2021. Non-GAAP noninterest income, net of noncontrolling interests, was $648 million for the second quarter of 2021, compared to $719 million for the first quarter of 2021. (See reconciliations of non-GAAP measures used under the section 'Use of Non-GAAP Financial Measures.')
The increase in noninterest income was driven by higher net gains on investment securities, partially offset by decreases in gains on equity warrant assets and investment banking revenue. Non-GAAP noninterest income decreased as a result of an increase in income attributable to noncontrolling interests for the second quarter of 2021 compared to the first quarter.
Items impacting noninterest income for the second quarter of 2021 were as follows:
Net gains on investment securities
The following tables provide a summary of non-GAAP net gains on investment securities, net of noncontrolling interests, for the three months ended June 30, 2021 and March 31, 2021, respectively:
|
|
Three months ended June 30, 2021
|
(Dollars in millions)
|
Managed
Funds of Funds
|
Managed Direct Venture Funds
|
Managed Credit Funds
|
Public Equity Securities
|
Debt
Funds
|
Strategic
and Other
Investments
|
SVB Leerink
|
Total
|
GAAP gains on investment securities, net
|
$
|
197
|
$
|
19
|
$
|
6
|
$
|
18
|
$
|
1
|
$
|
20
|
$
|
44
|
$
|
305
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
87
|
8
|
1
|
-
|
-
|
-
|
17
|
113
|
Non-GAAP gains on investment securities, net of noncontrolling interests
|
$
|
110
|
$
|
11
|
$
|
5
|
$
|
18
|
$
|
1
|
$
|
20
|
$
|
27
|
$
|
192
|
|
|
Three months ended March 31, 2021
|
(Dollars in millions)
|
Managed
Funds of Funds
|
Managed Direct Venture Funds
|
Managed Credit Funds
|
Public Equity Securities
|
Debt
Funds
|
Strategic
and Other
Investments
|
SVB Leerink
|
Total
|
GAAP gains on investment securities, net
|
$
|
31
|
$
|
18
|
$
|
7
|
$
|
76
|
$
|
1
|
$
|
30
|
$
|
4
|
$
|
167
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
13
|
9
|
1
|
-
|
-
|
-
|
2
|
25
|
Non-GAAP gains on investment securities, net of noncontrolling interests
|
$
|
18
|
$
|
9
|
$
|
6
|
$
|
76
|
$
|
1
|
$
|
30
|
$
|
2
|
$
|
142
|
Non-GAAP net gains, net of noncontrolling interests, of $192 million for the second quarter of 2021 was driven primarily by gains in our managed fund of funds portfolio. The managed fund of funds portfolio gains were driven by unrealized valuation increases of private and public positions as well as fund distributions driven primarily by realized gains from one public company position.
The net gains in public equity securities of $18 million was driven by realized gains of $38 million from the sale of shares of Coinbase Global, Inc. common stock, offset by valuation decreases of positions held at June 30, 2021.
Net gains on equity warrant assets
The following table provides a summary of our net gains on equity warrant assets:
9
|
|
Three months ended
|
Six months ended
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Equity warrant assets:
|
Gains on exercises, net
|
$
|
78
|
$
|
160
|
$
|
9
|
$
|
251
|
$
|
33
|
Terminations
|
(1)
|
-
|
-
|
(1)
|
(1)
|
Changes in fair value, net
|
45
|
62
|
18
|
94
|
8
|
Total net gains on equity warrant assets
|
$
|
122
|
$
|
222
|
$
|
27
|
$
|
344
|
$
|
40
|
Net gains on equity warrant assets for the second quarter of 2021 included $78 million of gains on exercises driven primarily by IPO activity during the quarter. The $45 million in net valuation increases were driven by our private company portfolio reflective primarily of pricing updates and pending exit activity.
At June 30, 2021, we held warrants in 2,718 companies with a total fair value of $266 million. Warrants in 53 companies each had fair values greater than $1 million and collectively represented $137 million, or 51.7 percent, of the fair value of the total warrant portfolio at June 30, 2021.
The gains (or losses) from investment securities from our non-marketable and other equity securities portfolio as well as our equity warrant assets resulting from changes in valuations (fair values) are currently unrealized, and the extent to which such gains (or losses) will become realized is subject to a variety of factors, including, among other things, performance of the underlying portfolio companies, investor demand for IPOs and SPACs, fluctuations in the underlying valuation of these companies, levels of M&A activity and legal and contractual restrictions on our ability to sell the underlying securities.
Non-GAAP core fee income plus non-GAAP SVB Leerink revenue
The following table provides a summary of our non-GAAP core fee income, non-GAAP SVB Leerink revenue and non-GAAP core fee income plus SVB Leerink revenue:
|
|
Three months ended
|
Six months ended
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Non-GAAP core fee income:
|
Client investment fees
|
$
|
15
|
$
|
20
|
$
|
32
|
$
|
35
|
$
|
75
|
Foreign exchange fees
|
67
|
57
|
36
|
124
|
84
|
Credit card fees
|
31
|
28
|
21
|
59
|
50
|
Deposit service charges
|
28
|
25
|
21
|
53
|
45
|
Lending related fees
|
18
|
16
|
11
|
34
|
24
|
Letters of credit and standby letters of credit fees
|
13
|
13
|
11
|
26
|
23
|
Total non-GAAP core fee income
|
$
|
172
|
$
|
159
|
$
|
132
|
$
|
331
|
$
|
301
|
Investment banking revenue
|
103
|
142
|
142
|
245
|
188
|
Commissions
|
17
|
24
|
17
|
41
|
33
|
Total non-GAAP SVB Leerink revenue
|
$
|
120
|
$
|
166
|
$
|
159
|
$
|
286
|
$
|
221
|
Total non-GAAP core fee income plus SVB Leerink revenue
|
$
|
292
|
$
|
325
|
$
|
291
|
$
|
617
|
$
|
522
|
Non-GAAP core fee income increased from the first quarter of 2021 to the second quarter of 2021 primarily reflective of increases in foreign exchange fees, credit card fees, and deposit service charges partially offset by a decrease in client investment fees. Foreign exchange fees increased $10 million driven primarily by increased private equity activity as well as continued foreign currency risk hedging activity. Credit card fees increased $3 million primarily due to new client growth, relationship expansion and higher utilization. Deposit service charges increased $3 million due to strong deposit growth and higher transaction volumes. The $5 million decrease in client investment fees is reflective of a reduction in fee margin resulting from lower short-term market rates.
Non-GAAP SVB Leerink revenue decreased $46 million from the first quarter of 2021 to the second quarter of 2021 reflective of lower completed deal volume following record revenues from strong public markets activity in the first quarter of 2021.
Reconciliations of our non-GAAP noninterest income, non-GAAP net gains on investment securities, non-GAAP core fee income, non-GAAP SVB Leerink revenue and non-GAAP core fee income plus SVB Leerink revenue are provided under the section 'Use of Non-GAAP Financial Measures.'
10
Noninterest Expense
Noninterest expense was $653 million for the second quarter of 2021, compared to $636 million for the first quarter of 2021. The increase of $17 million from the prior quarter was attributable primarily to an increase in our professional services expense and $19 million of merger-related charges recorded in the second quarter of 2021. Partially offsetting these increases was a decrease in compensation and benefits expense.
