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 April 21, 2016, announcing the Company's financial results for the first quarter ended March 31, 2016. |
Date: April 21, 2016 | 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 April 21, 2016, announcing the Company’s financial results for the first quarter ended March 31, 2016. |
* | 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 | |||||||
April 21, 2016 | ||||||||
NASDAQ: SIVB |
• | Average loan balances of $17.0 billion, an increase of $1.3 billion (or 8.0 percent). |
• | Average investment securities, excluding non-marketable and other securities, of $23.4 billion, a decrease of $0.1 billion (or 1.0 percent). |
• | Average total client funds (consisting of both on-balance sheet deposits and off-balance sheet client investment funds) of $81.7 billion, a decrease of $0.6 billion (or 1.0 percent) with average off-balance sheet client investment funds decreasing by $1.0 billion (or 2.2 percent), offset by average on-balance sheet deposits increasing by $0.4 billion (or 1.0 percent). |
• | Net interest income (fully taxable equivalent basis) of $281.7 million, an increase of $12.3 million (or 4.6 percent). |
• | Net interest margin of 2.67 percent, an increase of 13 basis points. |
• | Provision for loan losses of $33.3 million, compared to $31.3 million. |
• | Losses on investment securities of $4.7 million, compared to gains of $12.4 million. Non-GAAP losses on investment securities, net of noncontrolling interests, were $2.0 million, compared to gains of $9.6 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
• | Gains on equity warrant assets of $6.6 million, compared to $16.4 million. |
• | Non-GAAP core fee income increased $3.8 million (or 5.2 percent) to $76.5 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”.) |
• | Noninterest expense of $204.0 million, a decrease of $4.6 million (or 2.1 percent). |
(Dollars in millions, except share data, employees and ratios) | Three months ended | |||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Income statement: | ||||||||||||||||||||
Diluted earnings per common share | $ | 1.52 | $ | 1.68 | $ | 1.57 | $ | 1.66 | $ | 1.71 | ||||||||||
Net income available to common stockholders | 79.2 | 87.5 | 81.7 | 86.1 | 88.5 | |||||||||||||||
Net interest income | 281.4 | 269.1 | 254.7 | 243.8 | 238.9 | |||||||||||||||
Provision for loan losses | 33.3 | 31.3 | 33.4 | 26.5 | 6.5 | |||||||||||||||
Noninterest income (1) | 86.1 | 114.5 | 108.5 | 126.3 | 123.5 | |||||||||||||||
Noninterest expense (1) | 204.0 | 208.6 | 184.8 | 194.1 | 190.5 | |||||||||||||||
Non-GAAP core fee income (2) | 76.5 | 72.7 | 68.4 | 66.1 | 58.2 | |||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (1) (2) | 88.8 | 111.8 | 102.1 | 117.7 | 109.4 | |||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests (1) (2) | 204.1 | 208.4 | 184.6 | 193.9 | 190.2 | |||||||||||||||
Fully taxable equivalent: | ||||||||||||||||||||
Net interest income (3) | $ | 281.7 | $ | 269.4 | $ | 255.0 | $ | 244.2 | $ | 239.3 | ||||||||||
Net interest margin | 2.67 | % | 2.54 | % | 2.50 | % | 2.58 | % | 2.65 | % | ||||||||||
Balance sheet: | ||||||||||||||||||||
Average total assets (1) | $ | 44,190.2 | $ | 43,634.8 | $ | 42,014.2 | $ | 39,442.8 | $ | 38,221.3 | ||||||||||
Average loans, net of unearned income (1) | 17,012.4 | 15,745.6 | 14,916.7 | 14,320.9 | 14,048.3 | |||||||||||||||
Average available-for-sale securities | 14,692.6 | 15,314.8 | 15,035.1 | 13,797.7 | 13,571.2 | |||||||||||||||
Average held-to-maturity securities | 8,658.7 | 8,220.5 | 7,879.0 | 7,639.8 | 7,569.8 | |||||||||||||||
Average noninterest-bearing demand deposits (1) | 31,219.5 | 30,531.1 | 28,791.7 | 26,723.3 | 25,173.4 | |||||||||||||||
Average interest-bearing deposits | 8,048.6 | 8,373.6 | 8,591.3 | 8,232.7 | 8,688.8 | |||||||||||||||
Average total deposits (1) | 39,268.1 | 38,904.7 | 37,383.1 | 34,956.1 | 33,862.2 | |||||||||||||||
Average long-term debt | 796.7 | 797.1 | 797.3 | 797.6 | 690.0 | |||||||||||||||
Period-end total assets (1) | 43,573.9 | 44,686.7 | 41,731.0 | 40,231.0 | 38,606.6 | |||||||||||||||
Period-end loans, net of unearned income (1) | 17,735.1 | 16,742.1 | 15,314.6 | 14,261.4 | 14,447.7 | |||||||||||||||
Period-end available-for-sale securities | 14,327.1 | 16,380.7 | 15,307.7 | 14,495.8 | 13,746.9 | |||||||||||||||
Period-end held-to-maturity securities | 8,548.2 | 8,791.0 | 8,306.5 | 7,735.9 | 7,816.8 | |||||||||||||||
Period-end non-marketable and other securities (1) | 668.5 | 674.9 | 650.6 | 645.5 | 664.4 | |||||||||||||||
Period-end noninterest-bearing demand deposits (1) | 30,933.3 | 30,867.5 | 28,659.0 | 27,734.7 | 25,796.1 | |||||||||||||||
Period-end interest-bearing deposits | 7,826.5 | 8,275.3 | 8,390.5 | 7,892.2 | 8,135.0 | |||||||||||||||
Period-end total deposits (1) | 38,759.7 | 39,142.8 | 37,049.4 | 35,627.0 | 33,931.1 | |||||||||||||||
Off-balance sheet: | ||||||||||||||||||||
Average client investment funds | $ | 42,471.6 | $ | 43,436.2 | $ | 41,972.9 | $ | 37,869.5 | $ | 33,625.1 | ||||||||||
Period-end client investment funds | 42,273.5 | 43,991.7 | 43,566.7 | 40,084.5 | 35,169.8 | |||||||||||||||
Total unfunded credit commitments | 15,880.2 | 15,614.4 | 16,087.3 | 15,808.2 | 15,485.5 | |||||||||||||||
Earnings ratios: | ||||||||||||||||||||
Return on average assets (annualized) (1) (4) | 0.72 | % | 0.80 | % | 0.77 | % | 0.88 | % | 0.94 | % | ||||||||||
Return on average SVBFG stockholders’ equity (annualized) (5) | 9.58 | 10.74 | 10.35 | 11.40 | 12.38 | |||||||||||||||
Asset quality ratios: | ||||||||||||||||||||
Allowance for loan losses as a % of total gross loans | 1.29 | % | 1.29 | % | 1.28 | % | 1.34 | % | 1.15 | % | ||||||||||
Allowance for loan losses for performing loans as a % of total gross performing loans | 1.01 | 0.99 | 0.99 | 0.99 | 0.99 | |||||||||||||||
