UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2014~~March 31, 2015



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 000-15637

SVB FINANCIAL GROUP

(Exact name of registrant as specified in its charter)



Delaware		91-1962278
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



3003 Tasman Drive, Santa Clara, California		95054-1191
(Address of principal executive offices)		(Zip Code)

(408) 654-7400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

At ~~October 31, 2014, 50,849,278~~April 30, 2015, 51,240,105 shares of the registrant’s common stock ($0.001 par value) were outstanding.

Table of Contents

TABLE OF CONTENTS



		Page
PART I - FINANCIAL INFORMATION		4

Item 1.	Interim Consolidated Financial Statements	4

	Interim Consolidated Balance Sheets as of ~~September 30, 2014~~March 31, 2015 (unaudited) and December 31, ~~2013~~2014	4

	Interim Consolidated Statements of Income (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	5

	Interim Consolidated Statements of Comprehensive Income (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	6

	Interim Consolidated Statements of Stockholders' Equity (unaudited) for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	7

	Interim Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	8

	Notes to Interim Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5052

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8985

Item 4.	Controls and Procedures	9187

PART II - OTHER INFORMATION		9187

Item 1.	Legal Proceedings	9288

Item 1A.	Risk Factors	9288

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9288

Item 3.	Defaults Upon Senior Securities	9288

Item 4.	Mine Safety Disclosures	9288

Item 5.	Other Information	9288

Item 6.	Exhibits	9288

SIGNATURES		9389
		��
INDEX TO EXHIBITS		9490

Table of Contents

Glossary of Acronyms that may be used in this Report

ASC — Accounting Standards Codification

ASU – Accounting Standards Update

EHOP – Employee Home Ownership Program of the Company

EPS – Earnings Per Share

ESOP – Employee Stock Ownership Plan of the Company

ESPP – 1999 Employee Stock Purchase Plan of the Company

FASB – Financial Accounting Standards Board

FDIC – Federal Deposit Insurance Corporation

FHLB – Federal Home Loan Bank

FRB - Federal Reserve Bank

FTE - Full-Time Employee

FTP – Funds Transfer Pricing

GAAP - Accounting principles generally accepted in the United States of America

IASB – International Accounting Standards Board

IPO – Initial Public Offering

IRS – Internal Revenue Service

IT – Information Technology

LIBOR – London Interbank Offered Rate

M&A – Merger and Acquisition

OTTI – Other Than Temporary Impairment

SEC – Securities and Exchange Commission

TDR – Troubled Debt Restructuring

UK – United Kingdom

VIE – Variable Interest Entity

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED BALANCE SHEETS


(Dollars in thousands, except par value and share data)	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
	(Unaudited)						(Unaudited)
Assets
Cash and cash equivalents	$	1,872,537		$	1,538,779		$	1,308,003		$	1,796,062
Available-for-sale securities, at fair value (cost of $13,322,059 and $12,055,524, respectively)	13,333,436			11,986,821
Held-to-maturity securities, at cost (fair value of $6,613,893 and $0, respectively)	6,662,025			—
Available-for-sale securities, at fair value (cost of $13,619,702 and $13,497,945, respectively)							13,746,923			13,540,655
Held-to-maturity securities, at cost (fair value of $7,869,653 and $7,415,656, respectively)							7,816,797			7,421,042
Non-marketable and other securities(1)	1,703,550			1,595,494			1,706,873			1,728,140
Total investment securities	21,699,011			13,582,315			23,270,593			22,689,837
Loans, net of unearned income	12,017,181			10,906,386			14,439,574			14,384,276
Allowance for loan losses	(129,061		)	(142,886		)	(167,875		)	(165,359		)
Net loans	11,888,120			10,763,500			14,271,699			14,218,917
Premises and equipment, net of accumulated depreciation and amortization	74,375			67,485			82,724			79,845
Accrued interest receivable and other assets(1)	506,964			465,110			762,971			555,289
Total assets	$	36,041,007		$	26,417,189		$	39,695,990		$	39,339,950
Liabilities and total equity
Liabilities:
Noninterest-bearing demand deposits	$	22,461,068		$	15,894,360		$	25,716,586		$	24,583,682
Interest-bearing deposits	8,662,067			6,578,619			8,134,989			9,759,817
Total deposits	31,123,135			22,472,979			33,851,575			34,343,499
Short-term borrowings	6,630			5,080			77,766			7,781
Other liabilities	517,462			404,586			686,501			483,493
Long-term debt	453,764			455,216			802,917			453,443
Total liabilities	32,100,991			23,337,861			35,418,759			35,288,216
Commitments and contingencies (Note 11 and Note 14)
Commitments and contingencies (Note 12 and Note 15)
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; 50,820,946 shares and 45,800,418 shares outstanding, respectively	51			46
Common stock, $0.001 par value, 150,000,000 shares authorized; 51,095,341 shares and 50,924,925 shares outstanding, respectively							51			51
Additional paid-in capital	1,107,337			624,256			1,140,435			1,120,350
Retained earnings(1)	1,595,825			1,390,732			1,738,483			1,649,967
Accumulated other comprehensive income (loss)	18,744			(48,764		)
Accumulated other comprehensive income							92,668			42,704
Total SVBFG stockholders’ equity	2,721,957			1,966,270			2,971,637			2,813,072
Noncontrolling interests	1,218,059			1,113,058			1,305,594			1,238,662
Total equity	3,940,016			3,079,328			4,277,231			4,051,734
Total liabilities and total equity	$	36,041,007		$	26,417,189		$	39,695,990		$	39,339,950