Professional services expense increased due primarily to higher consulting fees related to our continued effort towards investments in our infrastructure, initiatives related to our regulatory programs and operating projects to support our presence both domestically and internationally. These increases were partially offset by a decrease in outsourcing fees related to support for the second round of the Paycheck Protection Program during the first quarter of 2021.
Merger-related charges was a new noninterest expense line item for the second quarter of 2021 and consisted primarily of professional services and systems integration expenses related to the acquisition of Boston Private.
The following table provides a summary of our compensation and benefits expense:
|
|
Three months ended
|
Six months ended
|
(Dollars in millions, except employees)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Compensation and benefits:
|
Salaries and wages
|
$
|
146
|
$
|
163
|
$
|
124
|
$
|
309
|
$
|
240
|
Incentive compensation plans
|
162
|
150
|
121
|
312
|
187
|
Other employee incentives and benefits (1)
|
117
|
132
|
75
|
249
|
148
|
Total compensation and benefits
|
$
|
425
|
$
|
445
|
$
|
320
|
$
|
870
|
$
|
575
|
Period-end full-time equivalent employees
|
4,932
|
4,656
|
3,984
|
4,932
|
3,984
|
Average full-time equivalent employees
|
4,808
|
4,601
|
3,855
|
4,705
|
3,764
|
(1)Other employee incentives and benefits expense 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.
The $20 million decrease in total compensation and benefits expense consists primarily of the following:
•A decrease of $17 million in salaries and wages expense due to $26 million of lower compensation costs reflective primarily of higher compensation costs attributable to strategic hires for SVB Leerink in the first quarter of 2021. The decrease was partially offset by an increase of $10 million in salaries and wages due to an increase in average full-time employees and the full quarter impact of merit increases, and
•A decrease of $15 million in other employee incentives and benefits due primarily to a decrease in warrant incentive plan expense reflective of lower gains on equity warrant assets in the second quarter of 2021 compared to the first quarter of 2021 and higher seasonal expense items relating to 401(k) matching contributions and employer-related payroll taxes as a result of the 2020 annual incentive compensation plan payments made in the first quarter annually, partially offset by
•An increase of $12 million in incentive compensation plans expense attributable primarily to an increase in our incentive compensation plan accrual as a result of improved financial outlook and an increase in the number of average FTEs.
Income Tax Expense
Our effective tax rate was 25.1 percent for the second quarter of 2021, compared to 25.9 percent for the first quarter of 2021.Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and net income attributable to noncontrolling interests. The decrease in our effective tax rate was driven primarily by an increase in the recognition of excess tax benefits from share-based compensation in the second quarter of 2021 which is reflective of the annual vesting of our restricted stock units and increase in our stock price.
11
Noncontrolling Interests
Included in net income is income and expense related to noncontrolling interests. The relevant amounts allocated to investors in our consolidated subsidiaries, other than us, are reflected under 'Net Income Attributable to Noncontrolling Interests' in our statements of income. The following table provides a summary of net income attributable to noncontrolling interests:
|
|
Three months ended
|
Six months ended
|
(Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Net interest income (1)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Noninterest income (1)
|
(36)
|
(16)
|
(6)
|
(52)
|
(3)
|
Noninterest expense (1)
|
-
|
-
|
-
|
-
|
-
|
Carried interest allocation (2)
|
(77)
|
(9)
|
(8)
|
(86)
|
(9)
|
Net income attributable to noncontrolling interests
|
$
|
(113)
|
$
|
(25)
|
$
|
(14)
|
$
|
(138)
|
$
|
(12)
|
(1)Represents noncontrolling interests' share in net interest income, noninterest income and noninterest expense.
(2)Represents the preferred allocation of income (or change in income) earned by us as the general partner of certain consolidated funds.
Net income attributable to noncontrolling interests of $113 million for the second quarter of 2021 was driven primarily by net gains on investment securities (including carried interest allocation) from our managed funds of funds portfolio.
SVBFG Stockholders' Equity
Total SVBFG stockholders' equity increased by $1.8 billion to $11.7 billionat June 30, 2021, compared to $9.9 billion at March 31, 2021, primarily due to $1.0 billion of capital raised related to our preferred stock issuance during the second quarter of 2021. We also issued and sold an additional 300,000 shares of common stock under the full exercise of the underwriter's over-allotment option from our first quarter equity raise resulting in additional net proceeds of approximately $146 million after deducting discounts and commissions. SVBFG stockholders' equity also increased due to net income of $502 million during the second quarter of 2021 as well as an increase in the net balance of accumulated other comprehensive income to $142 million from a balance of $21 million at March 31, 2021, driven primarily by an increase in the fair value of our AFS securities portfolio, reflective of decreases in market rates, partially offset by the cumulative adjustment for unrealized losses on securities transferred from AFS to HTM.
Preferred Stock
Series A Preferred Stock
On July 22, 2021, the Company's Board of Directors declared a quarterly cash dividend of $13.125 per share (representing $0.328125 per depositary share) on the Series A Preferred Stock. The dividend is payable on August 16, 2021 to holders of record at the close of business on August 2, 2021.
Series B Preferred Stock
On July 22, 2021, the Company's Board of Directors declared a quarterly cash dividend of $1,025 per share (representing $10.25 per depositary share) on the Series B Preferred Stock. The dividend is payable on August 16, 2021 to holders of record at the close of business on August 2, 2021.
Series C Preferred Stock
On May 13, 2021, the Company issued 1,000,000 depositary shares each representing a 1/100th ownership interest in a share of Series C Preferred Stock with a $0.001 par value and a liquidation preference of $100,000 per share, or $1,000 per depositary share. The Series C Preferred Stock is perpetual and has no stated maturity. Dividends, if approved and declared by the Board of Directors, are payable quarterly, in arrears, at a rate per annum equal to (i) (i) 4.000 percent from the original issue date to, but excluding, May 15, 2026, and (ii) the five-year treasury rate as of the most recent reset dividend determination date (calculated three business days prior to each reset period, which first occurs on May 15, 2026, and subsequently every five years from such date) plus 3.202 percent for each reset period from, and including, May 15, 2026. As of June 30, 2021, 1,000,000 depositary shares were issued and outstanding, had a carrying value of $985 million and a liquidation preference of $1.0 billion.
On July 22, 2021, the Company's Board of Directors declared a quarterly cash dividend of $1,022.222 per share (representing $10.22222 per depositary share) on the Series C Preferred Stock. The dividend is payable on August 16, 2021 to holders of record at the close of business on August 2, 2021.
12
SVB Financial and Bank Capital Ratios(1)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
SVB Financial:
|
CET 1 risk-based capital ratio
|
11.93
|
%
|
12.18
|
%
|
12.63
|
%
|
Tier 1 risk-based capital ratio
|
14.95
|
14.01
|
13.62
|
Total risk-based capital ratio
|
15.53
|
14.62
|
14.77
|
Tier 1 leverage ratio
|
7.77
|
8.01
|
8.68
|
Tangible common equity to tangible assets ratio (2)
|
5.76
|
6.06
|
7.94
|
Tangible common equity to risk-weighted assets ratio (2)
|
12.02
|
12.11
|
13.68
|
Silicon Valley Bank:
|
CET 1 risk-based capital ratio
|
13.66
|
%
|
12.93
|
%
|
11.08
|
%
|
Tier 1 risk-based capital ratio
|
13.66
|
12.93
|
11.08
|
Total risk-based capital ratio
|
14.26
|
13.56
|
12.28
|
Tier 1 leverage ratio
|
6.96
|
7.20
|
6.91
|
Tangible common equity to tangible assets ratio (2)
|
6.47
|
6.25
|
6.91
|
Tangible common equity to risk-weighted assets ratio (2)
|
13.76
|
12.87
|
12.17
|
(1)Regulatory capital ratios as of June 30, 2021 are preliminary.
