Regulatory Matters

12 Months Ended

Dec. 31, 2011

Regulatory Matters

19. Regulatory Matters

The Company and the Bank are subject to various regulatory capital adequacy requirements administered by the Federal Reserve Board and the California Department of Financial Institutions (“DFI”). The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) required that the federal regulatory agencies adopt regulations defining five capital tiers for banks: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements.

Quantitative measures, established by the regulators to ensure capital adequacy, require that SVB Financial Group and the Bank maintain minimum ratios (set forth in the table below) of capital to risk-weighted assets. There are three categories of capital under the guidelines. Tier 1 capital includes common stockholders’ equity, qualifying preferred stock and trust preferred securities, less goodwill and certain other deductions (including the net unrealized gains and losses, after applicable taxes, on securities available-for-sale carried at fair value). Tier 1 capital must comprise at least half of total capital. Components of Tier 2 capital include preferred stock not qualifying as Tier 1 capital, subordinated debt, the allowance for credit losses and net unrealized gains and losses on available-for-sale securities (deducted from Tier 1 capital above), subject to limitations by the guidelines. Tier 3 capital includes certain qualifying unsecured subordinated debt. We did not have any Tier 3 capital as of December 31, 2011 and December 31, 2010.

The most recent joint notification from the DFI and the Federal Reserve Board categorized the Bank as well-capitalized under the FDICIA prompt corrective action provisions applicable to banks. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The following table presents the capital ratios for the Company and the Bank under federal regulatory guidelines, compared to the minimum regulatory capital requirements for an adequately capitalized and a well capitalized depository institution, as of December 31, 2011 and 2010:

	Capital Ratios									Capital Amounts
(Dollars in thousands)	Actual			Well Capitalized Minimum			Adequately Capitalized Minimum			Actual		Well Capitalized Minimum		Adequately Capitalized Minimum
December 31, 2011:
Total risk-based capital:
SVB Financial		13.95	%		10.0	%		8.0	%	$	1,651,545	$	1,183,790	$	947,032
Bank		12.33			10.0			8.0			1,414,138		1,146,740		917,392
Tier 1 risk-based capital:
SVB Financial		12.62			6.0			4.0			1,493,823		710,274		473,516
Bank		10.96			6.0			4.0			1,257,030		688,044		458,696
Tier 1 leverage:
SVB Financial		7.92			N/A			4.0			1,493,823		N/A		754,516
Bank		6.87			5.0			4.0			1,257,030		915,095		732,076
December 31, 2010:
Total risk-based capital:
SVB Financial		17.35	%		10.0	%		8.0	%	$	1,632,469	$	940,668	$	752,534
Bank		15.48			10.0			8.0			1,400,255		904,791		723,832
Tier 1 risk-based capital:
SVB Financial		13.63			6.0			4.0			1,282,417		564,401		376,267
Bank		11.61			6.0			4.0			1,050,745		542,874		361,916
Tier 1 leverage:
SVB Financial		7.96			N/A			4.0			1,282,417		N/A		644,041
Bank		6.82			5.0			4.0			1,050,745		769,990		615,992