SVB Financial Group
SVB FINANCIAL GROUP (Form: 8-K, Received: 04/26/2012 16:21:24)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2012

 

 

SVB Financial Group

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   000-15637   91-1962278

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

3003 Tasman Drive, Santa Clara, CA 95054-1191

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 654-7400

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.142-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On April 26, 2012, SVB Financial Group (the “Company”) announced its financial results for the first quarter ended March 31, 2012. A copy of the release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in this report shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Securities Act of 1934, except as expressly stated by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

  

Description

99.1    Release, dated April 26, 2012, announcing the Company’s financial results for the first quarter ended March 31, 2012.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: April 26, 2012     SVB FINANCIAL GROUP
    By:   

/s/ KAMRAN HUSAIN

    Name:    Kamran Husain
    Title:    Chief Accounting Officer and Principal Accounting Officer


Exhibit Index

 

Exhibit
No.
  

Description

99.1*    Release, dated April 26, 2012, announcing the Company’s financial results for the first quarter ended March 31, 2012.

 

 

* This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934.

Exhibit 99.1

 

LOGO

3003 Tasman Drive, Santa Clara, CA 95054

www.svb.com

 

For release at 1:00 P.M. (Pacific Time)

       Contact:

April 26, 2012

       Meghan O’Leary
       Investor Relations

NASDAQ: SIVB

       (408) 654-6364

SVB FINANCIAL GROUP ANNOUNCES 2012 FIRST QUARTER FINANCIAL RESULTS

SANTA CLARA, Calif. — April 26, 2012 — SVB Financial Group (NASDAQ: SIVB) today announced financial results for the first quarter ended March 31, 2012.

Consolidated net income available to common stockholders for the first quarter of 2012 was $34.8 million, or $0.78 per diluted common share, compared to $35.6 million, or $0.81 per diluted common share, for the fourth quarter of 2011, and $33.0 million, or $0.76 per diluted common share, for the first quarter of 2011.

“We achieved another good quarter marked by robust core earnings,” said Greg Becker, President and CEO of SVB Financial Group. “Through continued effective execution of our strategy we delivered exceptional loan growth and solid core fee income. These results reflect the strength of our innovation-oriented clients and the value of our continued focus on helping them succeed.”

Highlights of our first quarter 2012 results (compared to fourth quarter 2011, unless otherwise noted) included:

 

   

Continued strong growth in our lending business with record high average loan balances of $6.8 billion, an increase of $409.6 million (or 6.4 percent). Period-end loan balances were $7.1 billion, an increase of $151.2 million.

 

   

A provision for loan losses of $14.5 million, which includes a $9.8 million provision for one nonperforming loan, $3.6 million related to net charge-offs and $1.1 million primarily relating to period-end loan growth.

 

   

Average deposit balances of $17.0 billion, an increase of $453.7 million (2.7 percent). Although our period end deposit balances were flat at $16.7 billion our total client funds (including both deposits and off-balance sheet client investment funds) increased by $375.2 million to record high balances of $35.8 billion.

 

   

Record high net interest income (fully taxable equivalent basis) of $151.4 million, an increase of $10.9 million.

 

   

Net interest margin of 3.30 percent, an increase of 20 basis points.

 

   

Gains on investment securities, net of noncontrolling interests, of $0.5 million, compared to $7.5 million.

 

   

Net gains on equity warrant assets of $6.9 million, compared to $14.1 million. The decrease was primarily due to higher than normal gains recognized in the fourth quarter of 2011. The net gains of $6.9 million in the first quarter of 2012 were driven by initial public offering (“IPO”) and merger and acquisition (“M&A”) activity.

 

   

Noninterest expense decreased by $2.7 million, despite growth in headcount and significant seasonal compensation-related expenses in the first quarter of 2012.


First Quarter 2012 Summary

 

     Three months ended  

(Dollars in millions, except share data and ratios)

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Income statement:

          

Diluted earnings per common share

   $ 0.78      $ 0.81      $ 0.86      $ 1.50      $ 0.76   

Net income available to common stockholders

     34.8        35.6        37.6        65.8        33.0   

Net interest income

     150.9        140.1        135.5        130.5        120.3   

Provision for (reduction of) loan losses

     14.5        8.2        0.8        0.1        (3.0

Noninterest income

     59.3        73.1        95.6        123.7        90.0   

Noninterest expense

     132.0        134.7        127.5        121.0        117.4   

Non-GAAP net income available to common stockholders (1)

     34.8        35.6        37.6        41.4        33.0   

Non-GAAP diluted earnings per common share (1)

     0.78        0.81        0.86        0.95        0.76   

Non-GAAP noninterest income, net of noncontrolling interests and excluding gains on sales of available-for-sale securities (1)

     51.4        62.1        54.4        59.8        46.4   

Non-GAAP noninterest expense, net of noncontrolling interests (1)

     129.2        132.0        124.7        121.5        114.0   

Fully taxable equivalent:

          

Net interest income (2)

   $ 151.4      $ 140.6      $ 135.9      $ 130.9      $ 120.8   

Net interest margin

     3.30     3.10     3.13     3.13     2.96

Balance sheet:

          

Average total assets

   $ 20,232.5      $ 19,660.6      $ 18,796.5      $ 18,254.5      $ 17,950.2   

Average loans, net of unearned income

     6,804.3        6,394.8        6,006.6        5,532.8        5,312.1   

Average available-for-sale securities

     10,497.7        9,530.3        9,620.9        9,513.3        8,725.2   

Average noninterest-bearing demand deposits

     12,026.0        11,586.3        10,634.8        9,551.7        9,147.5   

Average interest-bearing deposits

     4,939.8        4,925.7        5,169.3        5,718.1        5,519.0   

Average total deposits

     16,965.8        16,512.0        15,804.0        15,269.7        14,666.5   

Average long-term debt

     603.3        605.4        610.0        770.3        1,210.3   

Period-end total assets

     20,818.3        19,968.9        19,195.4        19,366.7        18,618.3   

Period-end loans, net of unearned income

     7,121.3        6,970.1        6,328.6        5,978.6        5,651.2   

Period-end available-for-sale securities

     11,527.5        10,536.0        9,639.4        9,580.9        9,500.8   

Period-end non-marketable securities

     1,021.9        1,004.4        952.0        875.2        798.1   

Period-end noninterest-bearing demand deposits

     11,837.6        11,861.9        11,162.8        10,683.9        9,524.7   

Period-end interest-bearing deposits

     4,879.3        4,847.6        4,976.4        5,594.5        5,805.6   

Period-end total deposits

     16,716.9        16,709.5        16,139.2        16,278.5        15,330.3   

Off-balance sheet:

          

Average total client investment funds

   $ 18,883.2      $ 18,458.7      $ 17,915.6      $ 17,759.2      $ 16,812.1   

Period-end total client investment funds

     19,111.7        18,743.9        18,692.4        18,158.7        17,035.4   

Total unfunded credit commitments

     7,866.1        8,067.6        7,619.2        7,414.6        6,964.9   

Earnings ratios:

          

Return on average assets (annualized) (3)

     0.69     0.72     0.79     1.44     0.75

Non-GAAP return on average assets (annualized) (1)

     0.69        0.72        0.79        0.91        0.75   

Return on average common SVBFG stockholders’ equity (annualized) (4)

     8.61        8.99        9.93        18.78        10.18   

Non-GAAP return on average SVBFG stockholders’ equity (annualized) (1)

     8.61        8.99        9.93        11.81        10.18   

Asset quality ratios:

          

Allowance for loan losses as a % of total gross loans

     1.41     1.28     1.34     1.36     1.44

Gross charge-offs as a % of average total gross loans (annualized)

     0.41        0.43        0.54        0.31        0.33   

Net charge-offs (recoveries) as a % of average total gross loans (annualized)

     0.21        0.22        (0.15     0.00        (0.19

Other ratios:

          

Operating efficiency ratio (5)

     62.65     63.06     55.04     47.53     55.72

Non-GAAP operating efficiency ratio (1)

     63.72        65.16        65.53        63.72        68.16   

Total risk-based capital ratio

     14.31        13.95        14.81        14.97        16.85   

Tangible common equity to tangible assets (1)

     7.87        7.86        8.00        7.42        7.05   

Tangible common equity to risk-weighted assets (1)

     13.55        13.25        14.21        13.72        13.12   

Book value per common share (6)

     37.19        36.07        35.50        33.31        30.76   

Period-end loans, net of unearned income, to deposits

     42.60        41.71        39.21        36.73        36.86   

Average loans, net of unearned income, to deposits

     40.11        38.73        38.01        36.23        36.22   

Other statistics:

          

Average SVB prime lending rate

     4.00     4.00     4.00     4.00     4.00

Average full-time equivalent employees

     1,556        1,522        1,478        1,416        1,389   

Period-end full-time equivalent employees

     1,554        1,526        1,504        1,428        1,396   

 

(1) To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP measures. A reconciliation of non-GAAP calculations to GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”
(2) Interest income on non-taxable investments is presented on a fully taxable equivalent basis using the federal statutory income tax rate of 35.0 percent. The taxable equivalent adjustments were $0.5 million for each of the quarters ended March 31, 2012, December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011.
(3) Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average assets.
(4) Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average SVBFG stockholders’ equity.
(5) Ratio is calculated by dividing noninterest expense by total taxable equivalent net interest income plus noninterest income.
(6) Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares.

