EX-99.1 2 q421earningsrelease_991.htm EX-99.1 Document

Exhibit 99.1
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3003 Tasman Drive, Santa Clara, CA 95054Contact:
www.svb.com    Meghan O'Leary
Investor Relations
For release at 1:00 P.M. (Pacific Time)    IR@SVB.com
January 20, 2022     (408) 654-6364
NASDAQ: SIVB     
SVB FINANCIAL GROUP ANNOUNCES 2021 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
Board of Directors declared a quarterly dividend on Series A, B, C, D and E Preferred Stock
SANTA CLARA, Calif. — January 20, 2022 — SVB Financial Group (NASDAQ: SIVB) today announced financial results for the fourth quarter and year ended December 31, 2021.
Consolidated net income available to common stockholders for the fourth quarter of 2021 was $371 million, or $6.22 per diluted common share, compared to $365 million, or $6.24 per diluted common share, for the third quarter of 2021 and $388 million, or $7.40 per diluted common share, for the fourth quarter of 2020. Consolidated net income available to common stockholders for the year ended December 31, 2021 was $1.8 billion, or $31.25 per diluted common share, compared to $1.2 billion, or $22.87 per diluted common share, for the comparable 2020 period. Included in the consolidated net income available to common stockholders for the three months and year ended December 31, 2021 are merger-related charges of $27 million and $129 million, or $0.34 and $1.68 per diluted common share, respectively. Net income available to common stockholders for the year ended December 31, 2021 also included a day one provision on non-purchased credit deteriorated loans and unfunded credit commitments acquired from Boston Private of $46 million, or $0.60 per diluted common share, incurred in the third quarter of 2021.
“Our fourth quarter was a strong finish to an exceptional year of growth driven by outstanding client liquidity, with continued robust balance sheet and core fee income growth, excellent credit quality, and healthy market-related gains," said Greg Becker, President and CEO of SVB Financial Group. "Against this backdrop, we are starting 2022 on strong footing: our client markets remain vibrant, despite ongoing pandemic-related challenges and concerns over rising inflation; we are firing on all cylinders in terms of client acquisition and execution of our strategy. If interest rate increases materialize as the markets predict, we would expect them to significantly add to our earnings on top of our already positive 2022 outlook, while opening up additional investment opportunities.”
Highlights of our fourth quarter 2021 results (compared to third quarter 2021, unless otherwise noted) included:
•Average loans of $62.6 billion, an increase of $3.3 billion (or 5.5 percent).
•Period-end loans of $66.3 billion, an increase of $4.8 billion (or 7.8 percent).
•Average fixed income investment securities of $111.7 billion, an increase of $17.9 billion (or 19.1 percent).
•Period-end fixed income investment securities of $125.4 billion, an increase of $20.1 billion (or 19.0 percent).
•Average total client funds (on-balance sheet deposits and off-balance sheet client investment funds) increased $36.0 billion (or 10.1 percent) to $390.6 billion, which includes an increase in average on-balance sheet deposits of $19.7 billion (or 12.0 percent).
•Period-end total client funds increased $27.9 billion (or 7.5 percent) to $399.3 billion, which includes an increase in period-end on-balance sheet deposits of $18.0 billion (or 10.5 percent).
•Issuance of $1.0 billion in depositary shares representing ownership interests in shares of Series D Preferred Stock resulting in net proceeds of approximately $988 million.
•Issuance of $600 million in depositary shares representing ownership interests in shares of Series E Preferred Stock resulting in net proceeds of approximately $593 million.
•Issuance of $650 million of 1.800% Senior Notes due October 2026.
•Period-end Private Bank Assets Under Management (“AUM”) of $19.6 billion, flat from the prior quarter.
•Net interest income (fully taxable equivalent basis) of $947 million, an increase of $88 million (or 10.2 percent).
•Provision for credit losses was $48 million, compared to $21 million.


•Net loan charge-offs of $1 million, or 1 basis point of average total loans (annualized) compared to $11 million, or 7 basis points.
•Noninterest income of $561 million, a decrease of $111 million (or 16.5 percent). Non-GAAP core fee income increased $12 million (or 5.9 percent) to $216 million. Non-GAAP SVB Leerink revenue increased $38 million (or 35.5 percent) to $145 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures.”)
•Net gains on investment securities of $100 million compared to $189 million. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $86 million, compared to $101 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures.”)
•Net gains on equity warrant assets of $69 million, compared to $147 million.
•Noninterest expense of $902 million, an increase of $23 million (or 2.6 percent).
•Operating efficiency ratio of 60.1 percent, compared to 57.7 percent. The decline in our operating efficiency is due to the increase in noninterest expense, driven primarily by higher compensation and benefits expense and the decrease in noninterest income, driven primarily by lower net gains on investment securities and net gains on equity warrant assets in the fourth quarter of 2021.
•Acquisition of MoffettNathanson LLC, a technology equity research firm, on December 10, 2021.

Coronavirus Disease 2019 ("COVID-19") Pandemic Update
During the fourth quarter of 2021, our overall credit trends remained stable, and our business and clients continued to demonstrate remarkable resilience and growth despite the continuing challenges of the COVID-19 pandemic, including the recent spread of the Omicron variant of COVID-19. We continue to carefully monitor the broader economic environment, which could be impacted by the continued spread of the Omicron variant, the emergence of new variants, vaccination mandates, delays in vaccination programs and the integration of vaccine booster shots into those programs, vaccination rates, potential government-imposed lockdowns, and related supply chain constraints and inflationary pressures. We continue to manage through these challenges with a focus on supporting our clients, employees and communities.

