Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2011

Fair Value Hierarchy Tables Present Information about Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following fair value hierarchy tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2011:

(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of September 30, 2011
Assets
Available-for-sale securities:
U.S. treasury securities	$	—	$	26,130	$	—	$	26,130
U.S. agency debentures		—		2,945,537		—		2,945,537
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		—		1,503,851		—		1,503,851
Agency-issued collateralized mortgage obligations (fixed)		—		2,402,232		—		2,402,232
Agency-issued collateralized mortgage obligations (variable)		—		2,559,161		—		2,559,161
Agency-issued commercial mortgage-backed securities		—		103,181		—		103,181
Municipal bonds and notes		—		98,776		—		98,776
Equity securities		518		—		—		518
Total available-for-sale securities		518		9,638,868		—		9,639,386
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments		—		—		578,126		578,126
Other venture capital investments		—		—		120,160		120,160
Other investments		—		—		973		973
Total non-marketable securities (investment company fair value accounting)		—		—		699,259		699,259
Other assets:
Marketable securities		3,962		—		—		3,962
Interest rate swaps		—		13,305		—		13,305
Foreign exchange forward and option contracts		—		13,936		—		13,936
Equity warrant assets		—		4,105		54,418		58,523
Loan conversion options		—		2,057		—		2,057
Client interest rate derivatives		—		53		—		53
Total assets (1)	$	4,480	$	9,672,324	$	753,677	$	10,430,481
Liabilities
Foreign exchange forward and option contracts	$	—	$	12,171	$	—	$	12,171
Client interest rate derivatives		—		55		—		55
Total liabilities	$	—	$	12,226	$	—	$	12,226

(1) Included in Level 1 and Level 3 assets are $3.4 million and $605.7 million, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

The following fair value hierarchy tables present information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2010:

(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2010
Assets
Available-for-sale securities:
U.S. treasury securities	$	—	$	26,410	$	—	$	26,410
U.S. agency debentures		—		2,835,093		—		2,835,093
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities		—		1,248,510		—		1,248,510
Agency-issued collateralized mortgage obligations (fixed)		—		830,466		—		830,466
Agency-issued collateralized mortgage obligations (variable)		—		2,879,525		—		2,879,525
Municipal bonds and notes		—		97,580		—		97,580
Equity securities		383		—		—		383
Total available-for-sale securities		383		7,917,584		—		7,917,967
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments		—		—		391,247		391,247
Other venture capital investments		—		—		111,843		111,843
Other investments		—		—		981		981
Total non-marketable securities (investment company fair value accounting)		—		—		504,071		504,071
Other assets:
Marketable securities		28		9,240		—		9,268
Interest rate swaps		—		52,017		—		52,017
Foreign exchange forward and option contracts		—		11,349		—		11,349
Equity warrant assets		—		4,028		43,537		47,565
Loan conversion options		—		4,291		—		4,291
Total assets (1)	$	411	$	7,998,509	$	547,608	$	8,546,528
Liabilities
Foreign exchange forward and option contracts	$	—	$	10,267	$	—	$	10,267
Total liabilities	$	—	$	10,267	$	—	$	10,267

(1) Included in Level 2 and Level 3 assets are $8.1 million and $423.5 million, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

Additional Information about Level 3 Assets Measured at Fair Value on a Recurring Basis

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for the three and nine months ended September 30, 2011 and 2010, respectively:

(Dollars in thousands)	Beginning Balance		Total Realized and Unrealized Gains (Losses) Included in Income			Purchases		Sales			Issuances		Distributions and Other Settlements			Transfers Into Level 3		Transfers Out of Level 3			Ending Balance
Three months ended September 30, 2011:
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments	$	515,118	$	32,041		$	42,590	$	—		$	—	$	(11,623	)	$	—	$	—		$	578,126
Other venture capital investments		114,070		17,237			2,193		(9,335	)		—		(4,005	)		—		—			120,160
Other investments		995		(16	)		—		—			—		(6	)		—		—			973
Total non-marketable securities (investment company fair value accounting) (1)		630,183		49,262			44,783		(9,335	)		—		(15,634	)		—		—			699,259
Other assets:
Equity warrant assets (2)		49,777		8,192			—		(6,427	)		2,876		—			—		—			54,418
Total assets	$	679,960	$	57,454		$	44,783	$	(15,762	)	$	2,876	$	(15,634	)	$	—	$	—		$	753,677
Three months ended September 30, 2010:
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments	$	322,159	$	13,010		$	31,873	$	—		$	—	$	(1,300	)	$	—	$	—		$	365,742
Other venture capital investments		94,980		(332	)		1,855		(1,177	)		—		—			—		(10,791	)		84,535
Other investments		960		9			—		—			—		(7	)		—		—			962
Total non-marketable securities (investment company fair value accounting) (1)		418,099		12,687			33,728		(1,177	)		—		(1,307	)		—		(10,791	)		451,239
Other assets:
Equity warrant assets (2)		38,633		3,130			—		(4,523	)		2,543		—			—		(18	)		39,765
Total assets	$	456,732	$	15,817		$	33,728	$	(5,700	)	$	2,543	$	(1,307	)	$	—	$	(10,809	)	$	491,004
Nine months ended September 30, 2011:
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments	$	391,247	$	108,032		$	119,990	$	—		$	—	$	(41,143	)	$	—	$	—		$	578,126
Other venture capital investments		111,843		22,608			12,939		(27,513	)		—		283			—		—			120,160
Other investments		981		4			—		—			—		(12	)		—		—			973
Total non-marketable securities (investment company fair value accounting) (1)		504,071		130,644			132,929		(27,513	)		—		(40,872	)		—		—			699,259
Other assets:
Equity warrant assets (2)		43,537		21,403			—		(19,889	)		10,058		(63	)		—		(628	)		54,418
Total assets	$	547,608	$	152,047		$	132,929	$	(47,402	)	$	10,058	$	(40,935	)	$	—	$	(628	)	$	753,677
Nine months ended September 30, 2010:
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments	$	271,316	$	32,408		$	73,718	$	—		$	—	$	(11,700	)	$	—	$	—		$	365,742
Other venture capital investments		96,577		(1,106	)		6,355		(6,500	)		—		—			—		(10,791	)		84,535
Other investments		1,143		(43	)		—		—			—		(138	)		—		—			962
Total non-marketable securities (investment company fair value accounting) (1)		369,036		31,259			80,073		(6,500	)		—		(11,838	)		—		(10,791	)		451,239
Other assets:
Equity warrant assets (2)		40,119		2,588			—		(7,859	)		5,312		(1	)		—		(394	)		39,765
Total assets	$	409,155	$	33,847		$	80,073	$	(14,359	)	$	5,312	$	(11,839	)	$	—	$	(11,185	)	$	491,004

