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Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments
 6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments
We serve a variety of commercial clients in the technology, life science/healthcare, private equity/venture capital and premium wine industries. Our technology clients generally tend to be in the industries of hardware (such as semiconductors, communications, data, storage and electronics), software/internet (such as infrastructure software, applications, software services, digital content and advertising technology) and ERI. Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans to our technology, life science/healthcare and ERI clients are reported under the Investor Dependent, Cash Flow Dependent and Balance Sheet Dependent risk-based segments below. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls and are reported under the Global Fund Banking portfolio segment below. Loans to the premium wine industry focus on vineyards and wineries that produce grapes and wines of high quality. In addition to commercial loans, we make consumer loans through SVB Private Bank and provide real estate secured loans to eligible employees through our EHOP.
We also provide community development loans made as part of our responsibilities under the CRA. These loans are included within “construction loans” below and are primarily secured by real estate. Additionally, beginning in April 2020, we accepted applications under the PPP administered by the SBA under the Coronavirus Aid, Relief, and Economic Security Act
(the "CARES Act") and originated loans to qualified small businesses. Disbursement of PPP funds under the CARES Act originally expired on August 8, 2020, however, on December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the "Economic Aid Act") was enacted, which extended the application period for PPP loans up to March 31, 2021, and allowed for certain PPP borrowers to apply for second draw loans. The disbursement phase of the PPP was further extended to June 30, 2021 pursuant to the PPP Extension Act of 2021.
The composition of loans at amortized cost basis broken out by risk-based segment at June 30, 2021 and December 31, 2020 is presented in the following table:
(Dollars in millions)June 30, 2021December 31, 2020
Global fund banking$30,630 $25,543 
Investor dependent:
Early stage1,565 1,486 
Mid stage1,708 1,565 
Later stage2,055 1,921 
Total investor dependent5,328 4,972 
Cash flow dependent:
Sponsor led buyout1,917 1,989 
Other2,926 2,945 
Total cash flow dependent4,843 4,934 
Private bank (4)5,297 4,901 
Balance sheet dependent2,804 2,191 
Premium wine (4)1,002 1,053 
Other (4)7 28 
SBA loans843 1,559 
Total loans (1) (2) (3)$50,754 $45,181 
ACL(396)(448)
Net loans$50,358 $44,733 
(1)    Total loans at amortized cost is net of unearned income of $248 million and $226 million at June 30, 2021 and December 31, 2020, respectively.
(2)     Included within our total loan portfolio are credit card loans of $509 million and $400 million at June 30, 2021 and December 31, 2020, respectively.
(3)     Included within our total loan portfolio are construction loans of $84 million and $118 million at June 30, 2021 and December 31, 2020, respectively.
(4)     Of our total loans, the table below includes those secured by real estate at amortized cost at June 30, 2021 and December 31, 2020 and were comprised of the following:
(Dollars in millions)June 30, 2021December 31, 2020
Real estate secured loans:
Private bank:
Loans for personal residence$3,773 $3,392 
Loans to eligible employees447 481 
Home equity lines of credit61 43 
Other131 143 
Total private bank loans secured by real estate$4,412 $4,059 
Premium wine807 824 
Other34 57 
Total real estate secured loans$5,253 $4,940 
Credit Quality Indicators
For each individual client, we establish an internal credit risk rating for that loan, which is used for assessing and monitoring credit risk as well as performance of the loan and the overall portfolio. Our internal credit risk ratings are also used to summarize the risk of loss due to failure by an individual borrower to repay the loan. For our internal credit risk ratings, each individual loan is given a risk rating of 1 through 10. Loans risk-rated 1 through 4 are performing loans and translate to an internal rating of “Pass,” with loans risk-rated 1 being cash secured. Loans risk-rated 5 through 7 are performing loans; however, we consider them as demonstrating higher risk, which requires more frequent review of the individual exposures; these translate to an internal rating of “Criticized.” All of our nonaccrual loans are risk-rated 8 or 9 and are classified with the internal rating of "Nonperforming." Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators on a quarterly basis for performance and appropriateness of risk ratings as part of our evaluation process for our ACL for loans.