2

Fourth Quarter and Full-Year 2021 Summary
(Dollars in millions, except share data, employees and ratios)
Three months endedYear ended
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020December 31, 2021December 31, 2020
Income statement:
Diluted earnings per common share$6.22 $6.24 $9.09 $10.03 $7.40 $31.25 $22.87 
Net income available to common stockholders371 365 502 532 388 1,770 1,191 
Net interest income939 852 728 660 592 3,179 2,157 
Provision (reduction) for credit losses (1) (2)48 21 35 19 (38)123 220 
Noninterest income 561 672 761 744 622 2,738 1,840 
Noninterest expense902 879 653 636 665 3,070 2,035 
Non-GAAP core fee income (3)216 204 172 159 156 751 603 
Non-GAAP core fee income plus SVB Leerink revenue (3)361 311 292 325 307 1,289 1,084 
Non-GAAP SVB Leerink revenue (3)145 107 120 166 151 538 481 
Fully taxable equivalent:
Net interest income (3) (4)$947 $859 $735 $665 $597 $3,207 $2,173 
Net interest margin1.91 %1.95 %2.06 %2.29 %2.40 %2.02 %2.67 %
Balance sheet:
Average total assets $204,760 $182,690 $150,717 $124,815 $103,754 $166,011 $85,792 
Average loans, amortized cost 62,573 59,291 49,812 46,281 41,525 54,547 37,266 
Average available-for-sale securities24,154 23,290 24,358 28,248 28,114 24,996 18,653 
Average held-to-maturity securities87,579 70,512 47,914 25,295 13,289 58,030 13,113 
Average noninterest-bearing demand deposits 122,789 109,638 91,530 73,233 61,663 99,461 50,193 
Average interest-bearing deposits60,273 53,754 42,230 37,375 30,774 48,486 24,823 
Average total deposits 183,062 163,392 133,760 110,608 92,437 147,947 75,016 
Average short-term borrowings145 99 39 12 10 74 401 
Average long-term debt2,380 1,936 1,604 1,162 843 1,775 632 
Period-end total assets 211,478 190,996 163,399 142,347 115,511 211,478 115,511 
Period-end loans, amortized cost66,276 61,487 50,754 47,675 45,181 66,276 45,181 
Period-end available-for-sale securities27,221 22,984 23,876 25,986 30,913 27,221 30,913 
Period-end held-to-maturity securities98,195 82,365 59,992 41,165 16,592 98,195 16,592 
Period-end non-marketable and other equity securities 2,543 2,485 1,943 1,858 1,802 2,543 1,802 
Period-end noninterest-bearing demand deposits 125,851 115,388 101,259 84,440 66,519 125,851 66,519 
Period-end interest-bearing deposits63,352 55,794 44,579 39,710 35,463 63,352 35,463 
Period-end total deposits 189,203 171,182 145,838 124,150 101,982 189,203 101,982 
Period-end short-term borrowings121 97 34 39 21 121 21 
Period-end long-term debt2,570 1,925 1,834 1,338 844 2,570 844 
Off-balance sheet:
Average client investment funds$207,578 $191,286 $174,327 $151,579 $133,105 $181,193 $117,380 
Period-end client investment funds210,086 200,234 183,167 163,882 141,053 210,086 141,053 
Period-end assets under management19,646 19,565 — — — 19,646 — 
Total unfunded credit commitments43,698 40,259 36,385 33,987 31,982 43,698 31,982 
Earnings ratios:
Return on average assets (annualized) (5)0.72 %0.79 %1.34 %1.73 %1.49 %0.84 %1.39 %
Return on average SVBFG common stockholders’ equity (annualized) (6)11.80 12.47 21.69 27.04 20.23 17.10 16.83 
Asset quality ratios:
Allowance for credit losses for loans as a % of total loans0.64 %0.65 %0.78 %0.82 %0.99 %0.64 %0.99 %
Allowance for credit losses for performing loans as a % of total performing loans 0.58 0.59 0.71 0.74 0.87 0.58 0.87 
Gross loan charge-offs as a % of average total loans (annualized) (2)0.06 0.13 0.12 0.83 0.22 0.25 0.28 
Net loan charge-offs as a % of average total loans (annualized) (2)0.01 0.07 0.10 0.79 0.09 0.21 0.20 
Other ratios:
Operating efficiency ratio (7) 60.13 %57.68 %43.85 %45.31 %54.79 %51.88 %50.92 %
Total cost of deposits (annualized) (8)0.04 0.05 0.04 0.04 0.04 0.04 0.08 
SVBFG CET 1 risk-based capital ratio 12.11 12.73 11.93 12.18 11.04 12.11 11.04 
Bank CET 1 risk-based capital ratio14.92 14.68 13.66 12.93 10.70 14.92 10.70 
SVBFG tier 1 risk-based capital ratio16.11 15.37 14.95 14.01 11.89 16.11 11.89 
Bank tier 1 risk-based capital ratio14.92 14.68 13.66 12.93 10.70 14.92 10.70 
SVBFG total risk-based capital ratio 16.61 15.87 15.53 14.62 12.64 16.61 12.64 
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Bank total risk-based capital ratio15.44 15.21 14.26 13.56 11.49 15.44 11.49 
SVBFG tier 1 leverage ratio 7.93 7.77 7.77 8.01 7.45 7.93 7.45 
Bank tier 1 leverage ratio7.24 7.30 6.96 7.20 6.43 7.24 6.43 
Period-end loans, amortized cost, to deposits ratio 35.03 35.92 34.80 38.40 44.30 35.03 44.30 
Average loans, amortized cost, to average deposits ratio34.18 36.29 37.24 41.84 44.92 36.87 49.68 
Book value per common share (9)$214.30 $208.53 $176.10 $163.25 $151.86 $214.30 $151.86 
Tangible book value per common share (3) (10)205.20 200.01 172.44 159.50 147.92 205.20 147.92 
Other statistics:
Average full-time equivalent ("FTE") employees6,431 6,024 4,808 4,601 4,419 5,466 4,040 
Period-end full-time equivalent ("FTE") employees6,567 6,208 4,932 4,656 4,461 6,567 4,461 

(1)This metric for the quarter ended September 30, 2021 and year ended December 31, 2021 includes a post-combination provision of $46 million to record the allowance for credit losses for non-PCD loans and unfunded credit commitments acquired from Boston Private.
(2)This metric for the quarter ended March 31, 2021 and year ended December 31, 2021 includes the impact of an $80 million charge-off related to potentially fraudulent activity discussed in previous filings.
(3)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 these non-GAAP measures to the most closely related GAAP measures is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”
(4)Interest income on non-taxable investments is presented on a fully taxable equivalent basis using the federal statutory income tax rate of 21.0 percent. The taxable equivalent adjustments were $8 million for the quarter ended December 31, 2021, $7 million for the quarter ended September 30, 2021, $7 million for the quarter ended June 30, 2021, $6 million for the quarter ended March 31, 2021 and $4 million for the quarter ended December 31, 2020. The taxable equivalent adjustments were $28 million and $16 million for the year ended December 31, 2021 and December 31, 2020, respectively.
(5)Ratio represents annualized consolidated net income available to common stockholders divided by average assets.
(6)Ratio represents annualized consolidated net income available to common stockholders divided by average SVB Financial Group ("SVBFG") common stockholders’ equity.
(7)Ratio is calculated by dividing noninterest expense by total net interest income plus noninterest income.
(8)Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.
(9)Book value per common share is calculated by dividing total SVBFG common stockholders’ equity by total outstanding common shares.
(10)Tangible book value per common share is calculated by dividing tangible common equity by total outstanding common shares. Tangible common equity is a non-GAAP measure defined under the section “Use of Non-GAAP Financial Measures.”

4

Investment Securities
Our investment securities portfolio is comprised of: (i) our available-for-sale ("AFS") and held-to-maturity ("HTM") securities portfolios, each consisting of fixed income investments which are managed to earn an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and addressing our asset/liability management objectives; and (ii) our non-marketable and other equity securities portfolio, which represents investments managed as part of our funds management business as well as public equity securities held as a result of equity warrant assets exercised. Our total average fixed income investment securities portfolio increased $17.9 billion, or 19.1 percent, to $111.7 billion for the quarter ended December 31, 2021 compared to the third quarter of 2021. Our total period-end fixed income investment securities portfolio increased $20.1 billion, or 19.0 percent, to $125.4 billion at December 31, 2021. Our period-end non-marketable and other equity securities portfolio was consistent with the prior quarter at $2.5 billion ($2.2 billion net of noncontrolling interests) at December 31, 2021, compared to the third quarter of 2021.
The weighted-average duration of our total fixed income securities portfolio was 4.0 years at December 31, 2021 and 4.5 years at September 30, 2021. The total notional value of our pay-fixed, receive-floating interest rate swap fair value hedge contracts for AFS securities was $10.7 billion as of December 31, 2021. The weighted-average duration of our total fixed income securities portfolio, including the impact of our fair value swaps, was 3.7 years at December 31, 2021 and 4.0 years at September 30, 2021.
AFS Securities
Average AFS securities were $24.2 billion for the fourth quarter of 2021 compared to $23.3 billion for the third quarter of 2021. Period-end AFS securities were $27.2 billion at December 31, 2021 compared to $23.0 billion at September 30, 2021. The increases in both average and period-end AFS securities were driven by purchases of $6.8 billion, partially offset by sales of AFS securities of $1.4 billion and paydowns and maturities of $877 million. The weighted-average duration of our AFS securities portfolio was 3.5 years at December 31, 2021 and 3.8 years at September 30, 2021. The weighted-average duration of AFS securities portfolio including the impact of our fair value swaps was 2.4 years at December 31, 2021 and 2.3 years at September 30, 2021.
HTM Securities
Average HTM securities were $87.6 billion for the fourth quarter of 2021, compared to $70.5 billion for the third quarter of 2021. Period-end HTM securities were $98.2 billion at December 31, 2021 compared to $82.4 billion at September 30, 2021. The increases in both average and period-end HTM securities were driven by purchases of $20.4 billion, partially offset by $4.4 billion in paydowns and maturities during the quarter. The weighted-average duration of our HTM securities portfolio was 4.1 years at December 31, 2021 and 4.7 years at September 30, 2021.