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands, except per share amounts)	2014			2013			2014			2013			2015			2014
Interest income:
Loans	$	153,292		$	139,687		$	449,144		$	395,216		$	165,458		$	148,172
Investment securities:
Taxable	73,540			43,604			191,384			134,013			81,274			54,420
Non-taxable	772			797			2,362			2,403			772			796
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities	1,722			1,152			5,301			2,605			1,285			1,636
Total interest income	229,326			185,240			648,191			534,237			248,789			205,024
Interest expense:
Deposits	2,961			2,397			8,933			6,533			1,943			2,904
Borrowings	5,800			5,747			17,400			17,358			7,956			5,792
Total interest expense	8,761			8,144			26,333			23,891			9,899			8,696
Net interest income	220,565			177,096			621,858			510,346			238,890			196,328
Provision for loan losses	16,610			10,638			19,051			35,023			6,452			494
Net interest income after provision for loan losses	203,955			166,458			602,807			475,323			232,438			195,834
Noninterest income:
Gains on investment securities, net	5,644			187,862			172,236			255,861			83,159			223,912
Gains on derivative instruments, net	26,538			9,422			63,480			27,802			39,729			24,167
Foreign exchange fees	17,911			13,667			53,035			41,529			17,678			17,196
Credit card fees	10,909			8,188			31,440			23,245			12,090			10,282
Deposit service charges	10,126			8,902			29,344			26,602			10,736			9,607
Lending related fees	6,029			5,265			18,208			13,835			8,022			6,303
Letters of credit and standby letters of credit fees	4,557			3,790			11,507			10,879			5,202			4,140
Client investment fees	3,814			3,393			10,751			10,392			4,482			3,418
Other	(5,361		)	17,161			14,601			24,348			(9,080		)	11,200
Total noninterest income	80,167			257,650			404,602			434,493			172,018			310,225
Noninterest expense:
Compensation and benefits	99,932			96,869			302,259			270,315			115,770			102,507
Professional services	26,081			18,966			68,383			52,759			24,185			21,189
Premises and equipment	12,631			12,171			36,267			34,298			12,657			11,582
Business development and travel	10,022			7,378			29,465			23,433			11,112			10,194
Net occupancy	7,437			5,898			22,436			17,460			7,313			7,320
FDIC assessments	4,587			2,913			13,660			9,148
FDIC and state assessments													5,789			4,128
Correspondent bank fees	3,278			2,906			9,755			9,009			3,421			3,203
Provision for unfunded credit commitments	2,225			2,774			5,533			6,135			2,263			1,123
Other(1)	15,796			10,649			40,113			30,273			13,598			9,162
Total noninterest expense(1)	181,989			160,524			527,871			452,830			196,108			170,408
Income before income tax expense(1)	102,133			263,584			479,538			456,986			208,348			335,651
Income tax expense(1)	38,961			47,404			131,460			103,773			63,066			61,296
Net income before noncontrolling interests(1)	63,172			216,180			348,078			353,213			145,282			274,355
Net income attributable to noncontrolling interests	(177		)	(148,559		)	(142,985		)	(196,117		)	(56,766		)	(183,405		)
Net income available to common stockholders(1)	$	62,995		$	67,621		$	205,093		$	157,096		$	88,516		$	90,950
Earnings per common share—basic(1)	$	1.24		$	1.48		$	4.25		$	3.48		$	1.74		$	1.98
Earnings per common share—diluted	1.22			1.46			4.17			3.43			1.71			1.95


