17.

Off-Balance Sheet Arrangements, Guarantees and Other Commitments

Operating Leases

We are obligated under a number of noncancelable operating leases for premises and equipment that expire at various dates, through 2021, and in most instances, include options to renew or extend at market rates and terms. Such leases may provide for periodic adjustments of rentals during the term of the lease based on changes in various economic indicators. The following table presents minimum future payments under noncancelable operating leases as of December 31, 2011:


Year ended December 31, (dollars in thousands):
2012	$	14,742
2013		13,223
2014		10,795
2015		7,312
2016		7,097
2017 and thereafter		25,708

Net minimum operating lease payments	$	78,877

Rent expense for premises and equipment leased under operating leases totaled $11.9 million, $11.5 million and $10.7 million in 2011, 2010 and 2009, respectively.

Commitments to Extend Credit

A commitment to extend credit is a formal agreement to lend funds to a client as long as there is no violation of any condition established in the agreement. Such commitments generally have fixed expiration dates, or other termination clauses, and usually require a fee paid by the client upon us issuing the commitment. The following table summarizes information related to our commitments to extend credit (excluding letters of credit) at December 31, 2011 and 2010, respectively:


	December 31,
(Dollars in thousands)	2011		2010
Commitments available for funding: (1)
Fixed interest rate commitments	$	658,377	$	386,055
Variable interest rate commitments		6,548,002		5,884,450

Total commitments available for funding	$	7,206,379	$	6,270,505

Commitments unavailable for funding (2)	$	841,439	$	963,847
Maximum lending limits for accounts receivable factoring arrangements (3)		747,392		697,702
Reserve for unfunded credit commitments (4)		21,811		17,414

(1)	Represents commitments which are available for funding, due to clients meeting all collateral, compliance and financial covenants required under loan commitment agreements.

(2)	Represents commitments which are currently unavailable for funding, due to clients failing to meet all collateral, compliance and financial covenants under loan commitment agreements.

(3)	We extend credit under accounts receivable factoring arrangements when our clients’ sales invoices are deemed creditworthy under existing underwriting practices.

(4)	Our reserve for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit.

Our potential exposure to credit loss for commitments to extend credit, in the event of nonperformance by the other party to the financial instrument, is the contractual amount of the available unused loan commitment. We use the same credit approval and monitoring process in extending credit commitments as we do in making loans. The actual liquidity needs and the credit risk that we have experienced have historically been lower than the contractual amount of commitments to extend credit because a significant portion of these commitments expire without being drawn upon. We evaluate each potential borrower and the necessary collateral on an individual basis. The type of collateral varies, but may include real property, intellectual property, bank deposits, or business and personal assets. The potential credit risk associated with these commitments is considered in management’s evaluation of the adequacy of the reserve for unfunded credit commitments.

Commercial and Standby Letters of Credit

Commercial and standby letters of credit represent conditional commitments issued by us on behalf of a client to guarantee the performance of the client to a third party when certain specified future events have occurred. Commercial letters of credit are issued primarily for inventory purchases by a client and are typically short-term in nature. We provide two types of standby letters of credit: performance and financial standby letters of credit. Performance standby letters of credit are issued to guarantee the performance of a client to a third party when certain specified future events have occurred and are primarily used to support performance instruments such as bid bonds, performance bonds, lease obligations, repayment of loans, and past due notices. Financial standby letters of credit are conditional commitments issued by us to guarantee the payment by a client to a third party (beneficiary) and are primarily used to support many types of domestic and international payments. These standby letters of credit have fixed expiration dates and generally require a fee to be paid by the client at the time we issue the commitment. Fees generated from these standby letters of credit are recognized in noninterest income over the commitment period using the straight-line method.

The credit risk involved in issuing letters of credit is essentially the same as that involved with extending credit commitments to clients, and accordingly, we use a credit evaluation process and collateral requirements similar to those for credit commitments. Our standby letters of credit often are cash secured by our clients. The actual liquidity needs and the credit risk that we have experienced historically have been lower than the contractual amount of letters of credit issued because a significant portion of these conditional commitments expire without being drawn upon.