5

Loans
Average loans increased by $3.3 billion to $62.6 billion for the fourth quarter of 2021, compared to $59.3 billion for the third quarter of 2021. Period-end loans increased $4.8 billion to $66.3 billion at December 31, 2021, compared to $61.5 billion at September 30, 2021. Average and period-end loan growth came primarily from our Global Fund Banking, Technology Banking and Private Bank loan portfolios.
The following table provides a summary of our loans at amortized cost basis broken out by class of financing receivable. Prior period amounts have been reclassified to conform to current period presentation.
(Dollars in millions)December 31, 2021September 30, 2021December 31, 2020
Global fund banking$37,958 $34,120 $25,543 
Investor dependent
Early stage1,593 1,550 1,486 
Growth stage3,951 3,827 3,486 
Total investor dependent5,544 5,377 4,972 
Cash flow dependent - SLBO1,798 1,895 1,989 
Innovation C&I6,673 5,916 5,136 
Private bank8,743 8,370 4,901 
CRE2,670 2,753 — 
Premium wine985 980 1,053 
Other C&I 1,257 1,259 — 
Other317 252 28 
PPP331 565 1,559 
Total loans$66,276 $61,487 $45,181 
Net Interest Income and Margin
Net interest income, on a fully taxable equivalent basis, was $947 million for the fourth quarter of 2021, compared to $859 million for the third quarter of 2021. The $88 million increase from the third quarter of 2021 to the fourth quarter of 2021 was attributable primarily to the following:
•An increase of $66 million in interest income from our fixed income investment securities reflective primarily of a $17.9 billion increase in average fixed income securities.
•An increase of $25 million in interest income from loans due primarily to $3.3 billion in average loan growth.
Net interest margin, on a fully taxable equivalent basis, was 1.91 percent for the fourth quarter of 2021, compared to 1.95 percent for the third quarter of 2021. The 4 basis point decrease in our net interest margin was due primarily to the overall shift in balance sheet growth into lower yielding fixed income investment securities.
For the fourth quarter of 2021, approximately 91 percent, or $56.9 billion, of our average loans were variable-rate loans that adjust at prescribed measurement dates. Of our variable-rate loans, approximately 68 percent are tied to prime-lending rates and 32 percent are tied to LIBOR.
With the December 31, 2021, cessation of most global LIBOR rates including the 1-week and 2-month USD LIBOR tenors, SVB is offering products tied to alternate reference rates for clients today across USD (SOFR), GBP (SONIA), and EUR (€STR). For USD, SVB supports Term SOFR (1-,3-, and 6-month tenors) and Daily Simple SOFR conventions. We are currently focused on legacy contracts and continued migration away from LIBOR to alternate reference rates. SVB does not expect any material changes in net interest income or net interest expense from product spread adjustments as a result of offering alternative reference rates.
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Credit Quality
The following table provides a summary of our allowance for credit losses for loans, unfunded credit commitments and HTM securities:
 Three months endedYear ended
(Dollars in millions, except ratios)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Allowance for credit losses for loans, beginning balance$398 $396 $513 $448 $305 
Day one impact of adopting CECL— — — — 25 
Initial allowance on PCD loans— 22 — 22 — 
Provision (reduction) for loans (1) (2)25 (9)(57)66 190 
Gross loan charge-offs (2)(9)(19)(23)(138)(103)
Loan recoveries8 8 13 24 29 
Foreign currency translation adjustments
— — 2 — 2 
Allowance for credit losses for loans, ending balance
$422 $398 $448 $422 $448 
Allowance for credit losses for unfunded credit commitments, beginning balance
149 120 102 121 68 
Day one impact of adopting CECL— — — — 23 
Provision for unfunded credit commitments (1)22 29 19 50 30 
Allowance for credit losses for unfunded credit commitments, ending balance (3)$171 $149 $121 $171 $121 
Allowance for credit losses for HTM securities, beginning balance6 5 — — — 
Provision for HTM securities1 1 — 7 — 
Allowance for credit losses for HTM securities, ending balance (4)$7 $6 $— $7 $— 
Ratios and other information:
Provision (reduction) for loans as a percentage of period-end total loans (annualized)0.15 %(0.06)%(0.51)%0.10 %0.42 %
Gross loan charge-offs as a percentage of average total loans (annualized)0.06 0.13 0.22 0.25 0.28 
Net loan charge-offs as a percentage of average total loans (annualized)0.01 0.07 0.09 0.21 0.20 
Allowance for credit losses for loans as a percentage of period-end total loans0.64 0.65 0.99 0.64 0.99 
Provision (reduction) for credit losses (1)$48 $21 $(38)$123 $220 
Period-end total loans66,276 61,487 45,181 66,276 45,181 
Average total loans62,573 59,291 41,525 54,547 37,266 
Allowance for credit losses for nonaccrual loans35 33 54 35 54 
Nonaccrual loans84 114 104 84 104 
(1)The provision for credit losses for the quarter ended September 30, 2021 and year ended December 31, 2021 includes $46 million recognized as a result of the Boston Private acquisition, which consists of a $44 million provision for loan losses related to non-PCD loans and a $2 million provision for unfunded commitments.
(2)Metrics for the year ended December 31, 2021 include the impact of an $80 million charge-off related to potentially fraudulent activity discussed in previous filings.
(3)The “allowance for credit losses for unfunded credit commitments” is included as a component of “other liabilities.”
(4)The "allowance for credit losses for HTM securities" is included as a component of HTM securities and presented net in our consolidated financial statements.

Our allowance for credit losses for loans increased $24 million to $422 million at December 31, 2021, compared to $398 million at September 30, 2021. The $24 million increase was driven primarily by an increase of $20 million in our performing reserves for loan growth and a $2 million increase in reserves for nonaccrual loans. As a percentage of total loans, our allowance for credit losses for loans decreased 1 basis point to 0.64 percent at December 31, 2021, compared to 0.65 percent at September 30, 2021.
The provision for credit losses was $48 million for the fourth quarter of 2021, consisting of the following:
•A provision for credit loss for loans of $25 million, driven primarily by a $20 million provision for loan growth, and an increase of $8 million for charge-offs not previously reserved for. These increases were partially offset by an $8 million reduction for recoveries.
•A provision for credit loss for unfunded credit commitments of $22 million, driven primarily by commitment growth.
•A provision for credit losses for HTM securities of $1 million, driven primarily by the continued growth of our corporate bond portfolio in the fourth quarter of 2021.
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Gross loan charge-offs were $9 million for the fourth quarter of 2021, of which $8 million was not specifically reserved for at September 30, 2021. Gross loan charge-offs were partly driven by a $3 million charge-off from one Investor Dependent - Growth Stage client. The remaining $5 million gross loan charge-offs were driven primarily by our Investor Dependent and Innovation C&I loan portfolios.
Nonaccrual loans were $84 million at December 31, 2021, compared to $114 million at September 30, 2021. Our nonaccrual loan balance decreased $30 million driven primarily by $59 million in repayments, which were partially offset by $31 million of new nonaccrual loans. Of the $59 million in repayments, $22 million was from one Investor Dependent - Later Stage client and $14 million from one CRE client. In addition, we received partial payment for a $17 million Premium Wine loan that in turn enabled the remaining balance to be upgraded and restored to accrual. The $31 million of new nonaccrual loans was driven primarily by clients in our Private Bank and Investor Dependent - Early Stage portfolios. Nonperforming loans, which includes nonaccrual loans of $84 million as well as $7 million of loans past due 90 days or more still accruing interest, as a percentage of total loans decreased 5 basis points to 0.14 percent for the fourth quarter of 2021, compared to 0.19 percent for the third quarter of 2021.
The allowance for credit losses for nonaccrual loans increased $2 million to $35 million in the fourth quarter of 2021. The increase was due primarily to $10 million in additional reserves for nonaccrual loans, partially offset by $8 million in repayments. The additional reserves were driven primarily by our Investor Dependent clients, including $3 million from one Investor Dependent - Early Stage client. Repayments were driven primarily by clients in our Investor Dependent and Investor C&I portfolios, including $4 million from one Investor Dependent - Early Stage client.
Client Funds
Our Total Client Funds consist of the sum of both our on-balance sheet deposits and off-balance sheet client investment funds. The following tables provide a summary of our average and period-end on-balance sheet deposits and off-balance sheet client investment funds:

Average On-Balance Sheet Deposits and Off-Balance Sheet Client Investment Funds (1)(2)
Average balances for the
 Three months endedYear ended
(Dollars in millions)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Interest-bearing deposits$60,273 $53,754 $30,774 $48,486 $24,823 
Noninterest bearing demand deposits122,789 109,638 61,663 99,461 50,192 
Total average on-balance sheet deposits$183,062 $163,392 $92,437 $147,947 $75,015 
Sweep money market funds$108,350 $97,590 $58,212 $88,913 $50,828 
Managed client investment funds (3)84,188 79,400 64,006 78,450 56,473 
Repurchase agreements15,040 14,296 10,887 13,830 10,079 
Total average off-balance sheet client investment funds$207,578 $191,286 $133,105 $181,193 $117,380 

Period-end On-Balance Sheet Deposits and Off-Balance Sheet Client Investment Funds (1)(2)
 Period-end balances at
(Dollars in millions)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020
Interest-bearing deposits$63,352 $55,794 $44,579 $39,710 $35,463 
Noninterest-bearing demand deposits125,851 115,388 101,259 84,440 66,519 
Total period-end on-balance sheet deposits$189,203 $171,182 $145,838 $124,150 $101,982 
Sweep money market funds$109,241 $105,163 $90,402 $75,328 $59,844 
Managed client investment funds (3)85,475 81,503 78,698 75,970 70,671 
Repurchase agreements15,370 13,568 14,067 12,584 10,538 
Total period-end off-balance sheet client investment funds$210,086 $200,234 $183,167 $163,882 $141,053 

(1)Off-Balance sheet client investment funds are maintained at third-party financial institutions.
(2)Off-Balance sheet client investment funds exclude Private Bank AUM beginning in the third quarter of 2021.
(3)These funds represent investments in third-party money market mutual funds and fixed income securities managed by SVB Asset Management.

