Investment Securities (Tables)

9 Months Ended

Sep. 30, 2011

Major Components of Investment Securities Portfolio

The major components of our investment securities portfolio at September 30, 2011 and December 31, 2010 are as follows:

	September 30, 2011									December 31, 2010
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value
Available-for-sale securities, at fair value:
U.S. treasury securities	$	25,277	$	853	$	—		$	26,130	$	25,408	$	1,002	$	—		$	26,410
U.S. agency debentures		2,896,079		49,460		(2	)		2,945,537		2,844,973		7,077		(16,957	)		2,835,093
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		1,461,806		42,205		(160	)		1,503,851		1,234,120		15,487		(1,097	)		1,248,510
Agency-issued collateralized mortgage obligations-fixed rate		2,332,140		70,092		—			2,402,232		806,032		24,435		(1	)		830,466
Agency-issued collateralized mortgage obligations-variable rate		2,558,348		2,905		(2,092	)		2,559,161		2,870,570		10,394		(1,439	)		2,879,525
Agency-issued commercial mortgage-backed securities		101,553		1,628		—			103,181		—		—		—			—
Municipal bonds and notes		92,258		6,523		(5	)		98,776		96,381		2,164		(965	)		97,580
Equity securities		633		13		(128	)		518		358		34		(9	)		383
Total available-for-sale securities	$	9,468,094	$	173,679	$	(2,387	)	$	9,639,386	$	7,877,842	$	60,593	$	(20,468	)	$	7,917,967
Non-marketable securities:
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments (1)									578,126									391,247
Other venture capital investments (2)									120,160									111,843
Other investments (3)									973									981
Non-marketable securities (equity method accounting):
Other investments (4)									65,934									67,031
Low income housing tax credit funds									34,446									27,832
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments (5)									138,960									110,466
Other venture capital investments									13,364									12,120
Total non-marketable securities									951,963									721,520
Total investment securities								$	10,591,349								$	8,639,487

(1) The following table shows the amount of venture capital and private equity fund investments by the following consolidated funds and our ownership of each fund at September 30, 2011 and December 31, 2010:

	September 30, 2011					December 31, 2010
(Dollars in thousands)	Amount		Ownership %			Amount		Ownership %
SVB Strategic Investors Fund, LP	$	44,205		12.6	%	$	44,722		12.6	%
SVB Strategic Investors Fund II, LP		122,264		8.6			94,694		8.6
SVB Strategic Investors Fund III, LP		205,505		5.9			146,613		5.9
SVB Strategic Investors Fund IV, LP		104,114		5.0			40,639		5.0
Strategic Investors Fund V, LP		1,965		0.3			—		—
SVB Capital Preferred Return Fund, LP		41,432		20.0			23,071		20.0
SVB Capital—NT Growth Partners, LP		44,837		33.0			28,624		33.0
SVB Capital Partners II, LP (i)		2,324		5.1			4,506		5.1
Other private equity fund (ii)		11,480		58.2			8,378		60.6
Total venture capital and private equity fund investments	$	578,126				$	391,247

(i) At September 30, 2011, we had a direct ownership interest of 1.3% and an indirect ownership interest of 3.8% in the fund through our ownership interest of SVB Strategic Investors Fund II, LP.

(ii) At September 30, 2011, we had a direct ownership interest of 41.5% and indirect ownership interests of 12.6% and 4.1% in the fund through our ownership interests of SVB Capital—NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.

(2) The following table shows the amount of other venture capital investments by the following consolidated funds and our ownership of each fund at September 30, 2011 and December 31, 2010:

	September 30, 2011					December 31, 2010
(Dollars in thousands)	Amount		Ownership %			Amount		Ownership %
Silicon Valley BancVentures, LP	$	16,606		10.7	%	$	21,371		10.7	%
SVB Capital Partners II, LP (i)		60,129		5.1			51,545		5.1
SVB India Capital Partners I, LP		41,927		14.4			38,927		14.4
SVB Capital Shanghai Yangpu Venture Capital Fund		1,498		6.8			—		—
Total other venture capital investments	$	120,160				$	111,843

(i) At September 30, 2011, we had a direct ownership interest of 1.3% and an indirect ownership interest of 3.8% in the fund through our ownership of SVB Strategic Investors Fund II, LP.