(2)These are non-GAAP measures. A reconciliation of non-GAAP measures to GAAP is provided at the end of this release under the section 'Use of Non-GAAP Financial Measures.'
June 30, 2021Preliminary Results
Our tier 1 risk-based capital ratios and total risk-based capital ratios increased for both SVB Financial and Silicon Valley Bank as of June 30, 2021, compared to March 31, 2021. The increase in these capital ratios was due to growth in our capital outpacing growth in our risk-weighted assets. Capital for SVB Financial increased due to our issuance of preferred and common stock during the quarter and net income. The increase in capital for Silicon Valley Bank was driven by a $1.3 billion downstream capital infusion from our bank holding company during the second quarter of 2021 and net income.
Our Tier 1 leverage ratio decreased for both SVB Financial and Silicon Valley Bank as of June 30, 2021, compared to March 31, 2021. The decrease was due to growth in our average assets outpacing growth in our capital. The increase in average assets was driven by increases in our fixed income and loan portfolios as well as cash and cash equivalents. The increase in capital for SVB Financial and Silicon Valley Bank is described above.
All of our reported capital ratios remain above the levels considered to be 'well capitalized' under applicable banking regulations.
13
Financial Outlook
Our outlook for the year ending December 31, 2021, is provided below on a GAAP basis, unless otherwise noted. We have provided our current outlook for the expected full year results of our significant forecasted activities based on management's assumptions and current expectations. Except for the items noted below, we do not provide an outlook for certain items (such as gains or losses from warrants and investment securities) where the timing or financial impact are particularly uncertain and/or subject to market or other conditions beyond our control (such as the level of IPO, M&A or general financing activity), or for potential unusual or non-recurring items. The outlook and the underlying assumptions presented are, by their nature, forward-looking statements and are subject to substantial risks and uncertainties, including risks and uncertainties related to the COVID-19 pandemic and related government actions, which are discussed below under the section 'Forward-Looking Statements.' Actual results may differ. (For additional information about our financial outlook, please refer to Q2 2021 Earnings Slides. See 'Additional Information' below.)
With the close of the Boston Private acquisition on July 1, 2021, their performance will be reflected in our results beginning in the third quarter of 2021. We have presented guidance including and excluding Boston Private so that our investors can understand our organic growth and the full impact of the acquisition of Boston Private.
Our current outlook for the full year ending December 31, 2021, compared to our full year 2020 results, we currently expect the following outlook (please note that the outlook below does not include and/or take into account: (i) changes in interest rates, (ii) material deterioration in the overall economy and (iii) changes to the federal corporate tax rate, and includes management's updates to certain 2021 outlook metrics we previously disclosed on April 22, 2021):
|
Current full year 2021 outlook compared to 2020 results (as of July 22, 2021) excluding Boston Private
|
Current full year 2021 outlook compared to 2020 results (as of July 22, 2021) including Boston Private
|
Average loan balances
|
Increase at a percentage rate in the mid-thirties
|
Increase at a percentage rate in the mid-forties
|
Average deposit balances
|
Increase at a percentage rate in the high eighties
|
Increase at a percentage rate in the low nineties
|
Net interest income (1)
|
Increase at a percentage rate in the low forties
|
Increase at a percentage rate in the mid-forties
|
Net interest margin (1)
|
Between 2.00% and 2.10%
|
Between 2.00% and 2.10%
|
Net loan charge-offs (2)
|
Between 0.20% and 0.40%
of average total loans
|
Between 0.20% and 0.40%
of average total loans
|
Core fee income (client investment fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit fees) (3)
|
Increase at a percentage rate in the low double digits
|
Increase at a percentage rate in the high teens
|
SVB Leerink revenue (3)
|
Between $480 million and $510 million
|
Between $480 million and $510 million
|
Noninterest expense excluding merger-related charges (4) (5) (6)
|
Increase at a percentage rate in the mid-twenties
|
Increase at a percentage rate in the mid-thirties
|
Effective tax rate (7)
|
Between 25% and 27%
|
Between 25% and 27%
|
(1)Our outlook for net interest income and net interest margin is based primarily on management's current forecast of average deposit and loan balances and deployment of surplus cash into investment securities. Such forecasts are subject to change, and actual results may differ, based on market conditions, the COVID-19 pandemic and its effects on the economic and business environments in which we operate, actual prepayment rates and other factors described under the section 'Forward-Looking Statements' below.
(2)Our outlook for loan charge-offs includes the impact of an $80 million charge-off related to potentially fraudulent activity discussed in previous filings.
(3)Core fee income and SVB Leerink revenue are each non-GAAP measures, which collectively represent noninterest income, but exclude certain line items where performance is typically subject to market or other conditions beyond our control. As we are unable to quantify such line items that would be required to be included in the comparable GAAP financial measure for the future period presented without unreasonable efforts, no reconciliation for the outlook of non-GAAP core fee income and non-GAAP SVB Leerink revenue to GAAP noninterest income for fiscal year ending 2021 is included in this release, as we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. See 'Use of Non-GAAP Financial Measures' at the end of this release for further information regarding the calculation and limitations of this measure. Core fee income does not include SVB Leerink revenue. SVB Leerink revenue represents investment banking revenue and commissions.
(4)Noninterest expense is a non-GAAP measure, which represents noninterest expense, but excludes expenses attributable to noncontrolling interests. As we are unable to quantify such line items that would be required to be included in the comparable GAAP financial measure for the future period presented without unreasonable efforts, no reconciliation for the outlook of non-GAAP noninterest expense to GAAP noninterest expense for the fiscal year ending 2021 is included in this release, as we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. See 'Use of Non-GAAP Financial Measures' at the end of this release for further information regarding the calculation and limitations of this measure.
14
(5)Our outlook for noninterest expense is partly based on management's current forecast of performance-based incentive compensation expenses. Such forecasts are subject to change, and actual results may differ, based on our performance relative to our internal performance targets.
(6)Pre-tax merger-related charges, associated with the Boston Private acquisition, are estimated to be approximately $100 million to $110 million in the second half of 2021 with approximately eighty percent to be recognized in the third quarter and approximately twenty percent in the fourth quarter. We expect a total of approximately $160 million to $190 million of pre-tax merger-related charges to be incurred over the next 24 months in addition to the $19 million recognized in the second quarter of 2021.
(7)Our outlook for our effective tax rate is based on management's current assumptions with respect to, among other things, SVB Financial Group's earnings, state income tax levels, tax deductions and estimated performance-based compensation activity and does not include assumptions for potential future tax rate changes.