 

2


Net Interest Income and Margin

Net interest income, on a fully taxable equivalent basis, was $151.4 million for the first quarter of 2012, compared to $140.6 million for the fourth quarter of 2011 and $120.8 million for the first quarter of 2011. The following table provides a summary of changes in interest income and interest expense attributable to both volume and rate from the fourth quarter of 2011 to the first quarter of 2012. Changes that are not solely due to either volume or rate (principally changes in the number of days from quarter to quarter) are allocated in proportion to the percentage changes in average volume and average rate:

 

     Q1’12 compared to Q4’11  
     Increase (decrease) due to change in  

(Dollars in thousands)

   Volume     Rate     Total  

Interest income:

      

Short-term investment securities

   $ (739   $ 263      $ (476

Available-for-sale securities

     3,956        2,925        6,881   

Loans

     5,287        (721     4,566   
  

 

 

   

 

 

   

 

 

 

Increase in interest income, net

     8,504        2,467        10,971   
  

 

 

   

 

 

   

 

 

 

Interest expense:

      

Deposits

     (43     41        (2

Short-term borrowings

     12        —          12   

Long-term debt

     (32     127        95   
  

 

 

   

 

 

   

 

 

 

(Decrease) increase in interest expense, net

     (63     168        105   
  

 

 

   

 

 

   

 

 

 

Increase in net interest income

   $ 8,567      $ 2,299      $ 10,866   
  

 

 

   

 

 

   

 

 

 

The increase in net interest income, on a fully taxable equivalent basis, from the fourth quarter of 2011 to the first quarter of 2012, was primarily attributable to the following:

 

   

An increase of $6.9 million in interest income from available-for-sale securities due to an increase in average balances of $967.4 million from new investments of excess cash. This increase was also attributable to the reinvestment of paydowns of lower-yielding variable-rate securities into higher-yielding fixed-rate securities.

 

   

An increase in interest income of $4.6 million from our loan portfolio, primarily due to an increase in average loan balances of $409.6 million. This increase was partially offset by a nominal decrease in the overall yield on our portfolio resulting from changes in loan composition, which is reflective of our ongoing strategy of growing our later stage client portfolio that typically has lower credit risk.

Net interest margin, on a fully taxable equivalent basis, was 3.30 percent for the first quarter of 2012, compared to 3.10 percent for the fourth quarter of 2011 and 2.96 percent for the first quarter of 2011. The increase in our net interest margin for the first quarter of 2012 was primarily due to growth in average loan balances, higher overall yields on our available-for-sale securities portfolio and growth in average available-for-sale securities balances from the investment of excess cash. The increases in net interest margin were partially offset by a decrease from lower overall yields on our loan portfolio resulting from changes in loan composition.

For the first quarter of 2012, 73.6 percent, or $5.1 billion, of our average outstanding gross loans were variable-rate loans that adjust at prescribed measurement dates upon a change in prime-lending rates or other variable indices. This compares to 72.5 percent, or $4.8 billion, for the fourth quarter of 2011 and 71.8 percent, or $3.9 billion, for the first quarter of 2011. For the first quarter of 2012, average variable-rate available-for-sale securities were $2.3 billion, or 22.4 percent of our available-for-sale securities portfolio, compared to $2.5 billion, or 26.2 percent in the fourth quarter of 2011. These securities have variable-rate coupons that are indexed to and change with movements in the one-month LIBOR rate.

 

3


Investment Securities

Our investment securities portfolio consists of both an available-for-sale securities portfolio, which represents interest-earning investment securities, and a non-marketable securities portfolio, which primarily represents investments managed as part of our funds management business.

Available-for-Sale Securities

Our available-for-sale securities portfolio is a fixed income investment portfolio that is managed to optimize portfolio yield over the long-term consistent with our liquidity, credit diversification and asset/liability management strategies.

Average available-for-sale securities increased by $967.4 million to $10.5 billion for the first quarter of 2012, compared to $9.5 billion for the fourth quarter of 2011 and $8.7 billion for the first quarter of 2011. Period-end available-for-sale securities were $11.5 billion at March 31, 2012, $10.5 billion at December 31, 2011 and $9.5 billion at March 31, 2011. During the first quarter of 2012 we purchased $1.8 billion in new investments, which was partially offset by paydowns of $777.7 million.

Non-Marketable Securities

Our non-marketable securities portfolio primarily represents investments in venture capital funds, debt funds and private portfolio companies.

Non-marketable securities remained flat at $1.0 billion ($360.2 million net of noncontrolling interests) at March 31, 2012, compared to $1.0 billion ($357.0 million net of noncontrolling interests) at December 31, 2011 and $798.1 million ($310.1 million net of noncontrolling interests) at March 31, 2011. Reconciliations of our non-GAAP non-marketable securities, net of noncontrolling interests, are provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”

Loans

Average loans, net of unearned income, were $6.8 billion for the first quarter of 2012, compared to $6.4 billion for the fourth quarter of 2011 and $5.3 billion for the first quarter of 2011. Period-end loans, net of unearned income, were $7.1 billion at March 31, 2012, compared to $7.0 billion at December 31, 2011 and $5.7 billion at March 31, 2011. The increase in average loan balances from the fourth quarter of 2011 to the first quarter of 2012 came primarily from our hardware and software industry clients.

Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million totaled $2.0 billion, $2.2 billion and $1.4 billion at March 31, 2012, December 31, 2011 and March 31, 2011, respectively, which represents 28.3 percent, 31.2 percent and 23.9 percent of total gross loans, respectively. Further details are provided at the end of this release under the section “Loan Concentrations.”

 

4


Credit Quality

The following table provides a summary of our allowance for loan losses:

 

     Three months ended  

(Dollars in thousands, except ratios)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Allowance for loan losses, beginning balance

   $ 89,947      $ 85,246      $ 82,627   

Provision for (reduction of) loan losses

     14,529        8,245        (3,047

Gross loan charge-offs

     (6,990     (7,041     (4,322

Loan recoveries

     3,436        3,497        6,793   
  

 

 

   

 

 

   

 

 

 

Allowance for loan losses, ending balance

   $ 100,922      $ 89,947      $ 82,051   
  

 

 

   

 

 

   

 

 

 

Provision for (reduction of) loan losses as a percentage of total gross loans (annualized)

     0.81     0.47     (0.22 )% 

Gross loan charge-offs as a percentage of average total gross loans (annualized)

     0.41        0.43        0.33   

Net loan charge-offs (recoveries) as a percentage of average total gross loans (annualized)

     0.21        0.22        (0.19

Allowance for loan losses as a percentage of period-end total gross loans

     1.41        1.28        1.44   

Total gross loans at period-end

   $ 7,180,779      $ 7,030,321      $ 5,698,898   

Average total gross loans

     6,861,122        6,446,061        5,355,895   

Our provision for loan losses was $14.5 million for the first quarter of 2012, compared to a provision of $8.2 million for the fourth quarter of 2011. The provision of $14.5 million for the first quarter of 2012 includes $9.8 million for one nonperforming loan, $3.6 million related to net charge-offs and $1.1 million primarily relating to period-end loan growth. The provision for the single nonperforming loan was related to a $22.0 million loan within our hardware portfolio, which has a specific reserve of $14.3 million at March 31, 2012.

