Delaware | 000-15637 | 91-1962278 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.142-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | Description |
99.1 | Release, dated October 22, 2015, announcing the Company's financial results for the third quarter ended September 30, 2015. |
Date: October 22, 2015 | SVB FINANCIAL GROUP | |||||
By: | /s/ KAMRAN HUSAIN | |||||
Name: | Kamran Husain | |||||
Title: | Chief Accounting Officer and Principal Accounting Officer |
Exhibit No. | Description |
99.1* | Release, dated October 22, 2015, announcing the Company’s financial results for the third quarter ended September 30, 2015. |
* | This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934. |
3003 Tasman Drive, Santa Clara, CA 95054 | Contact: | |||||||
www.svb.com | Meghan O'Leary | |||||||
Investor Relations | ||||||||
For release at 1:00 P.M. (Pacific Time) | (408) 654-6364 | |||||||
October 22, 2015 | ||||||||
NASDAQ: SIVB |
• | Average loan balances (net of unearned income) of $14.9 billion, an increase of $596 million (or 4.2 percent). |
• | Period-end loan balances (net of unearned income of $15.3 billion, an increase of $1.1 billion (or 7.4 percent). |
• | Average investment securities, excluding non-marketable and other securities, of $22.9 billion, an increase of $1.5 billion (or 6.9 percent). |
• | Period-end investment securities, excluding non-marketable and other securities of $23.6 billion, an increase of $1.4 billion (or 6.2 percent). |
• | Average total client funds (consisting of both on-balance sheet deposits and off-balance sheet client investment funds) of $79.4 billion, an increase of $6.5 billion (or 9.0 percent) with average off-balance sheet client investment funds increasing by $4.1 billion (or 10.8 percent) and average on-balance sheet deposits increasing by $2.4 billion (or 6.9 percent). |
• | Period-end total client funds (consisting of both on-balance sheet deposits and off-balance sheet client investment funds) of $80.6 billion, an increase of $4.9 billion (or 6.5 percent) with period-end off-balance sheet client investment funds increasing $3.5 billion (or 8.7 percent) and period-end on-balance sheet deposits increasing by $1.4 billion (or 4.0 percent). |
• | Net interest income (fully taxable equivalent basis) of $255.0 million, an increase of $10.9 million (or 4.5 percent). |
• | Net interest margin of 2.50 percent, a decrease of 8 basis points. |
• | Provision for loan losses of $33.4 million, compared to $26.5 million. |
• | Gains on investment securities of $18.8 million, compared to $25.0 million. Non-GAAP gains on investment securities, net of noncontrolling interests, were $12.7 million, compared to $15.9 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
• | Gains on equity warrant assets of $10.7 million, compared to $23.6 million. |
• | Non-GAAP core fee income increased $2.3 million (or 3.5 percent) to $68.4 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
• | Noninterest expense of $184.8 million, a decrease of $9.4 million (or 4.8 percent). |
(Dollars in millions, except share data, employees and ratios) | Three months ended | Nine months ended | ||||||||||||||||||||||||||
September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||||||||||||||
Income statement: | ||||||||||||||||||||||||||||
Diluted earnings per common share (1) | $ | 1.57 | $ | 1.66 | $ | 1.71 | $ | 1.13 | $ | 1.24 | $ | 4.94 | $ | 4.18 | ||||||||||||||
Net income available to common stockholders (1) | 81.7 | 86.1 | 88.5 | 58.0 | 64.0 | 256.4 | 205.9 | |||||||||||||||||||||
Net interest income | 254.7 | 243.8 | 238.9 | 234.7 | 220.6 | 737.4 | 621.9 | |||||||||||||||||||||
Provision for loan losses | 33.4 | 26.5 | 6.5 | 40.4 | 16.6 | 66.4 | 19.1 | |||||||||||||||||||||
Noninterest income (2) | 108.5 | 126.3 | 123.5 | 167.6 | 80.2 | 358.3 | 404.6 | |||||||||||||||||||||
Noninterest expense (1) (2) | 184.8 | 194.1 | 190.5 | 186.1 | 179.8 | 569.4 | 521.1 | |||||||||||||||||||||
Non-GAAP net income available to common stockholders (1) (3) | 81.7 | 86.1 | 88.5 | 69.4 | 64.0 | 256.4 | 205.9 | |||||||||||||||||||||
Non-GAAP diluted earnings per common share (1) (3) | 1.57 | 1.66 | 1.71 | 1.36 | 1.24 | 4.94 | 4.18 | |||||||||||||||||||||
Non-GAAP core fee income (3) | 68.4 | 66.1 | 58.2 | 55.3 | 53.3 | 192.7 | 154.3 | |||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (1) (2) (3) | 102.1 | 117.7 | 109.4 | 104.3 | 75.3 | 329.2 | 248.3 | |||||||||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests (1) (2) (3) | 184.6 | 193.9 | 190.2 | 180.5 | 175.0 | 568.8 | 507.8 | |||||||||||||||||||||
Fully taxable equivalent: | ||||||||||||||||||||||||||||
Net interest income (4) | $ | 255.0 | $ | 244.2 | $ | 239.3 | $ | 235.2 | $ | 221.0 | $ | 738.6 | $ | 623.1 | ||||||||||||||
Net interest margin | 2.50 | % | 2.58 | % | 2.65 | % | 2.66 | % | 2.73 | % | 2.57 | % | 2.87 | % | ||||||||||||||
Balance sheet: | ||||||||||||||||||||||||||||
Average total assets (2) | $ | 42,019.2 | $ | 39,442.8 | $ | 38,221.3 | $ | 37,588.1 | $ | 34,596.1 | $ | 39,911.5 | $ | 31,403.0 | ||||||||||||||
Average loans, net of unearned income (2) | 14,916.7 | 14,320.9 | 14,048.3 | 12,703.4 | 11,439.5 | 14,431.8 | 11,098.4 | |||||||||||||||||||||
Average available-for-sale securities | 15,035.1 | 13,797.7 | 13,571.2 | 13,526.5 | 12,446.8 | 14,140.0 | 12,698.4 | |||||||||||||||||||||
Average held-to-maturity securities | 7,879.0 | 7,639.8 | 7,569.8 | 7,115.3 | 5,775.6 | 7,697.3 | 2,544.3 | |||||||||||||||||||||
Average noninterest-bearing demand deposits (2) | 28,791.7 | 26,723.3 | 25,173.4 | 23,701.1 | 21,502.5 | 26,909.4 | 19,302.1 | |||||||||||||||||||||
Average interest-bearing deposits | 8,591.3 | 8,232.7 | 8,688.8 | 8,889.0 | 8,223.8 | 8,503.9 | 7,580.0 | |||||||||||||||||||||
Average total deposits (2) | 37,383.1 | 34,956.1 | 33,862.2 | 32,590.0 | 29,726.3 | 35,413.4 | 26,882.1 | |||||||||||||||||||||
Average long-term debt | 802.3 | 797.6 | 690.0 | 451.7 | 452.0 | 766.9 | 452.4 | |||||||||||||||||||||
Period-end total assets (1) (2) | 41,731.0 | 40,231.0 | 38,606.6 | 39,337.9 | 36,035.0 | 41,731.0 | 36,035.0 | |||||||||||||||||||||
Period-end loans, net of unearned income (2) | 15,314.6 | 14,261.4 | 14,447.7 | 14,384.3 | 12,017.2 | 15,314.6 | 12,017.2 | |||||||||||||||||||||
Period-end available-for-sale securities | 15,307.7 | 14,495.8 | 13,746.9 | 13,540.7 | 13,333.4 | 15,307.7 | 13,333.4 | |||||||||||||||||||||
Period-end held-to-maturity securities | 8,306.5 | 7,735.9 | 7,816.8 | 7,421.0 | 6,662.0 | 8,306.5 | 6,662.0 | |||||||||||||||||||||
Period-end non-marketable and other securities (1) (2) | 650.6 | 645.5 | 664.4 | 1,728.1 | 1,702.2 | 650.6 | 1,702.2 | |||||||||||||||||||||
Period-end noninterest-bearing demand deposits (2) | 28,659.0 | 27,734.7 | 25,796.1 | 24,583.7 | 22,461.1 | 28,659.0 | 22,461.1 | |||||||||||||||||||||
Period-end interest-bearing deposits | 8,390.5 | 7,892.2 | 8,135.0 | 9,759.8 | 8,662.1 | 8,390.5 | 8,662.1 | |||||||||||||||||||||
Period-end total deposits (2) | 37,049.4 | 35,627.0 | 33,931.1 | 34,343.5 | 31,123.1 | 37,049.4 | 31,123.1 | |||||||||||||||||||||
Off-balance sheet: | ||||||||||||||||||||||||||||
Average client investment funds | $ | 41,972.9 | $ | 37,869.5 | $ | 33,625.1 | $ | 31,868.1 | $ | 30,988.2 | $ | 37,822.5 | $ | 29,425.5 | ||||||||||||||
Period-end client investment funds | 43,566.7 | 40,084.5 | 35,169.8 | 32,367.7 | 31,143.9 | 43,566.7 | 31,143.9 | |||||||||||||||||||||
Total unfunded credit commitments | 16,087.3 | 15,808.2 | 15,485.5 | 14,705.8 | 14,631.6 | 16,087.3 | 14,631.6 | |||||||||||||||||||||
Earnings ratios: | ||||||||||||||||||||||||||||
Return on average assets (annualized) (1) (2) (5) | 0.77 | % | 0.88 | % | 0.94 | % | 0.61 | % | 0.73 | % | 0.86 | % | 0.88 | % | ||||||||||||||
Non-GAAP return on average assets (annualized) (1) (2) (3) | 0.77 | 0.88 | 0.94 | 0.73 | 0.73 | 0.86 | 0.88 | |||||||||||||||||||||
Return on average SVBFG stockholders’ equity (annualized) (1) (6) | 10.35 | 11.40 | 12.38 | 8.14 | 9.30 | 11.34 | 11.37 | |||||||||||||||||||||
Non-GAAP return on average SVBFG stockholders’ equity (annualized) (1) (3) | 10.35 | 11.40 | 12.38 | 9.74 | 9.30 | 11.34 | 11.37 | |||||||||||||||||||||
Asset quality ratios: | ||||||||||||||||||||||||||||
Allowance for loan losses as a % of total gross loans | 1.28 | % | 1.34 | % | 1.15 | % | 1.14 | % | 1.07 | % | 1.28 | % | 1.07 | % | ||||||||||||||