8

The increases in our average and period-end Total Client Funds from the third quarter of 2021 to the fourth quarter of 2021 reflect growth in both on-balance sheet deposits and off-balance sheet client investments. We saw Total Client Funds growth across all portfolios, with the primary contributor coming from our Technology Banking portfolio, driven by continued strong private fundraising activity.
Private Bank Assets Under Management ("AUM")
AUM consists of the Private Bank's client investment account balances and generates fee income included in our new financial statement line item "Wealth management and trust fees" included in our consolidated statements of income. The following table summarizes the activity relating to AUM for the three months ended December 31, 2021 and September 30, 2021:
 Three months ended
(Dollars in millions)December 31, 2021September 30, 2021
Beginning balance (1)$19,565 $1,667 
Assets acquired (2)— 17,980 
Net flows(891)(31)
Market returns972 (51)
Ending balance$19,646 $19,565 
(1)Beginning balance as of September 30, 2021, represents Private Bank assets under management previously reported in off-balance sheet managed client investment funds above.
(2)Represents AUM acquired from the acquisition of Boston Private on July 1, 2021.
Noninterest Income
Noninterest income was $561 million for the fourth quarter of 2021, compared to $672 million for the third quarter of 2021. The decrease in noninterest income was driven by lower net gains on investment securities and net gains on equity warrant assets, partially offset by increases in investment banking revenue and total core fees.
Items impacting noninterest income for the fourth quarter of 2021 were as follows:
Net gains on investment securities
The following tables provide a summary of non-GAAP net gains on investment securities, net of noncontrolling interests, for the three months ended December 31, 2021 and September 30, 2021, respectively:
 Three months ended December 31, 2021
(Dollars in millions)Managed
Funds of Funds		Managed Direct Venture FundsManaged Credit FundsPublic Equity SecuritiesSales of AFS SecuritiesStrategic
and Other
Investments		SVB LeerinkTotal
GAAP gains (losses) on investment securities, net$16 $2 $2 $(32)$32 $62 $18 $100 
Less: income attributable to noncontrolling interests, including carried interest allocation5 — 1 — — — 8 14 
Non-GAAP gains (losses) on investment securities, net of noncontrolling interests$11 $2 $1 $(32)$32 $62 $10 $86 

 Three months ended September 30, 2021
(Dollars in millions)Managed
Funds of Funds		Managed Direct Venture FundsManaged Credit FundsPublic Equity SecuritiesStrategic
and Other
Investments		SVB LeerinkTotal
GAAP gains (losses) on investment securities, net$109 $5 $7 $(39)$51 $56 $189 
Less: income attributable to noncontrolling interests, including carried interest allocation53 — 1 — — 34 88 
Non-GAAP gains (losses) on investment securities, net of noncontrolling interests (1)$56 $5 $6 $(39)$51 $22 $101 
(1)Three months ended September 30, 2021 includes gains and losses from debt funds and AFS security sales of less than $1 million.

Non-GAAP net gains on investment securities, net of noncontrolling interests, of $86 million for the fourth quarter of 2021 was driven primarily by gains in our strategic and other investments portfolio and gains from sales of AFS fixed income securities, partially offset by valuation decreases in our public equity securities portfolio. The strategic and other investments portfolio gains were driven primarily by unrealized gains from one strategic investment.
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Net gains on equity warrant assets
The following table provides a summary of our net gains on equity warrant assets:
 Three months endedYear ended
(Dollars in millions)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Equity warrant assets:
Gains on exercises, net
$44 $91 $95 $446 $179 
Terminations
— (1)— (2)(2)
Changes in fair value, net
25 57 49 116 60 
Total net gains on equity warrant assets$69 $147 $144 $560 $237 
Net gains on equity warrant assets for the fourth quarter of 2021 included $44 million of gains on exercises driven primarily by IPO activity during the quarter. The $25 million in net valuation increases were driven by our private company portfolio reflective primarily of pricing updates and pending exit activity.
At December 31, 2021, we held warrants in 2,831 companies with a total fair value of $277 million. Warrants in 47 companies each had fair values greater than $1 million and collectively represented $140 million, or 50.5 percent, of the fair value of the total warrant portfolio at December 31, 2021. 
Overall, net gains on investment securities and net gains on equity warrant assets had an exceptional year for 2021. Combined, they totaled $1.3 billion ($1.1 billion net of noncontrolling interest) for the year ended December 31, 2021.
The gains (or losses) from investment securities from our non-marketable and other equity securities portfolio as well as our equity warrant assets resulting from changes in valuations (fair values) are currently unrealized, and the extent to which such gains (or losses) will become realized is subject to a variety of factors, including, among other things, performance of the underlying portfolio companies, investor demand for IPOs and SPACs, fluctuations in the underlying valuation of these companies, levels of M&A activity and legal and contractual restrictions on our ability to sell the underlying securities.  
Non-GAAP core fee income plus non-GAAP SVB Leerink revenue
The following table provides a summary of our non-GAAP core fee income, non-GAAP SVB Leerink revenue and non-GAAP core fee income plus SVB Leerink revenue:
 Three months endedYear ended
(Dollars in millions)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Non-GAAP core fee income:
Client investment fees$20 $20 $25 $75 $132 
Wealth management and trust fees22 22 — 44 — 
Foreign exchange fees73 65 51 262 179 
Credit card fees38 34 25 131 98 
Deposit service charges30 29 23 112 90 
Lending related fees21 21 20 76 57 
Letters of credit and standby letters of credit fees12 13 12 51 47 
Total non-GAAP core fee income$216 $204 $156 $751 $603 
Investment banking revenue124 90 133 459 414 
Commissions21 17 18 79 67 
Total non-GAAP SVB Leerink revenue$145 $107 $151 $538 $481 
Total non-GAAP core fee income plus SVB Leerink revenue$361 $311 $307 $1,289 $1,084 
Non-GAAP core fee income increased from the third quarter of 2021 to the fourth quarter of 2021 primarily reflective of increases in foreign exchange fees and credit card fees which both had record quarters. Foreign exchange fees increased $8 million driven primarily by increased private equity activity. Credit card fees increased $4 million due primarily to increased spending activity, new client growth and relationship expansion.
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Non-GAAP SVB Leerink revenue increased $38 million from the third quarter of 2021 to the fourth quarter of 2021 reflective of an increase in deals led by SVB Leerink.
Reconciliations of our non-GAAP net gains on investment securities, non-GAAP core fee income, non-GAAP SVB Leerink revenue and non-GAAP core fee income plus SVB Leerink revenue are provided under the section “Use of Non-GAAP Financial Measures.”
Noninterest Expense
Noninterest expense was $902 million for the fourth quarter of 2021, compared to $879 million for the third quarter of 2021. The increase of $23 million from the prior quarter was attributable primarily to increases in our compensation and benefits expense and other noninterest expense, partially offset by a decrease in merger-related charges in the fourth quarter of 2021.
The following table provides a summary of our compensation and benefits expense:
 Three months endedYear ended
(Dollars in millions, except employees)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Compensation and benefits:
Salaries and wages
$217 $195 $140 $721 $516 
Incentive compensation plans
243 229 173 784 464 
Other employee incentives and benefits (1)
137 124 103 510 338 
Total compensation and benefits$597 $548 $416 $2,015 $1,318 
Period-end full-time equivalent employees6,5676,2084,4616,5674,461
Average full-time equivalent employees6,4316,0244,4195,4664,040