The table below summarizes our commercial and standby letters of credit at December 31, 2011. The maximum potential amount of future payments represents the amount that could be remitted under letters of credit if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from the collateral held or pledged.


(Dollars in thousands)	Expires In One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount Of Future Payments
(Dollars in thousands)	Expires In One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount Of Future Payments
Financial standby letters of credit	$	723,710	$	82,346	$	806,056	$	806,056
Performance standby letters of credit		45,631		3,924		49,555		49,555
Commercial letters of credit		5,580		—		5,580		5,580

Total	$	774,921	$	86,270	$	861,191	$	861,191

At December 31, 2011 and 2010, deferred fees related to financial and performance standby letters of credit were $6.1 million and $5.2 million, respectively. At December 31, 2011, collateral in the form of cash of $271.7 million and available-for-sale securities of $15.4 million were available to us to reimburse losses, if any, under financial and performance standby letters of credit.

Commitments to Invest in Venture Capital and Private Equity Funds

We make commitments to invest in venture capital and private equity funds, which in turn make investments generally in, or in some cases make loans to, privately-held companies. Commitments to invest in these funds are generally made for a ten-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from calling 100% of committed capital in one year, it is customary for these funds to generally call most of the capital commitments over five to seven years. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate. The following table details our total capital commitments, unfunded capital commitments, and our ownership in each fund at December 31, 2011:


Our Ownership in Limited Partnership (Dollars in thousands)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund
Silicon Valley BancVentures, LP	$	6,000	$	270		10.7	%
SVB Capital Partners II, LP (1)		1,200		222		5.1
SVB India Capital Partners I, LP		7,750		1,364		14.4
SVB Capital Shanghai Yangpu Venture Capital Fund		920		159		6.8
SVB Strategic Investors Fund, LP		15,300		688		12.6
SVB Strategic Investors Fund II, LP		15,000		1,950		8.6
SVB Strategic Investors Fund III, LP		15,000		3,000		5.9
SVB Strategic Investors Fund IV, LP		12,239		5,997		5.0
Strategic Investors Fund V, LP		500		460		0.3
SVB Capital Preferred Return Fund, LP		12,687		—		20.0
SVB Capital—NT Growth Partners, LP		24,670		1,340		33.0
Other private equity fund (2)		9,338		—		58.2
Partners for Growth, LP		25,000		9,750		50.0
Partners for Growth II, LP		15,000		4,950		24.2
Gold Hill Venture Lending 03, LP (3)		20,000		—		9.3
Other Fund Investments (4)		332,618		86,811		Various

Total	$	513,222	$	116,961

(1)	Our ownership includes 1.3 percent direct ownership through SVB Capital Partners II, LLC and SVB Financial Group, and 3.8 percent indirect ownership through our investment in SVB Strategic Investors Fund II, LP.

(2)	Our ownership includes 41.5 percent direct ownership and indirect ownership interest of 12.6 percent and 4.1 percent in the fund through our ownership interests of SVB Capital—NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.

(3)	Our ownership includes 4.8 percent direct ownership and 4.5 percent indirect ownership interest through GHLLC.

(4)	Represents commitments to 334 funds (primarily venture capital funds) where our ownership interest is generally less than 5% of the voting interests of each such fund.

The following table details the total remaining unfunded commitments to the venture capital and private equity funds by our consolidated managed funds of funds (including our interest and the noncontrolling interests) at December 31, 2011:


Limited Partnership (Dollars in thousands)	Unfunded Commitments
SVB Strategic Investors Fund, LP	$	2,311
SVB Strategic Investors Fund II, LP		12,145
SVB Strategic Investors Fund III, LP		60,040
SVB Strategic Investors Fund IV, LP		137,375
Strategic Investors Fund V, LP		43,628
SVB Capital Preferred Return Fund, LP		23,234
SVB Capital—NT Growth Partners, LP		26,373
Other private equity fund		4,659

Total	$	309,765