Gross loan charge-offs of $7.0 million for the first quarter of 2012 were primarily from our hardware portfolio. Loan recoveries of $3.4 million for the first quarter of 2012 were primarily from our software portfolio.

Our allowance for loan losses as a percentage of total gross loans increased from 1.28 percent at December 31, 2011 to 1.41 percent at March 31, 2012. This increase is primarily due to the $14.3 million reserve for the single nonperforming loan described above, partially offset by the continued strong performance of our performing loan portfolio. The allowance for loan losses for total gross performing loans as a percentage of total gross performing loans decreased from 1.23 percent at December 31, 2011 to 1.16 percent at March 31, 2012.

Our nonperforming loans totaled $41.7 million at March 31, 2012 compared to $36.6 million at December 31, 2011. The increase of $5.1 million came primarily from the addition of the $22.0 million loan within our hardware portfolio described above, offset by paydowns of $16.9 million on other nonperforming loans. The allowance for loan losses related to nonperforming loans was $18.4 million at March 31, 2012 compared to $3.7 million at December 31, 2011.

Client Funds

Deposits

Average deposits were $17.0 billion for the first quarter of 2012, compared to $16.5 billion for the fourth quarter of 2011 and $14.7 billion for the first quarter of 2011. Period-end deposits remained stable at $16.7 billion at March 31, 2012, compared to $16.7 billion at December 31, 2011 and $15.3 billion at March 31, 2011. The increase in average deposits from the fourth quarter of 2011 to the first quarter of 2012 came primarily from an increase in our noninterest-bearing demand deposits, which increased by $439.7 million to $12.0 billion.

Off-Balance Sheet Client Investment Funds

Average client investment funds were $18.9 billion for the first quarter of 2012, compared to $18.5 billion for the fourth quarter of 2011 and $16.8 billion for the first quarter of 2011. Period-end client investment funds were $19.1 billion at March 31, 2012, compared to $18.7 billion at December 31, 2011 and $17.0 billion at March 31, 2011. The increase in average and period-end total client investment funds from the fourth quarter of 2011 to the first quarter of 2012 was primarily due to a steadily improving funding environment for both private and public clients, as well as our clients’ increased utilization of our off-balance sheet sweep product.

 

5


Short-term Borrowings

Period-end short term borrowings were $849.4 million at March 31, 2012, primarily due to overnight borrowings at the end of the quarter. The overnight borrowings were used to support loan growth and client deposit outflows late in the first quarter of 2012, and to manage average cash balances to a lower level.

Noninterest Income

Noninterest income was $59.3 million for the first quarter of 2012, compared to $73.1 million for the fourth quarter of 2011 and $90.0 million for the first quarter of 2011. Non-GAAP noninterest income, net of noncontrolling interests was $51.4 million for the first quarter of 2012, compared to $62.1 million for the fourth quarter of 2011 and $46.4 million for the first quarter of 2011. Reconciliation of our non-GAAP noninterest income and non-GAAP net gains on investment securities, both of which exclude amounts attributable to noncontrolling interests, is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”

The decrease of $13.8 million in noninterest income from the fourth quarter of 2011 to the first quarter of 2012 was primarily driven by lower gains on investment securities and equity warrant assets, while our core fee income remained at solid levels. Items impacting the change in noninterest income from the fourth quarter of 2011 to the first quarter of 2012 were as follows:

 

   

Net gains on investment securities of $7.8 million for the first quarter of 2012, compared to net gains of $19.8 million for the fourth quarter of 2011. Net of noncontrolling interests, net gains on investment securities were $0.5 million for the first quarter of 2012, compared to $7.5 million for the fourth quarter of 2011. The net gains, net of noncontrolling interests, of $0.5 million for the first quarter of 2012 were primarily driven by IPO activity within our managed funds of funds and unrealized gains related to our share of debt funds operating income. These gains were partially offset by valuation losses primarily from one investment within our managed direct venture funds and losses from the sale of public company shares which were originally acquired through the exercise of equity warrant assets.

As of March 31, 2012, we held investments, either directly or through twelve of our managed investment funds, in 459 funds (primarily venture capital funds), 106 companies and five debt funds.

The following tables provide a summary of net gains on investment securities, net of noncontrolling interests, for the three months ended March 31, 2012 and December 31, 2011, respectively:

 

     Three months ended March 31, 2012  

(Dollars in thousands)

   Managed
Funds Of
Funds
     Managed
Direct
Venture
Funds
    Debt Funds      Available-
For-Sale
Securities
    Strategic
and Other
Investments
     Total  

Total gains (losses) on investment securities, net

   $ 12,305       $ (4,682   $ 881       $ (874   $ 209       $ 7,839   

Less: income (losses) attributable to noncontrolling interests, including carried interest

     11,282         (3,959     15         —          —           7,338   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net gains (losses) on investment securities, net of noncontrolling interests

   $ 1,023       $ (723   $ 866       $ (874   $ 209       $ 501   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
     Three months ended December 31, 2011  

(Dollars in thousands)

   Managed
Funds Of
Funds
     Managed
Direct
Venture
Funds
    Debt Funds      Available-
For-Sale
Securities
    Strategic
and Other
Investments
     Total  

Total gains (losses) on investment securities, net

   $ 11,455       $ 1,006      $ 3,250       $ (161   $ 4,205       $ 19,755   

Less: income attributable to noncontrolling interests, including carried interest

     11,143         1,105        11         —          —           12,259   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Net gains (losses) on investment securities, net of noncontrolling interests

   $ 312       $ (99   $ 3,239       $ (161   $ 4,205       $ 7,496   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

6


   

Net gains on derivative instruments of $6.0 million for the first quarter of 2012, compared to net gains of $14.5 million for the fourth quarter of 2011. The following table provides a summary of our net gains on derivative instruments:

 

     Three months ended  

(Dollars in thousands)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Net gains on equity warrant assets

   $ 6,935      $ 14,064      $ 3,996   

(Losses) gains on foreign exchange forward contracts, net:

      

Gains on client foreign exchange forward contracts, net

     1,065        811        475   

(Losses) gains on internal foreign exchange forward contracts, net (1)

     (2,051     1,433        (2,568
  

 

 

   

 

 

   

 

 

 

Total (losses) gains on foreign exchange forward contracts, net

     (986     2,244        (2,093

Change in fair value of interest rate swaps

     389        (3     —     

Net losses on other derivatives (2)

     (362     (1,777     (1,352
  

 

 

   

 

 

   

 

 

 

Total gains on derivative instruments, net

   $ 5,976      $ 14,528      $ 551   
  

 

 

   

 

 

   

 

 

 

 

  (1) Represents the change in fair value of foreign exchange forward contracts used to economically reduce our foreign exchange exposure related to certain foreign currency denominated loans. This is offset by the gains and losses from the revaluation of these foreign currency denominated loans, which are recorded in the line item “Other” as part of noninterest income, a component of consolidated net income.
  (2) Primarily represents the change in fair value of loan conversion options.

The key changes in factors affecting net gains on derivative instruments from the fourth quarter of 2011 to the first quarter of 2012 were as follows:

 

   

Net gains on equity warrant assets of $6.9 million for the first quarter of 2012, compared to net gains of $14.1 million for the fourth quarter of 2011. The decrease was primarily due to higher than normal gains recognized in the fourth quarter of 2011. The net gains for the first quarter of 2012 were driven by IPO and M&A activity and included gains of $4.6 million from valuation increases in our equity warrant assets and gains of $2.9 million from the exercise of equity warrant assets.

 

   

Net losses of $2.1 million on internal foreign exchange forward contracts for our foreign currency denominated loans for the first quarter of 2012, compared to net gains of $1.4 million for the fourth quarter of 2011. The net losses for the first quarter of 2012 were primarily due to the weakening of the U.S. dollar against the Euro and Pound Sterling and were partially offset by net gains of $1.7 million from the revaluation of foreign currency denominated loans that are included in the line item “Other” as part of noninterest income (as discussed below).

The above decreases in noninterest income were partially offset by the following:

 

   

An increase in other noninterest income of $6.3 million, primarily due to the following:

 

   

Net gains of $1.7 million from the revaluation of our foreign currency denominated loans for the first quarter of 2012, compared to net losses of $1.3 million for the fourth quarter of 2011. The gains for the first quarter of 2012 were primarily due to the weakening of the U.S. dollar against the Euro and Pound Sterling, and were partially offset by net losses of $2.1 million from our internal forward exchange forward contracts that are included in the line item “Gains on derivative instruments, net” as part of noninterest income (as discussed above).