Allowance for loan losses for performing loans as a % of total gross performing loans | 0.99 | 0.99 | 0.99 | 1.04 | 1.05 | 0.99 | 1.05 | |||||||||||||||||||||
Gross charge-offs as a % of average total gross loans (annualized) | 0.77 | 0.13 | 0.16 | 0.15 | 0.37 | 0.36 | 0.46 | |||||||||||||||||||||
Net charge-offs as a % of average total gross loans (annualized) | 0.75 | 0.05 | 0.11 | 0.13 | 0.28 | 0.31 | 0.39 | |||||||||||||||||||||
Other ratios: | ||||||||||||||||||||||||||||
GAAP operating efficiency ratio (1) (2) (7) | 50.88 | % | 52.45 | % | 52.57 | % | 46.24 | % | 59.77 | % | 51.97 | % | 50.77 | % | ||||||||||||||
Non-GAAP operating efficiency ratio (1) (2) (3) | 51.69 | 53.57 | 54.56 | 53.19 | 59.08 | 53.27 | 58.27 | |||||||||||||||||||||
SVBFG CET 1 risk-based capital ratio (2) (8) | 12.48 | 12.54 | 11.92 | — | — | 12.48 | — | |||||||||||||||||||||
Bank CET 1 risk-based capital ratio (8) | 12.79 | 12.87 | 12.36 | — | — | 12.79 | — | |||||||||||||||||||||
SVBFG total risk-based capital ratio (2) (8) | 14.05 | 14.15 | 13.46 | 13.92 | 14.97 | 14.05 | 14.97 | |||||||||||||||||||||
Bank total risk-based capital ratio (8) | 13.85 | 13.93 | 13.35 | 12.12 | 13.06 | 13.85 | 13.06 | |||||||||||||||||||||
SVBFG tier 1 leverage ratio (2) (8) | 7.67 | 7.95 | 7.92 | 7.74 | 8.22 | 7.67 | 8.22 | |||||||||||||||||||||
Bank tier 1 leverage ratio (8) | 7.13 | 7.39 | 7.43 | 6.64 | 7.05 | 7.13 | 7.05 | |||||||||||||||||||||
Period-end loans, net of unearned income, to deposits ratio (2) | 41.34 | 40.03 | 42.58 | 41.88 | 38.61 | 41.34 | 38.61 | |||||||||||||||||||||
Average loans, net of unearned income, to average deposits ratio | 39.90 | 40.97 | 41.49 | 38.98 | 38.48 | 40.75 | 41.29 | |||||||||||||||||||||
Book value per common share (1) (9) | $ | 61.66 | $ | 59.29 | $ | 58.16 | $ | 55.24 | $ | 53.48 | $ | 61.66 | $ | 53.48 |
Other statistics: | ||||||||||||||||||||||||||||
Average full-time equivalent employees | 2,030 | 1,959 | 1,955 | 1,907 | 1,850 | 1,981 | 1,784 | |||||||||||||||||||||
Period-end full-time equivalent employees | 2,054 | 1,964 | 1,965 | 1,914 | 1,881 | 2,054 | 1,881 |
(1) | Amounts and ratios for periods prior to March 31, 2015 have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects ("ASU 2014-01"). |
(2) | Amounts and ratios as of and for the three months ended March 31, 2015 have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts and ratios prior to January 1, 2015 have not been revised for the adoption of this guidance. |
(3) | 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 GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.” |
(4) | Interest income on non-taxable investments is presented on a fully taxable equivalent basis using the federal statutory income tax rate of 35.0 percent. The taxable equivalent adjustments were $0.4 million for each of the quarters ended September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014. The taxable equivalent adjustments were $1.2 million and $1.3 million for the nine month periods ended September 30, 2015 and 2014, respectively. |
(5) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly and year-to-date average assets. |
(6) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly and year-to-date average SVBFG stockholders’ equity. |
(7) | Ratio is calculated by dividing noninterest expense by total net interest income plus noninterest income. |
(8) | Ratios as of September 30, 2015, June 30, 2015 and March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for prior periods represent the previous capital rules under Basel I. |
(9) | Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares. |
Q3'15 compared to Q2'15 | ||||||||||||
Increase (decrease) due to change in | ||||||||||||
(Dollars in thousands) | Volume | Rate | Total | |||||||||
Interest income: | ||||||||||||
Short-term investment securities | $ | 285 | $ | (123 | ) | $ | 162 | |||||
AFS / HTM investment securities | 4,290 | (1,348 | ) | 2,942 | ||||||||
Loans | 8,560 | (819 | ) | 7,741 | ||||||||
Increase (decrease) in interest income, net | 13,135 | (2,290 | ) | 10,845 | ||||||||
Interest expense: | ||||||||||||
Deposits | 52 | (76 | ) | (24 | ) | |||||||
Short-term borrowings | (6 | ) | (4 | ) | (10 | ) | ||||||
Long-term debt | — | 10 | 10 | |||||||||
Increase (decrease) in interest expense, net | 46 | (70 | ) | (24 | ) | |||||||
Increase (decrease) in net interest income | $ | 13,089 | $ | (2,220 | ) | $ | 10,869 |
• | An increase in interest income from loans of $7.7 million to $175.0 million for the third quarter of 2015. The increase was primarily reflective of the increase in average loan balances of $595.8 million as well as an increase in the number of days in the third quarter of 2015 (compared to the second quarter of 2015), offset by a decrease in loan yields. Our overall loan yields decreased by 3 basis points to 4.65 percent from 4.68 percent, consisting of a 2 basis point decrease in gross loan yields and a 1 basis point decrease in loan fee yields. The decrease in yields continues to reflect the overall low market rate environment and continued competition in the marketplace. |
• | An increase in interest income from our fixed income securities in our available-for-sale ("AFS") and held-to-maturity ("HTM") portfolios of $2.9 million to $88.7 million for the third quarter of 2015. The increase was primarily reflective of the increase in average investment balances of $1.5 billion as a result of deposit growth. |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Allowance for loan losses, beginning balance | $ | 192,644 | $ | 167,875 | $ | 120,728 | $ | 165,359 | $ | 142,886 | ||||||||||
Provision for loan losses | 33,403 | 26,513 | 16,610 | 66,368 | 19,051 | |||||||||||||||
Gross loan charge-offs | (29,118 | ) | (4,734 | ) | (10,657 | ) | (39,339 | ) | (38,189 | ) | ||||||||||
Loan recoveries | 578 | 2,990 | 2,380 | 5,119 | 5,313 | |||||||||||||||
Allowance for loan losses, ending balance | $ | 197,507 | $ | 192,644 | $ | 129,061 | $ | 197,507 | $ | 129,061 | ||||||||||
Provision for loan losses as a percentage of period-end total gross loans (annualized) | 0.86 | % | 0.74 | % | 0.54 | % | 0.58 | % | 0.21 | % | ||||||||||
Gross loan charge-offs as a percentage of average total gross loans (annualized) | 0.77 | 0.13 | 0.37 | 0.36 | 0.46 | |||||||||||||||
Net loan charge-offs as a percentage of average total gross loans (annualized) | 0.75 | 0.05 | 0.28 | 0.31 | 0.39 | |||||||||||||||
Allowance for loan losses as a percentage of period-end total gross loans | 1.28 | 1.34 | 1.07 | 1.28 | 1.07 | |||||||||||||||
Period-end total gross loans | $ | 15,429,941 | $ | 14,370,930 | $ | 12,112,474 | $ | 15,429,941 | $ | 12,112,474 | ||||||||||
Average total gross loans | 15,026,206 | 14,427,039 | 11,528,172 | 14,537,874 | 11,184,840 |
• | Gains on investment securities of $18.8 million for the third quarter of 2015, compared to gains of $25.0 million for the second quarter of 2015. Net of noncontrolling interests, non-GAAP net gains on investment securities were $12.7 million for the third quarter of 2015 compared to net gains of $15.9 million for the second quarter of 2015. The non-GAAP net gains, net of noncontrolling interests, of $12.7 million for the third quarter of 2015 were primarily driven by the following: |
◦ | Gains of $6.8 million from our strategic and other investments, primarily driven by distribution gains from our strategic venture capital fund investments due to mergers and acquisition activity and unrealized valuation increases from certain investments. |
◦ | Gains of $6.0 million from our managed funds of funds, primarily related to unrealized valuation increases. |
Three months ended September 30, 2015 | ||||||||||||||||||||||||
(Dollars in thousands) | Managed Funds Of Funds | Managed Direct Venture Funds | Debt Funds | Available- For-Sale Securities | Strategic and Other Investments | Total | ||||||||||||||||||
GAAP gains (losses) on investment securities, net | $ | 11,786 | $ | (186 | ) | $ | 378 | $ | 14 | $ | 6,776 | $ | 18,768 | |||||||||||
Less: income (losses) attributable to noncontrolling interests, including carried interest | 5,816 | 286 | — | — | — | 6,102 | ||||||||||||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests | $ | 5,970 | $ | (472 | ) | $ | 378 | $ | 14 | $ | 6,776 | $ | 12,666 | |||||||||||
Three months ended June 30, 2015 | ||||||||||||||||||||||||