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2014 2013 2014 2013
Net income before noncontrolling interests $ 63,172
$ 216,180
$ 348,078
$ 353,213
Other comprehensive (loss) income, net of tax:
Change in cumulative translation (loss) income:
Foreign currency translation loss (2,259 ) (1,540 ) (638 ) (6,341 )
Related tax benefit 935
631
281
2,539
Change in unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains (48,724 ) 27,289
62,669
(167,021 )
Related tax benefit (expense) 19,716
(11,032 ) (25,292 ) 68,299
Reclassification adjustment for losses (gains) included in net income 990
(219 ) 17,411
(949 )
Related tax (benefit) expense (400 ) 85
(7,030 ) 363
Cumulative-effect adjustment for unrealized gains on securities transferred from available-for-sale to held-to-maturity —
—
37,700
—
Related tax expense —
—
(15,178 ) —
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity

(2,996 ) —
(4,043 ) —
Related tax benefit 1,206
—
1,628
—
Other comprehensive (loss) income, net of tax (31,532 ) 15,214
67,508
(103,110 )
Comprehensive income 31,640
231,394
415,586
250,103
Comprehensive income attributable to noncontrolling interests (177 ) (148,559 ) (142,985 ) (196,117 )
Comprehensive income attributable to SVBFG $ 31,463
$ 82,835
$ 272,601
$ 53,986



	Three months ended March 31,
(Dollars in thousands)	2015			2014
Net income before noncontrolling interests (1)	$	145,282		$	274,355
Other comprehensive income, net of tax:
Change in cumulative translation gains:
Foreign currency translation gains	2,129			1,464
Related tax expense	(820		)	(578		)
Change in unrealized gains on available-for-sale securities:
Unrealized holding gains	87,107			29,329
Related tax expense	(35,215		)	(11,805		)
Reclassification adjustment for gains included in net income	(2,596		)	(60		)
Related tax expense	1,048			24
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity	(2,828		)	—
Related tax benefit	1,139			—
Other comprehensive income, net of tax	49,964			18,374
Comprehensive income	195,246			292,729
Comprehensive income attributable to noncontrolling interests	(56,766		)	(183,405		)
Comprehensive income attributable to SVBFG	$	138,480		$	109,324