 

   

Currency revaluation gains of $0.6 million in the first quarter of 2012, compared to net losses of $1.6 million in the fourth quarter of 2011. The gains for the first quarter of 2012 were primarily due to the weakening of the U.S. dollar against the Indian Rupee.

Noninterest Expense

Noninterest expense was $132.0 million for the first quarter of 2012, compared to $134.7 million for the fourth quarter of 2011 and $117.4 million for the first quarter of 2011. The key factors contributing to the decrease in noninterest expense from the fourth quarter of 2011 to the first quarter of 2012 were as follows:

 

7


   

A decrease of $3.2 million in professional services expense, primarily due to higher spending in the fourth quarter of 2011 for our ongoing business and infrastructure initiatives, as well as changes in the timing of scheduled projects in 2012.

 

   

A reduction of provision for unfunded credit commitments of $0.3 million for the first quarter of 2012, compared to a provision of $2.3 million for the fourth quarter of 2011. The reduction of provision of $0.3 million for the first quarter of 2012 was primarily due to a decrease in unfunded credit commitment balances of $201.4 million.

The above decreases in noninterest expense were partially offset by the following:

 

   

An increase of $3.2 million in compensation and benefits expense. The following table provides a summary of our compensation and benefits expense:

 

     Three months ended  

(Dollars in thousands)

   March 31,
2012
     December 31,
2011
     March 31,
2011
 

Compensation and benefits:

        

Salaries and wages

   $ 38,120       $ 34,936       $ 33,807   

Incentive compensation plan

     15,716         23,966         15,655   

Employee stock ownership plan (“ESOP”)

     5,431         1,405         5,354   

Other employee benefits (1)

     24,470         20,207         20,816   
  

 

 

    

 

 

    

 

 

 

Total compensation and benefits

   $ 83,737       $ 80,514       $ 75,632   
  

 

 

    

 

 

    

 

 

 

Period-end full-time equivalent employees

     1,554         1,526         1,396   

Average full-time equivalent employees

     1,556         1,522         1,389   

 

(1) Other employee benefits expense includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), warrant and retention plans, agency fees and other employee related expenses.

The key changes in factors affecting compensation and benefits expense from the fourth quarter of 2011 to the first quarter of 2012 were as follows:

 

   

An increase of $7.6 million in additional ESOP contributions and 401(k) employer matching contributions made as a result of seasonal 2011 incentive compensation payouts received by employees during the first quarter of 2012.

 

   

An increase of $3.2 million in salaries and wages expense, primarily due to seasonal expenses of vacation benefits, as well as an increase in the number of average full-time equivalent employees (“FTE”), which increased by 34 to 1,556 FTEs for the first quarter of 2012 compared to 1,522 FTEs for the fourth quarter of 2011.

 

   

A decrease of $8.3 million in incentive compensation expense, primarily reflective of higher expenses in the fourth quarter of 2011 as a result of our strong 2011 results.

Non-GAAP noninterest expense, net of noncontrolling interests, was $129.2 million for the first quarter of 2012, compared to $132.0 million for the fourth quarter of 2011 and $114.0 million for the first quarter of 2011. Reconciliations of our non-GAAP noninterest expense, net of noncontrolling interests, are provided below under the section “Use of Non-GAAP Financial Measures.”

Income Tax Expense

Our effective tax expense rate was 40.6 percent for the first quarter of 2012, compared to 42.5 percent for the fourth quarter of 2011 and 40.8 percent for the first quarter of 2011. The decrease in the tax rate from the fourth quarter of 2011 to the first quarter of 2012 was primarily attributable to lower taxes on foreign operations and higher credits from low income housing investments.

Our effective tax expense rate is calculated by dividing income tax expense by the sum of income before income tax expense and the net income attributable to noncontrolling interests.

 

8


Noncontrolling Interests

Included in net income is income and expense related to noncontrolling interests. The relevant amounts allocated to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests” on our statements of income. The following table provides a summary of net income attributable to noncontrolling interests:

 

     Three months ended  

(Dollars in thousands)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Net interest income (1)

   $ (43   $ (38   $ (7

Noninterest income (1)

     (6,632     (11,052     (42,371

Noninterest expense (1)

     2,818        2,699        3,481   

Carried interest (2)

     (1,286     75        (1,191
  

 

 

   

 

 

   

 

 

 

Net income attributable to noncontrolling interests

   $ (5,143   $ (8,316   $ (40,088
  

 

 

   

 

 

   

 

 

 

 

(1) Represents noncontrolling interests’ share in net interest income, noninterest income and noninterest expense.
(2) Represents the preferred allocation of income earned by the general partners or limited partners of certain consolidated funds.

Net income attributable to noncontrolling interests was $5.1 million for the first quarter of 2012, compared to $8.3 million for the fourth quarter of 2011 and $40.1 million for the first quarter of 2011. Net income attributable to noncontrolling interests of $5.1 million for the first quarter of 2012 was primarily a result of the following:

 

   

Net gains on investment securities (including carried interest) attributable to noncontrolling interests of $7.3 million, primarily from gains of $11.3 million from our managed funds of funds, partially offset by losses of $4.0 million from our managed direct venture funds.

 

   

Noninterest expense of $2.8 million, primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as general partner.

SVBFG Stockholders’ Equity

Total SVBFG stockholders’ equity increased by $70.1 million to $1.6 billion at March 31, 2012, primarily due to net income of $34.8 million in the first quarter of 2012 and an increase in additional paid-in capital of $31.4 million primarily from stock option exercises and ESOP contributions during the first quarter of 2012.

 

9


Outlook for the Year Ending December 31, 2012

Our outlook for the year ending December 31, 2012 is provided below on a GAAP basis, unless otherwise noted. We have provided our current outlook for the expected full year results of our significant forecasted activities. In general, we do not provide our outlook for items where the timing or financial impact are particularly uncertain and/or subject to market or other conditions beyond our control (such as the level of IPO, M&A or general financing activity), or for potential unusual or non-recurring items. The outlook assumptions presented below are, by their nature, forward-looking statements and are subject to substantial risks and uncertainties which are discussed below under the caption “Forward-Looking Statements.”

For the year ending December 31, 2012, compared to our 2011 results, we currently expect the following outlook:

 

      

 

Current full year 2012 outlook compared to 2011
results (as of April 26, 2012)

 

  

 

Change in outlook compared to outlook
reported as of January 26, 2012

 

     
Average loan balances   

Increase at a percentage rate in the mid twenties

 

   No change from previous outlook
     
Average deposit balances   

Increase at a percentage rate in the low teens

 

   No change from previous outlook
     
Net interest income   

Increase at a percentage rate in the high teens

 

   No change from previous outlook
     

Net interest margin

 

  

Between 3.20% and 3.30%

 

  

No change from previous outlook

 

     

Allowance for loan losses for total gross performing loans as a percentage of total gross performing loans

 

   Comparable to 2011 levels of 1.23%    No change from previous outlook
     
Net loan charge-offs   

Between 0.40% and 0.70% of average total gross loans

 

   No change from previous outlook
     

Nonperforming loans as a percentage of total gross loans

 

   Lower than 2011 levels of 0.52%    No change from previous outlook
     

Core fee income (deposit services, letters of credit, credit card, client investment, and foreign exchange, in aggregate)

 

   Increase at a percentage rate in the mid teens    No change from previous outlook
     

Noninterest expense* (excluding expenses related to noncontrolling interests)

 

  

Increase at a percentage rate in the high single digits

 

   No change from previous outlook

 

* Non-GAAP

 

10


Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, such as forecasts of our future financial results and condition, expectations for our operations and business, and our underlying assumptions of such forecasts and expectations. In this release, including the section “Outlook for the Year Ending December 31, 2012” above, we make forward-looking statements discussing management’s expectations about economic conditions; opportunities in the market; the outlook on our client performance; our financial, credit, and business performance; expense levels; and financial results (and the components of such results) for the year 2012.