(Dollars in thousands) | Managed Funds Of Funds | Managed Direct Venture Funds | Debt Funds | Available- For-Sale Securities | Strategic and Other Investments | Total | ||||||||||||||||||
GAAP gains on investment securities, net | $ | 14,281 | $ | 869 | $ | 183 | $ | 141 | $ | 9,501 | $ | 24,975 | ||||||||||||
Less: income attributable to noncontrolling interests, including carried interest | 8,913 | 123 | — | — | — | 9,036 | ||||||||||||||||||
Non-GAAP net gains on investment securities, net of noncontrolling interests | $ | 5,368 | $ | 746 | $ | 183 | $ | 141 | $ | 9,501 | $ | 15,939 |
• | Net gains on derivative instruments were $10.2 million for the third quarter of 2015, compared to $16.3 million for the second quarter of 2015. The following table provides a summary of our net gains on derivative instruments: |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Net gains on equity warrant assets | $ | 10,685 | $ | 23,616 | $ | 13,157 | $ | 54,579 | $ | 50,859 | ||||||||||
(Losses) gains on foreign exchange forward contracts, net: | ||||||||||||||||||||
Gains on client foreign exchange forward contracts, net | 179 | 787 | 886 | 459 | 1,358 | |||||||||||||||
(Losses) gains on internal foreign exchange forward contracts, net (1) | (218 | ) | (8,174 | ) | 12,529 | 11,626 | 12,038 | |||||||||||||
Total (losses) gains on foreign exchange forward contracts, net | (39 | ) | (7,387 | ) | 13,415 | 12,085 | 13,396 | |||||||||||||
Net gains (losses) on other derivatives (2) | (402 | ) | 88 | (34 | ) | (374 | ) | (775 | ) | |||||||||||
Total gains on derivative instruments, net | $ | 10,244 | $ | 16,317 | $ | 26,538 | $ | 66,290 | $ | 63,480 |
(1) | Represents the change in fair value of foreign exchange forward contracts used to economically reduce our foreign exchange exposure related to certain foreign currency denominated instruments. The change in fair value of our foreign exchange forward contracts is offset by the revaluation of foreign currency denominated instruments which are included in the line item "Other" within noninterest income. |
(2) | Primarily represents the change in fair value of our client interest rate derivatives and our interest rate swaps. |
◦ | Net gains of $10.2 million on derivative instruments for the third quarter of 2015 were primarily attributable to the following: |
◦ | Net gains of $8.9 million from changes in warrant valuations in the third quarter of 2015 compared to net gains of $9.1 million for the second quarter of 2015. The warrant valuation gains consisted primarily of valuation increases in software and internet companies from our private company warrant portfolio reflective of continued funding activity during the quarter. |
◦ | Net gains of $2.2 million from the exercise of equity warrant assets, compared to net gains of $14.6 million for the second quarter of 2015. The net gains in the second quarter of 2015 were primarily reflective of $13.9 million in realized gains from one company in our public company warrant portfolio. |
• | Net losses of $0.2 million on internal foreign exchange forward contracts used to economically reduce our foreign exchange exposure to foreign currency denominated instruments for the third quarter of 2015, compared to net losses of $8.2 million for the second quarter of 2015. The net losses of $0.2 million were partially offset by net gains of $0.2 million from the revaluation of foreign currency denominated instruments that are included in the line item "Other" within noninterest income. |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Non-GAAP core fee income: | ||||||||||||||||||||
Foreign exchange fees | $ | 22,995 | $ | 22,364 | $ | 17,911 | $ | 63,037 | $ | 53,035 | ||||||||||
Credit card fees | 14,536 | 14,215 | 10,909 | 40,841 | 31,440 | |||||||||||||||
Deposit service charges | 12,272 | 11,301 | 10,126 | 34,309 | 29,344 | |||||||||||||||
Lending related fees | 7,561 | 8,163 | 6,029 | 23,746 | 18,208 | |||||||||||||||
Client investment fees | 5,683 | 5,264 | 3,814 | 15,429 | 10,751 | |||||||||||||||
Letters of credit and standby letters of credit fees | 5,341 | 4,772 | 4,557 | 15,315 | 11,507 | |||||||||||||||
Total Non-GAAP core fee income | $ | 68,388 | $ | 66,079 | $ | 53,346 | $ | 192,677 | $ | 154,285 |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands, except employees) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Compensation and benefits: | ||||||||||||||||||||
Salaries and wages | $ | 55,383 | $ | 51,648 | $ | 47,106 | $ | 158,456 | $ | 136,616 | ||||||||||
Incentive compensation plan | 23,789 | 37,234 | 24,621 | 87,399 | 74,957 | |||||||||||||||
ESOP | 1,660 | 2,635 | 1,540 | 6,462 | 5,398 | |||||||||||||||
Other employee incentives and benefits (1) | 28,513 | 33,398 | 26,665 | 97,713 | 85,288 | |||||||||||||||
Total compensation and benefits | $ | 109,345 | $ | 124,915 | $ | 99,932 | $ | 350,030 | $ | 302,259 | ||||||||||
Period-end full-time equivalent employees | 2,054 | 1,964 | 1,881 | 2,054 | 1,881 | |||||||||||||||
Average full-time equivalent employees | 2,030 | 1,959 | 1,850 | 1,981 | 1,784 |
(1) | Other employee benefits expense includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), warrant and retention plans, agency fees and other employee-related expenses. |
• | A decrease of $13.4 million in expense relating to incentive compensation plans, which reflects a slight change to our current expectations for our internal performance targets for full year 2015, and represents the cumulative amount on a year-to-date basis. |
• | A decrease of $4.9 million in total other employee incentives and benefits, primarily related to a $3.0 million decrease in warrant incentive compensation expense due to lower warrant gains in the third quarter of 2015 compared to the second quarter of 2015, which included a large gain from a single warrant. |
• | An increase of $3.7 million in salaries and wages expense, primarily due to an increase in the number of average full-time equivalent employees ("FTE"), which increased by 71 to 2,030 FTEs for the third quarter of 2015. |
• | A one-time additional tax provision for changes in estimates in connection with the filing of the 2014 U.S. federal corporate income tax return resulting in a 76 basis point increase. |
• | A decrease in the recognition of tax benefits from the second quarter of 2015 to the third quarter of 2015 from net operating loss carryforwards related to a previously disposed business line resulting in a 70 basis point increase, and: |
• | An increase of 59 basis points in the third quarter of 2015 resulting from a decrease in our effective tax rate for the second quarter of 2015 due to a reduction in the unremitted earnings tax liability during the second quarter of 2015 upon completion of the sale of SVB India Finance Private Limited ("SVBIF"). |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 (3) | September 30, 2014 (3) | |||||||||||||||
Net interest income (1) | $ | (2 | ) | $ | (2 | ) | $ | (9 | ) | $ | (6 | ) | $ | (12 | ) | |||||
Noninterest income (1) | (4,608 | ) | (7,382 | ) | (1,185 | ) | (26,043 | ) | (159,362 | ) | ||||||||||
Noninterest expense (1) | 116 | 242 | 4,743 | 650 | 13,331 | |||||||||||||||
Carried interest income (loss) (2) | (1,735 | ) | (1,174 | ) | (3,726 | ) | (3,020 | ) | 3,058 | |||||||||||
Net income attributable to noncontrolling interests | $ | (6,229 | ) | $ | (8,316 | ) | $ | (177 | ) | $ | (28,419 | ) | $ | (142,985 | ) |
(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. |
(3) | Amounts prior to January 1, 2015, do not reflect the application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
Current full year 2015 outlook compared to 2014 results (as of October 22, 2015) | Change in outlook compared to outlook reported as of July 23, 2015 | |
Average loan balances | Increase at a percentage rate in the high twenties | Outlook increased from a percentage rate in the mid-twenties |
Average deposit balances | Increase at a percentage rate in the high twenties | No change from previous outlook |
Net interest income (1) | Increase at a percentage rate in the high teens | No change from previous outlook |
Net interest margin (1) | Between 2.40% and 2.60% | No change from previous outlook |
Allowance for loan losses for total gross performing loans as a percentage of total gross performing loans | Comparable to 2014 levels | No change from previous outlook |
