Off-Balance Sheet Arrangements, Guarantees and Other Commitments

In the normal course of business, we use financial instruments with off-balance sheet risk to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commercial and standby letters of credit and commitments to invest in venture capital and private equity fund investments. These instruments involve credit risk to varying degrees. Credit risk is defined as the possibility of sustaining a loss because other parties to the financial instrument fail to perform in accordance with the terms of the contract.

Commitments to Extend Credit

The following table summarizes information related to our commitments to extend credit at September 30, 2012 and December 31, 2011:



(Dollars in thousands)	September 30, 2012		December 31, 2011
Loan commitments available for funding: (1)
Fixed interest rate commitments	$	855,885	$	658,377
Variable interest rate commitments	6,965,078		6,548,002
Total loan commitments available for funding	7,820,963		7,206,379
Commercial and standby letters of credit (2)	889,265		861,191
Total unfunded credit commitments	$	8,710,228	$	8,067,570
Commitments unavailable for funding (3)	$	994,888	$	841,439
Maximum lending limits for accounts receivable factoring arrangements (4)	888,463		747,392
Reserve for unfunded credit commitments (5)	23,075		21,811


(1)	Represents commitments which are available for funding, due to clients meeting all collateral, compliance and financial covenants required under loan commitment agreements.


(2)	See below for additional information on our commercial and standby letters of credit.


(3)	Represents commitments which are currently unavailable for funding, due to clients failing to meet all collateral, compliance and financial covenants under loan commitment agreements.


(4)	We extend credit under accounts receivable factoring arrangements when our clients’ sales invoices are deemed creditworthy under existing underwriting practices.


(5)	Our reserve for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit.

Commercial and Standby Letters of Credit

The table below summarizes our commercial and standby letters of credit at September 30, 2012. The maximum potential amount of future payments represents the amount that could be remitted under letters of credit if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from the collateral held or pledged.



(Dollars in thousands)	Expires In One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments
Financial standby letters of credit	$	696,922	$	60,234	$	757,156	$	757,156
Performance standby letters of credit	63,336		11,677		75,013		75,013
Commercial letters of credit	57,096		—		57,096		57,096
Total	$	817,354	$	71,911	$	889,265	$	889,265

At September 30, 2012 and December 31, 2011, deferred fees related to financial and performance standby letters of credit were $5.0 million and $6.1 million, respectively. At September 30, 2012, collateral in the form of cash of $347.7 million and available-for-sale securities of $13.2 million were available to us to reimburse losses, if any, under financial and performance standby letters of credit.

Commitments to Invest in Venture Capital and Private Equity Funds

We make commitments to invest in venture capital and private equity funds, which in turn make investments generally in, or in some cases make loans to, privately-held companies. Commitments to invest in these funds are generally made for a 10-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from calling 100% of committed capital in one year, it is customary for these funds to generally call most of the capital commitments over 5 to 7 years; however in certain cases, the funds may not call 100% of committed capital over the life of the fund. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate. The following table details our total capital commitments, unfunded capital commitments, and our ownership percentage in each fund at September 30, 2012:



Our Ownership in Limited Partnership (Dollars in thousands)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund
Silicon Valley BancVentures, LP	$	6,000	$	270	10.7	%
SVB Capital Partners II, LP (1)	1,200		162		5.1
SVB India Capital Partners I, LP	7,750		1,015		14.4
SVB Capital Shanghai Yangpu Venture Capital Fund	923		159		6.8
SVB Strategic Investors Fund, LP	15,300		688		12.6
SVB Strategic Investors Fund II, LP	15,000		1,200		8.6
SVB Strategic Investors Fund III, LP	15,000		2,700		5.9
SVB Strategic Investors Fund IV, LP	12,239		4,284		5.0
Strategic Investors Fund V Funds	1,000		833		Various
SVB Capital Preferred Return Fund, LP	12,687		—		20.0
SVB Capital—NT Growth Partners, LP	24,670		1,340		33.0
Other private equity fund (2)	9,338		—		58.2
Partners for Growth, LP	25,000		9,750		50.0
Partners for Growth II, LP	15,000		4,950		24.2
Gold Hill Venture Lending 03, LP (3)	20,000		—		9.3
Other fund investments (4)	331,902		64,435		Various
Total	$	513,009	$	91,786


(1)	Our ownership includes 1.3 percent direct ownership through SVB Capital Partners II, LLC and SVB Financial, and 3.8 percent indirect ownership through our investment in SVB Strategic Investors Fund II, LP.


(2)	Our ownership includes 41.5 percent direct ownership and indirect ownership interest of 12.6 percent and 4.1 percent in the fund through our ownership interest of SVB Capital - NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.


(3)	Our ownership includes 4.8 percent direct ownership and 4.5 percent indirect ownership interest through GHLLC.


(4)	Represents commitments to 331 funds (primarily venture capital funds) where our ownership interest is generally less than 5 percent of the voting interests of each such fund.

The following table details the amounts of remaining unfunded commitments to venture capital and private equity funds by our consolidated managed funds of funds (including our interest and the noncontrolling interests) at September 30, 2012:



Limited Partnership (Dollars in thousands)	Unfunded Commitments
SVB Strategic Investors Fund, LP	$	2,307
SVB Strategic Investors Fund II, LP	10,345
SVB Strategic Investors Fund III, LP	43,865
SVB Strategic Investors Fund IV, LP	102,650
Strategic Investors Fund V Funds	230,629
SVB Capital Preferred Return Fund, LP	17,688
SVB Capital—NT Growth Partners, LP	18,867
Other private equity fund	4,447
Total	$	430,798