Although management believes that the expectations reflected in our forward-looking statements are reasonable and has based these expectations on our beliefs and assumptions, such expectations are not guarantees and may prove to be incorrect. Actual results could differ significantly. Factors that may cause the outlook for the year 2012 and other forward-looking statements herein to change include, among others, the following: (i) deterioration, weaker than expected improvement, or other changes in the state of the economy or the markets in which we conduct business or are served by us (including the levels of IPOs and M&A activities), (ii) changes in the volume and credit quality of our loans, (iii) changes in interest rates or market levels or factors affecting them, (iv) changes in our deposit levels, (v) changes in the performance or equity valuations of funds or companies in which we have invested or hold derivative instruments or equity warrant assets, (vi) variations from our expectations as to factors impacting our cost structure, (vii) changes in our assessment of the creditworthiness or liquidity of our clients or unanticipated effects of credit concentration risks which create or exacerbate deterioration of such creditworthiness or liquidity, (viii) accounting changes, as required by U.S. generally accepted accounting principles, and (ix) regulatory or legal changes. For additional information about these factors, please refer to our public reports filed with the U.S. Securities and Exchange Commission, including our most recently-filed quarterly or annual report. The forward-looking statements included in this release are made only as of the date of this release. We do not intend, and undertake no obligation, to update these forward-looking statements.

Earnings Conference Call

On April 26, 2012, we will host a conference call at 3:00 p.m. (Pacific Time) to discuss the financial results for the first quarter ended March 31, 2012. The conference call can be accessed by dialing (877) 663-9523 or (404) 665-9482, and referencing the conference ID “71180154.” A live webcast of the audio portion of the call can be accessed on the Investor Relations section of our website at www.svb.com. A replay of the conference call will be available beginning at approximately 6:00 p.m. (Pacific Time) on Thursday, April 26, 2012, through midnight on Tuesday, May 1, 2012, by dialing (855) 859-2056 or (404) 537-3406 and referencing conference ID number “71180154.” A replay of the audio webcast will also be available on www.svb.com for 12 months beginning Thursday, April 26, 2012.

About SVB Financial Group

For nearly three decades, SVB Financial Group and its subsidiaries, including Silicon Valley Bank, have been dedicated to helping entrepreneurs succeed. SVB Financial Group is a financial holding company that serves companies in the technology, life science, venture capital, private equity and premium wine industries. Offering diversified financial services through Silicon Valley Bank, SVB Analytics, SVB Capital, and SVB Private Bank, SVB Financial Group provides clients with commercial, investment, international and private banking services. The company also offers funds management, broker-dealer transactions and asset management, as well as the added value of its knowledge and networks worldwide. Headquartered in Santa Clara, California, SVB Financial Group (Nasdaq: SIVB) operates through 27 offices in the U.S. and international operations in China, India, Israel and the United Kingdom. More information on the company can be found at www.svb.com.

Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Private Bank is a division of Silicon Valley Bank. SVB Financial Group is also a member of the Federal Reserve System.

 

11


SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

     Three months ended  

(Dollars in thousands, except share data)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Interest income:

      

Loans

   $ 109,461      $ 104,895      $ 89,776   

Available-for-sale securities:

      

Taxable

     47,375        40,493        41,382   

Non-taxable

     900        900        941   

Federal funds sold, securities purchased under agreements to resell and other short-term investment securities

     1,038        1,514        2,002   
  

 

 

   

 

 

   

 

 

 

Total interest income

     158,774        147,802        134,101   
  

 

 

   

 

 

   

 

 

 

Interest expense:

      

Deposits

     1,481        1,483        3,105   

Borrowings

     6,356        6,249        10,697   
  

 

 

   

 

 

   

 

 

 

Total interest expense

     7,837        7,732        13,802   
  

 

 

   

 

 

   

 

 

 

Net interest income

     150,937        140,070        120,299   

Provision for (reduction of) loan losses

     14,529        8,245        (3,047
  

 

 

   

 

 

   

 

 

 

Net interest income after provision for loan losses

     136,408        131,825        123,346   
  

 

 

   

 

 

   

 

 

 

Noninterest income:

      

Foreign exchange fees

     12,103        11,494        10,497   

Deposit service charges

     8,096        7,994        7,117   

Gains on investment securities, net

     7,839        19,755        51,337   

Gains on derivative instruments, net

     5,976        14,528        551   

Credit card fees

     5,668        6,054        3,817   

Letters of credit and standby letters of credit fees

     3,636        3,749        2,710   

Client investment fees

     2,897        2,714        3,661   

Other

     13,078        6,771        10,264   
  

 

 

   

 

 

   

 

 

 

Total noninterest income

     59,293        73,059        89,954   
  

 

 

   

 

 

   

 

 

 

Noninterest expense:

      

Compensation and benefits

     83,737        80,514        75,632   

Professional services

     14,607        17,807        12,987   

Business development and travel

     7,746        6,821        5,653   

Premises and equipment

     7,564        8,763        5,912   

Net occupancy

     5,623        5,461        4,650   

Correspondent bank fees

     2,688        2,351        2,163   

FDIC assessments

     2,498        2,358        3,475   

(Reduction of) provision for unfunded credit commitments

     (258     2,266        (900

Other

     7,807        8,369        7,863   
  

 

 

   

 

 

   

 

 

 

Total noninterest expense

     132,012        134,710        117,435   
  

 

 

   

 

 

   

 

 

 

Income before income tax expense

     63,689        70,174        95,865   

Income tax expense

     23,756        26,284        22,770   
  

 

 

   

 

 

   

 

 

 

Net income before noncontrolling interests

     39,933        43,890        73,095   

Net income attributable to noncontrolling interests

     (5,143     (8,316     (40,088
  

 

 

   

 

 

   

 

 

 

Net income available to common stockholders

   $ 34,790      $ 35,574      $ 33,007   
  

 

 

   

 

 

   

 

 

 

Earnings per common share—basic

   $ 0.79      $ 0.82      $ 0.78   

Earnings per common share—diluted

     0.78        0.81        0.76   

Weighted average common shares outstanding—basic

     43,779,800        43,366,891        42,482,037   

Weighted average common shares outstanding—diluted

     44,460,005        43,816,572        43,426,306   

 

12


SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in thousands, except par value and share data)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Assets:

      

Cash and cash equivalents

   $ 850,624      $ 1,114,948      $ 2,350,060   

Available-for-sale securities

     11,527,541        10,536,046        9,500,828   

Non-marketable securities

     1,021,941        1,004,440        798,064   
  

 

 

   

 

 

   

 

 

 

Investment securities

     12,549,482        11,540,486        10,298,892   
  

 

 

   

 

 

   

 

 

 

Loans, net of unearned income

     7,121,289        6,970,082        5,651,170   

Allowance for loan losses

     (100,922     (89,947     (82,051
  

 

 

   

 

 

   

 

 

 

Net loans

     7,020,367        6,880,135        5,569,119   
  

 

 

   

 

 

   

 

 

 

Premises and equipment, net of accumulated depreciation and amortization

     59,320        56,471        46,161   

Accrued interest receivable and other assets

     338,544        376,854        354,034   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 20,818,337      $ 19,968,894      $ 18,618,266   
  

 

 

   

 

 

   

 

 

 

Liabilities and total equity:

      

Liabilities:

      

Noninterest-bearing demand deposits

   $ 11,837,600      $ 11,861,888      $ 9,524,698   

Interest-bearing deposits

     4,879,282        4,847,648        5,805,621   
  

 

 

   

 

 

   

 

 

 

Total deposits

     16,716,882        16,709,536        15,330,319   
  

 

 

   

 

 

   

 

 

 

Short-term borrowings

     849,380        —          35,415   

Other liabilities

     307,537        405,321        200,768   

Long-term debt

     601,835        603,648        1,204,733   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     18,475,634        17,718,505        16,771,235   
  

 

 

   

 

 

   

 

 

 

SVBFG stockholders’ equity:

      

Preferred stock, $0.001 par value, 20,000,000 shares authorized; no shares issued and outstanding

     —          —          —     

Common stock, $0.001 par value, 150,000,000 shares authorized; 44,087,110 shares, 43,507,932 shares and 42,697,828 shares outstanding, respectively

     44        44        43   

Additional paid-in capital

     515,614        484,216        443,453   

Retained earnings

     1,034,523        999,733        860,838   

Accumulated other comprehensive income

     89,309        85,399        9,240   
  

 

 

   

 

 

   

 

 

 

Total SVBFG stockholders’ equity

     1,639,490        1,569,392        1,313,574   

Noncontrolling interests

     703,213        680,997        533,457   
  

 