15
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements are statements that are not historical facts, such as forecasts of our future financial results and condition, expectations for our operations and business, and our underlying assumptions of such forecasts and expectations. In addition, forward-looking statements generally can be identified by the use of such words as 'becoming,' 'may,' 'will,' 'should,' 'could,' 'would,' 'predict,' 'potential,' 'continue,' 'anticipate,' 'believe,' 'estimate,' 'assume,' 'seek,' 'expect,' 'plan,' 'intend,' the negative of such words or comparable terminology. In this release, including our CEO's statement and in the section 'Financial Outlook,' we make forward-looking statements discussing management's expectations for 2021 about, among other things, economic conditions; the continuing and potential effects of the COVID-19 pandemic; opportunities in the market; the outlook on our clients' performance; our financial, credit, and business performance, including loan growth, loan mix and loan yields; deposit growth; expense levels; our expected effective tax rate; accounting impact; financial results (and the components of such results) and the integration of Boston Private.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we have based these expectations on our current beliefs as well as our assumptions, and such expectations may not prove to be correct. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside our control. Our actual results of operations and financial performance could differ significantly from those expressed in or implied by our management's forward-looking statements. Important factors that could cause our actual results and financial condition to differ from the expectations stated in the forward-looking statements include, among others:
•market and economic conditions (including the general condition of the capital and equity markets, and IPO, secondary offering, SPAC fundraising, M&A and financing activity levels) and the associated impact on us (including effects on client demand for our commercial and investment banking and other financial services, as well as on the valuations of our investments);
•the COVID-19 pandemic and its effects on the economic and business environments in which we operate, and its effects on our operations, including, as a result of, prolonged work-from-home arrangements;
•the impact of changes from the Biden-Harris administration and the new U.S. Congress on the economic environment, capital markets and regulatory landscape, including monetary, tax and other trade policies;
•changes in the volume and credit quality of our loans as well as volatility of our levels of nonperforming assets and charge-offs;
•the impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios;
•the adequacy of our allowance for credit losses and the need to make provisions for credit losses for any period;
•the sufficiency of our capital and liquidity positions;
•changes in the levels of our loans, deposits and client investment fund balances;
•changes in the performance or equity valuations of funds or companies in which we have invested or hold derivative instruments or equity warrant assets;
•variations from our expectations as to factors impacting our cost structure;
•changes in our assessment of the creditworthiness or liquidity of our clients or unanticipated effects of credit concentration risks which create or exacerbate deterioration of such creditworthiness or liquidity;
•variations from our expectations as to factors impacting the timing and level of employee share-based transactions;
•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;
•the expansion of our business internationally, and the impact of international market and economic events on us;
•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 Boston Private;
16
•greater than expected costs or other difficulties related to the integration of our business and that of Boston Private;
•variations from our expectations as to the amount and timing of business opportunities, growth prospects and cost savings associated with the acquisition of Boston Private;
•the inability to retain existing Boston Private clients and employees following the Boston Private acquisition;
•unfavorable resolution of legal proceedings or claims, as well as legal or regulatory proceedings or governmental actions;
•variations from our expectations as to factors impacting our estimate of our full-year effective tax rate;
•changes in applicable accounting standards and tax laws; and
•regulatory or legal changes and their impact on us.
The operating and economic environment during the second quarter continued to be impacted by the COVID-19 pandemic and related government orders. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, potential variations of the virus, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.
For additional information about these and other factors, please refer to our public reports filed with the U.S. Securities and Exchange Commission, including under the caption 'Risk Factors' in our most recent Annual Report filed on Form 10-K. The forward-looking statements included in this release are made only as of the date of this release. We do not intend, and undertake no obligation, to update these forward-looking statements.
Earnings Conference Call
On Thursday, July 22, 2021, we will host a conference call at 3:00 p.m. (Pacific Time) to discuss the financial results for the quarter ended June 30, 2021. The conference call can be accessed by dialing (833) 494-1484 or (236) 714-2618 and entering the confirmation number '2093345'. A live webcast of the audio portion of the call can be accessed on the Investor Relations section of our website at www.svb.com. A replay of the audio webcast will also be available on www.svb.com for 12 months beginning on July 22, 2021.
Additional Information
For additional information about our business, financial results for the second quarter 2021 and financial outlook, please refer to our Q2 2021 Earnings Slides and Q2 2021 CEO Letter, which are available on the Investor Relations section of our website at www.svb.com. These materials should be read together with this release, and include important supplemental information including key considerations that may impact our financial outlook.
About SVB Financial Group
For nearly 40 years, SVB Financial Group (NASDAQ: SIVB) and its subsidiaries have helped innovative companies and their investors move bold ideas forward, fast. SVB Financial Group's businesses, including Silicon Valley Bank, offer commercial, investment and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life science and healthcare, private equity and venture capital and premium wine industries. Headquartered in Santa Clara, California, SVB Financial Group operates in centers of innovation around the world. Learn more at www.svb.com.
SVB Financial Group is the holding company for all business units and groups © 2021 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, SVB LEERINK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group.
17
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
Three months ended
|
Six Months ended
|
(Dollars in millions, except share data)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Interest income:
|
Loans
|
$
|
472
|
$
|
430
|
$
|
365
|
$
|
903
|
$
|
748
|
Investment securities:
|
Taxable
|
251
|
225
|
142
|
475
|
296
|
Non-taxable
|
24
|
21
|
14
|
45
|
27
|
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities
|
4
|
3
|
3
|
7
|
20
|
Total interest income
|
751
|
679
|
524
|
1,430
|
1,091
|
Interest expense:
|
Deposits
|
12
|
10
|
6
|
22
|
43
|
Borrowings
|
11
|
9
|
5
|
20
|
11
|
Total interest expense
|
23
|
19
|
11
|
42
|
54
|
Net interest income
|
728
|
660
|
513
|
1,388
|
1,037
|
Provision for credit losses
|
35
|
19
|
66
|
54
|
310
|