Gross charge-offs as a % of average total gross loans (annualized) | 0.61 | 0.29 | 0.77 | 0.13 | 0.16 | |||||||||||||||
Net charge-offs as a % of average total gross loans (annualized) | 0.49 | 0.28 | 0.75 | 0.05 | 0.11 | |||||||||||||||
Other ratios: | ||||||||||||||||||||
GAAP operating efficiency ratio (1) (6) | 55.51 | % | 54.39 | % | 50.88 | % | 52.45 | % | 52.57 | % | ||||||||||
Non-GAAP operating efficiency ratio (1) (2) | 55.09 | 54.67 | 51.69 | 53.57 | 54.56 | |||||||||||||||
SVBFG CET 1 risk-based capital ratio (1) | 12.38 | 12.28 | 12.48 | 12.54 | 11.92 | |||||||||||||||
Bank CET 1 risk-based capital ratio | 12.57 | 12.52 | 12.79 | 12.87 | 12.36 | |||||||||||||||
SVBFG total risk-based capital ratio (1) | 13.90 | 13.84 | 14.05 | 14.15 | 13.46 | |||||||||||||||
Bank total risk-based capital ratio | 13.66 | 13.60 | 13.85 | 13.93 | 13.35 | |||||||||||||||
SVBFG tier 1 leverage ratio (1) | 7.69 | 7.63 | 7.67 | 7.95 | 7.92 | |||||||||||||||
Bank tier 1 leverage ratio | 7.19 | 7.09 | 7.13 | 7.39 | 7.43 | |||||||||||||||
Period-end loans, net of unearned income, to deposits ratio (1) | 45.76 | 42.77 | 41.34 | 40.03 | 42.58 | |||||||||||||||
Average loans, net of unearned income, to average deposits ratio | 43.32 | 40.47 | 39.90 | 40.97 | 41.49 | |||||||||||||||
Book value per common share (7) | $ | 65.40 | $ | 61.97 | $ | 61.66 | $ | 59.29 | $ | 58.16 | ||||||||||
Other statistics: | ||||||||||||||||||||
Average full-time equivalent employees | 2,160 | 2,073 | 2,030 | 1,959 | 1,955 | |||||||||||||||
Period-end full-time equivalent employees | 2,170 | 2,089 | 2,054 | 1,964 | 1,965 |
(1) | 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). |
(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 GAAP 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 35.0 percent. The taxable equivalent adjustments were $0.3 million for the quarter ended March 31, 2016 and $0.4 million for each of the quarters ended December 31, 2015, September 30, 2015, June 30, 2015, and March 31, 2015. |
(4) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average assets. |
(5) | Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average SVBFG stockholders’ equity. |
(6) | Ratio is calculated by dividing noninterest expense by total net interest income plus noninterest income. |
(7) | Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares. |
Q1'16 compared to Q4'15 | ||||||||||||
Increase (decrease) due to change in | ||||||||||||
(Dollars in thousands) | Volume | Rate | Total | |||||||||
Interest income: | ||||||||||||
Short-term investment securities | $ | (678 | ) | $ | 752 | $ | 74 | |||||
AFS / HTM fixed income investment securities | (624 | ) | 389 | (235 | ) | |||||||
Loans | 12,276 | 265 | 12,541 | |||||||||
Increase in interest income, net | 10,974 | 1,406 | 12,380 | |||||||||
Interest expense: | ||||||||||||
Deposits | (54 | ) | 78 | 24 | ||||||||
Short-term borrowings | 26 | 2 | 28 | |||||||||
Long-term debt | — | 22 | 22 | |||||||||
Increase (decrease) in interest expense, net | (28 | ) | 102 | 74 | ||||||||
Increase in net interest income | $ | 11,002 | $ | 1,304 | $ | 12,306 |
• | An increase in interest income from loans of $12.5 million to $197.9 million for the first quarter of 2016. The increase was reflective primarily of a $1.3 billion increase in average loan balances as well as an increase in loan yields, offset by one less day in the quarter (compared to the fourth quarter of 2015). Our gross loan yields increased 8 basis points, offset by a decline of 7 basis points in our loan fee yields, resulting in an overall loan yield increase of 1 basis point to 4.68 percent. The increase in our gross loan yields is reflective primarily of the full quarter impact of the 25 basis point increase in the target federal funds rate by the Federal Reserve in December 2015. Loan fee yields decreased as a result of lower nonrecurring fee income and lower income from early payoffs during the first quarter. |
Three months ended | ||||||||||||
(Dollars in thousands, except ratios) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Allowance for loan losses, beginning balance | $ | 217,613 | $ | 197,507 | $ | 165,359 | ||||||
Provision for loan losses | 33,341 | 31,261 | 6,452 | |||||||||
Gross loan charge-offs | (26,174 | ) | (11,629 | ) | (5,487 | ) | ||||||
Loan recoveries | 5,469 | 474 | 1,551 | |||||||||
Allowance for loan losses, ending balance | $ | 230,249 | $ | 217,613 | $ | 167,875 | ||||||
Provision for loan losses as a percentage of period-end total gross loans (annualized) | 0.75 | % | 0.74 | % | 0.18 | % | ||||||
Gross loan charge-offs as a percentage of average total gross loans (annualized) | 0.61 | 0.29 | 0.16 | |||||||||
Net loan charge-offs as a percentage of average total gross loans (annualized) | 0.49 | 0.28 | 0.11 | |||||||||
Allowance for loan losses as a percentage of period-end total gross loans | 1.29 | 1.29 | 1.15 | |||||||||
Period-end total gross loans | $ | 17,846,081 | $ | 16,857,131 | $ | 14,554,854 | ||||||
Average total gross loans | 17,123,718 | 15,856,614 | 14,148,842 |
• | Losses on investment securities of $4.7 million for the first quarter of 2016, compared to gains of $12.4 million for the fourth quarter of 2015. Net of noncontrolling interests, non-GAAP net losses on investment securities were $2.0 million for the first quarter of 2016 compared to net gains of $9.6 million for the fourth quarter of 2015. The non-GAAP net losses, net of noncontrolling interests, of $2.0 million for the first quarter of 2016 were driven primarily by the following: |
◦ | Losses of $3.9 million from our managed funds of funds, related primarily to unrealized valuation decreases due to the decrease in market prices of public positions held by the fund investments in the portfolio. |