Net loan charge-offs | Between 0.30% and 0.50% of average total gross loans | No change from previous outlook |
Nonperforming loans as a percentage of total gross loans | Between 0.60% and 1.00% of total gross loans | No change from previous outlook |
Core fee income (foreign exchange fees, deposit service charges, credit card fees, lending related fees, client investment fees and letters of credit fees) (2) | Increase at a percentage rate in the mid-twenties | Outlook increased from a percentage rate in the low twenties |
Noninterest expense (excluding expenses related to noncontrolling interests) (2) (3) | Increase at a percentage rate in the low double digits | No change from previous outlook |
(1) | Our outlook for net interest income and net interest margin is primarily based 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, actual prepayment rates and other factors described under the section "Forward-Looking Statements" below. |
(2) | These are non-GAAP measures. See "Use of Non-GAAP Financial Measures" at the end of this release for further information regarding the calculation and limitations of these measures. |
(3) | 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. |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands, except share data) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Interest income: | ||||||||||||||||||||
Loans (1) | $ | 174,993 | $ | 167,252 | $ | 153,292 | $ | 507,746 | $ | 449,144 | ||||||||||
Investment securities: | ||||||||||||||||||||
Taxable | 87,609 | 84,613 | 73,540 | 253,496 | 191,384 | |||||||||||||||
Non-taxable | 707 | 741 | 772 | 2,220 | 2,362 | |||||||||||||||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities | 1,482 | 1,320 | 1,722 | 4,071 | 5,301 | |||||||||||||||
Total interest income | 264,791 | 253,926 | 229,326 | 767,533 | 648,191 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
Deposits | 1,158 | 1,182 | 2,961 | 4,283 | 8,933 | |||||||||||||||
Borrowings (1) | 8,973 | 8,973 | 5,800 | 25,894 | 17,400 | |||||||||||||||
Total interest expense | 10,131 | 10,155 | 8,761 | 30,177 | 26,333 | |||||||||||||||
Net interest income | 254,660 | 243,771 | 220,565 | 737,356 | 621,858 | |||||||||||||||
Provision for loan losses | 33,403 | 26,513 | 16,610 | 66,368 | 19,051 | |||||||||||||||
Net interest income after provision for loan losses | 221,257 | 217,258 | 203,955 | 670,988 | 602,807 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
Gains on investment securities, net (1) | 18,768 | 24,975 | 5,644 | 77,006 | 172,236 | |||||||||||||||
Gains on derivative instruments, net | 10,244 | 16,317 | 26,538 | 66,290 | 63,480 | |||||||||||||||
Foreign exchange fees | 22,995 | 22,364 | 17,911 | 63,037 | 53,035 | |||||||||||||||
Credit card fees | 14,536 | 14,215 | 10,909 | 40,841 | 31,440 | |||||||||||||||
Deposit service charges | 12,272 | 11,301 | 10,126 | 34,309 | 29,344 | |||||||||||||||
Lending related fees | 7,561 | 8,163 | 6,029 | 23,746 | 18,208 | |||||||||||||||
Client investment fees | 5,683 | 5,264 | 3,814 | 15,429 | 10,751 | |||||||||||||||
Letters of credit and standby letters of credit fees | 5,341 | 4,772 | 4,557 | 15,315 | 11,507 | |||||||||||||||
Other (1) | 11,077 | 18,916 | (5,361 | ) | 22,315 | 14,601 | ||||||||||||||
Total noninterest income | 108,477 | 126,287 | 80,167 | 358,288 | 404,602 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Compensation and benefits | 109,345 | 124,915 | 99,932 | 350,030 | 302,259 | |||||||||||||||
Professional services (1) | 21,137 | 18,950 | 26,081 | 58,834 | 68,383 | |||||||||||||||
Premises and equipment | 12,356 | 11,787 | 12,631 | 36,800 | 36,267 | |||||||||||||||
Business development and travel | 8,028 | 9,764 | 10,022 | 28,904 | 29,465 | |||||||||||||||
Net occupancy | 8,548 | 8,149 | 7,437 | 24,010 | 22,436 | |||||||||||||||
FDIC and state assessments | 6,954 | 5,962 | 4,587 | 18,705 | 13,660 | |||||||||||||||
Correspondent bank fees (1) | 3,070 | 3,337 | 3,278 | 9,775 | 9,755 | |||||||||||||||
Provision for (reduction of) unfunded credit commitments | 1,047 | (3,061 | ) | 2,225 | 249 | 5,533 | ||||||||||||||
Other (1) (2) | 14,270 | 14,309 | 13,568 | 42,101 | 33,355 | |||||||||||||||
Total noninterest expense | 184,755 | 194,112 | 179,761 | 569,408 | 521,113 | |||||||||||||||
Income before income tax expense | 144,979 | 149,433 | 104,361 | 459,868 | 486,296 | |||||||||||||||
Income tax expense (2) | 57,017 | 54,974 | 40,207 | 175,057 | 137,431 | |||||||||||||||
Net income before noncontrolling interests | 87,962 | 94,459 | 64,154 | 284,811 | 348,865 | |||||||||||||||
Net income attributable to noncontrolling interests (1) | (6,229 | ) | (8,316 | ) | (177 | ) | (28,419 | ) | (142,985 | ) | ||||||||||
Net income available to common stockholders | $ | 81,733 | $ | 86,143 | $ | 63,977 | $ | 256,392 | $ | 205,880 | ||||||||||
Earnings per common share—basic (2) | $ | 1.59 | $ | 1.68 | $ | 1.26 | $ | 5.00 | $ | 4.26 | ||||||||||
Earnings per common share—diluted (2) | 1.57 | 1.66 | 1.24 | 4.94 | 4.18 | |||||||||||||||
Weighted average common shares outstanding—basic | 51,479,026 | 51,268,197 | 50,751,633 | 51,253,758 | 48,280,664 | |||||||||||||||
Weighted average common shares outstanding—diluted | 52,048,331 | 51,875,715 | 51,570,771 | 51,878,170 | 49,200,163 |
(1) | Amounts prior to January 1, 2015, do not reflect the application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(2) | Amounts for the three and nine months ended September 30, 2014 have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(Dollars in thousands, except par value and share data) | September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents (1) | $ | 1,674,145 | $ | 2,625,550 | $ | 1,872,537 | ||||||
Available-for-sale securities, at fair value (cost $15,167,233, $14,414,219, and $13,322,059, respectively) | 15,307,661 | 14,495,759 | 13,333,436 | |||||||||
Held-to-maturity securities, at cost (fair value $8,367,003, $7,730,811 and $6,6613,890, respectively) | 8,306,526 | 7,735,891 | 6,662,025 | |||||||||
Non-marketable and other securities (1) (2) | 650,555 | 645,506 | 1,702,218 | |||||||||
Investment securities | 24,264,742 | 22,877,156 | 21,697,679 | |||||||||
Loans, net of unearned income (1) | 15,314,580 | 14,261,430 | 12,017,181 | |||||||||
Allowance for loan losses | (197,507 | ) | (192,644 | ) | (129,061 | ) | ||||||
Net loans | 15,117,073 | 14,068,786 | 11,888,120 | |||||||||
Premises and equipment, net of accumulated depreciation and amortization | 94,652 | 88,284 | 74,375 | |||||||||
Accrued interest receivable and other assets (1) (2) | 580,370 | 571,231 | 502,283 | |||||||||
Total assets | $ | 41,730,982 | $ | 40,231,007 | $ | 36,034,994 | ||||||
Liabilities and total equity: | ||||||||||||
Liabilities: | ||||||||||||
Noninterest-bearing demand deposits (1) | $ | 28,658,963 | $ | 27,734,720 | $ | 22,461,068 | ||||||
Interest-bearing deposits | 8,390,454 | 7,892,245 | 8,662,067 | |||||||||
Total deposits | 37,049,417 | 35,626,965 | 31,123,135 | |||||||||
Short-term borrowings | 3,756 | 2,537 | 6,630 | |||||||||
Other liabilities (1) | 566,370 | 614,690 | 517,462 | |||||||||
Long-term debt | 797,211 | 797,343 | 451,599 | |||||||||
Total liabilities | 38,416,754 | 37,041,535 | 32,098,826 | |||||||||
SVBFG stockholders’ equity: | ||||||||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; no shares issued and outstanding | — | — | — | |||||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 51,488,985 shares, 51,461,496 shares and 50,820,946 shares outstanding, respectively | 51 | 51 | 51 | |||||||||
Additional paid-in capital (1) | 1,171,649 | 1,162,508 | 1,107,337 | |||||||||
Retained earnings (2) | 1,906,135 | 1,824,626 | 1,591,977 | |||||||||
Accumulated other comprehensive income (1) | 97,064 | 63,917 | 18,744 | |||||||||
Total SVBFG stockholders’ equity | 3,174,899 | 3,051,102 | 2,718,109 | |||||||||
Noncontrolling interests (1) | 139,329 | 138,370 | 1,218,059 | |||||||||
Total equity | 3,314,228 | 3,189,472 | 3,936,168 | |||||||||
Total liabilities and total equity | $ | 41,730,982 | $ | 40,231,007 | $ | 36,034,994 |
(1) | Amounts prior to January 1, 2015, do not reflect the application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(2) | Amounts as of September 30, 2014 have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
Three months ended | |||||||||||||||||||||||||||||||||
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||||||||||||||||||||||||