(3) Other investments within non-marketable securities (investment company fair value accounting) include our ownership in Partners for Growth, LP, a consolidated debt fund. At both September 30, 2011 and December 31, 2010, we had a majority ownership interest of slightly more than 50.0% in the fund. Partners for Growth, LP is managed by a third party and we do not have an ownership interest in the general partner of this fund.

(4) The following table shows the carrying value and our ownership percentage of each investment at September 30, 2011 and December 31, 2010:

	September 30, 2011					December 31, 2010
(Dollars in thousands)	Amount		Ownership %			Amount		Ownership %
Gold Hill Venture Lending 03, LP (i)	$	16,781		9.3	%	$	17,826		9.3	%
Gold Hill Capital 2008, LP (ii)		16,414		15.5			12,101		15.5
Partners for Growth II, LP		3,564		24.2			10,465		24.2
Other investments		29,175		N/A			26,639		N/A
Total other investments	$	65,934				$	67,031

(i) At September 30, 2011, we had a direct ownership interest of 4.8% in the fund and an indirect interest in the fund through our investment in Gold Hill Venture Lending Partners 03, LLC (“GHLLC”) of 4.5%. Our aggregate direct and indirect ownership in the fund is 9.3%.

(ii) At September 30, 2011, we had a direct ownership interest of 11.5% in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0%. Our aggregate direct and indirect ownership in the fund is 15.5%.

(5) Represents investments in 329 and 343 funds (primarily venture capital funds) at September 30, 2011 and December 31, 2010, respectively, where our ownership interest is less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating and financial policies. For the three months ended September 30, 2011, we recognized other-than-temporary impairment (“OTTI”) losses of $0.3 million resulting from other-than-temporary declines in value for 21 of the 329 investments. For the nine months ended September 30, 2011, we recognized OTTI losses of $0.8 million resulting from other-than-temporary declines in value for 39 of the 329 investments. The OTTI losses are included in net gains on investment securities, a component of noninterest income. For the remaining 290 investments at September 30, 2011, we concluded that declines in value, if any, were temporary and as such, no OTTI was required to be recognized. At September 30, 2011, the carrying value of these venture capital and private equity fund investments (cost method accounting) was $139.0 million, and the estimated fair value was $155.8 million.

Summary of Unrealized Losses on Available for Sale Investment Securities

The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months, or 12 months or longer as of September 30, 2011:

	September 30, 2011
	Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses
U.S. agency debentures	$	25,000	$	(2	)	$	—	$	—		$	25,000	$	(2	)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		51,756		(160	)		—		—			51,756		(160	)
Agency-issued collateralized mortgage obligations—variable rate		1,304,198		(2,059	)		44,606		(33	)		1,348,804		(2,092	)
Municipal bonds and notes		1,195		(5	)		—		—			1,195		(5	)
Equity securities		320		(128	)		—		—			320		(128	)
Total temporarily impaired securities (1)	$	1,382,469	$	(2,354	)	$	44,606	$	(33	)	$	1,427,075	$	(2,387	)

(1) As of September 30, 2011, we identified a total of 85 investments that were in unrealized loss positions, of which one investment totaling $44.6 million with unrealized losses of $33 thousand has been in an impaired position for a period of time greater than 12 months. Based on the underlying credit quality of the investments, we do not intend to sell any of our securities prior to recovery of our adjusted cost basis and as of September 30, 2011, it is more likely than not that we will not be required to sell any of our debt securities prior to recovery of our adjusted cost basis. Based on our analysis as of September 30, 2011, we deem all impairments to be temporary and changes in value for our temporarily impaired securities as of the same date are included in other comprehensive income. Market valuations and impairment analyses on assets in the investment securities portfolio are reviewed and monitored on a quarterly basis.