Net interest income after provision for credit losses
|
693
|
641
|
447
|
1,334
|
727
|
Noninterest income:
|
Gains on investment securities, net
|
305
|
167
|
35
|
472
|
81
|
Gains on equity warrant assets, net
|
122
|
222
|
27
|
344
|
40
|
Client investment fees
|
15
|
20
|
32
|
35
|
75
|
Foreign exchange fees
|
67
|
57
|
36
|
124
|
84
|
Credit card fees
|
31
|
28
|
21
|
59
|
50
|
Deposit service charges
|
28
|
25
|
21
|
53
|
45
|
Lending related fees
|
18
|
16
|
11
|
34
|
24
|
Letters of credit and standby letters of credit fees
|
13
|
13
|
11
|
26
|
23
|
Investment banking revenue
|
103
|
142
|
142
|
245
|
188
|
Commissions
|
17
|
24
|
17
|
41
|
33
|
Other
|
42
|
30
|
16
|
72
|
27
|
Total noninterest income
|
761
|
744
|
369
|
1,505
|
670
|
Noninterest expense:
|
Compensation and benefits
|
425
|
445
|
320
|
870
|
575
|
Professional services
|
97
|
81
|
64
|
178
|
103
|
Premises and equipment
|
37
|
33
|
28
|
70
|
55
|
Net occupancy
|
17
|
18
|
19
|
35
|
37
|
Business development and travel
|
3
|
4
|
3
|
7
|
17
|
FDIC and state assessments
|
10
|
10
|
7
|
20
|
12
|
Merger-related charges
|
19
|
-
|
-
|
19
|
-
|
Other
|
45
|
45
|
39
|
90
|
80
|
Total noninterest expense
|
653
|
636
|
480
|
1,289
|
879
|
Income before income tax expense
|
801
|
749
|
336
|
1,550
|
518
|
Income tax expense
|
173
|
187
|
88
|
360
|
137
|
Net income before noncontrolling interests and dividends
|
628
|
562
|
248
|
1,190
|
381
|
Net income attributable to noncontrolling interests
|
(113)
|
(25)
|
(14)
|
(138)
|
(12)
|
Preferred stock dividends
|
(13)
|
(5)
|
(5)
|
(18)
|
(8)
|
Net income available to common stockholders
|
$
|
502
|
$
|
532
|
$
|
229
|
$
|
1,034
|
$
|
361
|
Earnings per common share-basic
|
$
|
9.23
|
$
|
10.20
|
$
|
4.44
|
$
|
19.40
|
$
|
7.00
|
Earnings per common share-diluted
|
9.09
|
10.03
|
4.42
|
19.10
|
6.97
|
Weighted average common shares outstanding-basic
|
54,352,725
|
52,180,045
|
51,581,237
|
53,272,389
|
51,572,846
|
Weighted average common shares outstanding-diluted
|
55,151,596
|
53,075,690
|
51,794,833
|
54,115,083
|
51,847,538
|
18
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
(Dollars in millions, except par value and share data)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
Assets:
|
Cash and cash equivalents
|
$
|
23,959
|
$
|
21,255
|
$
|
14,202
|
Available-for-sale securities, at fair value (cost $23,776, $26,159 and $17,801, respectively)
|
23,876
|
25,986
|
18,452
|
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $5, $1 and less than $1 (fair value of $60,107, $41,187 and $13,541), respectively
|
59,992
|
41,165
|
12,859
|
Non-marketable and other equity securities
|
1,943
|
1,858
|
1,271
|
Investment securities
|
85,811
|
69,009
|
32,582
|
Loans, amortized cost
|
50,754
|
47,675
|
36,727
|
Allowance for credit losses: loans
|
(396)
|
(392)
|
(590)
|
Net loans
|
50,358
|
47,283
|
36,137
|
Premises and equipment, net of accumulated depreciation and amortization
|
196
|
180
|
169
|
Goodwill
|
143
|
143
|
138
|
Other intangible assets, net
|
57
|
59
|
47
|
Lease right-of-use assets
|
225
|
234
|
215
|
Accrued interest receivable and other assets
|
2,650
|
4,184
|
2,241
|
Total assets
|
$
|
163,399
|
$
|
142,347
|
$
|
85,731
|
Liabilities and total equity:
|
Liabilities:
|
Noninterest-bearing demand deposits
|
$
|
101,259
|
$
|
84,440
|
$
|
49,161
|
Interest-bearing deposits
|
44,579
|
39,710
|
25,345
|
Total deposits
|
145,838
|
124,150
|
74,506
|
Short-term borrowings
|
34
|
39
|
51
|
Lease liabilities
|
277
|
287
|
239
|
Other liabilities
|
3,449
|
6,412
|
2,623
|
Long-term debt
|
1,834
|
1,338
|
843
|
Total liabilities
|
151,432
|
132,226
|
78,262
|
SVBFG stockholders' equity:
|
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 367,500, 357,500 and 350,000 shares issued and outstanding, respectively
|
2,064
|
1,079
|
340
|
Common stock, $0.001 par value, 150,000,000 shares authorized; 54,530,307 shares, 54,001,797 shares and 51,740,714 shares issued and outstanding, respectively
|
-
|
-
|
-
|
Additional paid-in capital
|
2,755
|
2,591
|
1,523
|
Retained earnings
|
6,706
|
6,204
|
4,842
|
Accumulated other comprehensive income
|
142
|
21
|
615
|
Total SVBFG stockholders' equity
|
11,667
|
9,895
|
7,320
|
Noncontrolling interests
|
300
|
226
|
149
|
Total equity
|
11,967
|
10,121
|
7,469
|
Total liabilities and total equity
|
$
|
163,399
|
$
|
142,347
|
$
|
85,731
|
19
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
|
|
Three months ended
|
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
(Dollars in millions, except yield/rate and ratios)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
|
Interest-earning assets:
|
Federal reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)
|
$
|
21,069
|
$
|
4
|
0.08
|
%
|
$
|
18,174
|
$
|
3
|
0.07
|
%
|
$
|
11,920
|
$
|
3
|
0.08
|
%
|
Investment securities: (2)
|
Available-for-sale securities:
|
Taxable
|
24,358
|
73
|
1.20
|
28,248
|
125
|
1.79
|
12,784
|
69
|
2.18
|
Held-to-maturity securities:
|
Taxable
|
43,352
|
178
|
1.65
|
21,590
|
100
|
1.87
|
10,887
|
73
|
2.67
|
Non-taxable (3)
|
4,562
|
31
|
2.73
|
3,705
|
26
|
2.90
|
2,153
|
18
|
3.42
|
Total loans, amortized cost (4) (5)
|
49,812
|
472
|
3.80
|
46,281
|
430
|
3.77
|
36,512
|
365
|
4.02
|
Total interest-earning assets
|
143,153
|
758
|
2.12
|
117,998
|
684
|
2.35
|
74,256
|
528
|
2.85
|
Cash and due from banks
|
2,108
|
1,547
|
895
|
Allowance for credit losses: loans
|
(411)
|
(484)
|
(561)
|
Other assets (6)
|
5,867
|
5,754
|
3,843
|
Total assets
|
$
|
150,717
|
$
|
124,815
|
$
|
78,433
|
Funding sources:
|
Interest-bearing liabilities:
|
Interest bearing checking and savings accounts
|
$
|
3,096
|
$
|
1
|
0.11
|
%
|
$
|
3,662
|
$
|
1
|
0.10
|
%
|
$
|
2,175
|
$
|
2
|
0.31
|
%
|
Money market deposits
|
36,452
|
10
|
0.11
|
30,959
|
9
|
0.11
|
17,531
|
4
|
0.08
|
Money market deposits in foreign offices
|
787
|
-
|
0.01
|
873
|
-
|
0.06
|
291
|
-
|
0.04
|
Time deposits
|
631
|
1
|
0.37
|
658
|
-
|
0.39
|
187
|
-
|
0.75
|
Sweep deposits in foreign offices
|
1,264
|
-
|
0.01
|
1,223
|
-
|
0.02
|
1,645
|
-
|
0.02
|
Total interest-bearing deposits
|
42,230
|
12
|
0.11
|
37,375
|
10
|
0.11
|
21,829
|
6
|
0.10
|
Short-term borrowings
|
39
|
-
|
0.19
|
12
|
2
|
0.07
|
618
|
1
|
0.38
|
2.100% Senior Notes
|
267
|
2
|
2.35
|
-
|
-
|
-
|
-
|
-
|
-
|
1.800% Senior Notes
|
494
|
2
|
1.92
|
319
|
-
|
1.98
|
-
|
-
|
-
|
3.125% Senior Notes
|
495
|
4
|
3.25
|
495
|
4
|
3.29
|
142
|
1
|
3.29
|
3.50% Senior Notes
|
348
|
3
|
3.63
|
348
|
3
|
3.67
|
348
|
3
|
3.64
|
Total interest-bearing liabilities
|
43,873
|
23
|
0.21
|
38,549
|
19
|
0.20
|
22,937
|
11
|
0.19
|
Portion of noninterest-bearing funding sources
|
99,280
|
79,449
|
51,319
|
Total funding sources
|
143,153
|
23
|
0.06
|
117,998
|
19
|
0.06
|
74,256
|
11
|
0.05
|
Noninterest-bearing funding sources:
|
Demand deposits
|
91,530
|
73,233
|
46,088
|
Other liabilities
|
4,200
|
4,021
|
2,024
|
Preferred stock
|
1,610
|
817
|
340
|
SVBFG common stockholders' equity
|
9,283
|
7,984
|
6,894
|
Noncontrolling interests
|
221
|
211
|
150
|
Portion used to fund interest-earning assets
|
(99,280)
|
(79,449)
|
(51,319)
|
Total liabilities and total equity
|
$
|
150,717
|
$
|
124,815
|
$
|
78,433
|
Net interest income and margin
|
$
|
735
|
2.06
|
%
|
$
|
665
|
2.29
|
%
|
$
|
517
|
2.80
|
%
|
Total deposits
|
$
|
133,760
|
$
|
110,608
|
$
|
67,917
|
Average SVBFG common stockholders' equity as a percentage of average assets
|
6.16
|
%
|
6.40
|
%
|
8.79
|
%
|
Reconciliation to reported net interest income:
|
Adjustments for taxable equivalent basis
|
(7)
|
(5)
|
(4)
|
Net interest income, as reported
|
$
|
728
|
$
|
660
|
$
|
513
|
(1)Includes average interest-earning deposits in other financial institutions of $1.9 billion, $1.6 billion and $855 million; and $16.7 billion, $14.8 billion and $10.0 billion deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate, for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.