(Dollars in thousands, 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) | $ | 2,618,582 | $ | 1,482 | 0.22 | % | $ | 2,128,460 | $ | 1,320 | 0.25 | % | $ | 2,472,205 | $ | 1,722 | 0.28 | % | |||||||||||||||
Investment securities: (2) | |||||||||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||||
Taxable | 15,035,114 | 49,027 | 1.29 | 13,797,718 | 46,698 | 1.36 | 12,446,821 | 43,519 | 1.39 | ||||||||||||||||||||||||
Non-taxable (3) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Held-to-maturity securities: | |||||||||||||||||||||||||||||||||
Taxable | 7,803,045 | 38,582 | 1.96 | 7,558,646 | 37,915 | 2.01 | 5,691,201 | 30,021 | 2.09 | ||||||||||||||||||||||||
Non-taxable (3) | 75,918 | 1,087 | 5.68 | 81,144 | 1,141 | 5.64 | 84,401 | 1,188 | 5.58 | ||||||||||||||||||||||||
Total loans, net of unearned income (4) (5) | 14,916,652 | 174,993 | 4.65 | 14,320,875 | 167,252 | 4.68 | 11,439,521 | 153,292 | 5.32 | ||||||||||||||||||||||||
Total interest-earning assets | 40,449,311 | 265,171 | 2.60 | 37,886,843 | 254,326 | 2.69 | 32,134,149 | 229,742 | 2.84 | ||||||||||||||||||||||||
Cash and due from banks | 349,072 | 316,577 | 299,964 | ||||||||||||||||||||||||||||||
Allowance for loan losses | (200,683 | ) | (180,130 | ) | (128,598 | ) | |||||||||||||||||||||||||||
Other assets (6) | 1,421,524 | 1,419,533 | 2,290,550 | ||||||||||||||||||||||||||||||
Total assets | $ | 42,019,224 | $ | 39,442,823 | $ | 34,596,065 | |||||||||||||||||||||||||||
Funding sources: | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
NOW deposits | $ | 258,127 | $ | 54 | 0.08 | % | $ | 230,891 | $ | 48 | 0.08 | % | $ | 161,793 | $ | 279 | 0.68 | % | |||||||||||||||
Money market deposits | 6,109,030 | 867 | 0.06 | 6,034,187 | 909 | 0.06 | 5,649,971 | 2,332 | 0.16 | ||||||||||||||||||||||||
Money market deposits in foreign offices | 192,859 | 20 | 0.04 | 188,399 | 18 | 0.04 | 228,142 | 26 | 0.05 | ||||||||||||||||||||||||
Time deposits | 68,875 | 28 | 0.16 | 93,387 | 38 | 0.16 | 162,182 | 96 | 0.23 | ||||||||||||||||||||||||
Sweep deposits in foreign offices | 1,962,448 | 189 | 0.04 | 1,685,870 | 169 | 0.04 | 2,021,727 | 228 | 0.04 | ||||||||||||||||||||||||
Total interest-bearing deposits | 8,591,339 | 1,158 | 0.05 | 8,232,734 | 1,182 | 0.06 | 8,223,815 | 2,961 | 0.14 | ||||||||||||||||||||||||
Short-term borrowings | 6,956 | 3 | 0.17 | 26,345 | 13 | 0.20 | 5,538 | — | — | ||||||||||||||||||||||||
3.50% Senior Notes | 349,684 | 3,138 | 3.56 | 346,479 | 3,137 | 3.63 | — | — | — | ||||||||||||||||||||||||
5.375% Senior Notes | 348,556 | 4,839 | 5.51 | 346,654 | 4,837 | 5.60 | 346,262 | 4,832 | 5.54 | ||||||||||||||||||||||||
Junior Subordinated Debentures | 54,743 | 831 | 6.02 | 54,787 | 833 | 6.10 | 54,918 | 834 | 6.02 | ||||||||||||||||||||||||
6.05% Subordinated Notes | 49,298 | 162 | 1.30 | 49,651 | 153 | 1.24 | 50,796 | 134 | 1.05 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 9,400,576 | 10,131 | 0.43 | 9,056,650 | 10,155 | 0.45 | 8,681,329 | 8,761 | 0.40 | ||||||||||||||||||||||||
Portion of noninterest-bearing funding sources | 31,048,735 | 28,830,193 | 23,452,820 | ||||||||||||||||||||||||||||||
Total funding sources | 40,449,311 | 10,131 | 0.10 | 37,886,843 | 10,155 | 0.11 | 32,134,149 | 8,761 | 0.11 | ||||||||||||||||||||||||
Noninterest-bearing funding sources: | |||||||||||||||||||||||||||||||||
Demand deposits | 28,791,728 | 26,723,333 | 21,502,469 | ||||||||||||||||||||||||||||||
Other liabilities | 556,935 | 490,847 | 402,231 | ||||||||||||||||||||||||||||||
SVBFG stockholders’ equity | 3,131,687 | 3,031,699 | 2,729,862 | ||||||||||||||||||||||||||||||
Noncontrolling interests | 138,298 | 140,294 | 1,280,174 | ||||||||||||||||||||||||||||||
Portion used to fund interest-earning assets | (31,048,735 | ) | (28,830,193 | ) | (23,452,820 | ) | |||||||||||||||||||||||||||
Total liabilities and total equity | $ | 42,019,224 | $ | 39,442,823 | $ | 34,596,065 | |||||||||||||||||||||||||||
Net interest income and margin | $ | 255,040 | 2.50 | % | $ | 244,171 | 2.58 | % | $ | 220,981 | 2.73 | % | |||||||||||||||||||||
Total deposits | $ | 37,383,067 | $ | 34,956,067 | $ | 29,726,284 | |||||||||||||||||||||||||||
Average SVBFG stockholders’ equity as a percentage of average assets | 7.45 | % | 7.69 | % | 7.89 | % | |||||||||||||||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||
Adjustments for taxable equivalent basis | (380 | ) | (400 | ) | (416 | ) | |||||||||||||||||||||||||||
Net interest income, as reported | $ | 254,660 | $ | 243,771 | $ | 220,565 |
(1) | Includes average interest-earning deposits in other financial institutions of $446 million, $445 million and $408 million; and $2.1 billion, $1.6 billion and $2.0 billion deposited at the Federal Reserve Bank, earning interest at the Fed Funds target rate, for the quarters ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively. |
(2) | Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income. |
(3) | Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent for all periods presented. |
(4) | Nonaccrual loans are reflected in the average balances of loans. |
(5) | Interest income includes loan fees of $24.7 million, $23.7 million and $26.0 million for the quarters ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively. |
(6) | Average investment securities of $0.7 billion, $0.8 billion and $1.8 billion for the quarters ended September 30, 2015, June 30, 2015 and September 30, 2014, respectively, were classified as other assets as they are noninterest-earning assets. These investments primarily consist of non-marketable and other securities. |
Nine months ended | ||||||||||||||||||||||
September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
(Dollars in thousands, 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) | $ | 2,086,409 | $ | 4,071 | 0.26 | % | $ | 2,721,501 | $ | 5,301 | 0.26 | % | ||||||||||
Investment securities: (2) | ||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||
Taxable | 14,140,044 | 139,734 | 1.32 | 12,653,194 | 151,854 | 1.60 | ||||||||||||||||
Non-taxable (3) | — | — | — | 45,201 | 2,040 | 6.03 | ||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||
Taxable | 7,617,112 | 113,762 | 2.00 | 2,506,315 | 39,530 | 2.11 | ||||||||||||||||
Non-taxable (3) | 80,190 | 3,416 | 5.70 | 37,941 | 1,594 | 5.62 | ||||||||||||||||
Total loans, net of unearned income (4) (5) | 14,431,785 | 507,746 | 4.70 | 11,098,397 | 449,144 | 5.41 | ||||||||||||||||
Total interest-earning assets | 38,355,540 | 768,729 | 2.68 | 29,062,549 | 649,463 | 2.99 | ||||||||||||||||
Cash and due from banks | 302,251 | 208,502 | ||||||||||||||||||||
Allowance for loan losses | (184,119 | ) | (132,667 | ) | ||||||||||||||||||
Other assets (6) | 1,437,853 | 2,264,568 | ||||||||||||||||||||
Total assets | $ | 39,911,525 | $ | 31,402,952 | ||||||||||||||||||
Funding sources: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
NOW deposits | $ | 239,292 | $ | 226 | 0.13 | % | $ | 157,322 | $ | 570 | 0.48 | % | ||||||||||
Money market deposits | 6,033,935 | 3,308 | 0.07 | 5,194,449 | 7,305 | 0.19 | ||||||||||||||||
Money market deposits in foreign offices | 196,200 | 58 | 0.04 | 207,359 | 110 | 0.07 | ||||||||||||||||
Time deposits | 90,939 | 126 | 0.19 | 160,300 | 288 | 0.24 | ||||||||||||||||
Sweep deposits in foreign offices | 1,943,565 | 565 | 0.04 | 1,860,576 | 660 | 0.05 | ||||||||||||||||
Total interest-bearing deposits | 8,503,931 | 4,283 | 0.07 | 7,580,006 | 8,933 | 0.16 | ||||||||||||||||
Short-term borrowings | 25,505 | 28 | 0.15 | 5,027 | — | — | ||||||||||||||||
3.50% Senior Notes | 313,834 | 8,401 | 4.69 | — | — | — | ||||||||||||||||
5.375% Senior Notes | 348,509 | 14,511 | 5.57 | 346,136 | 14,490 | 5.60 | ||||||||||||||||
Junior Subordinated Debentures | 54,786 | 2,496 | 6.09 | 54,962 | 2,521 | 6.13 | ||||||||||||||||
6.05% Subordinated Notes | 49,726 | 458 | 1.23 | 51,302 | 389 | 1.01 | ||||||||||||||||
Total interest-bearing liabilities | 9,296,291 | 30,177 | 0.43 | 8,037,433 | 26,333 | 0.44 | ||||||||||||||||
Portion of noninterest-bearing funding sources | 29,059,249 | 21,025,116 | ||||||||||||||||||||
Total funding sources | 38,355,540 | 30,177 | 0.11 | 29,062,549 | 26,333 | 0.12 | ||||||||||||||||
Noninterest-bearing funding sources: | ||||||||||||||||||||||
Demand deposits | 26,909,422 | 19,302,107 | ||||||||||||||||||||
Other liabilities | 539,787 | 399,349 | ||||||||||||||||||||