The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months, or 12 months or longer as of December 31, 2010:

	December 31, 2010
	Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses
U.S. agency debentures	$	1,731,639	$	(16,957	)	$	—	$	—		$	1,731,639	$	(16,957	)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		32,595		(1,097	)		—		—			32,595		(1,097	)
Agency-issued collateralized mortgage obligations—fixed rate		322		(1	)		—		—			322		(1	)
Agency-issued collateralized mortgage obligations—variable rate		506,104		(1,439	)		—		—			506,104		(1,439	)
Municipal bonds and notes		25,699		(893	)		3,451		(72	)		29,150		(965	)
Equity securities		148		(9	)		—		—			148		(9	)
Total temporarily impaired securities	$	2,296,507	$	(20,396	)	$	3,451	$	(72	)	$	2,299,958	$	(20,468	)

Summary of the Remaining Contractual Principal Maturities and Fully Taxable Equivalent Yields on Debt Securities Classified as Available for Sale

The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on debt securities classified as available-for-sale as of September 30, 2011. Interest income on certain municipal bonds and notes (non-taxable investments) are presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent. The weighted average yield is computed using the amortized cost of debt securities, which are reported at fair value. For U.S. treasury securities, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for most U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for mortgage-backed securities may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. Mortgage-backed securities classified as available-for-sale typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure.

	September 30, 2011
	Total					One Year or Less					After One Year to Five Years					After Five Years to Ten Years					After Ten Years
(Dollars in thousands)	Carrying Value		Weighted- Average Yield			Carrying Value		Weighted- Average Yield			Carrying Value		Weighted- Average Yield			Carrying Value		Weighted- Average Yield			Carrying Value		Weighted- Average Yield
U.S. treasury securities	$	26,130		2.39	%	$	—		—	%	$	26,130		2.39	%	$	—		—	%	$	—		—	%
U.S. agency debentures		2,945,537		1.55			63,421		2.51			2,804,770		1.49			77,346		3.28			—		—
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		1,503,851		2.66			—		—			—		—			1,369,093		2.57			134,758		3.58
Agency-issued collateralized mortgage obligations-fixed rate		2,402,232		2.72			—		—			—		—			—		—			2,402,232		2.72
Agency-issued collateralized mortgage obligations-variable rate		2,559,161		0.70			—		—			—		—			—		—			2,559,161		0.70
Agency-issued commercial mortgage-backed securities		103,181		2.22			—		—			—		—			—		—			103,181		2.22
Municipal bonds and notes		98,776		6.00			564		5.38			12,091		5.48			44,864		5.97			41,257		6.20
Total	$	9,638,868		1.84		$	63,985		2.54		$	2,842,991		1.52		$	1,491,303		2.71		$	5,240,589		1.77

Components of Gains and Losses on Investment Securities

The following table presents the components of gains and losses (realized and unrealized) on investment securities for the three and nine months ended September 30, 2011 and 2010:

	Three months  ended September 30,						Nine months  ended September 30,
(Dollars in thousands)	2011			2010			2011			2010
Gross gains on investment securities:
Available-for-sale securities, at fair value (1)	$	5		$	23,605		$	37,382		$	26,737
Marketable securities (investment company fair value accounting)		470			8,109			912			8,160
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments		34,640			19,014			117,344			47,659
Other venture capital investments		22,058			2,321			29,077			7,258
Other investments		—			9			20			36
Non-marketable securities (equity method accounting):
Other investments		2,192			2,663			8,708			4,804
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments		735			222			1,791			780
Other venture capital investments		8			—			2,437			—
Other investments		—			242			—			344
Total gross gains on investment securities		60,108			56,185			197,671			95,778
Gross losses on investment securities:
Available-for-sale securities, at fair value (1)		—			—			(94	)		(2,264	)
Marketable securities (investment company fair value accounting)		(1,691	)		—			(5,806	)		(57	)
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments		(2,373	)		(6,171	)		(9,274	)		(15,291	)
Other venture capital investments		(3,351	)		(2,877	)		(5,015	)		(8,589	)
Other investments		(16	)		—			(16	)		(79	)
Non-marketable securities (equity method accounting):
Other investments		(50	)		(1	)		(1,359	)		(614	)
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments		(365	)		(516	)		(797	)		(1,455	)
Other venture capital investments		—			(9	)		(31	)		(9	)
Total gross losses on investment securities		(7,846	)		(9,574	)		(22,392	)		(28,358	)
Gains on investment securities, net	$	52,262		$	46,611		$	175,279		$	67,420
Gains attributable to noncontrolling interests, including carried interest	$	42,961		$	16,817		$	112,783		$	33,159

(1) The cost basis of available-for-sale securities sold is determined on a specific identification basis.