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


	Common Stock			Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Total SVBFG Stockholders’ Equity			Noncontrolling Interests				Total Equity				Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total SVBFG Stockholders’ Equity			Noncontrolling Interests			Total Equity
(Dollars in thousands)	Shares	Amount							Accumulated Other Comprehensive Income (Loss)			Shares				Noncontrolling Interests			Amount								Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total SVBFG Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2012	44,627,182	$	45	Additional Paid-in Capital		$	Retained Earnings	547,079	$	1,174,878			Total SVBFG Stockholders’ Equity	$	108,553		$	1,830,555		Total Equity			$	774,678	$	2,605,233
Balance at December 31, 2013 (As Reported)																								45,800,418	$	46	$	624,256	$	1,390,732		$	(48,764	)	$	1,966,270		$	1,113,058		$	3,079,328
Cumulative effective of adopting ASU 2014-01 (1)																								—	—		—		(4,635		)	—			(4,635		)	—			(4,635		)
Balance at December 31, 2013 (As Revised)																								45,800,418	$	46	$	624,256	$	1,386,097		$	(48,764	)	$	1,961,635		$	1,113,058		$	3,074,693
Common stock issued under employee benefit plans, net of restricted stock cancellations																								103,341	—		4,254		—			—			4,254			—			4,254
Common stock issued under ESOP																								30,762	—		3,890		—			—			3,890			—			3,890
Income tax benefit from stock options exercised, vesting of restricted stock and other																								—	—		1,996		—			—			1,996			—			1,996
Net income (1)																								—	—		—		90,950			—			90,950			183,405			274,355
Capital calls and distributions, net																								—	—		—		—			—			—			(23,482		)	(23,482		)
Net change in unrealized gains and losses on available-for-sale securities, net of tax																								—	—		—		—			17,488			17,488			—			17,488
Foreign currency translation adjustments, net of tax																								—	—		—		—			886			886			—			886
Share-based compensation expense																								—	—		7,892		—			—			7,892			—			7,892
Other, net																								—	—		23		—			—			23			—			23
Balance at March 31, 2014 (1)																								45,934,521	$	46	$	642,311	$	1,477,047		$	(30,390	)	$	2,089,014		$	1,272,981		$	3,361,995
Balance at December 31, 2014 (1)																								50,924,925	$	51	$	1,120,350	$	1,649,967		$	42,704		$	2,813,072		$	1,238,662		$	4,051,734
Common stock issued under employee benefit plans, net of restricted stock cancellations	906,242	1		33,241			—		—				33,242			—				33,242				142,991	—		6,595		—			—			6,595			—			6,595
Common stock issued under ESOP	74,946	—		5,166			—		—				5,166			—				5,166				27,425	—		3,512		—			—			3,512			—			3,512
Income tax benefit from stock options exercised, vesting of restricted stock and other	—	—		3,148			—		—				3,148			—				3,148				—	—		2,514		—			—			2,514			—			2,514
Net income	—	—		—			157,096		—				157,096			196,117				353,213				—	—		—		88,516			—			88,516			56,766			145,282
Capital calls and distributions, net	—	—		—			—		—				—			7,922				7,922				—	—		—		—			—			—			10,166			10,166
Net change in unrealized gains and losses on available-for-sale securities, net of tax	—	—		—			—		(99,308		)		(99,308		)	—				(99,308		)		—	—		—		—			50,344			50,344			—			50,344
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax																								—	—		—		—			(1,689		)	(1,689		)	—			(1,689		)
Foreign currency translation adjustments, net of tax	—	—		—			—		(3,802		)		(3,802		)	—				(3,802		)		—	—		—		—			1,309			1,309			—			1,309
Share-based compensation expense	—	—		18,826			—		—				18,826			—				18,826				—	—		7,464		—			—			7,464			—			7,464
Other, net	—	—		3			1		—				4			—				4
Balance at September 30, 2013	45,608,370	$	46	$	607,463		$	1,331,975	$	5,443			$	1,944,927		$	978,717			$	2,923,644
Balance at December 31, 2013	45,800,418	$	46	$	624,256		$	1,390,732	$	(48,764	)		$	1,966,270		$	1,113,058			$	3,079,328
Common stock issued under employee benefit plans, net of restricted stock cancellations	504,766	—		13,878			—		—				13,878			—				13,878
Common stock issued under ESOP	30,762	—		3,890			—		—				3,890			—				3,890
Income tax benefit from stock options exercised, vesting of restricted stock and other	—	—		7,973			—		—				7,973			—				7,973
Net income	—	—		—			205,093		—				205,093			142,985				348,078
Capital calls and distributions, net	—	—		—			—		—				—			(37,984		)		(37,984		)
Net change in unrealized gains and losses on available-for-sale securities, net of tax	—	—		—			—		47,758				47,758			—				47,758
Cumulative-effect for unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax	—	—		—			—		22,522				22,522			—				22,522
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax	—	—		—			—		(2,415		)		(2,415		)	—				(2,415		)
Foreign currency translation adjustments, net of tax	—	—		—			—		(357		)		(357		)	—				(357		)
Common stock issued in public offering	4,485,000	5		434,861			—		—				434,866			—				434,866
Share-based compensation expense	—	—		22,479			—		—				22,479			—				22,479
Balance at September 30, 2014	50,820,946	$	51	$	1,107,337		$	1,595,825	$	18,744			$	2,721,957		$	1,218,059			$	3,940,016
Balance at March 31, 2015																								51,095,341	$	51	$	1,140,435	$	1,738,483		$	92,668		$	2,971,637		$	1,305,594		$	4,277,231