◦ | Gains of $2.4 million from our strategic and other investments, driven primarily by distribution gains from our strategic venture capital fund investments. |
◦ | Net losses of $0.8 million from our available-for-sale securities portfolio reflective of $2.2 million of losses on sales of shares from exercised warrants in public companies upon expiration of lock-up periods during the first quarter of 2016, offset by a $1.4 million gain from the sale of U.S. Treasury securities previously noted. |
Three months ended March 31, 2016 | ||||||||||||||||||||||||
(Dollars in thousands) | Managed Funds Of Funds | Managed Direct Venture Funds | Debt Funds | Available- For-Sale Securities | Strategic and Other Investments | Total | ||||||||||||||||||
GAAP (losses) gains on investment securities, net | $ | (6,481 | ) | $ | (634 | ) | $ | 855 | $ | (817 | ) | $ | 2,393 | $ | (4,684 | ) | ||||||||
Less: (losses) attributable to noncontrolling interests, including carried interest | (2,587 | ) | (129 | ) | — | — | — | (2,716 | ) | |||||||||||||||
Non-GAAP net (losses) gains on investment securities, net of noncontrolling interests | $ | (3,894 | ) | $ | (505 | ) | $ | 855 | $ | (817 | ) | $ | 2,393 | $ | (1,968 | ) | ||||||||
Three months ended December 31, 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 | $ | 4,101 | $ | 1,521 | $ | 1,859 | $ | (1,548 | ) | $ | 6,506 | $ | 12,439 | |||||||||||
Less: income attributable to noncontrolling interests, including carried interest | 1,933 | 870 | — | — | — | 2,803 | ||||||||||||||||||
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests | $ | 2,168 | $ | 651 | $ | 1,859 | $ | (1,548 | ) | $ | 6,506 | $ | 9,636 |
• | Net losses on derivative instruments were $1.7 million for the first quarter of 2016, compared to gains of $17.5 million for the fourth quarter of 2015. The following table provides a summary of our net losses on derivative instruments: |
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Net gains on equity warrant assets | $ | 6,605 | $ | 16,384 | $ | 20,278 | ||||||
(Losses) gains on foreign exchange forward contracts, net: | ||||||||||||
(Losses) gains on client foreign exchange forward contracts, net | (5,654 | ) | 235 | (507 | ) | |||||||
(Losses) gains on internal foreign exchange forward contracts, net (1) | (2,208 | ) | 751 | 20,018 | ||||||||
Total (losses) gains on foreign exchange forward contracts, net | (7,862 | ) | 986 | 19,511 | ||||||||
Net (losses) gains on other derivatives (2) | (438 | ) | 145 | (60 | ) | |||||||
Total (losses) gains on derivative instruments, net | $ | (1,695 | ) | $ | 17,515 | $ | 39,729 |
(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) | Represents primarily the change in fair value of our client interest rate derivatives and our interest rate swaps. |
◦ | Net losses of $1.7 million on derivative instruments for the first quarter of 2016 were attributable primarily to the following: |
◦ | Net gains of $6.8 million from the exercise of equity warrant assets as a result of M&A activity during the quarter, compared to net gains of $4.6 million for the fourth quarter of 2015. |
◦ | Net gains of $0.4 million from changes in warrant valuations in the first quarter of 2016 compared to net gains of $12.0 million for the fourth quarter of 2015, reflective primarily of the downward pressure on our private equity warrant valuations as a result of the first quarter 2016 equity market environment. |
• | Net losses of $5.7 million on client foreign exchange forward contracts for the first quarter of 2016, compared to net gains of $0.2 million for the fourth quarter of 2015. The net losses of $5.7 million were partially offset by net gains of $3.7 million from the revaluation of foreign currency denominated cash that are included in the line item "Other" within noninterest income. Also contributing to the loss is a reclassification of $2.8 million in unrealized gains on forward contracts to foreign exchange fee income (included in Non-GAAP core fee income below) reflecting fees earned on forward contracts executed on behalf of our clients, that were previously recorded in gains (losses) on derivative instruments. |
• | Net losses of $2.2 million on internal foreign exchange forward contracts used to economically reduce our foreign exchange exposure to foreign currency denominated instruments for the first quarter of 2016, compared to net gains of $0.8 million for the fourth quarter of 2015. The net losses of $2.2 million were offset by net gains of $2.5 million from the revaluation of foreign currency denominated instruments that are included in the line item "Other" within noninterest income. |
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Non-GAAP core fee income: | ||||||||||||
Foreign exchange fees | $ | 26,966 | $ | 23,970 | $ | 17,678 | ||||||
Credit card fees | 15,507 | 15,816 | 12,090 | |||||||||
Deposit service charges | 12,672 | 12,374 | 10,736 | |||||||||
Client investment fees | 7,995 | 6,181 | 4,482 | |||||||||
Lending related fees | 7,813 | 8,790 | 8,022 | |||||||||
Letters of credit and standby letters of credit fees | 5,589 | 5,574 | 5,202 | |||||||||
Total Non-GAAP core fee income | $ | 76,542 | $ | 72,705 | $ | 58,210 |
Three months ended | ||||||||||||
(Dollars in thousands, except employees) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Compensation and benefits: | ||||||||||||
Salaries and wages | $ | 59,386 | $ | 55,854 | $ | 51,425 | ||||||
Incentive compensation plans | 24,966 | 34,549 | 26,376 | |||||||||
Employee stock ownership plan ("ESOP") | 1,662 | 2,123 | 2,167 | |||||||||
Other employee incentives and benefits (1) | 36,248 | 31,285 | 35,802 | |||||||||
Total compensation and benefits | $ | 122,262 | $ | 123,811 | $ | 115,770 | ||||||