The following tables summarize the credit quality indicators, broken out by risk-based segment and vintage year, as of June 30, 2021 and December 31, 2020:
Term Loans by Origination Year
June 30, 2021 (Dollars in millions)20212020201920182017PriorRevolving LoansRevolving Loans Converted to Term LoansUnallocated (1)Total
Global fund banking:
Risk rating:
Pass $567 $165 $42 $55 $20 $7 $29,766 $1 $— $30,623 
Criticized— — — — — — 5 2 — 7 
Nonperforming— — — — — — — — — — 
Total global fund banking$567 $165 $42 $55 $20 $7 $29,771 $3 $— $30,630 
Investor dependent:
Early stage:
Risk rating:
Pass $392 $520 $237 $53 $10 $— $144 $1 $— $1,357 
Criticized8 93 51 14 2 5 24 — — 197 
Nonperforming— 1 5 4 — — 1 — — 11 
Total early stage$400 $614 $293 $71 $12 $5 $169 $1 $— $1,565 
Mid stage:
Risk rating:
Pass $505 $654 $215 $106 $16 $2 $100 $5 $— $1,603 
Criticized8 49 9 13 3 — 18 — — 100 
Nonperforming— — 2 3 — — — — — 5 
Total mid stage$513 $703 $226 $122 $19 $2 $118 $5 $— $1,708 
Later stage:
Risk rating:
Pass $576 $829 $290 $63 $10 $2 $195 $— $— $1,965 
Criticized6 29 16 3 2 — 13 — — 69 
Nonperforming— 15 — — — — 6 — — 21 
Total later stage$582 $873 $306 $66 $12 $2 $214 $— $— $2,055 
Total investor dependent$1,495 $2,190 $825 $259 $43 $9 $501 $6 $— $5,328 
Cash flow dependent:
Sponsor led buyout:
Risk rating:
Pass $588 $548 $341 $141 $120 $4 $44 $— $— $1,786 
Criticized— 14 15 40 10 13 5 — — 97 
Nonperforming— — 12 10 7 — 5 — — 34 
Total sponsor led buyout$588 $562 $368 $191 $137 $17 $54 $— $— $1,917 
Other
Risk rating:
Pass $540 $720 $332 $137 $108 $— $868 $— $— $2,705 
Criticized— 10 35 37 — — 138 — — 220 
Nonperforming— — — — — — 1 — — 1 
Total other$540 $730 $367 $174 $108 $— $1,007 $— $— $2,926 
Total cash flow dependent$1,128 $1,292 $735 $365 $245 $17 $1,061 $— $— $4,843 
Private bank:
Risk rating:
Pass $1,047 $1,748 $980 $321 $243 $513 $406 $1 $— $5,259 
Criticized— 1 8 3 4 11 4 — — 31 
Nonperforming— — — 6 — 1 — — — 7 
Total private bank$1,047 $1,749 $988 $330 $247 $525 $410 $1 $— $5,297 
Balance sheet dependent:
Risk rating:
Pass $657 $728 $130 $158 $31 $— $928 $— $— $2,632 
Criticized— 65 42 — — — 64 1 — 172 
Nonperforming— — — — — — — — — — 
Total balance sheet dependent$657 $793 $172 $158 $31 $— $992 $1 $— $2,804 
Premium wine:
Risk rating:
Pass $52 $128 $195 $72 $74 $210 $112 $36 $— $879 
Criticized2 15 12 16 10 47 21 — — 123 
Nonperforming— — — — — — — — — — 
Total Premium wine$54 $143 $207 $88 $84 $257 $133 $36 $— $1,002 
Other:
Risk rating:
Pass $— $17 $13 $— $1 $— $3 $— $(27)$7 
Criticized— — — — — — — — — — 
Nonperforming— — — — — — — — — — 
Total other$— $17 $13 $— $1 $— $3 $— $(27)$7 
SBA loans:
Risk rating:
Pass $401 $368 $— $— $— $— $— $— $— $769 
Criticized46 28 — — — — — — — 74 
Nonperforming— — — — — — — — — — 
Total SBA loans$447 $396 $— $— $— $— $— $— $— $843 
Total loans$5,395 $6,745 $2,982 $1,255 $671 $815 $32,871 $47 $(27)$50,754 
(1)    These amounts consist of fees and clearing items that have not yet been allocated at the loan level.