(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income or loss.
(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.
(4)Nonaccrual loans are reflected in the average balances of loans.
(5)Interest income includes loan fees of $68 million, $58 million and $50 million for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.
(6)Average investment securities of $3.4 billion, $3.4 billion and $1.9 billion for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, were classified as other assets as they are noninterest-earning assets. These investments consist primarily of non-marketable and other equity securities.
20
SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
|
|
Six months ended
|
|
June 30, 2021
|
June 30, 2020
|
(Dollars in millions, except yield/rate and ratios)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
|
Interest-earning assets:
|
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)
|
$
|
19,635
|
$
|
7
|
0.07
|
%
|
$
|
9,614
|
$
|
20
|
0.42
|
%
|
Investment securities: (2)
|
Available-for-sale securities:
|
Taxable
|
26,292
|
197
|
1.51
|
13,175
|
146
|
2.23
|
Held-to-maturity securities:
|
Taxable
|
32,531
|
278
|
1.72
|
11,281
|
150
|
2.67
|
Non-taxable (3)
|
4,136
|
57
|
2.78
|
2,027
|
34
|
3.43
|
Total loans, amortized cost (4) (5)
|
48,056
|
903
|
3.79
|
35,086
|
748
|
4.29
|
Total interest-earning assets
|
130,650
|
1,442
|
2.22
|
71,183
|
1,098
|
3.10
|
Cash and due from banks
|
1,823
|
847
|
Allowance for credit losses for loans
|
(448)
|
(444)
|
Other assets (6)
|
5,812
|
3,834
|
Total assets
|
$
|
137,837
|
$
|
75,420
|
Funding sources:
|
Interest-bearing liabilities:
|
Interest bearing checking and savings accounts
|
$
|
3,377
|
$
|
2
|
0.10
|
%
|
$
|
1,361
|
$
|
2
|
0.26
|
%
|
Money market deposits
|
33,721
|
19
|
0.11
|
17,572
|
36
|
0.42
|
Money market deposits in foreign offices
|
830
|
-
|
0.04
|
279
|
-
|
0.04
|
Time deposits
|
644
|
1
|
0.35
|
175
|
1
|
0.89
|
Sweep deposits in foreign offices
|
1,244
|
-
|
0.02
|
1,764
|
4
|
0.45
|
Total interest-bearing deposits
|
39,816
|
22
|
0.11
|
21,151
|
43
|
0.41
|
Short-term borrowings
|
26
|
-
|
0.16
|
794
|
3
|
0.84
|
2.100% Senior Notes
|
134
|
2
|
2.35
|
-
|
-
|
-
|
1.800% Senior Notes
|
407
|
4
|
1.94
|
-
|
-
|
-
|
3.125% Senior Notes
|
495
|
8
|
3.27
|
71
|
2
|
3.29
|
3.50% Senior Notes
|
348
|
6
|
3.65
|
348
|
6
|
3.64
|
Total interest-bearing liabilities
|
41,226
|
42
|
0.21
|
22,364
|
54
|
0.48
|
Portion of noninterest-bearing funding sources
|
89,424
|
48,819
|
Total funding sources
|
130,650
|
42
|
0.06
|
71,183
|
54
|
0.15
|
Noninterest-bearing funding sources:
|
Demand deposits
|
82,432
|
43,712
|
Other liabilities
|
4,111
|
2,151
|
Preferred stock
|
1,216
|
340
|
SVBFG common stockholders' equity
|
8,636
|
6,703
|
Noncontrolling interests
|
216
|
150
|
Portion used to fund interest-earning assets
|
(89,424)
|
(48,819)
|
Total liabilities and total equity
|
$
|
137,837
|
$
|
75,420
|
Net interest income and margin
|
$
|
1,400
|
2.16
|
%
|
$
|
1,044
|
2.95
|
%
|
Total deposits
|
$
|
122,248
|
$
|
64,863
|
Average SVBFG stockholders' equity as a percentage of average assets
|
6.27
|
%
|
8.89
|
%
|
Reconciliation to reported net interest income:
|
Adjustments for taxable equivalent basis
|
(12)
|
(7)
|
Net interest income, as reported
|
$
|
1,388
|
$
|
1,037
|
(1)Includes average interest-earning deposits in other financial institutions of $1.8 billion and $898 million for the six months endedJune 30, 2021 and June 30, 2020. The balance also includes $15.8 billion and $7.8 billion deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate for the six months ended June 30, 2021 and June 30, 2020, respectively.
(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income or loss.
(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.
(4)Nonaccrual loans are reflected in the average balances of loans.
(5)Interest income includes loan fees of $126 million and $86 million for the six months ended June 30, 2021 and June 30, 2020, respectively.
(6)Average investment securities of $3.4 billion and $1.7 billion for the six months ended June 30, 2021 and June 30, 2020, respectively, were classified as other assets as they are noninterest-earning assets. These investments consisted primarily of non-marketable and other equity securities.