(1)Other employee incentives and benefits expense includes employer payroll taxes, group health and life insurance, share-based compensation, 401(k), ESOP, warrant incentive and retention plans, agency fees and other employee-related expenses.
The $49 million increase in total compensation and benefits expense consists primarily of the following:

•An increase of $22 million in salaries and wages expense primarily due to an increase in FTEs across the organization as we continue to invest in our revenue-generating lines of business and support functions,
•An increase of $14 million in incentive compensation plans expense attributable to SVB Leerink, which had increased compensation accruals related to an increase in FTEs and higher revenues for the year, and
•An increase of $13 million in other employee incentives and benefits due primarily to higher share-based payment accruals reflective of reaching certain target performance metrics, increased employer payroll taxes and an increase in employee fringe benefits.
Other noninterest expense increased primarily due to higher investment banking expense driven by deal costs from increased SVB Leerink activity as well as higher miscellaneous expenses reflective primarily of an increase in charitable donations expense driven by year-end giving campaigns.
These increases were partially offset by a decrease in merger-related charges, which were higher in the third quarter of 2021 reflective of several Boston Private merger-related activities.
Income Tax Expense
Our effective tax rate was 26.4 percent for the fourth quarter of 2021, compared to 27.6 percent for the third quarter of 2021. Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and net income attributable to noncontrolling interests. The decrease in our effective tax rate is primarily driven by a provision to return adjustment made during the fourth quarter related to our filed 2020 income tax returns.
SVBFG Stockholders’ Equity
Total SVBFG stockholders’ equity increased by $1.9 billion to $16.2 billion at December 31, 2021, compared to $14.3 billion at September 30, 2021, primarily due to $1.6 billion of capital raised related to our Series D and Series E Preferred Stock issuances and net income of $371 million during the fourth quarter of 2021.

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Preferred Stock
Series A Preferred Stock
On January 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $13.125 per share (representing $0.328125 per depositary share) on the Series A Preferred Stock. The dividend is payable on February 15, 2022 to holders of record at the close of business on February 1, 2022.
Series B Preferred Stock
On January 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $1,025 per share (representing $10.25 per depositary share) on the Series B Preferred Stock. The dividend is payable on February 15, 2022 to holders of record at the close of business on February 1, 2022.
Series C Preferred Stock
On January 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $1,000 per share (representing $10 per depositary share) on the Series C Preferred Stock. The dividend is payable on February 15, 2022 to holders of record at the close of business on February 1, 2022.
Series D Preferred Stock
On January 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $1,263.194 per share (representing $12.631944 per depositary share) on the Series D Preferred Stock. The dividend is payable on February 15, 2022 to holders of record at the close of business on February 1, 2022.
Series E Preferred Stock
On January 20, 2022, the Company's Board of Directors declared a quarterly cash dividend of $1,396.944 per share (representing $13.969444 per depositary share) on the Series E Preferred Stock. The dividend is payable on February 15, 2022 to holders of record at the close of business on February 1, 2022.
SVB Financial and Bank Capital Ratios(1)
December 31, 2021September 30, 2021December 31, 2020
SVB Financial:
CET 1 risk-based capital ratio12.11 %12.73 %11.04 %
Tier 1 risk-based capital ratio16.11 15.37 11.89 
Total risk-based capital ratio16.61 15.87 12.64 
Tier 1 leverage ratio7.93 7.77 7.45 
Tangible common equity to tangible assets ratio (2)5.73 6.17 6.66 
Tangible common equity to risk-weighted assets ratio (2)12.01 12.71 11.87 
Silicon Valley Bank:
CET 1 risk-based capital ratio14.92 %14.68 %10.70 %
Tier 1 risk-based capital ratio14.92 14.68 10.70 
Total risk-based capital ratio15.44 15.21 11.49 
Tier 1 leverage ratio 7.24 7.30 6.43 
Tangible common equity to tangible assets ratio (2)7.09 7.12 6.24 
Tangible common equity to risk-weighted assets ratio (2)15.09 14.98 11.58 
(1)Regulatory capital ratios as of December 31, 2021 are preliminary.
(2)These are non-GAAP measures. A reconciliation of non-GAAP measures to GAAP is provided at the end of this release under the section “Use of Non-GAAP Financial Measures.”

December 31, 2021 Preliminary Results
As of December 31, 2021, our Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage ratios for SVB Financial and our CET 1 risk-based, Tier 1 risk-based capital and total risk-based capital ratios for Silicon Valley Bank increased compared to September 30, 2021. The increases were due to growth in our capital outpacing growth in our risk-weighted and average assets. Capital for SVB Financial increased primarily due to the issuance of a total of $1.6 billion of preferred stock during the quarter as well as net income. The increase in capital for Silicon Valley Bank was primarily driven by a $1.0 billion downstream capital infusion from our bank holding company during the fourth quarter of 2021 and net income. The increase in our risk-weighted and average assets were driven by increases in our investment securities and loan portfolios. The decrease in our CET 1 risk-based capital ratio for SVB Financial was driven by the growth in our risk weighted assets which outpaced the growth in capital which
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excludes our preferred stock. The decrease in our Tier 1 leverage ratio for Silicon Valley Bank was driven by an increase in our average assets which outpaced the increase in our Tier 1 capital.
All of our reported capital ratios remain above the levels considered to be “well capitalized” under applicable banking regulations.
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Financial Outlook for the Year Ending December 31, 2022
Our outlook for the year ending December 31, 2022 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 based on management's assumptions and current expectations. Except for the items noted below, we do not provide an outlook for certain items (such as gains or losses from warrants and investment securities) 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, SPAC, M&A or general financing activity), or for potential unusual or non-recurring items. The outlook and the underlying assumptions presented are, by their nature, forward-looking statements and are subject to substantial risks and uncertainties, including risks and uncertainties related to the COVID-19 pandemic and related government actions, which are discussed below under the section “Forward-Looking Statements.” Actual results may differ. (For additional information about our financial outlook, please refer to Q4 2021 Earnings Slides. See "Additional Information" below.)
For the full year ending December 31, 2022, compared to our full year 2021 results, we currently expect the following outlook (please note that the outlook below does not include and/or take into account: (i) changes in interest rates, including, but not limited to, changes in the Federal Funds or alternative reference rates, (ii) material deterioration in the overall economy, or (iii) regulatory/policy changes under the current U.S. government administration, and includes management's updates to the preliminary 2022 outlook for selected items previously disclosed on October 21, 2021):
Preliminary full year 2022 outlook compared to 2021 results (as of October 21, 2021)Current full year 2022 outlook compared to 2021 results (as of January 20, 2022)
Average loan balancesMid-twenties growthLow thirties growth
Average deposit balancesLow forties growthLow forties growth
Net interest income (1)Mid-thirties growthHigh thirties growth
Net interest margin (1)1.90% — 2.00%1.90% — 2.00%
Net loan charge-offs0.20% — 0.40% of average loans0.15% — 0.35% of average loans
Core fee income (client investment fees, wealth management and trust fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit fees) (2)Mid-twenties growthMid-twenties growth
SVB Leerink revenue (2)$625 million — $675 million$625 million — $675 million
Noninterest expense excluding merger-related charges (3) (4)Low twenties growthLow twenties growth
Effective tax rate (5)25% — 27%25% — 27%
(1)Our outlook for net interest income and net interest margin is based primarily on management's current forecast of average deposit and loan balances and deployment of surplus cash into investment securities. Such forecasts are subject to change, and actual results may differ, based on market conditions, the COVID-19 pandemic and its effects on the economic and business environments in which we operate, actual prepayment rates and other factors described under the section "Forward-Looking Statements" below.
(2)Core fee income and SVB Leerink revenue are each non-GAAP measures, which collectively represent noninterest income, but exclude certain line items where performance is typically subject to market or other conditions beyond our control. As we are unable to quantify such line items that would be required to be included in the comparable GAAP financial measure for the future period presented without unreasonable efforts, no reconciliation for the outlook of non-GAAP core fee income and non-GAAP SVB Leerink revenue to GAAP noninterest income for fiscal year ending 2021 is included in this release, as we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. See "Use of Non-GAAP Financial Measures" at the end of this release for further information regarding the calculation and limitations of this measure. Core fee income does not include SVB Leerink revenue. SVB Leerink revenue represents investment banking revenue and commissions.
(3)Our outlook for noninterest expense is partly based on management's current forecast of performance-based incentive compensation expenses. Such forecasts are subject to change, and actual results may differ, based on our performance relative to our internal performance targets.
(4)We expect a total of approximately $40 million of pre-tax merger-related charges ($30 million in the first half of 2022 with the remainder in the second half of 2022).
(5)Our outlook for our effective tax rate is based on management's current assumptions with respect to, among other things, SVB Financial Group's earnings, state income tax levels, tax deductions and estimated performance-based compensation activity and does not include assumptions for potential future tax rate changes.