Term Loans by Origination Year
December 31, 2020 (Dollars in millions)20202019201820172016PriorRevolving LoansRevolving Loans Converted to Term LoansTotal
Global fund banking:
Risk rating:
Pass $440 $48 $69 $23 $2 $6 $24,947 $2 $25,537 
Criticized—————— — 6 6 
Nonperforming—————— — — — 
Total global fund banking$440 $48 $69 $23 $2 $6 $24,947 $8 $25,543 
Investor dependent:
Early stage:
Risk rating:
Pass $667 $370 $121 $32 $1 $1 $96 $1 $1,289 
Criticized47 73 26 10 4 — 19 — 179 
Nonperforming2 9 5 1 — — 1 — 18 
Total early stage$716 $452 $152 $43 $5 $1 $116 $1 $1,486 
Mid stage:
Risk rating:
Pass $840 $302 $146 $23 $5 $1 $101 $3 $1,421 
Criticized43 48 26 8 — 5 10 — 140 
Nonperforming— 1 — 3 — — — — 4 
Total mid stage$883 $351 $172 $34 $5 $6 $111 $3 $1,565 
Later stage:
Risk rating:
Pass $906 $394 $170 $38 $— $8 $224 $5 $1,745 
Criticized22 55 30 1 — 2 37 — 147 
Nonperforming17 2 4 — — — 6 — 29 
Total later stage$945 $451 $204 $39 $— $10 $267 $5 $1,921 
Total investor dependent$2,544 $1,254 $528 $116 $10 $17 $494 $9 $4,972 
Cash flow dependent:
Sponsor led buyout:
Risk rating:
Pass $791 $452 $274 $167 $37 $— $75 $— $1,796 
Criticized— 70 39 22 13 — 9 — 153 
Nonperforming— 12 16 7 — — 5 — 40 
Total sponsor led buyout
$791 $534 $329 $196 $50 $— $89 $— $1,989 
Other
Risk rating:
Pass $880 $513 $179 $133 $39 $— $933 $— $2,677 
Criticized19 68 34 4 — — 137 — 262 
Nonperforming— — 5 — — — 1 — 6 
Total other$899 $581 $218 $137 $39 $— $1,071 $— $2,945 
Total cash flow dependent$1,690 $1,115 $547 $333 $89 $— $1,160 $— $4,934 
Private bank:
Risk rating:
Pass $1,878 $1,153 $394 $353 $295 $406 $382 $1 $4,862 
Criticized3 10 5 1 5 8 1 — 33 
Nonperforming— — 3 — — 2 1 — 6 
Total private bank$1,881 $1,163 $402 $354 $300 $416 $384 $1 $4,901 
Balance sheet dependent:
Risk rating:
Pass $838 $190 $199 $19 $— $— $858 $1 $2,105 
Criticized56 4 — — — — 26 — 86 
Nonperforming— — — — — — — — — 
Total balance sheet dependent
$894 $194 $199 $19 $— $— $884 $1 $2,191 
Premium wine:
Risk rating:
Pass $127 $194 $71 $79 $115 $154 $135 $36 $911 
Criticized18 24 36 10 13 6 34 — 141 
Nonperforming— — — — 1 — — — 1 
Total Premium wine$145 $218 $107 $89 $129 $160 $169 $36 $1,053 
Other:
Risk rating:
Pass $— $16 $11 $— $— $1 $— $— $28 
Criticized— — — — — — — — — 
Nonperforming— — — — — — — — — 
Total other
$— $16 $11 $— $— $1 $— $— $28 
SBA loans:
Risk rating:
Pass $1,456 $— $— $— $— $— $— $— $1,456 
Criticized103 — — — — — — — 103 
Nonperforming— — — — — — — — — 
Total SBA loans
$1,559 $— $— $— $— $— $— $— $1,559 
Total loans$9,153 $4,008 $1,863 $934 $530 $600 $28,038 $55 $45,181 
Allowance for Credit Losses: Loans
In the second quarter of 2021, the ACL for loans increased by $4 million from the prior quarter, driven primarily by growth in our loan portfolio, partially offset by improved economic conditions within our forecasted assumptions.
The economic forecast in Moody's Analytics June 2021 forecast was utilized in our quantitative model for the ACL as of June 30, 2021. The forecast assumptions included an improvement in the unemployment rate as a result of continued business re-openings and the effect of government aid programs, as well as an improved forecasted gross domestic product growth rate. We determined the forecast to be a reasonable view of the outlook for the economy given the available information at current quarter end. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics June 2021 forecast, we addressed the risk through management's qualitative adjustments to our ACL.
We do not estimate expected credit losses on AIR on loans, as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled $143 million at June 30, 2021 and $126 million at December 31, 2020 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.