Period-end full-time equivalent employees | 2,170 | 2,089 | 1,965 | |||||||||
Average full-time equivalent employees | 2,160 | 2,073 | 1,955 |
(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 $10.0 million in incentive compensation plans and ESOP expenses, primarily reflective of higher expenses in the fourth quarter of 2015 as a result of our strong 2015 full year financial performance. |
• | An increase of $5.7 million due to first quarter seasonal expense items related to additional 401(k) matching expense as a result of the 2015 annual incentive compensation plan payments and employer payroll taxes. |
• | An increase of $3.5 million in salaries and wages primarily due to an increase in the number of average full-time equivalent employees ("FTE") by 87 to 2,160 FTEs for the first quarter of 2016. |
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Net interest income (1) | $ | (3 | ) | $ | (2 | ) | $ | (2 | ) | |||
Noninterest loss (income) (1) | 3,753 | (1,605 | ) | (14,053 | ) | |||||||
Noninterest expense (1) | (91 | ) | 178 | 292 | ||||||||
Carried interest allocation (2) | (1,082 | ) | (1,068 | ) | (111 | ) | ||||||
Net loss (income) attributable to noncontrolling interests | $ | 2,577 | $ | (2,497 | ) | $ | (13,874 | ) |
(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. |
Current full year 2016 outlook compared to 2015 results (as of April 21, 2016) | Change in outlook compared to outlook reported as of January 21, 2016 | |
Average loan balances | Increase at a percentage rate in the low twenties | Outlook narrowed to low twenties from previous outlook of high teens to low twenties |
Average deposit balances | Increase at a percentage rate in the low double digits | No change from previous outlook |
Net interest income (1) | Increase at a percentage rate in the mid-teens | No change from previous outlook |
Net interest margin (1) | Between 2.50% and 2.70% | No change from previous outlook |
Allowance for loan losses for total gross performing loans as a percentage of total gross performing loans | Comparable to 2015 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 | No change from previous outlook |
Noninterest expense (excluding expenses related to noncontrolling interests) (2) (3) | Increase at a percentage rate in the high single digits | No change from previous outlook |
(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, 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. |
• | deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business or are served by us (including the levels of IPOs and M&A activities); |
• | changes in the volume and credit quality of our loans; |
• | the impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios; |
• | changes in our deposit levels; |
• | 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; |
• | accounting changes, as required by GAAP; and |
• | regulatory or legal changes or their impact on us, including the impact of the Volcker Rule. |
Three months ended | ||||||||||||
(Dollars in thousands, except share data) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Interest income: | ||||||||||||
Loans (1) | $ | 197,942 | $ | 185,401 | $ | 165,501 | ||||||
Investment securities: | ||||||||||||
Taxable | 91,050 | 91,150 | 81,274 | |||||||||
Non-taxable | 596 | 685 | 772 | |||||||||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1) | 2,070 | 1,996 | 1,269 | |||||||||
Total interest income | 291,658 | 279,232 | 248,816 | |||||||||
Interest expense: | ||||||||||||
Deposits | 1,188 | 1,164 | 1,943 | |||||||||
Borrowings (1) | 9,049 | 8,999 | 7,948 | |||||||||
Total interest expense | 10,237 | 10,163 | 9,891 | |||||||||
Net interest income | 281,421 | 269,069 | 238,925 | |||||||||
Provision for loan losses | 33,341 | 31,261 | 6,452 | |||||||||
Net interest income after provision for loan losses | 248,080 | 237,808 | 232,473 | |||||||||
Noninterest income: | ||||||||||||
(Losses) gains on investment securities, net (1) | (4,684 | ) | 12,439 | 33,263 | ||||||||
(Losses) gains on derivative instruments, net | (1,695 | ) | 17,515 | 39,729 | ||||||||
Foreign exchange fees | 26,966 | 23,970 | 17,678 | |||||||||
Credit card fees | 15,507 | 15,816 | 12,090 | |||||||||
Deposit service charges | 12,672 | 12,374 | 10,736 | |||||||||
Client investment fees | 7,995 | 6,181 | 4,482 | |||||||||
Lending related fees | 7,813 | 8,790 | 8,022 | |||||||||
Letters of credit and standby letters of credit fees | 5,589 | 5,574 | 5,202 | |||||||||
Other (1) | 15,971 | 11,847 | (7,678 | ) | ||||||||
Total noninterest income | 86,134 | 114,506 | 123,524 | |||||||||
Noninterest expense: | ||||||||||||
Compensation and benefits | 122,262 | 123,811 | 115,770 | |||||||||
Professional services (1) | 19,000 | 24,005 | 18,747 | |||||||||
Premises and equipment | 14,984 | 15,127 | 12,657 | |||||||||
Business development and travel | 12,246 | 10,620 | 11,112 | |||||||||
Net occupancy | 10,035 | 10,664 | 7,313 | |||||||||
FDIC and state assessments | 6,927 | 6,750 | 5,789 | |||||||||
Correspondent bank fees (1) | 3,652 | 3,640 | 3,368 | |||||||||
Provision for (reduction of) unfunded credit commitments | 134 | (2,195 | ) | 2,263 | ||||||||
Other (1) | 14,793 | 16,186 | 13,522 | |||||||||
Total noninterest expense | 204,033 | 208,608 | 190,541 | |||||||||
Income before income tax expense | 130,181 | 143,706 | 165,456 | |||||||||
Income tax expense | 53,584 | 53,697 | 63,066 | |||||||||
Net income before noncontrolling interests | 76,597 | 90,009 | 102,390 | |||||||||
Net loss (income) attributable to noncontrolling interests (1) | 2,577 | (2,497 | ) | (13,874 | ) | |||||||
Net income available to common stockholders | $ | 79,174 | $ | 87,512 | $ | 88,516 | ||||||
Earnings per common share—basic | $ | 1.53 | $ | 1.70 | $ | 1.74 | ||||||
Earnings per common share—diluted | 1.52 | 1.68 | 1.71 | |||||||||