SVBFG stockholders’ equity | 3,022,086 | 2,420,695 | ||||||||||||||||||||
Noncontrolling interests | 143,939 | 1,243,368 | ||||||||||||||||||||
Portion used to fund interest-earning assets | (29,059,249 | ) | (21,025,116 | ) | ||||||||||||||||||
Total liabilities and total equity | $ | 39,911,525 | $ | 31,402,952 | ||||||||||||||||||
Net interest income and margin | $ | 738,552 | 2.57 | % | $ | 623,130 | 2.87 | % | ||||||||||||||
Total deposits | $ | 35,413,353 | $ | 26,882,113 | ||||||||||||||||||
Average SVBFG stockholders’ equity as a percentage of average assets | 7.57 | % | 7.71 | % | ||||||||||||||||||
Reconciliation to reported net interest income: | ||||||||||||||||||||||
Adjustments for taxable equivalent basis | (1,196 | ) | (1,272 | ) | ||||||||||||||||||
Net interest income, as reported | $ | 737,356 | $ | 621,858 |
(1) | Includes average interest-earning deposits in other financial institutions of $467 million and $356 million for the nine months ended September 30, 2015 and 2014, respectively. For the nine months ended September 30, 2015 and 2014, balance also includes $1.5 billion and $2.2 billion, respectively, deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate. |
(2) | Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income. |
(3) | Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent for all periods presented. |
(4) | Nonaccrual loans are reflected in the average balances of loans. |
(5) | Interest income includes loan fees of $71.4 million and $71.6 million for the nine months ended September 30, 2015 and 2014, respectively. |
(6) | Average investment securities of $0.8 billion and $1.8 billion for the nine months ended September 30, 2015 and 2014, respectively, were classified as other assets as they are noninterest-earning assets. These investments primarily consisted of non-marketable and other securities. |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in thousands) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Equity warrant assets (1): | ||||||||||||||||||||
Gains on exercises, net | $ | 2,173 | $ | 14,584 | $ | 6,788 | $ | 26,363 | $ | 28,743 | ||||||||||
Cancellations and expirations | (412 | ) | (114 | ) | (61 | ) | (818 | ) | (577 | ) | ||||||||||
Changes in fair value, net | 8,924 | 9,146 | 6,430 | 29,034 | 22,693 | |||||||||||||||
Total net gains on equity warrant assets (2) | $ | 10,685 | $ | 23,616 | $ | 13,157 | $ | 54,579 | $ | 50,859 |
(1) | At September 30, 2015, we held warrants in 1,625 companies, compared to 1,587 companies at June 30, 2015 and 1,415 companies at September 30, 2014. The total value of our warrant portfolio was $130 million at September 30, 2015 compared to $123 million at June 30, 2015, and $95 million at September 30, 2014. Of the 1,625 companies, 21 companies had values greater than $1.0 million and represented 33 percent of the fair value of the portfolio at September 30, 2015. |
(2) | Net gains on equity warrant assets are included in the line item “Gains on derivative instruments, net” as part of noninterest income. |
Three months ended | Nine months ended | ||||||||||||||
(Shares in thousands) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | ||||||||||
Weighted average common shares outstanding—basic | 51,479 | 51,268 | 50,752 | 51,254 | 48,281 | ||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock options and employee stock purchase plan | 382 | 410 | 534 | 411 | 580 | ||||||||||
Restricted stock units | 187 | 198 | 285 | 213 | 339 | ||||||||||
Total effect of dilutive securities | 569 | 608 | 819 | 624 | 919 | ||||||||||
Weighted average common shares outstanding—diluted | 52,048 | 51,876 | 51,571 | 51,878 | 49,200 |
September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||
SVB Financial Group: | |||||||||
CET 1 risk-based capital ratio (1) (2) | 12.48 | % | 12.54 | % | — | % | |||
Tier 1 risk-based capital ratio (2) (3) | 13.07 | 13.15 | 14.03 | ||||||
Total risk-based capital ratio (2) (3) | 14.05 | 14.15 | 14.97 | ||||||
Tier 1 leverage ratio (2) (3) | 7.67 | 7.95 | 8.22 | ||||||
Tangible common equity to tangible assets ratio (2) (4) | 7.61 | 7.58 | 7.54 | ||||||
Tangible common equity to risk-weighted assets ratio (2) (4) | 12.87 | 12.81 | 13.95 | ||||||
Silicon Valley Bank: | |||||||||
CET 1 risk-based capital ratio (1) | 12.79 | % | 12.87 | % | — | % | |||
Tier 1 risk-based capital ratio (3) | 12.79 | 12.87 | 12.11 | ||||||
Total risk-based capital ratio (3) | 13.85 | 13.93 | 13.06 | ||||||
Tier 1 leverage ratio (3) | 7.13 | 7.39 | 7.05 | ||||||
Tangible common equity to tangible assets ratio (4) | 7.42 | 7.40 | 6.75 | ||||||
Tangible common equity to risk-weighted assets ratio (4) | 13.21 | 13.16 | 12.12 |
(1) | As of March 31, 2015, Common Equity Tier 1 ("CET 1") is a new ratio requirement under the Basel III Capital Rules and represents, common stock, plus related surplus and retained earnings, plus limited amounts of majority interest in the form of common stock, less certain regulatory deductions, divided by total risk-weighted assets. |
(2) | Ratios prior to January 1, 2015, do not reflect the application of new accounting guidance adopted int he second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(3) | Ratios as of September 30, 2015 and June 30, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for prior periods represent the previous capital rules under Basel I. |
(4) | 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.” |
(Dollars in thousands, except ratios and client data) | September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software and internet | $ | 1,895,605 | $ | 1,643,110 | $ | 1,600,284 | ||||||
Hardware | 338,720 | 524,983 | 403,383 | |||||||||
Private equity/venture capital | 2,897,115 | 2,093,557 | 1,692,560 | |||||||||
Life science & healthcare | 527,259 | 585,608 | 429,207 | |||||||||
Premium wine (1) | 16,701 | 30,182 | 28,425 | |||||||||
Other | 99,825 | 97,920 | 35,000 | |||||||||
Total commercial loans | 5,775,225 | 4,975,360 | 4,188,859 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine (1) | 65,101 | 96,935 | 81,464 | |||||||||
Consumer (2) | — | — | — | |||||||||
Other | 22,133 | 22,333 | 22,933 | |||||||||
Total real estate secured loans | 87,234 | 119,268 | 104,397 | |||||||||
Consumer loans (2) | 97,501 | 115,000 | 30,000 | |||||||||
Total loans individually equal to or greater than $20 million | $ | 5,959,960 | $ | 5,209,628 | $ | 4,323,256 | ||||||
Loans (individually or in the aggregate) to any single client, less than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software and internet | $ | 3,424,451 | $ | 3,382,966 | $ | 2,945,040 | ||||||
Hardware | 632,195 | 533,453 | 678,707 | |||||||||
Private equity/venture capital (3) | 1,714,838 | 1,930,275 | 1,255,775 | |||||||||
Life science & healthcare | 1,085,421 | 903,447 | 827,923 | |||||||||
Premium wine | 178,747 | 162,561 | 159,990 | |||||||||
Other | 198,373 | 158,485 | 209,067 | |||||||||
Total commercial loans | 7,234,025 | 7,071,187 | 6,076,502 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine | 568,656 | 535,691 | 482,191 | |||||||||
Consumer | 1,443,170 | 1,340,106 | 1,047,487 | |||||||||
Other | 16,250 | 11,250 | 7,500 | |||||||||
Total real estate secured loans | 2,028,076 | 1,887,047 | 1,537,178 | |||||||||
Construction loans | 92,729 | 91,436 | 80,273 | |||||||||
Consumer loans | 115,151 | 111,632 | 95,265 | |||||||||
Total loans individually less than $20 million | $ | 9,469,981 | $ | 9,161,302 | $ | 7,789,218 | ||||||
Total gross loans | $ | 15,429,941 | $ | 14,370,930 | $ | 12,112,474 | ||||||
Loans individually equal to or greater than $20 million as a percentage of total gross loans | 38.6 | % | 36.3 | % | 35.7 | % | ||||||
Total clients with loans individually equal to or greater than $20 million | 165 | 155 | 127 | |||||||||
Loans individually equal to or greater than $20 million on nonaccrual status | $ | 84,588 | $ | 63,310 | $ | — |
(1) | Premium wine clients can have loan balances included in both commercial loans and real estate secured loans, the combination of which are equal to or greater than $20 million. |
(2) | Consumer loan clients can have loan balances included in both real estate secured loans and other consumer loans, the combination of which are equal to or greater than $20 million. |
(3) | Amounts prior to January 1, 2015, do not reflect the application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||