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Forward-Looking Statements
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. 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 addition, forward-looking statements generally can be identified by the use of such words as “becoming,” “may,” “will,” “should,” “could,” “would,” “predict,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “assume,” “seek,” “expect,” “plan,” “intend,” the negative of such words or comparable terminology. In this release, including our CEO's statement and in the section “Financial Outlook for the Year Ending December 31, 2022,” we make forward-looking statements discussing management’s expectations for 2022 about, among other things, economic conditions; the continuing and potential effects of the COVID-19 pandemic; opportunities in the market; the outlook on our clients' performance; our financial, credit, and business performance, including loan growth, loan mix and loan yields; deposit growth; expense levels; our expected effective tax rate; accounting impacts; and financial results (and the components of such results).
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we have based these expectations on our current beliefs as well as our assumptions, and such expectations may not prove to be correct. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside our control. Our actual results of operations and financial performance could differ significantly from those expressed in or implied by our management’s forward-looking statements. Important factors that could cause our actual results and financial condition to differ from the expectations stated in the forward-looking statements include, among others:
•market and economic conditions (including inflation trends, interest rate volatility, the general condition of the capital and equity markets, and IPO, secondary offering, SPAC fundraising, M&A and financing activity levels) and the associated impact on us (including effects on client demand for our commercial and investment banking and other financial services, as well as on the valuations of our investments);
•the COVID-19 pandemic, including the emergence of the Omicron variant and its effects on the economic and business environments in which we operate, and its effects on our operations, including, as a result of, prolonged work-from-home arrangements;
•the impact of changes from the Biden-Harris administration and the U.S. Congress on the economic environment, capital markets and regulatory landscape, including monetary, tax and other trade policies, as well as changes in personnel at the bank regulatory agencies;
•changes in the volume and credit quality of our loans as well as volatility of our levels of nonperforming assets and charge-offs;
•the impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios;
•the adequacy of our allowance for credit losses and the need to make provisions for credit losses for any period;
•the sufficiency of our capital and liquidity positions;
•changes in the levels of our loans, deposits and client investment fund balances;
•changes in the performance or equity valuations of funds or companies in which we have invested or hold derivative instruments or equity warrant assets;
•variations from our expectations as to factors impacting our cost structure;
•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;
•variations from our expectations as to factors impacting the timing and level of employee share-based transactions;
•the occurrence of fraudulent activity, including breaches of our information security or cyber security-related incidents;
•business disruptions and interruptions due to natural disasters and other external events;
•the impact on our reputation and business from our interactions with business partners, counterparties, service providers and other third parties;
•the expansion of our business internationally, and the impact of international market and economic events on us;
•the effectiveness of our risk management framework and quantitative models;
•our ability to maintain or increase our market share, including through successfully implementing our business strategy and undertaking new business initiatives, including through the continuing integration of
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Boston Private and the expansion of our private banking business and the growth and expansion of SVB Leerink, including entry into the technology investment banking sector;
•greater than expected costs or other difficulties related to the continuing integration of our business and that of Boston Private;
•variations from our expectations as to the amount and timing of business opportunities, growth prospects and cost savings associated with the acquisition of Boston Private;
•the inability to retain existing Boston Private clients and employees following the Boston Private acquisition;
•unfavorable resolution of legal proceedings or claims, as well as legal or regulatory proceedings or governmental actions;
•variations from our expectations as to factors impacting our estimate of our full-year effective tax rate;
•changes in applicable accounting standards and tax laws; and
•regulatory or legal changes and their impact on us.
The operating and economic environment during the fourth quarter continued to be impacted by the COVID-19 pandemic, including the emergence of the Omicron variant. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, potential variations of the virus, vaccination rates, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.
For additional information about these and other factors, please refer to our public reports filed with the U.S. Securities and Exchange Commission, including under the caption "Risk Factors" in our most recent Annual Report filed on Form 10-K. 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 Thursday, January 20, 2022, we will host a conference call at 3:00 p.m. (Pacific Time) to discuss the financial results for the quarter ended December 31, 2021. The conference call can be accessed by dialing (888) 330-3016 or (646) 960-0828 and entering the confirmation number "5682116". 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 audio webcast will also be available on www.svb.com for 12 months beginning on January 20, 2022.
Additional Information
For additional information about our business, financial results for the fourth quarter 2021 and financial outlook, please refer to our Q4 2021 Earnings Slides and Q4 2021 CEO Letter, which are available on the Investor Relations section of our website at www.svb.com. These materials should be read together with this release, and include important supplemental information including key considerations that may impact our financial outlook.
About SVB Financial Group
For nearly 40 years, SVB Financial Group (NASDAQ: SIVB) and its subsidiaries have helped innovative companies and their investors move bold ideas forward, fast. SVB Financial Group’s businesses, including Silicon Valley Bank, offer commercial, investment and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life science and healthcare, private equity and venture capital and premium wine industries. Headquartered in Santa Clara, California, SVB Financial Group operates in centers of innovation around the world. Learn more at www.svb.com.
SVB Financial Group is the holding company for all business units and groups © 2022 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, SVB LEERINK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group.
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SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three months endedYear ended
(Dollars in millions, except share data)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Interest income:
Loans $544 $519 $403 $1,966 $1,520 
Investment securities:
Taxable392 332 183 1,199 635 
Non-taxable33 28 19 106 61 
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities
6 5 3 18 26 
Total interest income975 884 608 3,289 2,242 
Interest expense:
Deposits21 19 9 62 60 
Borrowings 15 13 7 48 25 
Total interest expense36 32 16 110 85 
Net interest income939 852 592 3,179 2,157 
Provision (reduction) for credit losses48 21 (38)123 220 
Net interest income after provision for credit losses
891 831 630 3,056 1,937 
Noninterest income:
Gains on investment securities, net 100 189 150 761 421 
Gains on equity warrant assets, net69 147 144 560 237 
Client investment fees20 20 25 75 132 
Wealth management and trust fees22 22 — 44 — 
Foreign exchange fees73 65 51 262 179 
Credit card fees38 34 25 131 98 
Deposit service charges30 29 23 112 90 
Lending related fees
21 21 20 76 57 
Letters of credit and standby letters of credit fees
12 13 12 51 47 
Investment banking revenue
124 90 133 459 414 
Commissions21 17 18 79 67 
Other31 25 21 128 98 
Total noninterest income561 672 622 2,738 1,840 
Noninterest expense:
Compensation and benefits597 548 416 2,015 1,318 
Professional services 110 104 77 392 247 
Premises and equipment54 54 42 178 127 
Net occupancy23 25 45 83 101 
Business development and travel11 6 4 24 24 
FDIC and state assessments15 13 9 48 28 
Merger-related charges27 83 — 129 — 
Other65 46 72 201 190 
Total noninterest expense902 879 665 3,070 2,035 
Income before income tax expense550 624 587 2,724 1,742 
Income tax expense142 149 148 651 448 
Net income before noncontrolling interests and dividends
408 475 439 2,073 1,294 
Net income attributable to noncontrolling interests (14)(88)(46)(240)(86)
Preferred stock dividends
(23)(22)(5)(63)(17)
Net income available to common stockholders
$371 $365 $388 $1,770 $1,191 
Earnings per common share—basic$6.32 $6.33 $7.49 $31.74 $23.05 
Earnings per common share—diluted6.22 6.24 7.40 31.25 22.87 
Weighted average common shares outstanding—basic
58,702,618 57,722,890 51,817,077 55,762,874 51,684,595 
Weighted average common shares outstanding—diluted
59,623,961 58,521,274 52,466,389 56,637,591 52,084,039 