21
Reconciliation of Basic and Diluted Weighted Average Common Shares Outstanding
|
|
Three months ended
|
Six months ended
|
(Shares in thousands)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
Weighted average common shares outstanding-basic
|
54,353
|
52,180
|
51,581
|
53,272
|
51,573
|
Effect of dilutive securities:
|
Stock options and employee stock purchase plan
|
272
|
294
|
114
|
274
|
140
|
Restricted stock units
|
527
|
602
|
100
|
568
|
135
|
Total effect of dilutive securities
|
799
|
896
|
214
|
842
|
275
|
Weighted average common shares outstanding-diluted
|
55,152
|
53,076
|
51,795
|
54,114
|
51,848
|
Credit Quality
|
(Dollars in millions, except ratios)
|
June 30, 2021
|
March 31, 2021
|
June 30, 2020
|
Nonaccrual, past due and restructured loans:
|
Nonaccrual loans
|
$
|
79
|
$
|
90
|
$
|
94
|
Loans past due 90 days or more still accruing interest
|
3
|
5
|
-
|
Total nonperforming loans
|
82
|
95
|
94
|
OREO and other foreclosed assets
|
1
|
1
|
-
|
Total nonperforming assets
|
$
|
83
|
$
|
96
|
$
|
94
|
Nonperforming loans as a percentage of total loans
|
0.16
|
%
|
0.20
|
%
|
0.26
|
%
|
Nonperforming assets as a percentage of total assets
|
0.05
|
0.07
|
0.11
|
Allowance for credit losses for loans
|
$
|
396
|
$
|
392
|
$
|
590
|
As a percentage of total loans
|
0.78
|
%
|
0.82
|
%
|
1.61
|
%
|
As a percentage of total nonperforming loans
|
482.93
|
413.51
|
624.80
|
Allowance for credit losses for nonaccrual loans
|
$
|
38
|
$
|
42
|
$
|
54
|
As a percentage of total loans
|
0.07
|
%
|
0.09
|
%
|
0.15
|
%
|
As a percentage of total nonperforming loans
|
46.34
|
44.18
|
57.61
|
Allowance for credit losses for total performing loans
|
$
|
358
|
$
|
350
|
$
|
536
|
As a percentage of total loans
|
0.71
|
%
|
0.73
|
%
|
1.46
|
%
|
As a percentage of total performing loans
|
0.71
|
0.74
|
1.46
|
Total loans
|
$
|
50,754
|
$
|
47,675
|
$
|
36,727
|
Total performing loans
|
50,672
|
47,580
|
36,633
|
Allowance for credit losses for unfunded credit commitments (1)
|
120
|
105
|
99
|
As a percentage of total unfunded credit commitments
|
0.33
|
%
|
0.31
|
%
|
0.35
|
%
|
Total unfunded credit commitments (2)
|
$
|
36,385
|
$
|
33,987
|
$
|
28,127
|
(1)The 'allowance for credit losses for unfunded credit commitments' is included as a component of 'other liabilities.'
(2)Includes unfunded loan commitments and letters of credit.
22
Use of Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures (including, but not limited to, non-GAAP core fee income, non-GAAP SVB Leerink revenue, non-GAAP core fee income plus non-GAAP SVB Leerink revenue, non-GAAP noninterest income, non-GAAP net gains on investment securities, non-GAAP non-marketable and other equity securities, non-GAAP noninterest expense and non-GAAP financial ratios) of financial performance. These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.
We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures (as applicable), provide meaningful supplemental information regarding our performance by: (i) excluding amounts attributable to noncontrolling interests for which we effectively do not receive the economic benefit or cost of, where indicated, or (ii) providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, net income or other financial measures prepared in accordance with GAAP. In the financial tables below, we have provided a reconciliation of, where applicable, the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release, or a reconciliation of the non-GAAP calculation of the financial measure.
Additionally, from time to time, we may make reference to the non-GAAP financial metric of Core EPS in our earnings call and other investor presentations. Non-GAAP Core EPS consists of our net income available to common stockholders less gains or losses on investment securities, equity warrant assets and income and expenses related to SVB Leerink, net of tax, divided by our diluted weighted average common shares outstanding. Our management believes this measure to be a useful assessment of our performance as it relates to our core business because it excludes certain financial items where performance is typically subject to market or other conditions beyond our control. A reconciliation of Core EPS to the closest corresponding GAAP measure is not available with respect to future goals due to our inability to provide a quantitative reconciliation to such measure.
In particular, in this press release, we use certain non-GAAP measures that exclude the following from net income and certain other financial line items in certain periods:
•Income and expense attributable to noncontrolling interests - As part of our funds management business, we recognize the entire income or loss from certain funds where we own less than 100 percent. We are required under GAAP to consolidate 100 percent of the results of certain SVB Capital funds. The relevant amounts attributable to investors other than us are reflected under 'Net Income Attributable to Noncontrolling Interests.' Our net income available to common stockholders/certain financial line items include only the portion of income or loss related to our ownership interest.
In addition, in this press release, we use certain non-GAAP financial ratios and measures that are not required by GAAP or exclude certain financial items from calculations that are otherwise required under GAAP, including:
•Non-GAAP core fee income plus SVB Leerink revenue - This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.
•Non-GAAP core fee income - This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control, as well as our non-GAAP SVB Leerink revenue, and represents client investment fees, foreign exchange fees, credit card fees,
23
deposit service charges, lending related fees and letters of credit and standby letters of credit fees. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.
•Non-GAAP SVB Leerink revenue - This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control, as well as our non-GAAP core fee income, and represents investment banking revenue and commissions. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.
•Non-GAAP core operating efficiency ratio - This ratio excludes income and expenses related to SVB Leerink and certain financial items where performance is typically subject to market or other conditions beyond our control as well as other non-recurring expenses. It is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink, merger-related charges resulting from the acquisition of Boston Private and other non-recurring expenses by total revenue after adjusting for net interest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets, investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis. This ratio is used by management to evaluate the operating efficiency of our core banking business.
•Tangible common equity, or tangible book value, to tangible assets ratio; tangible common equity to risk-weighted assets ratio - These ratios are not required by GAAP or applicable bank regulatory requirements and are used by management to evaluate the adequacy of our capital levels. Risk-based capital guidelines require a minimum level of capital as a percentage of risk-weighted assets. Risk-weighted assets are calculated by assigning assets and off-balance sheet items to broad risk categories. Our ratios are calculated by dividing total SVBFG stockholders' equity, by total assets or total risk-weighted assets, as applicable, after reducing amounts by acquired intangibles, if any.