Gross nonperforming, past due, and restructured loans: | ||||||||||||
Impaired loans | $ | 115,461 | $ | 100,802 | $ | 11,687 | ||||||
Loans past due 90 days or more still accruing interest | 169 | 47 | 125 | |||||||||
Total nonperforming loans | $ | 115,630 | $ | 100,849 | $ | 11,812 | ||||||
OREO and other foreclosed assets | — | — | 561 | |||||||||
Total nonperforming assets | $ | 115,630 | $ | 100,849 | $ | 12,373 | ||||||
Nonperforming loans as a percentage of total gross loans | 0.75 | % | 0.70 | % | 0.10 | % | ||||||
Nonperforming assets as a percentage of total assets | 0.28 | 0.25 | 0.03 | |||||||||
Allowance for loan losses | $ | 197,507 | $ | 192,644 | $ | 129,061 | ||||||
As a percentage of total gross loans | 1.28 | % | 1.34 | % | 1.07 | % | ||||||
As a percentage of total gross nonperforming loans | 170.81 | 191.02 | NM | |||||||||
Allowance for loan losses for impaired loans | $ | 46,256 | $ | 50,865 | $ | 2,325 | ||||||
As a percentage of total gross loans | 0.30 | % | 0.35 | % | 0.02 | % | ||||||
As a percentage of total gross nonperforming loans | 40.00 | 50.44 | 19.68 | |||||||||
Allowance for loan losses for total gross performing loans | $ | 151,251 | $ | 141,779 | $ | 126,736 | ||||||
As a percentage of total gross loans | 0.98 | % | 0.99 | % | 1.05 | % | ||||||
As a percentage of total gross performing loans | 0.99 | 0.99 | 1.05 | |||||||||
Total gross loans (1) | $ | 15,429,941 | $ | 14,370,930 | $ | 12,112,474 | ||||||
Total gross performing loans (1) | 15,314,311 | 14,270,081 | 12,100,662 | |||||||||
Reserve for unfunded credit commitments (2) | 36,631 | 35,617 | 35,489 | |||||||||
As a percentage of total unfunded credit commitments | 0.23 | % | 0.23 | % | 0.24 | % | ||||||
Total unfunded credit commitments (3) | $ | 16,087,307 | $ | 15,808,209 | $ | 14,631,637 |
(1) | Amounts prior to January 1, 2015, do not reflect the application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(2) | The “reserve for unfunded credit commitments” is included as a component of “other liabilities.” |
(3) | Includes unfunded loan commitments and letters of credit. |
Three months ended | Nine months ended | |||||||||||||||||||
(Dollars in millions) | September 30, 2015 | June 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||
Client directed investment assets | $ | 8,392 | $ | 7,847 | $ | 7,168 | $ | 7,752 | $ | 7,288 | ||||||||||
Client investment assets under management (2) | 20,943 | 19,261 | 17,050 | 19,305 | 15,574 | |||||||||||||||
Sweep money market funds | 12,638 | 10,761 | 6,770 | 10,765 | 6,564 | |||||||||||||||
Total average client investment funds | $ | 41,973 | $ | 37,869 | $ | 30,988 | $ | 37,822 | $ | 29,426 |
Period-end balances at | ||||||||||||||||||||
(Dollars in millions) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | |||||||||||||||
Client directed investment assets | $ | 8,487 | $ | 8,047 | $ | 7,344 | $ | 6,158 | $ | 6,491 | ||||||||||
Client investment assets under management (2) | 21,823 | 20,394 | 17,956 | 18,253 | 17,423 | |||||||||||||||
Sweep money market funds | 13,257 | 11,643 | 9,870 | 7,957 | 7,230 | |||||||||||||||
Total period-end client investment funds | $ | 43,567 | $ | 40,084 | $ | 35,170 | $ | 32,368 | $ | 31,144 |
(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. |
• | 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. We adopted the new accounting guidance related to our consolidated variable interest entities (ASU 2015-02) effective January 1, 2015. 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. |
• | Pre-tax net losses for the fourth quarter of 2014 of $13.9 million ($11.4 million, net of tax) from the pending sale of SVBIF at December 31, 2014. |
• | Tangible common equity 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 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. |
• | Non-GAAP return on average assets ratio; Non-GAAP return on average SVBFG stockholders’ equity ratio — These ratios exclude certain financial items that are otherwise required under GAAP. Our ratios are calculated by dividing non-GAAP net income available to common stockholders (annualized) by average assets or average SVBFG stockholders’ equity, as applicable. |
• | Non-GAAP operating efficiency ratio — This ratio excludes certain financial items that are otherwise required under GAAP. It is calculated by dividing noninterest expense by total revenue, after adjusting both amounts by |
• | 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. We do not provide our outlook for the expected full year results for these excluded items, which include gains on investment securities, net, gains on derivative instruments, net, and other noninterest income items. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP net income and earnings per share (Dollars in thousands, except share data) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
Net income available to common stockholders (1) | $ | 81,733 | $ | 86,143 | $ | 88,516 | $ | 57,990 | $ | 63,977 | $ | 256,392 | $ | 205,880 | ||||||||||||||
Less: net losses on SVBIF Sale Transaction (2) | — | — | — | 13,934 | — | — | — | |||||||||||||||||||||
Tax impact from net losses on SVBIF Sale Transaction | — | — | — | (5,398 | ) | — | — | — | ||||||||||||||||||||
Tax impact of undistributed earnings of SVBIF | — | — | — | 2,900 | — | — | — | |||||||||||||||||||||
Non-GAAP net income available to common stockholders (1) | $ | 81,733 | $ | 86,143 | $ | 88,516 | $ | 69,426 | $ | 63,977 | $ | 256,392 | $ | 205,880 | ||||||||||||||
GAAP earnings per common share — diluted (1) | $ | 1.57 | $ | 1.66 | $ | 1.71 | $ | 1.13 | $ | 1.24 | $ | 4.94 | $ | 4.18 | ||||||||||||||
Less: net losses on SVBIF Sale Transaction (2) | — | — | — | 0.28 | — | — | — | |||||||||||||||||||||
Tax impact from net losses on SVBIF Sale Transaction | — | — | — | (0.11 | ) | — | — | — | ||||||||||||||||||||
Tax impact of undistributed earnings of SVBIF | — | — | — | 0.06 | — | — | — | |||||||||||||||||||||
Non-GAAP earnings per common share — diluted (1) | $ | 1.57 | $ | 1.66 | $ | 1.71 | $ | 1.36 | $ | 1.24 | $ | 4.94 | $ | 4.18 | ||||||||||||||
Weighted average diluted common shares outstanding | 52,048,331 | 51,875,715 | 51,719,086 | 51,528,150 | 51,570,771 | 51,878,170 | 49,200,163 |
(1) | Amounts for periods prior to March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Pre-tax net losses of $13.9 million on the pending sale of SVBIF are included in other noninterest income at December 31, 2014. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP return on average assets (annualized) and average SVBFG stockholders' equity (annualized) (Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
Net income available to common stockholders (1) | $ | 81,733 | $ | 86,143 | $ | 88,516 | $ | 57,990 | $ | 63,977 | $ | 256,392 | $ | 205,880 | ||||||||||||||
Non-GAAP net income available to common stockholders (1) | $ | 81,733 | $ | 86,143 | $ | 88,516 | $ | 69,426 | $ | 63,977 | $ | 256,392 | $ | 205,880 | ||||||||||||||
Average Assets (2) | $ | 42,019,224 | $ | 39,442,823 | $ | 38,221,341 | $ | 37,588,050 | $ | 34,596,065 | $ | 39,911,525 | $ | 31,402,952 | ||||||||||||||
Return on average assets (annualized) (1) (2) | 0.77 | % | 0.88 | % | 0.94 | % | 0.61 | % | 0.73 | % | 0.86 | % | 0.88 | % | ||||||||||||||
Non-GAAP return on average assets (annualized) (1) (2) | 0.77 | 0.88 | 0.94 | 0.73 | 0.73 | 0.86 | 0.88 | |||||||||||||||||||||
Average SVBFG stockholders' equity (annualized) (2) | $ | 3,131,687 | $ | 3,031,699 | $ | 2,900,330 | $ | 2,827,512 | $ | 2,729,862 | $ | 3,022,086 | $ | 2,420,695 | ||||||||||||||
Return on average SVBFG stockholders' equity (annualized) (1) | 10.35 | % | 11.40 | % | 12.38 | % | 8.14 | % | 9.30 | % | 11.34 | % | 11.37 | % | ||||||||||||||
Non-GAAP return on average SVBFG stockholders' equity (annualized) (1) | 10.35 | 11.40 | 12.38 | 9.74 | 9.30 | 11.34 | 11.37 |
(1) | Amounts and ratios for periods prior to March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Amounts and ratios for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts prior to January 1, 2015 have not been revised for the adoption of this guidance. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
GAAP noninterest income (1) | $ | 108,477 | $ | 126,287 | $ | 123,524 | $ | 167,637 | $ | 80,167 | $ | 358,288 | $ | 404,602 | ||||||||||||||
