Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2019

Our segment information for the three and nine months ended September 30, 2019 and 2018 is as follows:



(Dollars in thousands)	Global Commercial Bank (1)			SVB Private Bank			SVB Capital (1)			SVB Leerink (1)			Other Items (2)			Total
Three months ended September 30, 2019
Net interest income	$	455,161		$	12,772		$	9		$	277		$	52,425		$	520,644
Provision for credit losses	(34,075		)	(1,910		)	—			—			(551		)	(36,536		)
Noninterest income	161,029			634			34,955			52,947			44,444			294,009
Noninterest expense (3)	(213,786		)	(11,638		)	(8,129		)	(55,200		)	(102,571		)	(391,324		)
Income (loss) before income tax expense (4)	$	368,329		$	(142	)	$	26,835		$	(1,976	)	$	(6,253	)	$	386,793
Total average loans, net of unearned income	$	25,839,647		$	3,400,889		$	—		$	—		$	581,890		$	29,822,426
Total average assets (5) (6)	58,384,473			3,431,313			396,031			428,848			2,687,083			65,327,748
Total average deposits	55,250,154			1,497,303			—			—			487,512			57,234,969
Three months ended September 30, 2018
Net interest income	$	431,036		$	14,919		$	6		$	—		$	47,261		$	493,222
(Provision for) reduction of credit losses	(19,074		)	(362		)	—			—			2,262			(17,174		)
Noninterest income (7)	135,228			605			24,423			—			49,814			210,070
Noninterest expense (3)	(206,487		)	(6,760		)	(6,469		)	—			(89,729		)	(309,445		)
Income before income tax expense (4)	$	340,703		$	8,402		$	17,960		$	—		$	9,608		$	376,673
Total average loans, net of unearned income	$	22,925,909		$	2,928,576		$	—		$	—		$	476,892		$	26,331,377
Total average assets (5) (8)	49,948,578			2,949,908			388,531			—			3,178,020			56,465,037
Total average deposits	47,037,693			1,505,746			—			—			548,801			49,092,240
Nine months ended September 30, 2019
Net interest income	$	1,360,997		$	37,200		$	20		$	961		$	163,755		$	1,562,933
Provision for credit losses	(79,175		)	(1,779		)	—			—			(8,079		)	(89,033		)
Noninterest income	471,492			1,829			99,860			188,064			146,890			908,135
Noninterest expense (3)	(617,933		)	(30,015		)	(21,794		)	(177,675		)	(293,093		)	(1,140,510		)
Income before income tax expense (4)	$	1,135,381		$	7,235		$	78,086		$	11,350		$	9,473		$	1,241,525
Total average loans, net of unearned income	$	25,457,997		$	3,235,943		$	—		$	—		$	517,020		$	29,210,960
Total average assets (5) (6)	54,196,976			3,264,071			382,707			380,290			2,990,088			61,214,132
Total average deposits	51,352,644			1,461,170			—			—			517,530			53,331,344
Nine months ended September 30, 2018
Net interest income	$	1,209,960		$	46,811		$	22		$	—		$	122,735		$	1,379,528
Provision for credit losses	(71,704		)	(2,384		)	—			—			(138		)	(74,226		)
Noninterest income (7)	377,320			1,677			81,832			—			97,448			558,277
Noninterest expense (3)	(591,434		)	(18,729		)	(17,182		)	—			(253,256		)	(880,601		)
Income (loss) before income tax expense (4)	$	924,142		$	27,375		$	64,672		$	—		$	(33,211	)	$	982,978
Total average loans, net of unearned income	$	21,781,557		$	2,791,910		$	—		$	—		$	434,810		$	25,008,277
Total average assets (5) (8)	48,380,180			2,813,101			379,809			—			2,859,562			54,432,652
Total average deposits	45,701,317			1,519,200			—			—			513,845			47,734,362


(1)	Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of net interest income, noninterest income, noninterest expense and total average assets are shown net of noncontrolling interests for all periods presented. Noncontrolling interest is included within “Other Items."

(2)

The “Other Items” column reflects the adjustments necessary to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP. Net interest income consists primarily of interest earned from our fixed income investment portfolio, net of FTP. Noninterest income consists primarily of gains on equity warrant assets, gains or losses on the sale of fixed income investments and gains on equity securities from exercised warrant assets. Noninterest expense consists primarily of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses.


(3)	The Global Commercial Bank segment includes direct depreciation and amortization of $5.1 million and $5.5 million for the three months ended September 30, 2019 and 2018, respectively, and $14.8 million and $16.6 million for the nine months ended September 30, 2019 and 2018.


(4)	The internal reporting model used by management to assess segment performance does not calculate income tax expense by segment. Our effective tax rate is a reasonable approximation of the segment rates.


(5)	Total average assets equal the greater of total average assets or the sum of total average liabilities and total average stockholders’ equity for each segment to reconcile the results to the consolidated financial statements prepared in conformity with GAAP.


(6)	Included in the total average assets for SVB Leerink is goodwill of $137.8 million for both the three and nine months ended September 30, 2019 related to the acquisition effective January 4, 2019.

(7)

For the three and nine months ended September 30, 2018, amounts of client investment fees included in the line item "Noninterest Income" previously reported as "Other Items" have been correctly allocated to our reportable segment "Global Commercial Bank" to properly reflect the source of such revenue. The correction of this immaterial error had no impact on the "Total" amount of noninterest income.

(8)

For the three and nine months ended September 30, 2018, amounts for average assets previously reported as "Other Items" have been correctly allocated to the reportable segments "Global Commercial Bank" and “Private Bank” to properly reflect the greater of total average assets or the sum of total average liabilities and total average stockholders’ equity for “Global Commercial Bank” and “Private Bank.” The correction of this immaterial error had no impact on the "Total" amount of average assets.