The following tables summarize the activity relating to our ACL for loans for the three and six months ended June 30, 2021 and 2020, broken out by portfolio segment:
Three months ended June 30, 2021Beginning Balance March 31, 2021Charge-offsRecoveriesProvision (Reduction) for Credit LossesEnding Balance June 30, 2021
(Dollars in millions)
Global fund banking$60 $— $— $6 $66 
Investor dependent:
Early stage62 (5)2 (4)55 
Growth stage106 (1)1 (3)103 
Total investor dependent168 (6)3 (7)158 
Cash flow and balance sheet dependent112 (7)— 14 119 
Private bank44 (2)— 5 47 
Premium wine and other8 — — (2)6 
Total ACL$392 $(15)$3 $16 $396 
Three months ended June 30, 2020Beginning Balance March 31, 2020Charge-offsRecoveriesProvision (Reduction) for Credit LossesEnding Balance June 30, 2020
(Dollars in millions)
Global fund banking$57 $— $— $(3)$54 
Investor dependent:
Early stage127 (2)3 20 148 
Growth stage149 (4)1 (2)144 
Total investor dependent276 (6)4 18 292 
Cash flow and balance sheet dependent104 (8)— 27 123 
Private bank88 (1)— 4 91 
Premium wine and other24 — — 2 26 
SBA loans— — — 4 4 
Total ACL$549 $(15)$4 $52 $590 
Six months ended June 30, 2021Beginning Balance December 31, 2020Charge-offsRecoveriesProvision (Reduction) for Credit LossesEnding Balance June 30, 2021
(Dollars in millions)
Global fund banking$46 $(80)$— $100 $66 
Investor dependent:
Early stage86 (19)3 (15)55 
Growth stage127 (1)5 (28)103 
Total investor dependent213 (20)8 (43)158 
Cash flow and balance sheet dependent125 (7)— 1 119 
Private bank53 (2)— (4)47 
Premium wine and other9 (1)— (2)6 
SBA loans2 — — (2)— 
Total ACL$448 $(110)$8 $50 $396 

Six months ended June 30, 2020Beginning Balance December 31, 2019Impact of adopting ASC 326Charge-offsRecoveriesProvision for Credit LossesForeign Currency Translation AdjustmentsEnding Balance June 30, 2020
(Dollars in millions)
Global fund banking$107 $(70)$— $— $17 $— $54 
Investor dependent:
Early stage26 40 (12)4 91 (1)148 
Growth stage56 32 (27)5 79 (1)144 
Total investor dependent82 72 (39)9 170 (2)292 
Cash flow and balance sheet dependent81 (1)(11)3 51 — 123 
Private bank22 12 (2)— 59 — 91 
Premium wine and other13 12 — — — 1 26 
SBA loans— — — — 4 — 4 
Total ACL$305 $25 $(52)$12 $301 $(1)$590 
The following table summarizes the aging of our loans broken out by risk-based segment as of June 30, 2021 and December 31, 2020:
(Dollars in millions)30 - 59
  Days Past  
Due		60 - 89
  Days Past  
Due		Equal to or Greater
Than 90
  Days Past  
Due		  Total Past  
Due		Current  Total   Loans Past Due
90 Days or
More Still
Accruing
Interest
June 30, 2021:
Global fund banking$— $— $— $— $30,630 $30,630 $— 
Investor dependent:
Early stage1 — 1 2 1,563 1,565 — 
Mid stage— 2 — 2 1,706 1,708 — 
Later stage1 — — 1 2,054 2,055 — 
Total investor dependent2 2 1 5 5,323 5,328 — 
Cash flow dependent:
Sponsor led buyout— — — — 1,917 1,917 — 
Other5 — — 5 2,921 2,926 — 
Total cash flow dependent5 — — 5 4,838 4,843 — 
Private bank— — 2 2 5,295 5,297 2 
Balance sheet dependent1 3 — 4 2,800 2,804 — 
Premium wine2 — — 2 1,000 1,002 — 
Other— — — — 7 7 — 
SBA loans— 1 1 2 841 843 1 
Total loans$10 $6 $4 $20 $50,734 $50,754 $3 
December 31, 2020:
Global fund banking$28 $— $— $28 $25,515 $25,543 $— 
Investor dependent:
Early stage6 2 — 8 1,478 1,486 — 
Mid stage6 — 1 7 1,558 1,565 — 
Later stage5 — — 5 1,916 1,921 — 
Total investor dependent17 2 1 20 4,952 4,972 — 
Cash flow dependent
Sponsor led buyout— — — — 1,989 1,989 — 
Other6 — — 6 2,939 2,945 — 
Total cash flow dependent6 — — 6 4,928 4,934 — 
Private bank4 4 — 8 4,893 4,901 — 
Balance sheet dependent1 1 — 2 2,189 2,191 — 
Premium wine3 — 1 4 1,049 1,053 — 
Other— — — — 28 28 — 
SBA loans— — — — 1,559 1,559 — 
Total loans$59 $7 $2 $68 $45,113 $45,181 $— 
Nonaccrual Loans
The following table summarizes our nonaccrual loans with no allowance for credit loss at June 30, 2021 and December 31, 2020:
June 30, 2021December 31, 2020
(Dollars in millions)Nonaccrual LoansNonaccrual Loans with no Allowance for Credit LossNonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss
Investor dependent:
Early stage$11 $3 $18 $— 
Mid stage5 — 4 3 
Later stage21 — 29 — 
Total investor dependent37 3 51 3 
Cash flow dependent:
Sponsor led buyout34 — 40 — 
Other1 1 6 1 
Total cash flow dependent35 1 46 1 
Private bank7 2 6 3 
Premium wine— — 1 1 
Total nonaccrual loans$79 $6 $104 $8 
TDRs
As of June 30, 2021, we had 12 TDRs with a total carrying value of $61 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were no unfunded commitments available for funding to the clients associated with these TDRs as of June 30, 2021.