 

   

 

 

   

 

 

 

Total equity

     2,342,703        2,250,389        1,847,031   
  

 

 

   

 

 

   

 

 

 

Total liabilities and total equity

   $ 20,818,337      $ 19,968,894      $ 18,618,266   
  

 

 

   

 

 

   

 

 

 

 

13


SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM AVERAGE BALANCES, RATES AND YIELDS

(Unaudited)

 

     Three months ended  
     March 31, 2012     December 31, 2011     March 31, 2011  

(Dollars in thousands)

   Average
balance
    Interest
income/
expense
    Yield/
rate
    Average
balance
    Interest
income/
expense
    Yield/
rate
    Average
balance
    Interest
income/
expense
    Yield/
rate
 

Interest-earning assets:

                  

Federal reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)

   $ 1,171,410      $ 1,038        0.36   $ 2,040,398      $ 1,514        0.29   $ 2,538,941      $ 2,002        0.32

Available-for-sale securities: (2)

                  

Taxable

     10,405,476        47,375        1.83        9,438,012        40,493        1.70        8,628,837        41,382        1.94   

Non-taxable (3)

     92,236        1,384        6.03        92,252        1,385        5.96        96,375        1,448        6.09   

Total loans, net of unearned income (4)

     6,804,348        109,461        6.47        6,394,784        104,895        6.51        5,312,050        89,776        6.85   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-earning assets

     18,473,470        159,258        3.47        17,965,446        148,287        3.27        16,576,203        134,608        3.30   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and due from banks

     318,574            307,273            266,097       

Allowance for loan losses

     (93,840         (89,552         (87,980    

Other assets (5)

     1,534,339            1,477,403            1,195,884       
  

 

 

       

 

 

       

 

 

     

Total assets

   $ 20,232,543          $ 19,660,570          $ 17,950,204       
  

 

 

       

 

 

       

 

 

     

Funding sources:

                  

Interest-bearing liabilities:

                  

NOW deposits

   $ 104,498      $ 79        0.30   $ 110,801      $ 72        0.26   $ 76,282      $ 77        0.41

Money market deposits

     2,470,781        930        0.15        2,573,761        945        0.15        2,361,971        1,576        0.27   

Money market deposits in foreign offices

     152,582        37        0.10        120,242        30        0.10        135,967        112        0.33   

Time deposits

     152,621        179        0.47        158,216        189        0.47        342,341        377        0.45   

Sweep deposits

     2,059,284        256        0.05        1,962,725        247        0.05        2,602,487        963        0.15   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing deposits

     4,939,766        1,481        0.12        4,925,745        1,483        0.12        5,519,048        3,105        0.23   

Short-term borrowings

     27,415        11        0.16        1,288        —          —          39,927        16        0.16   

5.375% Senior Notes

     347,810        4,815        5.57        347,761        4,813        5.49        347,617        4,809        5.61   

3.875% Convertible Notes

     —          —          —          —          —          —          249,509        3,554        5.78   

Junior Subordinated Debentures

     55,357        831        6.04        55,401        831        5.95        55,533        834        6.09   

5.70% Senior Notes

     143,485        503        1.41        145,070        423        1.16        265,077        668        1.02   

6.05% Subordinated Notes

     55,252        127        0.92        55,074        111        0.80        287,286        743        1.05   

Other long-term debt

     1,440        69        19.27        2,103        71        13.39        5,261        73        5.63   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total interest-bearing liabilities

     5,570,525        7,837        0.57        5,532,442        7,732        0.55        6,769,258        13,802        0.83   

Portion of noninterest-bearing funding sources

     12,902,945            12,433,004            9,806,945       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total funding sources

     18,473,470        7,837        0.17        17,965,446        7,732        0.17        16,576,203        13,802        0.34   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest-bearing funding sources:

                  

Demand deposits

     12,025,997            11,586,280            9,147,491       

Other liabilities

     326,679            312,306            235,924       

SVBFG stockholders’ equity

     1,624,256            1,570,556            1,314,811       

Noncontrolling interests

     685,086            658,986            482,720       

Portion used to fund interest-earning assets

     (12,902,945         (12,433,004         (9,806,945    
  

 

 

       

 

 

       

 

 

     

Total liabilities and total equity

   $ 20,232,543          $ 19,660,570          $ 17,950,204       
  

 

 

       

 

 

       

 

 

     

Net interest income and margin

     $ 151,421        3.30     $ 140,555        3.10     $ 120,806        2.96
    

 

 

   

 

 

     

 

 

   

 

 

     

 

 

   

 

 

 

Total deposits

   $ 16,965,763          $ 16,512,025          $ 14,666,539       
  

 

 

       

 

 

       

 

 

     

Average SVBFG stockholders’ equity as a percentage of average assets

         8.03          7.99          7.32 
      

 

 

       

 

 

       

 

 

 

Reconciliation to reported net interest income:

                  

Adjustments for taxable equivalent basis

       (484         (485         (507  
    

 

 

       

 

 

       

 

 

   

Net interest income, as reported

     $ 150,937          $ 140,070          $ 120,299     
    

 

 

       

 

 

       

 

 

   

 

(1) Includes average interest-earning deposits in other financial institutions of $332.3 million, $416.9 million and $253.2 million for the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011, respectively. For the quarters ended March 31, 2012, December 31, 2011 and March 31, 2011, balance also includes $594.4 million, $1.4 billion and $1.9 billion, respectively, deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate.
(2) Yields on available-for-sale securities are based on amortized cost, therefore do not give effect to unrealized changes in fair value that are reflected in other comprehensive income.
(3) Interest income on non-taxable available-for-sale securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent for all periods presented.
(4) Nonaccrual loans are reflected in the average balances of loans.
(5) Average investment securities of $1.2 billion, $1.1 billion and $774.0 million for the quarters March 31, 2012, December 31, 2011 and March 31, 2011, respectively, were classified as other assets as they are noninterest-earning assets. These investments primarily consisted of non-marketable securities.

 

14


Gains on Equity Warrant Assets

 

     Three months ended  

(Dollars in thousands)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Equity warrant assets (1):

      

Gains on exercises, net

   $ 2,941      $ 5,887        2,024   

Cancellations and expirations

     (569     (116     (581

Changes in fair value

     4,563        8,293        2,553   
  

 

 

   

 

 

   

 

 

 

Total net gains on equity warrant assets (2)

   $ 6,935      $ 14,064      $ 3,996   
  

 

 

   

 

 

   

 

 

 

 

(1) At March 31, 2012, we held warrants in 1,192 companies, compared to 1,174 companies at December 31, 2011 and 1,164 companies at March 31, 2011.
(2) Net gains on equity warrant assets are included in the line item “Gains on derivative instruments, net” as part of noninterest income.

Reconciliation of Basic and Diluted Weighted Average Common Shares Outstanding

 

     Three months ended  

(Shares in thousands)

   March 31,
2012
     December 31,
2011
     March 31,
2011
 

Weighted average common shares outstanding—basic

     43,780         43,367         42,482   

Effect of dilutive securities:

        

Stock options and employee stock purchase plan

     501         327         707   

Restricted stock units

     179         123         149   

3.875% Convertible Notes (1)

     —           —           88   
  

 

 

    

 

 

    

 

 

 

Total effect of dilutive securities

     680         450         944   
  

 

 

    

 

 

    

 

 

 

Weighted average common shares outstanding—diluted

     44,460         43,817         43,426   
  

 

 

    

 

 

    

 

 

 

 

(1) These notes matured on April 15, 2011.