Weighted average common shares outstanding—basic | 51,645,843 | 51,508,962 | 51,008,680 | |||||||||
Weighted average common shares outstanding—diluted | 52,085,387 | 52,061,171 | 51,719,086 |
(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). |
(Dollars in thousands, except par value and share data) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Assets: | ||||||||||||
Cash and cash equivalents (1) | $ | 1,868,512 | $ | 1,503,257 | $ | 1,254,530 | ||||||
Available-for-sale securities, at fair value (cost $14,150,695, $16,375,941, and $13,619,702, respectively) | 14,327,079 | 16,380,748 | 13,746,923 | |||||||||
Held-to-maturity securities, at cost (fair value $8,630,952, $8,758,622 and $7,869,653, respectively) | 8,548,238 | 8,790,963 | 7,816,797 | |||||||||
Non-marketable and other securities (1) | 668,497 | 674,946 | 664,388 | |||||||||
Investment securities | 23,543,814 | 25,846,657 | 22,228,108 | |||||||||
Loans, net of unearned income (1) | 17,735,147 | 16,742,070 | 14,447,683 | |||||||||
Allowance for loan losses | (230,249 | ) | (217,613 | ) | (167,875 | ) | ||||||
Net loans | 17,504,898 | 16,524,457 | 14,279,808 | |||||||||
Premises and equipment, net of accumulated depreciation and amortization | 108,570 | 102,625 | 82,724 | |||||||||
Accrued interest receivable and other assets (1) | 548,108 | 709,707 | 761,440 | |||||||||
Total assets | $ | 43,573,902 | $ | 44,686,703 | $ | 38,606,610 | ||||||
Liabilities and total equity: | ||||||||||||
Liabilities: | ||||||||||||
Noninterest-bearing demand deposits (1) | $ | 30,933,256 | $ | 30,867,497 | $ | 25,796,125 | ||||||
Interest-bearing deposits | 7,826,465 | 8,275,279 | 8,134,989 | |||||||||
Total deposits | 38,759,721 | 39,142,776 | 33,931,114 | |||||||||
Short-term borrowings | — | 774,900 | 77,766 | |||||||||
Other liabilities (1) | 506,571 | 639,094 | 686,070 | |||||||||
Long-term debt | 796,570 | 796,702 | 797,692 | |||||||||
Total liabilities | 40,062,862 | 41,353,472 | 35,492,642 | |||||||||
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; 51,701,312 shares, 51,610,226 shares and 51,095,341 shares outstanding, respectively | 52 | 52 | 51 | |||||||||
Additional paid-in capital (1) | 1,192,782 | 1,189,032 | 1,140,458 | |||||||||
Retained earnings | 2,072,820 | 1,993,646 | 1,738,483 | |||||||||
Accumulated other comprehensive income (1) | 115,390 | 15,404 | 92,700 | |||||||||
Total SVBFG stockholders’ equity | 3,381,044 | 3,198,134 | 2,971,692 | |||||||||
Noncontrolling interests (1) | 129,996 | 135,097 | 142,276 | |||||||||
Total equity | 3,511,040 | 3,333,231 | 3,113,968 | |||||||||
Total liabilities and total equity | $ | 43,573,902 | $ | 44,686,703 | $ | 38,606,610 |
(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). |
Three months ended | |||||||||||||||||||||||||||||||||
March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||||||||||||||||||||||||
(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) | $ | 2,130,958 | $ | 2,070 | 0.39 | % | $ | 2,806,666 | $ | 1,996 | 0.28 | % | $ | 1,499,891 | $ | 1,269 | 0.34 | % | |||||||||||||||
Investment securities: (3) | |||||||||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||||
Taxable | 14,692,632 | 50,083 | 1.37 | 15,314,771 | 50,125 | 1.30 | 13,571,213 | 44,009 | 1.32 | ||||||||||||||||||||||||
Non-taxable (4) | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Held-to-maturity securities: | |||||||||||||||||||||||||||||||||
Taxable | 8,595,081 | 40,967 | 1.92 | 8,146,904 | 41,025 | 2.00 | 7,486,164 | 37,265 | 2.02 | ||||||||||||||||||||||||
Non-taxable (4) | 63,603 | 918 | 5.81 | 73,597 | 1,053 | 5.68 | 83,591 | 1,188 | 5.76 | ||||||||||||||||||||||||
Total loans, net of unearned income (2) (5) (6) | 17,012,435 | 197,942 | 4.68 | 15,745,610 | 185,401 | 4.67 | 14,048,285 | 165,501 | 4.78 | ||||||||||||||||||||||||
Total interest-earning assets | 42,494,709 | 291,980 | 2.76 | 42,087,548 | 279,600 | 2.64 | 36,689,144 | 249,232 | 2.75 | ||||||||||||||||||||||||
Cash and due from banks (2) | 402,433 | 299,385 | 239,905 | ||||||||||||||||||||||||||||||
Allowance for loan losses | (225,344 | ) | (203,102 | ) | (171,222 | ) | |||||||||||||||||||||||||||
Other assets (2) (7) | 1,518,392 | 1,450,972 | 1,463,514 | ||||||||||||||||||||||||||||||
Total assets | $ | 44,190,190 | $ | 43,634,803 | $ | 38,221,341 | |||||||||||||||||||||||||||
Funding sources: | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Interest bearing checking and savings accounts | $ | 313,460 | $ | 61 | 0.08 | % | $ | 282,775 | $ | 56 | 0.08 | % | $ | 237,575 | $ | 125 | 0.21 | % | |||||||||||||||
Money market deposits | 6,097,575 | 946 | 0.06 | 6,051,490 | 886 | 0.06 | 5,947,877 | 1,531 | 0.10 | ||||||||||||||||||||||||
Money market deposits in foreign offices | 132,171 | 15 | 0.05 | 172,301 | 17 | 0.04 | 207,502 | 20 | 0.04 | ||||||||||||||||||||||||
Time deposits | 67,466 | 23 | 0.14 | 71,801 | 28 | 0.15 | 111,017 | 60 | 0.22 | ||||||||||||||||||||||||
Sweep deposits in foreign offices | 1,437,953 | 143 | 0.04 | 1,795,228 | 177 | 0.04 | 2,184,821 | 207 | 0.04 | ||||||||||||||||||||||||
Total interest-bearing deposits | 8,048,625 | 1,188 | 0.06 | 8,373,595 | 1,164 | 0.06 | 8,688,792 | 1,943 | 0.09 | ||||||||||||||||||||||||
Short-term borrowings | 44,752 | 42 | 0.38 | 16,461 | 14 | 0.34 | 43,618 | 12 | 0.11 | ||||||||||||||||||||||||
3.50% Senior Notes | 346,693 | 3,140 | 3.64 | 346,617 | 3,138 | 3.59 | 238,662 | 2,126 | 3.61 | ||||||||||||||||||||||||
5.375% Senior Notes | 347,063 | 4,842 | 5.61 | 346,925 | 4,841 | 5.54 | 346,522 | 4,835 | 5.66 | ||||||||||||||||||||||||
Junior Subordinated Debentures | 54,654 | 831 | 6.12 | 54,698 | 831 | 6.03 | 54,830 | 832 | 6.15 | ||||||||||||||||||||||||