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SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited) 
(Dollars in millions, except par value and share data)December 31, 2021September 30, 2021December 31, 2020
Assets:
Cash and cash equivalents $14,619 $18,940 $17,675 
Available-for-sale securities, at fair value (cost $27,370, $22,919 and $30,245, respectively)27,221 22,984 30,913 
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $7, $6 and less than $1 (fair value of $97,227, $81,995 and $17,217), respectively
98,195 82,365 16,592 
Non-marketable and other equity securities2,543 2,485 1,802 
Investment securities127,959 107,834 49,307 
Loans, amortized cost 66,276 61,487 45,181 
Allowance for credit losses: loans(422)(398)(448)
Net loans65,854 61,089 44,733 
Premises and equipment, net of accumulated depreciation and amortization
270 247 176 
Goodwill375 344 143 
Other intangible assets, net160 156 61 
Lease right-of-use assets313 312 210 
Accrued interest receivable and other assets 1,928 2,074 3,206 
Total assets$211,478 $190,996 $115,511 
Liabilities and total equity:
Liabilities:
Noninterest-bearing demand deposits $125,851 $115,388 $66,519 
Interest-bearing deposits63,352 55,794 35,463 
Total deposits189,203 171,182 101,982 
Short-term borrowings121 97 21 
Lease liabilities388 390 259 
Other liabilities 2,587 2,733 3,972 
Long-term debt2,570 1,925 844 
Total liabilities194,869 176,327 107,078 
SVBFG stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 383,500 shares, 367,500 shares and 350,000 shares issued and outstanding, respectively
3,646 2,064 340 
Common stock, $0.001 par value, 150,000,000 shares authorized; 58,748,469 shares, 58,677,483 shares and 51,888,463 shares issued and outstanding, respectively— — — 
Additional paid-in capital 5,157 5,100 1,585 
Retained earnings7,442 7,071 5,672 
Accumulated other comprehensive (loss) income(9)65 623 
Total SVBFG stockholders’ equity16,236 14,300 8,220 
Noncontrolling interests373 369 213 
Total equity16,609 14,669 8,433 
Total liabilities and total equity$211,478 $190,996 $115,511 
x


18

SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited)
 Three months ended
 December 31, 2021September 30, 2021December 31, 2020
(Dollars in millions, except yield/rate and ratios)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)
$22,112 $6 0.10 %$21,779 $5 0.10 %$15,904 $3 0.07 %
Investment securities: (2)
Available-for-sale securities:
Taxable24,154 68 1.13 23,290 69 1.17 28,114 102 1.45 
Held-to-maturity securities:
Taxable81,121 324 1.58 64,899 262 1.61 10,076 80 3.15 
Non-taxable (3)6,458 41 2.50 5,613 36 2.53 3,213 24 2.95 
Total loans, amortized cost (4) (5)
62,573 544 3.45 59,291 519 3.47 41,525 403 3.86 
Total interest-earning assets
196,418 983 1.99 174,872 891 2.02 98,832 612 2.46 
Cash and due from banks 3,018 2,285 1,228 
Allowance for credit losses: loans(419)(451)(535)
Other assets (6) 5,743 5,984 4,229 
Total assets$204,760 $182,690 $103,754 
Funding sources:
Interest-bearing liabilities:
Interest bearing checking and savings accounts$4,612 $2 0.12 %$4,310 $1 0.14 %$4,442 $2 0.18 %
Money market deposits52,177 18 0.14 46,051 17 0.14 23,943 6 0.10 
Money market deposits in foreign offices
972 — 0.01 1,039 — 0.01 502 — 0.18 
Time deposits1,431 1 0.29 1,245 1 0.32 609 1 0.42 
Sweep deposits in foreign offices
1,081 — 0.01 1,109 — 0.01 1,278 — 0.03 
Total interest-bearing deposits
60,273 21 0.14 53,754 19 0.14 30,774 9 0.12 
Short-term borrowings145 — 0.16 99 — 0.17 10 — 0.08 
Long-term debt2,380 15 2.53 1,936 13 2.66 843 7 3.38 
Total interest-bearing liabilities
62,798 36 0.23 55,789 32 0.23 31,627 16 0.20 
Portion of noninterest-bearing funding sources
133,620 119,083 67,205 
Total funding sources196,418 36 0.08 174,872 32 0.07 98,832 16 0.06 
Noninterest-bearing funding sources:
Demand deposits122,789 109,638 61,663 
Other liabilities3,153 3,279 2,316 
Preferred stock
3,182 2,065 340 
SVBFG common stockholders’ equity
12,470 11,613 7,637 
Noncontrolling interests368 306 171 
Portion used to fund interest-earning assets
(133,620)(119,083)(67,205)
Total liabilities and total equity
$204,760 $182,690 $103,754 
Net interest income and margin
$947 1.91 %$859 1.95 %$596 2.40 %
Total deposits $183,062 $163,392 $92,437 
Average SVBFG common stockholders’ equity as a percentage of average assets 6.09 %6.36 %7.36 %
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis
(8)(7)(4)
Net interest income, as reported
$939 $852 $592 
(1)Includes average interest-earning deposits in other financial institutions of $5.7 billion, $5.5 billion and $1.5 billion; and $16.1 billion, $15.9 billion and $12.7 billion deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate, for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income or loss.
(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.
(4)Nonaccrual loans are reflected in the average balances of loans.
(5)Interest income includes loan fees of $49 million, $43 million and $55 million for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.
(6)Average investment securities of $2.7 billion, $3.0 billion and $2.3 billion for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, were classified as other assets as they are noninterest-earning assets. These investments consist primarily of non-marketable and other equity securities.

19

SVB FINANCIAL GROUP AND SUBSIDIARIES
INTERIM AVERAGE BALANCES, RATES AND YIELDS
(Unaudited) 
 Year ended
 December 31, 2021December 31, 2020
(Dollars in millions, except yield/rate and ratios)Average
Balance		Interest
Income/
Expense		Yield/
Rate		Average
Balance		Interest
Income/
Expense		Yield/
Rate
Interest-earning assets:
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)
$20,800 $18 0.08 %$12,252 $26 0.21 %
Investment securities: (2)
Available-for-sale securities:
Taxable24,996 334 1.34 18,653 337 1.81 
Held-to-maturity securities:
Taxable52,937 865 1.63 10,728 298 2.78 
Non-taxable (3)5,093 134 2.63 2,385 77 3.24 
Total loans, amortized cost (4) (5)54,547 1,966 3.60 37,266 1,520 4.08 
Total interest-earning assets158,373 3,317 2.09 81,284 2,258 2.77 
Cash and due from banks2,241 1,021 
Allowance for credit losses for loans(441)(509)
Other assets (6)5,838 3,996 
Total assets$166,011 $85,792 
Funding sources:
Interest-bearing liabilities:
Interest bearing checking and savings accounts$3,924 $5 0.12 %$2,874 $7 0.24 %
Money market deposits41,481 54 0.13 19,741 47 0.24 
Money market deposits in foreign offices918 — 0.02 330 — 0.09 
Time deposits994 3 0.31 336 2 0.56 
Sweep deposits in foreign offices1,169 — 0.01 1,542 4 0.27 
Total interest-bearing deposits48,486 62 0.13 24,823 60 0.24 
Short-term borrowings74 — 0.16 401 3 0.83 
Long-term debt1,775 48 2.70 632 22 3.45 
Total interest-bearing liabilities
50,335 110 0.22 25,856 85 0.33 
Portion of noninterest-bearing funding sources
108,038 55,428 
Total funding sources158,373 110 0.07 81,284 85 0.10 
Noninterest-bearing funding sources:
Demand deposits99,461 50,193 
Other liabilities3,660 2,168 
Preferred stock1,925 340 
SVBFG common stockholders’ equity10,353 7,080 
Noncontrolling interests277 155 
Portion used to fund interest-earning assets(108,038)(55,428)
Total liabilities and total equity$166,011 $85,792 
Net interest income and margin$3,207 2.02 %$2,173 2.67 %
Total deposits$147,947 $75,016 
Average SVBFG stockholders’ equity as a percentage of average assets
6.24 %8.25 %
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis(28)(16)
Net interest income, as reported$3,179 $2,157 

(1)Includes average interest-earning deposits in other financial institutions of $4.6 billion and $1.1 billion for the years ended December 31, 2021 and December 31, 2020. The balance also includes $15.9 billion and $9.9 billion deposited at the Federal Reserve Bank, earning interest at the Federal Funds target rate for the year ended December 31, 2021 and December 31, 2020, respectively.
(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income or loss.
(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.
(4)Nonaccrual loans are reflected in the average balances of loans.
(5)Interest income includes loan fees of $217 million and $191 million for the year ended December 31, 2021 and December 31, 2020, respectively.
(6)Average investment securities of $3.2 billion and $2.0 billion for the year ended December 31, 2021 and December 31, 2020, respectively, were classified as other assets as they are noninterest-earning assets. These investments consisted primarily of non-marketable and other equity securities.