Capital Ratios

 

     March 31,
2012
    December 31,
2011
    March 31,
2011
 

SVB Financial Group:

      

Total risk-based capital ratio

     14.31     13.95     16.85

Tier 1 risk-based capital ratio

     12.91        12.62        13.37   

Tier 1 leverage ratio

     8.04        7.92        7.65   

Tangible common equity to tangible assets ratio (1)

     7.87        7.86        7.05   

Tangible common equity to risk-weighted assets ratio (1)

     13.55        13.25        13.12   

Silicon Valley Bank:

      

Total risk-based capital ratio

     12.59     12.33     14.99

Tier 1 risk-based capital ratio

     11.16        10.96        11.38   

Tier 1 leverage ratio

     6.94        6.87        6.58   

Tangible common equity to tangible assets ratio (1)

     7.16        7.18        6.37   

Tangible common equity to risk-weighted assets ratio (1)

     11.95        11.75        11.47   

 

(1) These are non-GAAP calculations. A reconciliation of non-GAAP calculations to GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”

 

15


Loan Concentrations

 

(Dollars in thousands, except ratios and client data)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million

      

Commercial loans:

      

Software

   $ 568,580      $ 745,772      $ 346,121   

Hardware

     427,989        355,188        133,010   

Venture capital/private equity

     478,677        490,810        416,459   

Life science

     288,848        291,832        210,175   

Premium wine (1)

     6,200        5,400        6,200   

Other

     119,370        157,714        145,396   
  

 

 

   

 

 

   

 

 

 

Total commercial loans

     1,889,664        2,046,716        1,257,361   
  

 

 

   

 

 

   

 

 

 

Real estate secured loans:

      

Premium wine (1)

     75,382        77,125        47,022   

Consumer loans (2)

     19,744        18,932        19,960   
  

 

 

   

 

 

   

 

 

 

Total real estate secured loans

     95,126        96,057        66,982   
  

 

 

   

 

 

   

 

 

 

Consumer loans (2)

     45,750        48,000        40,121   
  

 

 

   

 

 

   

 

 

 

Total loans individually equal to or greater than $20 million

   $ 2,030,540      $ 2,190,773      $ 1,364,464   
  

 

 

   

 

 

   

 

 

 

Loans (individually or in the aggregate) to any single client, less than $20 million

      

Commercial loans:

      

Software

   $ 1,967,782      $ 1,772,118      $ 1,523,721   

Hardware

     636,753        606,681        543,461   

Venture capital/private equity

     655,954        637,710        606,801   

Life science

     583,496        580,581        400,233   

Premium wine

     115,079        126,152        124,178   

Other

     233,334        187,874        256,649   
  

 

 

   

 

 

   

 

 

 

Total commercial loans

     4,192,398        3,911,116        3,455,043   
  

 

 

   

 

 

   

 

 

 

Real estate secured loans:

      

Premium wine

     286,147        270,116        263,837   

Consumer loans

     522,658        514,885        396,661   
  

 

 

   

 

 

   

 

 

 

Total real estate secured loans

     808,805        785,001        660,498   
  

 

 

   

 

 

   

 

 

 

Construction loans

     30,040        30,319        62,975   

Consumer loans

     118,996        113,112        155,918   
  

 

 

   

 

 

   

 

 

 

Total loans individually less than $20 million

   $ 5,150,239      $ 4,839,548      $ 4,334,434   
  

 

 

   

 

 

   

 

 

 

Total gross loans

   $ 7,180,779      $ 7,030,321      $ 5,698,898   
  

 

 

   

 

 

   

 

 

 

Loans individually equal to or greater than $20 million as a percentage of total gross loans

     28.3     31.2     23.9

Total clients with loans individually equal to or greater than $20 million

     67        71        43   

Loans individually equal to or greater than $20 million on nonaccrual status

   $ 21,965      $ —        $ —     

Loans individually equal to or greater than $20 million on nonaccrual status as a percentage of total loans greater than $20 million

     1.08     —       —  

 

(1) Premium wine clients can have loan balances included in both commercial loans and real estate secured loans, the combination of which are equal to or greater than $20 million.
(2) Consumer loan clients can have loan balances included in both real estate secured loans and other consumer loans, the combination of which are equal to or greater than $20 million.

 

16


Credit Quality

 

     Period end balances at  

(Dollars in thousands, except ratios)

   March 31,
2012
    December 31,
2011
    March 31,
2011
 

Nonperforming loans and assets:

      

Gross nonperforming loans:

      

Loans past due 90 days or more still accruing interest

   $ —        $ —        $ 13   

Impaired loans

     41,697        36,617        34,506   
  

 

 

   

 

 

   

 

 

 

Total gross nonperforming loans

   $ 41,697      $ 36,617      $ 34,519   
  

 

 

   

 

 

   

 

 

 

Nonperforming loans as a percentage of total gross loans

     0.58     0.52     0.61

Nonperforming loans as a percentage of total assets

     0.20        0.18        0.19   

Allowance for loan losses

   $ 100,922      $ 89,947      $ 82,051   

As a percentage of total gross loans

     1.41     1.28     1.44

As a percentage of total gross nonperforming loans

     242.04        245.64        237.70   

Allowance for loan losses for impaired loans

   $ 18,369      $ 3,707      $ 6,882   

As a percentage of total gross loans

     0.26     0.05     0.12

As a percentage of total gross nonperforming loans

     44.05        10.12        19.94   

Allowance for loan losses for total gross performing loans

   $ 82,553      $ 86,240      $ 75,169   

As a percentage of total gross loans

     1.15     1.23     1.32

As a percentage of total gross performing loans

     1.16        1.23        1.33   

Total gross loans

   $ 7,180,779      $ 7,030,321      $ 5,698,898   

Total gross performing loans

     7,139,082        6,993,704        5,664,379   

Reserve for unfunded credit commitments (1)

     21,553        21,811        16,515   

As a percentage of total unfunded credit commitments

     0.27     0.27     0.24

Total unfunded credit commitments (2)

     7,866,137        8,067,570        6,964,905   

 

(1) The “reserve for unfunded credit commitments” is included as a component of “other liabilities.”
(2) Includes unfunded loan commitments and letters of credit

Average Client Investment Funds (1)

 

     Three months ended  

(Dollars in millions)

   March 31,
2012
     December 31,
2011
     March 31,
2011
 

Client directed investment assets

   $ 7,556       $ 8,200       $ 9,337   

Client investment assets under management

     9,986         9,656         7,475   

Sweep money market funds

     1,341         603         —     
  

 

 

    

 

 

    

 

 

 

Total average client investment funds

   $ 18,883       $ 18,459       $ 16,812   
  

 

 

    

 

 

    

 

 

 

 

(1) Client investment funds are maintained at third party financial institutions.

Use of Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures (non-GAAP net income, non-GAAP EPS, non-GAAP noninterest income, non-GAAP net gains on investment securities, non-GAAP non-marketable securities, non-GAAP noninterest expense and non-GAAP financial ratios) of financial performance. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.

We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures (as applicable), provide meaningful supplemental information regarding our performance by: (i) excluding amounts attributable to noncontrolling interests for which we effectively do not receive the economic

 

17


benefit or cost of, where indicated, or (ii) providing additional information used by management that is not otherwise required by GAAP or other applicable requirements. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing our operating results and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate a comparison of our performance to prior periods. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, net income or other financial measures prepared in accordance with GAAP. In the financial tables below, we have provided a reconciliation of, where applicable, the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release, or a reconciliation of the non-GAAP calculation of the financial measure.

In particular, in this press release, we use certain non-GAAP measures that exclude the following from net income and certain other financial line items in certain periods:

 

   

Income and expense attributable to noncontrolling interests— As part of our funds management business, we recognize the entire income or loss from certain funds where we own less than 100 percent. We are required under GAAP to consolidate 100 percent of the results of the funds that we are deemed to control or in which we have a majority ownership. The relevant amounts attributable to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests.” Our net income available to common stockholders includes only the portion of income or loss related to our ownership interest.

 

   

Gains of $37.3 million from the sales of certain available-for-sale securities in the second quarter of 2011.

 

   

Net gains of $3.1 million from the repurchase of $108.6 million aggregate principal amount of our 5.70% Senior Notes and $204.0 million aggregate principal amount of our 6.05% Subordinated Notes and the termination of the associated portions of interest rate swaps in the second quarter of 2011.

In addition, in this press release, we use certain non-GAAP financial ratios that are not required by GAAP or exclude certain financial items from their calculations that are otherwise required under GAAP, including:

 

   

Tangible common equity to tangible assets ratio; tangible common equity to risk-weighted assets ratio— These ratios are not required by GAAP or applicable bank regulatory requirements, and are used by management to evaluate the adequacy of our capital levels. Our ratios are calculated by dividing total SVBFG stockholders’ equity, by total assets or total risk-weighted assets, as applicable, after reducing amounts by acquired intangibles. The manner in which this ratio is calculated varies among companies. Accordingly, our ratios are not necessarily comparable to similar measures of other companies.