6.05% Subordinated Notes | 48,295 | 194 | 1.62 | 48,810 | 175 | 1.42 | 50,015 | 143 | 1.16 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 8,890,082 | 10,237 | 0.46 | 9,187,106 | 10,163 | 0.44 | 9,422,439 | 9,891 | 0.43 | ||||||||||||||||||||||||
Portion of noninterest-bearing funding sources | 33,604,627 | 32,900,442 | 27,266,705 | ||||||||||||||||||||||||||||||
Total funding sources | 42,494,709 | 10,237 | 0.10 | 42,087,548 | 10,163 | 0.10 | 36,689,144 | 9,891 | 0.11 | ||||||||||||||||||||||||
Noninterest-bearing funding sources: (2) | |||||||||||||||||||||||||||||||||
Demand deposits | 31,219,504 | 30,531,096 | 25,173,444 | ||||||||||||||||||||||||||||||
Other liabilities | 624,796 | 544,986 | 571,736 | ||||||||||||||||||||||||||||||
SVBFG stockholders’ equity | 3,322,362 | 3,233,488 | 2,900,330 | ||||||||||||||||||||||||||||||
Noncontrolling interests | 133,446 | 138,127 | 153,392 | ||||||||||||||||||||||||||||||
Portion used to fund interest-earning assets | (33,604,627 | ) | (32,900,442 | ) | (27,266,705 | ) | |||||||||||||||||||||||||||
Total liabilities and total equity | $ | 44,190,190 | $ | 43,634,803 | $ | 38,221,341 | |||||||||||||||||||||||||||
Net interest income and margin (2) | $ | 281,743 | 2.67 | % | $ | 269,437 | 2.54 | % | $ | 239,341 | 2.65 | % | |||||||||||||||||||||
Total deposits (2) | $ | 39,268,129 | $ | 38,904,691 | $ | 33,862,236 | |||||||||||||||||||||||||||
Average SVBFG stockholders’ equity as a percentage of average assets (2) | 7.52 | % | 7.41 | % | 7.59 | % | |||||||||||||||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||
Adjustments for taxable equivalent basis | (322 | ) | (368 | ) | (416 | ) | |||||||||||||||||||||||||||
Net interest income, as reported | $ | 281,421 | $ | 269,069 | $ | 238,925 |
(1) | Includes average interest-earning deposits in other financial institutions of $566 million, $521 million and $509 million; and $1.5 billion, $2.2 billion and $0.9 billion deposited at the Federal Reserve Bank, earning interest at the Fed Funds target rate, for the quarters ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively. |
(2) | 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). |
(3) | Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income. |
(4) | 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. |
(5) | Nonaccrual loans are reflected in the average balances of loans. |
(6) | Interest income includes loan fees of $25 million, $27 million and $23 million for the quarters ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively. |
(7) | Average investment securities of $781 million, $754 million and $773 million for the quarters ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively, were classified as other assets as they are noninterest-earning assets. These investments consist primarily of non-marketable and other securities. |
Three months ended | ||||||||||||
(Dollars in thousands) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Equity warrant assets (1): | ||||||||||||
Gains on exercises, net | $ | 6,849 | $ | 4,625 | $ | 4,043 | ||||||
Cancellations and expirations | (616 | ) | (222 | ) | (292 | ) | ||||||
Changes in fair value, net | 372 | 11,981 | 16,527 | |||||||||
Total net gains on equity warrant assets (2) | $ | 6,605 | $ | 16,384 | $ | 20,278 |
(1) | At March 31, 2016, we held warrants in 1,670 companies, compared to 1,652 companies at December 31, 2015 and 1,525 companies at March 31, 2015. The total value of our warrant portfolio was $131 million at March 31, 2016 compared to $137 million at December 31, 2015, and $124 million at March 31, 2015. Warrants in 18 companies had values greater than $1.0 million and represented 32 percent of the fair value of the total warrant portfolio at March 31, 2016. |
(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 | |||||||||
(Shares in thousands) | March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||
Weighted average common shares outstanding—basic | 51,646 | 51,509 | 51,009 | ||||||
Effect of dilutive securities: | |||||||||
Stock options and employee stock purchase plan | 264 | 342 | 445 | ||||||
Restricted stock units | 175 | 210 | 265 | ||||||
Total effect of dilutive securities | 439 | 552 | 710 | ||||||
Weighted average common shares outstanding—diluted | 52,085 | 52,061 | 51,719 |
March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||
SVB Financial Group: | |||||||||
CET 1 risk-based capital ratio | 12.38 | % | 12.28 | % | 11.92 | % | |||
Tier 1 risk-based capital ratio | 12.86 | 12.83 | 12.53 | ||||||
Total risk-based capital ratio | 13.90 | 13.84 | 13.46 | ||||||
Tier 1 leverage ratio | 7.69 | 7.63 | 7.92 | ||||||
Tangible common equity to tangible assets ratio (1) | 7.76 | 7.16 | 7.70 | ||||||
Tangible common equity to risk-weighted assets ratio (1) | 12.82 | 12.34 | 12.30 | ||||||
Silicon Valley Bank: | |||||||||
CET 1 risk-based capital ratio | 12.57 | % | 12.52 | % | 12.36 | % | |||
Tier 1 risk-based capital ratio | 12.57 | 12.52 | 12.36 | ||||||
Total risk-based capital ratio | 13.66 | 13.60 | 13.35 | ||||||
Tier 1 leverage ratio | 7.19 | 7.09 | 7.43 | ||||||
Tangible common equity to tangible assets ratio (1) | 7.55 | 6.95 | 7.60 | ||||||
Tangible common equity to risk-weighted assets ratio (1) | 13.03 | 12.59 | 12.77 |
(1) | 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) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software and internet | $ | 1,939,785 | $ | 1,891,512 | $ | 1,810,914 | ||||||
Hardware | 414,191 | 392,080 | 501,456 | |||||||||
Private equity/venture capital | 4,271,726 | 3,600,102 | 3,068,021 | |||||||||
Life science/healthcare | 613,634 | 620,170 | 477,396 | |||||||||
Premium wine (1) | 17,957 | 22,294 | 27,882 | |||||||||
Other | 140,729 | 110,155 | 94,311 | |||||||||
Total commercial loans | 7,398,022 | 6,636,313 | 5,979,980 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine (1) | 90,162 | 82,305 | 80,091 | |||||||||