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014			2013			2015			2014
Cash flows from operating activities:
Net income before noncontrolling interests(1)	$	348,078		$	353,213		$	145,282		$	274,355
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	19,051			35,023			6,452			494
Provision for unfunded credit commitments	5,533			6,135			2,263			1,123
Changes in fair values of derivatives, net	11,087			(16,594		)	(20,404		)	13,356
Gains on investment securities, net	(172,236		)	(255,861		)	(83,159		)	(223,912		)
Depreciation and amortization	29,041			26,474			9,892			9,765
Amortization of premiums and discounts on investment securities, net	18,700			21,040			6,418			7,541
Tax expense from stock exercises	(1		)	(1,353		)
Amortization of share-based compensation	22,285			18,945			7,771			7,078
Amortization of deferred loan fees	(59,550		)	(51,941		)	(21,169		)	(20,502		)
Pre-tax net gain on SVBIF sale transaction							(887		)	—
Deferred income tax benefit	(17,897		)	(3,488		)	1,311			15,828
Changes in other assets and liabilities:
Accrued interest receivable and payable, net	(17,488		)	(5,183		)	772			(6,604		)
Accounts receivable and payable, net	(12,890		)	1,463			(4,015		)	(7,885		)
Income tax payable and receivable, net(1)	(14,234		)	(7,787		)	9,283			25,159
Accrued compensation	(24,241		)	(7,481		)	(74,614		)	(74,687		)
Foreign exchange spot contracts, net	97,357			12,442			33,934			22,634
Other, net	(25,388		)	(27,005		)	28,486			6,247
Net cash provided by operating activities	207,207			98,042			47,616			49,990
Cash flows from investing activities:
Purchases of available-for-sale securities	(8,060,750		)	(906,495		)	(552,573		)	(1,531,045		)
Proceeds from sales of available-for-sale securities	32,135			10,207			5,612			2,097
Proceeds from maturities and pay downs of available-for-sale securities	1,352,369			1,879,424			424,713			694,243
Purchases of held-to-maturity securities	(1,577,634		)	—			(739,291		)	—
Proceeds from maturities and pay downs of held-to-maturity securities	327,913			—			336,511			—
Purchases of non-marketable and other securities (cost and equity method accounting)	(23,965		)	(20,019		)	(7,304		)	(9,824		)
Proceeds from sales and distributions of non-marketable and other securities (cost and equity method accounting)	47,478			47,069			14,123			19,053
Purchases of non-marketable and other securities (fair value accounting)	(182,247		)	(108,663		)	(60,039		)	(45,125		)
Proceeds from sales and distributions of non-marketable and other securities (fair value accounting)	264,389			103,105			154,031			92,558
Net increase in loans	(1,103,447		)	(867,075		)
Net (increase) decrease in loans							(53,886		)	66,086
Proceeds from recoveries of charged-off loans	5,313			8,163			1,551			1,312
Purchases of premises and equipment	(29,332		)	(20,837		)	(12,038		)	(5,974		)
Net cash (used for) provided by investing activities	(8,947,778		)	124,879
Net cash used for investing activities							(488,590		)	(716,619		)
Cash flows from financing activities:
Net increase in deposits	8,650,156			820,539
Net (decrease) increase in deposits							(491,924		)	3,003,926
Increase (decrease) in short-term borrowings	1,550			(160,530		)	69,985			(270		)
Capital contributions from noncontrolling interests, net of distributions	(37,984		)	7,922
Net capital contributions from (distributions to) noncontrolling interests							10,166			(23,482		)
Tax benefit from stock exercises	7,973			4,501			2,514			1,996
Proceeds from issuance of common stock, ESPP, and ESOP	17,768			38,408			10,107			8,144
Net proceeds from public equity offering	434,866			—
Net cash provided by financing activities	9,074,329			710,840
Net increase in cash and cash equivalents	333,758			933,761
Proceeds from issuance of 3.50% Senior Notes							346,431			—
Net cash (used for) provided by financing activities							(52,721		)	2,990,314
Net (decrease) increase in cash and cash equivalents							(493,695		)	2,323,685
Cash and cash equivalents at beginning of period(2)	1,538,779			1,008,983			1,811,014			1,538,779
Cash and cash equivalents at end of period(2)	$	1,872,537		$	1,942,744		$	1,317,319		$	3,862,464
Supplemental disclosures:
Cash paid during the period for:
Interest	$	30,259		$	28,339		$	11,859		$	12,688
Income taxes	154,746			107,282			46,599			15,486
Noncash items during the period:
Changes in unrealized gains and losses on available-for-sale securities, net of tax	$	47,758		$	(99,308	)	$	50,344		$	17,488
Transfers from available-for-sale securities to held-to-maturity	5,418,572			—


(1)	Cash flows for the quarters ended March 31, 2015 and March 31, 2014 were revised to reflect the retrospective application of our adoption of ASU 2014-01.


(2)	Cash and cash equivalents at March 31, 2015 and December 31, 2014 included $9.3 million and $15.0 million, respectively, recognized in assets held-for-sale in conjunction with the pending sale of SVBIF (refer to Note 7—”Disposal - Assets Held-for-Sale” of the “Notes to Interim Consolidated Financial Statements” under Part I, Item 1 of this report.