Less: income (losses) attributable to noncontrolling interests, including carried interest (1) | 6,343 | 8,556 | 14,164 | 77,320 | 4,911 | 29,063 | 156,304 | |||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (1) | $ | 102,134 | $ | 117,731 | $ | 109,360 | $ | 90,317 | $ | 75,256 | $ | 329,225 | $ | 248,298 | ||||||||||||||
Less: net losses on SVBIF Sale Transaction | — | — | — | 13,934 | — | — | — | |||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests and excluding net losses on SVBIF Sale Transaction (1) | $ | 102,134 | $ | 117,731 | $ | 109,360 | $ | 104,251 | $ | 75,256 | $ | 329,225 | $ | 248,298 |
(1) | Amounts as of and for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts prior to January 1, 2015 have not been revised. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP core fee income (Dollars in thousands) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
GAAP noninterest income (1) | $ | 108,477 | $ | 126,287 | $ | 123,524 | $ | 167,637 | $ | 80,167 | $ | 358,288 | $ | 404,602 | ||||||||||||||
Less: gains on investment securities, net (1) | 18,768 | 24,975 | 33,263 | 94,787 | 5,644 | 77,006 | 172,236 | |||||||||||||||||||||
Less: gains on derivative instruments, net | 10,244 | 16,317 | 39,729 | 33,365 | 26,538 | 66,290 | 63,480 | |||||||||||||||||||||
Less: other noninterest income (losses) (1) | 11,077 | 18,916 | (7,678 | ) | (15,861 | ) | (5,361 | ) | 22,315 | 14,601 | ||||||||||||||||||
Non-GAAP core fee income | $ | 68,388 | $ | 66,079 | $ | 58,210 | $ | 55,346 | $ | 53,346 | $ | 192,677 | $ | 154,285 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts prior to January 1, 2015 have not been revised. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests (Dollars in thousands) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
GAAP net gains on investment securities (1) | $ | 18,768 | $ | 24,975 | $ | 33,263 | $ | 94,787 | $ | 5,644 | $ | 77,006 | $ | 172,236 | ||||||||||||||
Less: income attributable to noncontrolling interests, including carried interest (1) | 6,102 | 9,036 | 14,171 | 78,225 | 6,757 | 29,309 | 158,069 | |||||||||||||||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests (1) | $ | 12,666 | $ | 15,939 | $ | 19,092 | $ | 16,562 | $ | (1,113 | ) | $ | 47,697 | $ | 14,167 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts prior to January 1, 2015 have not been revised. |
Three months ended | Nine months ended | |||||||||||||||||||||||||||
Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
GAAP noninterest expense (1) (2) | $ | 184,755 | $ | 194,112 | $ | 190,541 | $ | 186,067 | $ | 179,761 | $ | 569,408 | $ | 521,113 | ||||||||||||||
Less: expense attributable to noncontrolling interests (2) | 116 | 242 | 292 | 5,536 | 4,743 | 650 | 13,331 | |||||||||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests (1) (2) | $ | 184,639 | $ | 193,870 | $ | 190,249 | $ | 180,531 | $ | 175,018 | $ | 568,758 | $ | 507,782 | ||||||||||||||
GAAP net interest income (2) | $ | 254,660 | $ | 243,771 | $ | 238,925 | $ | 234,737 | $ | 220,565 | $ | 737,356 | $ | 621,858 | ||||||||||||||
Adjustments for taxable equivalent basis | 380 | 400 | 416 | 417 | 416 | 1,196 | 1,272 | |||||||||||||||||||||
Non-GAAP taxable equivalent net interest income (2) | $ | 255,040 | $ | 244,171 | $ | 239,341 | $ | 235,154 | $ | 220,981 | $ | 738,552 | $ | 623,130 | ||||||||||||||
Less: income (losses) attributable to noncontrolling interests (2) | 2 | 2 | 2 | 21 | 9 | 6 | 12 | |||||||||||||||||||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests (2) | $ | 255,038 | $ | 244,169 | $ | 239,339 | $ | 235,133 | $ | 220,972 | $ | 738,546 | $ | 623,118 | ||||||||||||||
GAAP noninterest income (2) | $ | 108,477 | $ | 126,287 | $ | 123,524 | $ | 167,637 | $ | 80,167 | $ | 358,288 | $ | 404,602 | ||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests and excluding net losses on SVBIF Sale Transaction (2) | 102,134 | 117,731 | 109,360 | 104,251 | 75,256 | 329,225 | 248,298 | |||||||||||||||||||||
GAAP total revenue (2) | $ | 363,137 | $ | 370,058 | $ | 362,449 | $ | 402,374 | $ | 300,732 | $ | 1,095,644 | $ | 1,026,460 | ||||||||||||||
Non-GAAP taxable equivalent revenue, net of noncontrolling interests and excluding net losses on SVBIF Sale Transaction (2) | $ | 357,172 | $ | 361,900 | $ | 348,699 | $ | 339,384 | $ | 296,228 | $ | 1,067,771 | $ | 871,416 | ||||||||||||||
GAAP operating efficiency ratio (2) | 50.88 | % | 52.45 | % | 52.57 | % | 46.24 | % | 59.77 | % | 51.97 | % | 50.77 | % | ||||||||||||||
Non-GAAP, net of noncontrolling interests and excluding net losses on SVBIF Sale Transaction operating efficiency ratio (2) | 51.69 | 53.57 | 54.56 | 53.19 | 59.08 | 53.27 | 58.27 |
(1) | Amounts for periods prior to March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Amounts and ratios for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts and ratios prior to January 1, 2015 have not been revised for the adoption of this guidance. |
Non-GAAP non-marketable and other securities, net of noncontrolling interests (Dollars in thousands) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | |||||||||||||||
GAAP non-marketable and other securities (1) (2) | $ | 650,555 | $ | 645,506 | $ | 664,388 | $ | 1,728,140 | $ | 1,702,218 | ||||||||||
Less: amounts attributable to noncontrolling interests (2) | 129,417 | 128,539 | 129,921 | 1,216,344 | 1,200,903 | |||||||||||||||
Non-GAAP non-marketable and other securities, net of noncontrolling interests (2) | $ | 521,138 | $ | 516,967 | $ | 534,467 | $ | 511,796 | $ | 501,315 |
(1) | Amounts for periods prior to March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Amounts as of March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
SVB Financial Group tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | March 31, 2015 (Revised)(3) | December 31, 2014 | September 30, 2014 | |||||||||||||||
GAAP SVBFG stockholders’ equity (1) | $ | 3,174,899 | $ | 3,051,102 | $ | 2,971,692 | $ | 2,813,072 | $ | 2,718,109 | ||||||||||
Tangible common equity (1) | $ | 3,174,899 | $ | 3,051,102 | $ | 2,971,692 | $ | 2,813,072 | $ | 2,718,109 | ||||||||||
GAAP total assets (1) | $ | 41,730,982 | $ | 40,231,007 | $ | 38,606,610 | $ | 39,337,869 | $ | 36,034,994 | ||||||||||
Tangible assets (1) | $ | 41,730,982 | $ | 40,231,007 | $ | 38,606,610 | $ | 39,337,869 | $ | 36,034,994 | ||||||||||
Risk-weighted assets (2) | $ | 24,666,658 | $ | 23,815,512 | $ | 24,151,737 | $ | 21,755,091 | $ | 19,482,333 | ||||||||||
Tangible common equity to tangible assets (1) | 7.61 | % | 7.58 | % | 7.70 | % | 7.15 | % | 7.54 | % | ||||||||||
Tangible common equity to risk-weighted assets (1) (2) | 12.87 | 12.81 | 12.30 | 12.93 | 13.95 |
(1) | Amounts for periods prior to March 31, 2015, and ratios have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Amounts and ratios as of September 30, June 30, 2015 and March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Amounts and ratios for prior periods represent the previous capital rules under Basel I. |
(3) | Amounts and ratios as of March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts and ratios prior to January 1, 2015 have not been revised for the adoption of this guidance. |
Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | |||||||||||||||
Tangible common equity (1) (3) | $ | 3,048,933 | $ | 2,930,554 | $ | 2,886,173 | $ | 2,399,411 | $ | 2,320,613 | ||||||||||
Tangible assets (1) (3) | $ | 41,073,120 | $ | 39,612,481 | $ | 37,974,587 | $ | 37,607,973 | $ | 34,359,839 | ||||||||||
Risk-weighted assets (2) | $ | 23,072,656 | $ | 22,277,020 | $ | 22,602,065 | $ | 21,450,480 | $ | 19,144,527 | ||||||||||
Tangible common equity to tangible assets (1) (3) | 7.42 | % | 7.40 | % | 7.60 | % | 6.38 | % | 6.75 | % | ||||||||||
Tangible common equity to risk-weighted assets (1) (2) (3) | 13.21 | 13.16 | 12.77 | 11.19 | 12.12 |
(1) | Amounts for periods prior to March 31, 2015, and ratios have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). |
(2) | Amounts and ratios as of September 30, June 30, 2015 and March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Amounts and ratios for prior periods represent the previous capital rules under Basel I. |
(3) | Amounts and ratios as of March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). Amounts and ratios prior to January 1, 2015 have not been revised for the adoption of this guidance. |
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