Consumer (2) | — | — | — | |||||||||
Other | 21,733 | 21,933 | 22,533 | |||||||||
Total real estate secured loans | 111,895 | 104,238 | 102,624 | |||||||||
Consumer loans (2) | 107,610 | 103,640 | 63,000 | |||||||||
Total loans individually equal to or greater than $20 million | $ | 7,617,527 | $ | 6,844,191 | $ | 6,145,604 | ||||||
Loans (individually or in the aggregate) to any single client, less than $20 million | ||||||||||||
Commercial loans: | ||||||||||||
Software and internet | $ | 3,555,087 | $ | 3,590,598 | $ | 3,102,833 | ||||||
Hardware | 650,554 | 688,151 | 575,169 | |||||||||
Private equity/venture capital | 2,074,363 | 1,911,827 | 1,487,725 | |||||||||
Life science/healthcare | 1,127,132 | 1,104,375 | 934,167 | |||||||||
Premium wine | 167,319 | 180,514 | 159,799 | |||||||||
Other | 219,514 | 204,658 | 197,202 | |||||||||
Total commercial loans | 7,793,969 | 7,680,123 | 6,456,895 | |||||||||
Real estate secured loans: | ||||||||||||
Premium wine | 564,197 | 564,282 | 533,695 | |||||||||
Consumer | 1,652,344 | 1,543,340 | 1,208,637 | |||||||||
Other | 23,200 | 23,261 | 17,230 | |||||||||
Total real estate secured loans | 2,239,741 | 2,130,883 | 1,759,562 | |||||||||
Construction loans | 74,205 | 78,862 | 85,906 | |||||||||
Consumer loans | 120,639 | 123,072 | 106,887 | |||||||||
Total loans individually less than $20 million | $ | 10,228,554 | $ | 10,012,940 | $ | 8,409,250 | ||||||
Total gross loans | $ | 17,846,081 | $ | 16,857,131 | $ | 14,554,854 | ||||||
Loans individually equal to or greater than $20 million as a percentage of total gross loans | 42.7 | % | 40.6 | % | 42.2 | % | ||||||
Total clients with loans individually equal to or greater than $20 million | 207 | 188 | 167 | |||||||||
Loans individually equal to or greater than $20 million on nonaccrual status | $ | 60,954 | $ | 85,156 | $ | 27,525 |
(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. |
(Dollars in thousands, except ratios) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Gross nonaccrual, past due, and restructured loans: | ||||||||||||
Nonaccrual loans | $ | 113,945 | $ | 123,392 | $ | 42,382 | ||||||
Loans past due 90 days or more still accruing interest | 27 | — | 3,099 | |||||||||
Total nonperforming loans | 113,972 | 123,392 | 45,481 | |||||||||
OREO and other foreclosed assets | — | — | 545 | |||||||||
Total nonperforming assets | $ | 113,972 | $ | 123,392 | $ | 46,026 | ||||||
Nonperforming loans as a percentage of total gross loans | 0.64 | % | 0.73 | % | 0.31 | % | ||||||
Nonperforming assets as a percentage of total assets | 0.26 | 0.28 | 0.12 | |||||||||
Allowance for loan losses | $ | 230,249 | $ | 217,613 | $ | 167,875 | ||||||
As a percentage of total gross loans | 1.29 | % | 1.29 | % | ` | 1.15 | % | |||||
As a percentage of total gross nonperforming loans | 202.02 | 176.36 | 369.11 | |||||||||
Allowance for loan losses for nonaccrual loans | $ | 50,353 | $ | 51,844 | $ | 23,822 | ||||||
As a percentage of total gross loans | 0.28 | % | 0.31 | % | 0.16 | % | ||||||
As a percentage of total gross nonperforming loans | 44.18 | 42.02 | 52.38 | |||||||||
Allowance for loan losses for total gross performing loans | $ | 179,896 | $ | 165,769 | $ | 144,053 | ||||||
As a percentage of total gross loans | 1.01 | % | 0.98 | % | 0.99 | % | ||||||
As a percentage of total gross performing loans | 1.01 | 0.99 | 0.99 | |||||||||
Total gross loans | $ | 17,846,081 | $ | 16,857,131 | $ | 14,554,854 | ||||||
Total gross performing loans | 17,732,109 | 16,733,739 | 14,509,373 | |||||||||
Reserve for unfunded credit commitments (1) | 34,541 | 34,415 | 38,628 | |||||||||
As a percentage of total unfunded credit commitments | 0.22 | % | 0.22 | % | 0.25 | % | ||||||
Total unfunded credit commitments (2) | $ | 15,880,198 | $ | 15,614,359 | $ | 15,485,514 |
(1) | The “reserve for unfunded credit commitments” is included as a component of “other liabilities.” |
(2) | Includes unfunded loan commitments and letters of credit. |
Three months ended | ||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | March 31, 2015 | |||||||||
Client directed investment assets | $ | 7,318 | $ | 8,268 | $ | 7,017 | ||||||
Client investment assets under management (2) | 21,731 | 21,820 | 17,712 | |||||||||
Sweep money market funds | 13,423 | 13,348 | 8,896 | |||||||||
Total average client investment funds | $ | 42,472 | $ | 43,436 | $ | 33,625 |
Period-end balances at | ||||||||||||||||||||
(Dollars in millions) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
Client directed investment assets | $ | 7,512 | $ | 7,527 | $ | 8,487 | $ | 8,047 | $ | 7,344 | ||||||||||
Client investment assets under management (2) | 21,431 | 22,454 | 21,823 | 20,394 | 17,956 | |||||||||||||||
Sweep money market funds | 13,331 | 14,011 | 13,257 | 11,643 | 9,870 | |||||||||||||||
Total period-end client investment funds | $ | 42,274 | $ | 43,992 | $ | 43,567 | $ | 40,084 | $ | 35,170 |
(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. |
• | 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 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 income (losses) and expense attributable to noncontrolling interests, adjustments to net interest income for a taxable equivalent basis and the losses noted above for applicable periods. |
• | 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 (losses) on investment securities, net, gains (losses) on derivative instruments, net, and other noninterest income items. |
Three months ended | ||||||||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
GAAP noninterest income | $ | 86,134 | $ | 114,506 | $ | 108,477 | $ | 126,287 | $ | 123,524 | ||||||||||
Less: (losses) income attributable to noncontrolling interests, including carried interest | (2,671 | ) | 2,673 | 6,343 | 8,556 | 14,164 | ||||||||||||||