See accompanying notes to interim consolidated financial statements (unaudited).

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


1.	Basis of Presentation

SVB Financial Group is a diversified financial services company, as well as a bank holding company and financial holding company. SVB Financial was incorporated in the state of Delaware in March 1999. Through our various subsidiaries and divisions, we offer a variety of banking and financial products and services to support our clients of all sizes and stages throughout their life cycles. In these notes to our consolidated financial statements, when we refer to “SVB Financial Group,” “SVBFG”, the “Company,” “we,” “our,” “us” or use similar words, we mean SVB Financial Group and all of its subsidiaries collectively, including Silicon Valley Bank (the “Bank”), unless the context requires otherwise. When we refer to “SVB Financial” or the “Parent” we are referring only to the parent company, SVB Financial Group, unless the context requires otherwise.

The accompanying unaudited interim consolidated financial statements reflect all adjustments of a normal and recurring nature that are, in the opinion of management, necessary to fairly present our financial position, results of operations and cash flows in accordance with GAAP. Such unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 are not necessarily indicative of results to be expected for any future periods. These unaudited interim consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 (“~~2013~~2014 Form 10-K”).

During the second quarter of 2014, we re-designated certain securities from the classification of "available-for-sale" ("AFS") to "held-to-maturity" ("HTM"). Transfers of investment securities into the held-to-maturity category from the available-for-sale category are made at fair value at the date of transfer. The unrealized gains (losses), net of tax, are retained in other comprehensive income, and the carrying value of the held-to-maturity securities are amortized over the life of the securities in a manner consistent with the amortization of a premium or discount. Our decision to re-designate the securities was based on our ability and intent to hold these securities to maturity. Other than the re-designation of securities from AFS to HTM, the accompanying unaudited interim consolidated financial statements have been prepared on a consistent basis with the accounting policies described in Consolidated Financial Statements and Supplementary Data—Note 2—“Summary of Significant Accounting Policies” under Part II, Item 8 of our ~~2013~~ ~~Form 10-K.~~

The preparation of unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates may change as new information is obtained. Significant items that are subject to such estimates include measurements of fair value, the valuation of non-marketable securities, the valuation of equity warrant assets, the adequacy of the allowance for loan losses and reserve for unfunded credit commitments, and the recognition and measurement of income tax assets and liabilities.

Principles of Consolidation and Presentation

Our consolidated financial statements include the accounts of SVB Financial Group and entities in which we have a controlling financial interest. We determine whether we have a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or a VIE and whether the applicable accounting guidance requires consolidation. All significant intercompany accounts and transactions have been eliminated.

Voting interest entities are entities that have sufficient equity and provide the equity investors voting rights that enable them to make significant decisions relating to the entity’s operations. For these types of entities, the Company’s determination of whether it has a controlling interest is based on ownership of the majority of the entities’ voting equity interest or through control of management of the entities.

VIEs are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the ~~entity��s~~entity’s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity. We determine whether we have a controlling financial interest in a VIE by considering whether our involvement with the VIE is significant and whether we are the primary beneficiary based on the following:


1.	We have the power to direct the activities of the VIE that most significantly impact the entity’s economic performance;

~~Table of Contents~~


2.	The aggregate indirect and direct variable interests held by the Company have the obligation to absorb losses or the right to receive benefits from the entity that could be significant to the VIE; and,


3.	Qualitative and quantitative factors regarding the nature, size, and form of our involvement with the VIE.

Voting interest entities in which we have a controlling financial interest or byVIEs in which we ~~control through management rights~~are the primary beneficiary are consolidated into our financial statements.

We have not provided financial or other support during the periods presented to any VIE that we were not previously contractually required to provide. We are variable interest holders in certain partnerships for which we are not the primary beneficiary. We perform on-going reassessments on the status of the entities and whether facts or circumstances have changed

Table of Contents

in relation to previously evaluated voting interest entities and our involvement in VIEs which could cause our consolidation conclusion to change.