 

   

Non-GAAP return on average assets ratio; Non-GAAP return on average SVBFG stockholders’ equity ratio— These ratios exclude certain financial items that are otherwise required under GAAP. Our ratios are calculated by dividing non-GAAP net income available to common stockholders (annualized) by average assets or average SVBFG stockholders’ equity, as applicable.

 

   

Non-GAAP operating efficiency ratio—This ratio excludes certain financial items that are otherwise required under GAAP. It is calculated by dividing noninterest expense by total taxable equivalent income, after reducing both amounts by taxable equivalent income and expense attributable to noncontrolling interests and the gains noted above for applicable periods.

 

18


$000,000,000 $000,000,000 $000,000,000 $000,000,000 $000,000,000
     Three months ended  

Non-GAAP net income and earnings per share

(Dollars in thousands, except share amounts)

   March 31,
2012
     December 31,
2011
     September 30,
2011
     June 30,
2011
    March 31,
2011
 

Net income available to common stockholders

   $ 34,790       $ 35,574       $ 37,571       $ 65,750      $ 33,007   

Less: gains on sales of certain available-for-sale securities (1)

     —           —           —           (37,314     —     

Tax impact of gains on sales of available-for-sale securities

     —           —           —           14,810        —     

Less: net gain from note repurchases and termination of corresponding interest rate swaps (2)

     —           —           —           (3,123     —     

Tax impact of net gain from note repurchases and termination of corresponding interest rate swaps

     —           —           —           1,240        —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP net income available to common stockholders

   $ 34,790       $ 35,574       $ 37,571       $ 41,363      $ 33,007   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

GAAP earnings per common share — diluted

   $ 0.78       $ 0.81       $ 0.86       $ 1.50      $ 0.76   

Less: gains on sales of certain available-for-sale securities (1)

     —           —           —           (0.85     —     

Tax impact of gains on sales of available-for-sale securities

     —           —           —           0.34        —     

Less: net gain from note repurchases and termination of corresponding interest rate swaps (2)

     —           —           —           (0.07     —     

Tax impact of net gain from note repurchases and termination of corresponding interest rate swaps

     —           —           —           0.03        —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP earnings per common share — diluted

   $ 0.78       $ 0.81       $ 0.86       $ 0.95      $ 0.76   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Weighted average diluted common shares outstanding

     44,460,005         43,816,572         43,791,238         43,739,743        43,426,306   

 

(1) Gains on the sales of $1.4 billion in certain available-for-sale securities in the second quarter of 2011.
(2) Net gains of $3.1 million from the repurchase of $108.6 million of our 5.70% Senior Notes and $204.0 million of our 6.05% Subordinated Notes and the termination of the corresponding portions of interest rate swaps in the second quarter of 2011.

 

$00,000,000 $00,000,000 $00,000,000 $00,000,000 $00,000,000
    Three months ended  

Non-GAAP return on average assets and average SVBFG stockholders’ equity
(Dollars in thousands, except ratios)

  March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Non-GAAP net income available to common stockholders

  $ 34,790      $ 35,574      $ 37,571      $ 41,363      $ 33,007   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average assets

  $ 20,232,543      $ 19,660,570      $ 18,796,510      $ 18,254,531      $ 17,950,204   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average SVBFG stockholders’ equity

  $ 1,624,256      $ 1,570,556      $ 1,500,452      $ 1,404,391      $ 1,314,811   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP return on average assets (annualized)

    0.69     0.72     0.79     0.91     0.75

Non-GAAP return on average SVBFG stockholders’ equity (annualized)

    8.61        8.99        9.93        11.81        10.18   
    Three months ended  

Non-GAAP noninterest income, net of noncontrolling interests
(Dollars in thousands)

  March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

GAAP noninterest income

  $ 59,293      $ 73,059      $ 95,611      $ 123,708      $ 89,954   

Less: income attributable to noncontrolling interests, including carried interest

    7,918        10,977        41,239        26,558        43,562   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Noninterest income, net of noncontrolling interests

    51,375        62,082        54,372        97,150        46,392   

Less: gains on sales of certain available-for-sale securities

    —          —          —          37,314        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP noninterest income, net of noncontrolling interests and excluding gains on sales of certain available-for-sale securities

  $ 51,375      $ 62,082      $ 54,372      $ 59,836      $ 46,392   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Three months ended  

Non-GAAP net gains on investment securities, net of noncontrolling interests
(Dollars in thousands)

  March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

GAAP net gains on investment securities

  $ 7,839      $ 19,755      $ 52,262      $ 71,680      $ 51,337   

Less: income attributable to noncontrolling interests, including carried interest

    7,338        12,259        42,961        26,437        43,385   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net gains on investment securities, net of noncontrolling interests

    501        7,496        9,301        45,243        7,952   

Less: gains on sales of certain available-for-sale securities

    —          —          —          37,314        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net gains on investment securities, net of noncontrolling interests and excluding gains on sales of certain available-for-sale securities

  $ 501      $ 7,496      $ 9,301      $ 7,929      $ 7,952   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

19


     Three months ended  

Non-GAAP operating efficiency ratio, net of noncontrolling interests
(Dollars in thousands, except ratios)

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

GAAP noninterest expense

   $ 132,012      $ 134,710      $ 127,451      $ 121,032      $ 117,435   

Less: amounts attributable to noncontrolling interests

     2,818        2,699        2,766        2,621        3,481   

Less: net gain from note repurchases and termination of corresponding interest rate swaps

     —          —          —          (3,123     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP noninterest expense, net of noncontrolling interests

   $ 129,194      $ 132,011      $ 124,685      $ 121,534      $ 113,954   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP taxable equivalent net interest income

   $ 151,421      $ 140,555      $ 135,938      $ 130,929      $ 120,806   

Less: income attributable to noncontrolling interests

     43        38        32        45        7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP taxable equivalent net interest income, net of noncontrolling interests

     151,378        140,517        135,906        130,884        120,799   

Non-GAAP noninterest income, net of noncontrolling interests

     51,375        62,082        54,372        59,836        46,392   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP taxable equivalent revenue, net of noncontrolling interests

   $ 202,753      $ 202,599      $ 190,278      $ 190,720      $ 167,191   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating efficiency ratio

     63.72     65.16     65.53     63.72     68.16
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP non-marketable securities, net of noncontrolling interests
(Dollars in thousands)

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

GAAP non-marketable securities

   $ 1,021,941      $ 1,004,440      $ 951,963      $ 875,194      $ 798,064   

Less: noncontrolling interests in non-marketable securities

     661,750        647,432        605,558        543,548        488,013   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP non-marketable securities, net of noncontrolling interests

   $ 360,191      $ 357,008      $ 346,405      $ 331,646      $ 310,051   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SVB Financial Group tangible common equity, tangible assets

and risk-weighted assets (Dollars in thousands, except ratios)

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

GAAP SVBFG stockholders’ equity

   $ 1,639,490      $ 1,569,392      $ 1,536,098      $ 1,436,893      $ 1,313,574   

Less: intangible assets

     559        601        650        709        749   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity

   $ 1,638,931      $ 1,568,791      $ 1,535,448      $ 1,436,184      $ 1,312,825   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP total assets

   $ 20,818,337      $ 19,968,894      $ 19,195,363      $ 19,366,735      $ 18,618,266   

Less: intangible assets

     559        601        650        709        749   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 20,817,778      $ 19,968,293      $ 19,194,713      $ 19,366,026      $ 18,617,517   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Risk-weighted assets

   $ 12,099,505      $ 11,837,902      $ 10,808,233      $ 10,470,533      $ 10,004,948   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     7.87     7.86     8.00     7.42     7.05

Tangible common equity to risk-weighted assets

     13.55        13.25        14.21        13.72        13.12   

Silicon Valley Bank tangible common equity, tangible assets

and risk-weighted assets (Dollars in thousands, except ratios)

   March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Tangible common equity

   $ 1,403,570      $ 1,346,854      $ 1,317,325      $ 1,216,268      $ 1,107,544   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 19,596,848      $ 18,758,813      $ 18,016,695      $ 18,225,561      $ 17,397,095   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Risk-weighted assets

   $ 11,749,900      $ 11,467,401      $ 10,453,446      $ 10,075,105      $ 9,655,938   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     7.16     7.18     7.31     6.67     6.37

Tangible common equity to risk-weighted assets

     11.95        11.75        12.60        12.07        11.47   

 

20