Non-GAAP noninterest income, net of noncontrolling interests | $ | 88,805 | $ | 111,833 | $ | 102,134 | $ | 117,731 | $ | 109,360 |
(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). |
Three months ended | ||||||||||||||||||||
Non-GAAP core fee income (Dollars in thousands) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
GAAP noninterest income (1) | $ | 86,134 | $ | 114,506 | $ | 108,477 | $ | 126,287 | $ | 123,524 | ||||||||||
Less: (losses) gains on investment securities, net (1) | (4,684 | ) | 12,439 | 18,768 | 24,975 | 33,263 | ||||||||||||||
Less: (losses) gains on derivative instruments, net | (1,695 | ) | 17,515 | 10,244 | 16,317 | 39,729 | ||||||||||||||
Less: other noninterest income (losses) (1) | 15,971 | 11,847 | 11,077 | 18,916 | (7,678 | ) | ||||||||||||||
Non-GAAP core fee income | $ | 76,542 | $ | 72,705 | $ | 68,388 | $ | 66,079 | $ | 58,210 |
(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). |
Three months ended | ||||||||||||||||||||
Non-GAAP net (losses) gains on investment securities, net of noncontrolling interests (Dollars in thousands) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
GAAP net (losses) gains on investment securities | $ | (4,684 | ) | $ | 12,439 | $ | 18,768 | $ | 24,975 | $ | 33,263 | |||||||||
Less: (losses) income attributable to noncontrolling interests, including carried interest | (2,716 | ) | 2,803 | 6,102 | 9,036 | 14,171 | ||||||||||||||
Non-GAAP net (losses) gains on investment securities, net of noncontrolling interests | $ | (1,968 | ) | $ | 9,636 | $ | 12,666 | $ | 15,939 | $ | 19,092 |
(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). |
Three months ended | ||||||||||||||||||||
Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
GAAP noninterest expense | $ | 204,033 | $ | 208,608 | $ | 184,755 | $ | 194,112 | $ | 190,541 | ||||||||||
Less: expense attributable to noncontrolling interests | (91 | ) | 178 | 116 | 242 | 292 | ||||||||||||||
Non-GAAP noninterest expense, net of noncontrolling interests | $ | 204,124 | $ | 208,430 | $ | 184,639 | $ | 193,870 | $ | 190,249 | ||||||||||
GAAP net interest income | $ | 281,421 | $ | 269,069 | $ | 254,660 | $ | 243,771 | $ | 238,925 | ||||||||||
Adjustments for taxable equivalent basis | 322 | 368 | 380 | 400 | 416 | |||||||||||||||
Non-GAAP taxable equivalent net interest income | $ | 281,743 | $ | 269,437 | $ | 255,040 | $ | 244,171 | $ | 239,341 | ||||||||||
Less: net interest income attributable to noncontrolling interests | 3 | 2 | 2 | 2 | 2 | |||||||||||||||
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests | $ | 281,740 | $ | 269,435 | $ | 255,038 | $ | 244,169 | $ | 239,339 | ||||||||||
GAAP noninterest income | $ | 86,134 | $ | 114,506 | $ | 108,477 | $ | 126,287 | $ | 123,524 | ||||||||||
Non-GAAP noninterest income, net of noncontrolling interests | 88,805 | 111,833 | 102,134 | 117,731 | 109,360 | |||||||||||||||
GAAP total revenue | $ | 367,555 | $ | 383,575 | $ | 363,137 | $ | 370,058 | $ | 362,449 | ||||||||||
Non-GAAP taxable equivalent revenue, net of noncontrolling interests | $ | 370,545 | $ | 381,268 | $ | 357,172 | $ | 361,900 | $ | 348,699 | ||||||||||
GAAP operating efficiency ratio | 55.51 | % | 54.39 | % | 50.88 | % | 52.45 | % | 52.57 | % | ||||||||||
Non-GAAP, net of noncontrolling interests operating efficiency ratio | 55.09 | 54.67 | 51.69 | 53.57 | 54.56 |
(1) | 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). |
Non-GAAP non-marketable and other securities, net of noncontrolling interests (Dollars in thousands) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
GAAP non-marketable and other securities | $ | 668,497 | $ | 674,946 | $ | 650,555 | $ | 645,506 | $ | 664,388 | ||||||||||
Less: amounts attributable to noncontrolling interests | 123,158 | 126,388 | 129,417 | 128,539 | 129,921 | |||||||||||||||
Non-GAAP non-marketable and other securities, net of noncontrolling interests | $ | 545,339 | $ | 548,558 | $ | 521,138 | $ | 516,967 | $ | 534,467 |
(1) | 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) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
GAAP SVBFG stockholders’ equity | $ | 3,381,044 | $ | 3,198,134 | $ | 3,174,899 | $ | 3,051,102 | $ | 2,971,692 | ||||||||||
Tangible common equity | $ | 3,381,044 | $ | 3,198,134 | $ | 3,174,899 | $ | 3,051,102 | $ | 2,971,692 | ||||||||||
GAAP total assets | $ | 43,573,902 | $ | 44,686,703 | $ | 41,730,982 | $ | 40,231,007 | $ | 38,606,610 | ||||||||||
Tangible assets | $ | 43,573,902 | $ | 44,686,703 | $ | 41,730,982 | $ | 40,231,007 | $ | 38,606,610 | ||||||||||
Risk-weighted assets | $ | 26,382,154 | $ | 25,919,594 | $ | 24,666,658 | $ | 23,815,512 | $ | 24,151,737 | ||||||||||
Tangible common equity to tangible assets | 7.76 | % | 7.16 | % | 7.61 | % | 7.58 | % | 7.70 | % | ||||||||||
Tangible common equity to risk-weighted assets | 12.82 | 12.34 | 12.87 | 12.81 | 12.30 |
(1) | 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). |
Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in thousands, except ratios) | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 (1) | |||||||||||||||
Tangible common equity | $ | 3,246,536 | $ | 3,059,045 | $ | 3,048,933 | $ | 2,930,554 | $ | 2,886,173 | ||||||||||
Tangible assets | $ | 42,990,146 | $ | 44,045,967 | $ | 41,073,120 | $ | 39,612,481 | $ | 37,974,587 | ||||||||||
Risk-weighted assets | $ | 24,922,140 | $ | 24,301,043 | $ | 23,072,656 | $ | 22,277,020 | $ | 22,602,065 | ||||||||||
Tangible common equity to tangible assets | 7.55 | % | 6.95 | % | 7.42 | % | 7.40 | % | 7.60 | % | ||||||||||
Tangible common equity to risk-weighted assets | 13.03 | 12.59 | 13.21 | 13.16 | 12.77 |
(1) | 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). |
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