~~Impact~~Adoption of ~~Adopting ASU No. 2013-08, Amendments to the Scope, Measurement and Disclosure Requirement for Investment Companies~~

In June 2013, the FASB issued an accounting standards update, which modified the guidance in ASC 946 for determining whether an entity is an investment company, as well as the measurement and disclosure requirements for investment companies. The ASU does not change current accounting where a noninvestment company parent retains the specialized accounting applied by an investment company subsidiary in consolidation. ASU 2013-08 was effective on a prospective basis for the interim and annual reporting periods beginning after December 15, 2013, and was therefore adopted in the first quarter of 2014. This standard did not have any impact on our financial position, results of operations or stockholders' equity.

~~Impact of Adopting ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists~~

In July 2013, the FASB issued a new accounting standard which requires an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward that the entity intends to use and is available for settlement at the reporting date. ASU 2013-11 was effective for, and adopted by the Company, in the first quarter of 2014. The adoption of ASU 2013-11 did not have a material impact on our financial position, results of operations or stockholders' equity.

~~Recently Issued~~New Accounting ~~Pronouncements~~Standards

In January 2014, the FASB issued a new accounting standard (ASU 2014-01, Investments - Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects), which permits entities that invest in qualified affordable housing projects through limited liability entities that are flow-through entities for tax purposes to make an accounting policy election to use proportional amortization method or apply an equity or cost method. If the proportional amortization method is elected, retrospective presentation is required for prior periods. The guidance is effective ~~on a retrospective basis~~ for ~~the~~us for interim and annual reporting periods beginning after December 15, ~~2014,~~2014. The standard is required to be applied retrospectively, with ~~early adoption available.~~an adjustment to retained earnings in the earliest period presented. The ASU will be applicable to our portfolio of low income housing tax credit ("LIHTC") partnership interests. We ~~are currently assessing the impact of~~adopted this guidance ~~however, we do not expect it~~in the first quarter of 2015.

For prior periods, pursuant to ~~have~~ASU 2014-01, (i) amortization expense related to our low income housing tax credits was reclassified from Other noninterest expense to Income tax expense, (ii) additional amortization, net of the associated tax benefits, was recognized in Income tax expense as a ~~material~~result of our adoption of the proportional amortization method and (iii) net deferred tax assets, related to our low income housing tax investments, were written-off. The cumulative effect to retained earnings as of January 1, 2015 of adopting this guidance was a reduction of $4.7 million, inclusive of a $4.6 million reduction to retained earnings as of January 1, 2014. Our previously reported net income for the first quarter of 2014 decreased $0.4 million. This reduction had no impact on ~~our financial position, results of operations or stockholders' equity.~~first quarter 2014 diluted earnings per share.

Recent Accounting Pronouncements

In May 2014, the FASB issued a new accounting standard (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)), which provides revenue recognition guidance that is intended to create greater consistency with respect to how and when revenue from contracts with customers is shown in the income statement. The guidance requires that revenue from contracts with customers be recognized upon delivery of a good or service based on the amount of consideration expected to be received, and requires additional disclosures about revenue. ~~The~~On April 29, 2015 the FASB issued an exposure draft to defer the effective date of Update 2014-09. If the FASB issues the proposed update, the guidance will be effective on a retrospective basis beginning on January 1, ~~2017.~~2018. We do not expect the adoption of this guidance to have a material impact on our financial position, results of operations or stockholders' equity.

In August 2014, the FASB issued a new accounting standard (ASU 2014-15, Going Concern (Topic 205-40)), which requires management to evaluate for each annual and interim reporting period whether there is substantial doubt about an entity's ability to continue as a going concern. The guidance will be effective for annual and quarterly periods ~~ending~~beginning on or after December 15, 2016, with early adoption permitted. We are currently developing processes and controls to adopt this guidance by the adoption ~~period~~deadline and do not expect the adoption of this guidance to have a material impact on our financial position, results of operations or stockholders' equity.

In February 2015, the FASB issued a new accounting standard (ASU 2015-02, Consolidation (Topic 810)), which amends the consolidation requirement for certain legal entities. The guidance will be effective for annual and quarterly periods beginning on January 1, 2016, with early adoption permitted. The standard may be applied using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. We are currently assessing the impact this amendment is expected to have upon adoption.

In April 2015, the FASB issued a new accounting standard (ASU 2015-03, Interest- Imputation of Interest (Subtopic 835-30), which simplifies the presentation of debt issuance costs. The guidance will be effective for annual and quarterly periods beginning on January 1, 2016, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our financial position.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentations.