|
Three months ended
|
Six months ended
|
Non-GAAP core fee income plus SVB Leerink revenue, non-GAAP SVB Leerink revenue and non-GAAP core fee income (Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
GAAP noninterest income
|
$
|
761
|
$
|
744
|
$
|
622
|
$
|
547
|
$
|
369
|
$
|
1,505
|
$
|
670
|
Less: gains on investment securities, net
|
305
|
167
|
150
|
190
|
35
|
472
|
81
|
Less: net gains on equity warrant assets
|
122
|
222
|
144
|
54
|
27
|
344
|
40
|
Less: other noninterest income
|
42
|
30
|
21
|
49
|
16
|
72
|
27
|
Non-GAAP core fee income plus SVB Leerink revenue
|
$
|
292
|
$
|
325
|
$
|
307
|
$
|
254
|
$
|
291
|
$
|
617
|
$
|
522
|
Investment banking revenue
|
103
|
142
|
133
|
92
|
142
|
245
|
188
|
Commissions
|
17
|
24
|
18
|
16
|
17
|
41
|
33
|
Less: non-GAAP SVB Leerink revenue
|
$
|
120
|
$
|
166
|
$
|
151
|
$
|
108
|
$
|
159
|
$
|
286
|
$
|
221
|
Non-GAAP core fee income
|
$
|
172
|
$
|
159
|
$
|
156
|
$
|
146
|
$
|
132
|
$
|
331
|
$
|
301
|
|
Three months ended
|
Six months ended
|
Non-GAAP net gains on investment securities, net of noncontrolling interests (Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
GAAP net gains on investment securities
|
$
|
305
|
$
|
167
|
$
|
150
|
$
|
190
|
$
|
35
|
$
|
472
|
$
|
81
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
113
|
25
|
46
|
28
|
14
|
138
|
13
|
Non-GAAP net gains on investment securities, net of noncontrolling interests
|
$
|
192
|
$
|
142
|
$
|
104
|
$
|
162
|
$
|
21
|
$
|
334
|
$
|
68
|
24
|
|
Three months ended
|
Six months ended
|
Non-GAAP core operating efficiency ratio (Dollars in millions, except ratios)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
June 30, 2021
|
June 30, 2020
|
GAAP noninterest expense
|
$
|
653
|
$
|
636
|
$
|
665
|
$
|
491
|
$
|
480
|
$
|
1,289
|
$
|
879
|
Less: expense attributable to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Non-GAAP noninterest expense, net of noncontrolling interests
|
653
|
636
|
665
|
491
|
480
|
1,289
|
879
|
Less: expense attributable to SVB Leerink
|
99
|
136
|
131
|
78
|
109
|
235
|
171
|
Less: real estate expenses
|
-
|
-
|
29
|
-
|
-
|
-
|
-
|
Less: charitable donation of net PPP loan origination fees
|
-
|
-
|
20
|
-
|
-
|
-
|
-
|
Less: Merger-related charges
|
19
|
-
|
-
|
-
|
-
|
19
|
-
|
Non-GAAP noninterest expense, net of noncontrolling interests, SVB Leerink and other non-recurring expenses
|
$
|
535
|
$
|
500
|
$
|
485
|
$
|
413
|
$
|
371
|
$
|
1,035
|
$
|
708
|
|
GAAP net interest income
|
$
|
728
|
$
|
660
|
$
|
592
|
$
|
528
|
$
|
513
|
$
|
1,388
|
$
|
1,037
|
Adjustments for taxable equivalent basis
|
7
|
5
|
5
|
4
|
4
|
12
|
7
|
Non-GAAP taxable equivalent net interest income
|
735
|
665
|
597
|
532
|
517
|
1,400
|
1,044
|
Less: income attributable to noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests
|
735
|
665
|
597
|
532
|
517
|
1,400
|
1,044
|
Less: net interest income attributable to SVB Leerink
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests and SVB Leerink
|
$
|
735
|
$
|
665
|
$
|
597
|
$
|
532
|
$
|
517
|
$
|
1,400
|
$
|
1,044
|
|
GAAP noninterest income
|
$
|
761
|
$
|
744
|
$
|
622
|
$
|
547
|
$
|
369
|
$
|
1,505
|
$
|
670
|
Less: income attributable to noncontrolling interests, including carried interest allocation
|
113
|
25
|
46
|
28
|
14
|
138
|
12
|
Non-GAAP noninterest income, net of noncontrolling interests
|
648
|
719
|
576
|
519
|
355
|
1,367
|
658
|
Less: Non-GAAP net gains on investment securities, net of noncontrolling interests
|
192
|
142
|
104
|
162
|
21
|
334
|
69
|
Less: net gains on equity warrant assets
|
122
|
222
|
144
|
54
|
27
|
344
|
40
|
Less: investment banking revenue
|
103
|
142
|
133
|
92
|
142
|
245
|
188
|
Less: commissions
|
17
|
24
|
18
|
16
|
17
|
41
|
33
|
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
|
$
|
214
|
$
|
189
|
$
|
177
|
$
|
195
|
$
|
148
|
$
|
403
|
$
|
328
|
|
GAAP total revenue
|
$
|
1,489
|
$
|
1,404
|
$
|
1,214
|
$
|
1,075
|
$
|
882
|
$
|
2,893
|
$
|
1,707
|
Non-GAAP taxable equivalent revenue, net of noncontrolling interests, SVB Leerink, net of net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions
|
$
|
949
|
$
|
854
|
$
|
774
|
$
|
727
|
$
|
665
|
$
|
1,803
|
$
|
1,372
|
|
Operating efficiency ratio
|
43.85
|
%
|
45.31
|
%
|
54.79
|
%
|
45.66
|
%
|
54.39
|
%
|
44.56
|
%
|
51.48
|
%
|
Non-GAAP core operating efficiency ratio
|
56.38
|
58.52
|
62.67
|
56.86
|
55.70
|
57.40
|
51.59
|
25
|
Period-end balances at
|
Non-GAAP non-marketable and other equity securities, net of noncontrolling interests (Dollars in millions)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
GAAP non-marketable and other equity securities
|
$
|
1,943
|
$
|
1,858
|
$
|
1,802
|
$
|
1,548
|
$
|
1,271
|
Less: amounts attributable to noncontrolling interests
|
298
|
226
|
213
|
168
|
147
|
Non-GAAP non-marketable and other equity securities, net of noncontrolling interests
|
$
|
1,645
|
$
|
1,632
|
$
|
1,589
|
$
|
1,380
|
$
|
1,124
|
|
Period-end balances at
|
SVB Financial Group tangible common equity, tangible assets and risk-weighted assets (Dollars in millions, except ratios)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
GAAP SVBFG stockholders' equity
|
$
|
11,667
|
$
|
9,895
|
$
|
8,220
|
$
|
7,793
|
$
|
7,320
|
Less: preferred stock
|
2,064
|
1,079
|
340
|
340
|
340
|
Less: intangible assets
|
200
|
202
|
204
|
183
|
185
|
Tangible common equity
|
$
|
9,403
|
$
|
8,614
|
$
|
7,676
|
$
|
7,270
|
$
|
6,795
|
GAAP total assets
|
$
|
163,399
|
$
|
142,347
|
$
|
115,511
|
$
|
96,917
|
$
|
85,731
|
Less: intangible assets
|
200
|
202
|
204
|
183
|
185
|
Tangible assets
|
$
|
163,199
|
$
|
142,145
|
$
|
115,307
|
$
|
96,734
|
$
|
85,546
|
Risk-weighted assets
|
$
|
78,228
|
$
|
71,059
|
$
|
64,681
|
$
|
54,738
|
$
|
49,682
|
Tangible common equity to tangible assets
|
5.76
|
%
|
6.06
|
%
|
6.66
|
%
|
7.52
|
%
|
7.94
|
%
|
Tangible common equity to risk-weighted assets
|
12.02
|
12.12
|
11.87
|
13.28
|
13.68
|
|
Period-end balances at
|
Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in millions, except ratios)
|
June 30, 2021
|
March 31, 2021
|
December 31, 2020
|
September 30, 2020
|
June 30, 2020
|
Tangible common equity
|
$
|
10,428
|
$
|
8,766
|
$
|
7,069
|
$
|
6,104
|
$
|
5,821
|
Tangible assets
|
$
|
161,197
|
$
|
140,231
|
$
|
113,303
|
$
|
95,012
|
$
|
84,215
|
Risk-weighted assets
|
$
|
75,795
|
$
|
68,058
|
$
|
61,023
|
$
|
51,793
|
$
|
47,838
|
Tangible common equity to tangible assets
|
6.47
|
%
|
6.25
|
%
|
6.24
|
%
|
6.42
|
%
|
6.91
|
%
|
Tangible common equity to risk-weighted assets
|
13.76
|
12.88
|
11.58
|
11.79
|
12.17
|
26