The following table summarizes our loans modified in TDRs, broken out by risk-based segment, at June 30, 2021 and December 31, 2020:
(Dollars in millions)June 30, 2021December 31, 2020
Loans modified in TDRs:
Investor dependent:
Early stage$1 $7 
Mid stage5 4 
Later stage15 25 
Total investor dependent21 36 
Cash flow dependent:
Sponsor led buyout34 22 
Other1 1 
Total cash flow dependent35 23 
Private bank3 — 
Premium wine2 2 
Total loans modified in TDRs$61 $61 
The following table summarizes the recorded investment in loans modified in TDRs, broken out by risk-based segment, for modifications made during the three and six months ended June 30, 2021 and 2020:
 Three months ended June 30, Six months ended June 30,
(Dollars in millions)2021202020212020
Loans modified in TDRs during the period:
Investor dependent:
Early stage$1 $— $1 $— 
Mid stage— 5 — 11 
Later stage— 4 — 7 
Total investor dependent1 9 1 18 
Cash flow dependent:
Sponsor led buyout— — 13 — 
Other— 4 — 4 
Total cash flow dependent— 4 13 4 
Private bank1 — 3 — 
Premium wine— 1 — 1 
Total loans modified in TDRs during the period (1)$2 $14 $17 $23 
(1)There were $6 million and $7 million of partial charge-offs for the three and six months ended June 30, 2021, respectively, and $5 million and $18 million of partial charge-offs for the three and six months ended June 30, 2020, respectively.

During the three months ended June 30, 2021 and 2020, new TDRs of $1 million and $14 million, respectively, were modified through payment deferrals granted to our clients. During the three months ended June 30, 2021, new TDRs of $1 million were modified through forgiveness of principal; there were no modifications of principal forgiveness during the three months ended June 30, 2020. During the six months ended June 30, 2021 and 2020, $14 million and $23 million, respectively, were modified through payment deferrals granted to our clients, and $3 million and less than $1 million, respectively, were modified through forgiveness of principal.
The following table summarizes the recorded investment in loans modified in TDRs within the previous 12 months that subsequently defaulted during the three and six months ended June 30, 2021 and June 30, 2020:
 Three months ended June 30, Six months ended June 30,
(Dollars in millions)2021202020212020
TDRs modified within the previous 12 months that defaulted during the period:
Cash flow dependent:
Sponsor led buyout$— $10 $— $10 
Total cash flow dependent— 10 — 10 
Total TDRs modified within the previous 12 months that defaulted in the period$— $10 $— $10 
Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the ACL for loans, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and nonaccrual loans as well as management’s overall outlook of macroeconomic factors that affect the reserve on the loan portfolio as a whole. After evaluating the charge-offs and defaults experienced on our TDRs we determined that no change to our reserving methodology for TDRs was necessary to determine the ACL for loans as of June 30, 2021.
ACL: Unfunded Credit Commitments
We maintain a separate ACL for unfunded credit commitments that is determined using a methodology that is inherently similar to the methodology used for calculating the ACL for loans. At June 30, 2021, our ACL estimates utilized the improved Moody's economic forecasts from June 2021 as mentioned above.
The following table summarizes the activity relating to our ACL for unfunded credit commitments for the three and six months ended June 30, 2021 and 2020:
 Three months ended June 30, Six months ended June 30,
(Dollars in millions)2021202020212020
ACL: unfunded credit commitments, beginning balance$105 $85 $121 $67 
Impact of adopting ASC 326— — — 23 
Provision of credit losses15 14 (1)9 
ACL: unfunded credit commitments, ending balance (1)$120 $99 $120 $99 
(1)The “ACL: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 13 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional disclosures related to our commitments to extend credit.