20

Reconciliation of Basic and Diluted Weighted Average Common Shares Outstanding 
 Three months endedYear ended
(Shares in thousands)December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
Weighted average common shares outstanding—basic
58,703 57,723 51,817 55,763 51,685 
Effect of dilutive securities:
Stock options and employee stock purchase plan
286 268 195 283 151 
Restricted stock units
635 530 454 592 248 
Total effect of dilutive securities921 798 649 875 399 
Weighted average common shares outstanding—diluted
59,624 58,521 52,466 56,638 52,084 
Credit Quality
(Dollars in millions, except ratios)December 31, 2021September 30, 2021December 31, 2020
Nonaccrual, past due and restructured loans:
Nonaccrual loans$84 $114 $104 
Loans past due 90 days or more still accruing interest7 3 — 
Total nonperforming loans91 117 104 
OREO and other foreclosed assets1 1 1 
Total nonperforming assets$92 $118 $105 
Nonperforming loans as a percentage of total loans0.14 %0.19 %0.23 %
Nonperforming assets as a percentage of total assets0.04 0.06 0.09 
Allowance for credit losses for loans$422 $398 $448 
As a percentage of total loans0.64 %0.65 %0.99 %
As a percentage of total nonperforming loans463.74 340.17 429.54 
Allowance for credit losses for nonaccrual loans$35 $33 $54 
As a percentage of total loans0.05 %0.06 %0.12 %
As a percentage of total nonperforming loans38.46 28.21 51.83 
Allowance for credit losses for total performing loans$387 $365 $394 
As a percentage of total loans0.58 %0.59 %0.87 %
As a percentage of total performing loans0.58 0.59 0.87 
Total loans$66,276 $61,487 $45,181 
Total performing loans66,185 61,370 45,077 
Allowance for credit losses for unfunded credit commitments (1)171 149 121 
As a percentage of total unfunded credit commitments0.39 %0.37 %0.38 %
Total unfunded credit commitments (2)$43,698 $40,259 $31,982 

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

21

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 (including, but not limited to, non-GAAP core fee income, non-GAAP SVB Leerink revenue, non-GAAP core fee income plus non-GAAP SVB Leerink revenue, non-GAAP net gains on investment securities, non-GAAP non-marketable and other equity securities and non-GAAP financial ratios) of financial performance. These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures by other companies in our industry. 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 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. We believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. 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.
Additionally, from time to time, we may make reference to the non-GAAP financial metric of Core EPS in our earnings call and other investor presentations. Non-GAAP Core EPS consists of our net income available to common stockholders less gains or losses on investment securities, equity warrant assets and income and expenses related to SVB Leerink, net of tax, divided by our diluted weighted average common shares outstanding. Our management believes this measure to be a useful assessment of our performance as it relates to our core business because it excludes certain financial items where performance is typically subject to market or other conditions beyond our control. A reconciliation of Core EPS to the closest corresponding GAAP measure is not available with respect to future goals due to our inability to provide a quantitative reconciliation to such 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 certain SVB Capital funds. 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/certain financial line items include only the portion of income or loss related to our ownership interest.
In addition, in this press release, we use certain non-GAAP financial ratios and measures that are not required by GAAP or exclude certain financial items from calculations that are otherwise required under GAAP, including:
•Non-GAAP core fee income plus SVB Leerink revenue — This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.
•Non-GAAP core fee income — This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control, as well as our non-GAAP SVB Leerink revenue, and represents client investment fees, wealth management and trust fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.

22

•Non-GAAP SVB Leerink revenue — This measure represents noninterest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control, as well as our non-GAAP core fee income, and represents investment banking revenue and commissions. We do not provide our outlook for the expected full year results for these excluded items, which include net gains or losses on investment securities, net gains or losses on equity warrant assets and other noninterest income items.
•Tangible common equity, or tangible book value, 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. Risk-based capital guidelines require a minimum level of capital as a percentage of risk-weighted assets. Risk-weighted assets are calculated by assigning assets and off-balance sheet items to broad risk categories. 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, if any.
Three months endedYear ended
Non-GAAP core fee income plus SVB Leerink revenue, non-GAAP SVB Leerink revenue and non-GAAP core fee income (Dollars in millions)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020December 31, 2021December 31, 2020
GAAP noninterest income $561 $672 $761 $744 $622 $2,738 $1,840 
Less: gains on investment securities, net
100 189 305 167 150 761 421 
Less: net gains on equity warrant assets
69 147 122 222 144 560 237 
Less: other noninterest income
31 25 42 30 21 128 98 
Non-GAAP core fee income plus SVB Leerink revenue$361 $311 $292 $325 $307 $1,289 $1,084 
Investment banking revenue124 90 103 142 133 459 414 
Commissions21 17 17 24 18 79 67 
Less: non-GAAP SVB Leerink revenue$145 $107 $120 $166 $151 $538 $481 
Non-GAAP core fee income $216 $204 $172 $159 $156 $751 $603 
Three months endedYear ended
Non-GAAP net gains on investment securities, net of noncontrolling interests (Dollars in millions)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020December 31, 2021December 31, 2020
GAAP net gains on investment securities
$100 $189 $305 $167 $150 $761 $421 
Less: income attributable to noncontrolling interests, including carried interest allocation14 88 113 25 46 240 86 
Non-GAAP net gains on investment securities, net of noncontrolling interests
$86 $101 $192 $142 $104 $521 $334 

23

Period-end balances at
Non-GAAP non-marketable and other equity securities, net of noncontrolling interests (Dollars in millions)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020
GAAP non-marketable and other equity securities $2,543 $2,485 $1,943 $1,858 $1,802 
Less: amounts attributable to noncontrolling interests
367 349 298 226 213 
Non-GAAP non-marketable and other equity securities, net of noncontrolling interests
$2,176 $2,136 $1,645 $1,632 $1,589 
Period-end balances at
SVB Financial Group tangible common equity, tangible assets and risk-weighted assets (Dollars in millions, except ratios)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020
GAAP SVBFG stockholders’ equity$16,236 $14,300 $11,667 $9,895 $8,220 
Less: preferred stock3,646 2,064 2,064 1,079 340 
Less: intangible assets535 500 200 202 204 
Plus: net deferred taxes on intangible assets26 25 — (1)— 
Tangible common equity$12,081 $11,761 $9,403 $8,613 $7,676 
GAAP total assets$211,478 $190,996 $163,399 $142,347 $115,511 
Less: intangible assets535 500 200 202 204 
Plus: net deferred taxes on intangible assets26 25 — (1)— 
Tangible assets $210,969 $190,521 $163,199 $142,144 $115,307 
Risk-weighted assets $100,613 $92,511 $78,231 $71,059 $64,681 
Tangible common equity to tangible assets5.73 %6.17 %5.76 %6.06 %6.66 %
Tangible common equity to risk-weighted assets12.01 12.71 12.02 12.12 11.87 
Period-end balances at
Silicon Valley Bank tangible common equity, tangible assets and risk-weighted assets (Dollars in millions, except ratios)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020
Tangible common equity$14,795 $13,404 $10,428 $8,766 $7,069 
Tangible assets$208,576 $188,329 $161,197 $140,231 $113,303 
Risk-weighted assets$98,015 $89,477 $75,795 $68,058 $61,023 
Tangible common equity to tangible assets7.09 %7.12 %6.47 %6.25 %6.24 %
Tangible common equity to risk-weighted assets15.09 14.98 13.76 12.88 11.58 
24