(1) Realized and unrealized gains are recorded on the line items gains on investment securities, net and other noninterest income, components of noninterest income.

(2) Realized and unrealized gains (losses) are recorded on the line item gains on derivative instruments, net a component of noninterest income.

Unrealized Gains (Losses) Included in Earnings Attributable to Level 3 Assets Held

The following table presents the amount of unrealized gains (losses) included in earnings (which is inclusive of noncontrolling interest) attributable to Level 3 assets still held at September 30, 2011:

	Three months ended September 30, 2011			Nine months ended September 30, 2011
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments	$	22,845		$	75,576
Other venture capital investments		13,770			14,076
Other investments		(16	)		4
Total non-marketable securities (investment company fair value accounting) (1)		36,599			89,656
Other assets:
Equity warrant assets (2)		3,288			11,297
Total unrealized gains	$	39,887		$	100,953

(1) Unrealized gains are recorded on the line items gains on investment securities, net and other noninterest income, components of noninterest income.

(2) Unrealized gains are recorded on the line item gains on derivative instruments, net a component of noninterest income.

Summary of the Estimated Fair Values of Financial Instruments that are Not Carried at Fair Value

The information presented herein is based on pertinent information available to us as of September 30, 2011 and December 31, 2010. The following table is a summary of the estimated fair values of our financial instruments that are not carried at fair value at September 30, 2011 and December 31, 2010.

	September 30, 2011				December 31, 2010
(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Non-marketable securities (cost and equity method accounting)	$	252,704	$	273,991	$	217,449	$	230,158
Net loans		6,243,342		6,302,330		5,439,110		5,466,252
Financial liabilities:
Other short-term borrowings		—		—		37,245		37,245
Deposits		16,139,222		16,139,059		14,336,941		14,334,013
5.375% Senior Notes		347,744		363,763		347,601		344,498
5.70% Senior Notes (1)		145,632		149,695		265,613		277,301
6.05% Subordinated Notes (2)		55,302		58,916		285,937		298,101
3.875% Convertible Notes		—		—		249,304		276,825
7.0% Junior Subordinated Debentures		55,416		50,722		55,548		49,485
Other long-term debt		5,463		5,463		5,257		5,257
Off-balance sheet financial assets:
Commitments to extend credit		—		20,252		—		19,264

(1) At September 30, 2011 and December 31, 2010, included in the carrying value and estimated fair value of our 5.70% Senior Notes are $4.2 million and $15.7 million, respectively, related to the fair value of the interest rate swaps associated with the notes.

(2) At September 30, 2011 and December 31, 2010, included in the carrying value and estimated fair value of our 6.05% Subordinated Notes are $9.1 million and $36.3 million, respectively, related to the fair value of the interest rate swaps associated with the notes.

Summary of the Estimated Fair Values of Investments and Remaining Unfunded Commitments for Each Major Category of Investments

The following table is a summary of the estimated fair values of these investments and remaining unfunded commitments for each major category of these investments as of September 30, 2011:

(Dollars in thousands)	Fair Value		Unfunded Commitments
Non-marketable securities (investment company fair value accounting):
Venture capital and private equity fund investments (1)	$	578,126	$	314,285
Non-marketable securities (equity method accounting):
Other investments (2)		60,010		10,150
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments (3)		155,794		92,598
Total	$	793,930	$	417,033

(1) Venture capital and private equity fund investments within non-marketable securities (investment company fair value accounting) include investments made by our managed funds of funds, one of our co-investment funds and one other private equity fund. These investments represent investments in venture capital and private equity funds that invest primarily in U.S. and global technology and life sciences companies. Included in the fair value and unfunded commitments of fund investments under investment company fair value accounting are $495.9 million and $300.0 million, respectively, attributable to noncontrolling interests. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of terms of the funds.

(2) Other investments within non-marketable securities (equity method accounting) include investments in debt funds and venture capital and private equity fund investments that invest in or lend money to primarily U.S. and global technology and life sciences companies. It is estimated that we will receive distributions from the fund investments over the next 10 years, depending on the age of the funds.

(3) Venture capital and private equity fund investments within non-marketable securities (cost method accounting) include investments in venture capital and private equity fund investments that invest primarily in U.S. and global technology and life sciences companies. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of the terms of the funds. Included in the $92.6 million of unfunded commitments is $74.9 million of unfunded commitments made by SVB Financial which were originally intended to be transferred to certain new managed funds of funds. We currently do not have any plans to transfer these investments to any new or existing managed fund. Until we may later decide to transfer, sell or otherwise dispose of the investments to a fund managed by us or a third party, they continue to remain investments and obligations of SVB Financial.