Table of Contents


2.	Stockholders’ Equity and EPS

~~Common Stock~~Accumulated Other Comprehensive Income

InThe following table summarizes the ~~second quarter~~items reclassified out of ~~2014, to support~~accumulated other comprehensive income into the ~~continued growth~~Consolidated Statements of our balance sheet, we completed a registered public offering of 4,485,000 shares of our common stock at an offering price of $101.00 per share. We received net proceeds of $434.9 million after deducting underwriting discountsIncome (unaudited) for the three months ended March 31, 2015 and ~~commissions.~~2014:



		Three months ended March 31,
(Dollars in thousands)	Income Statement Location	2015			2014
Reclassification adjustment for gains included in net income	Gains on investment securities, net	$	(2,596	)	$	(60	)
Related tax expense	Income tax expense	1,048			24
Total reclassification adjustment for gains included in net income, net of tax		$	(1,548	)	$	(36	)

EPS

Basic EPS is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted EPS is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options and restricted stock units outstanding under our equity incentive plans and our ESPP. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. The following is a reconciliation of basic EPS to diluted EPS for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(Dollars and shares in thousands, except per share amounts)	2014		2013		2014		2013		2015		2014
Numerator:
Net income available to common stockholders(1)	$	62,995	$	67,621	$	205,093	$	157,096	$	88,516	$	90,950
Denominator:
Weighted average common shares outstanding-basic	50,752		45,580		48,281		45,180		51,009		45,866
Weighted average effect of dilutive securities:
Stock options and ESPP	534		429		580		405		445		566
Restricted stock units	285		193		339		180		265		293
Denominator for diluted calculation	51,571		46,202		49,200		45,765		51,719		46,725
Earnings per common share:
Basic(1)	$	1.24	$	1.48	$	4.25	$	3.48	$	1.74	$	1.98
Diluted	$	1.22	$	1.46	$	4.17	$	3.43	$	1.71	$	1.95


(1)	Results for the quarter ended March 31, 2014 were restated to reflect the retrospective application of adopting new accounting guidance in 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 of the Notes to Consolidated Financial Statements for additional information.

The following table summarizes the weighted-average common shares excluded from the diluted EPS calculation as they were deemed to be antidilutive for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:

Three months ended September 30, Nine months ended September 30,
(Shares in thousands) 2014 2013 2014 2013
Stock options 241
343
140
546
Restricted stock units 1
—
2
1
Total 242
343
142
547

~~Accumulated Other Comprehensive Income~~

~~The following table summarizes the items reclassified out of accumulated other comprehensive income into the Consolidated Statements of Income (unaudited) for the three and nine months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013~~:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) Income Statement Location 2014 2013 2014 2013
Reclassification adjustment for losses (gains) included in net income Gains on investment securities, net $ 990
$ (219 ) $ 17,411
$ (949 )
Related tax (benefit) expense Income tax expense (400 ) 85
(7,030 ) 363
Total reclassification adjustment for losses (gains) included in net income, net of tax $ 590
$ (134 ) $ 10,381
$ (586 )



	Three months ended March 31,
(Shares in thousands)	2015	2014
Stock options	241	6
Restricted stock units	2	1
Total	243	7

Table of Contents


3.	Share-Based Compensation

For the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, we recorded share-based compensation and related tax benefits as follows:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014			2013			2014			2013			2015			2014
Share-based compensation expense	$	7,520		$	6,723		$	22,285		$	18,945		$	7,771		$	7,078
Income tax benefit related to share-based compensation expense	(2,676		)	(2,243		)	(7,351		)	(5,801		)	(2,638		)	(2,160		)

Unrecognized Compensation Expense

As of ~~September 30, 2014~~March 31, 2015, unrecognized share-based compensation expense was as follows:


(Dollars in thousands)	Unrecognized Expense		Average Expected Recognition Period - in Years	Unrecognized Expense		Average Expected Recognition Period - in Years
Stock options	$	16,282	2.64	$	12,436	2.39
Restricted stock units	35,324		2.56	32,100		2.40
Total unrecognized share-based compensation expense	$	51,606		$	44,536

Share-Based Payment Award Activity

The table below provides stock option information related to the 2006 Equity Incentive Plan for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015:

Options
Weighted
Average
Exercise Price
Weighted Average Remaining Contractual Life in Years
Aggregate
Intrinsic Value
of In-The-
Money
Options
Outstanding at December 31, 2013 1,514,159
$ 55.27

Granted 239,383
108.27

Exercised (283,498 ) 47.56

Forfeited (21,975 ) 71.17

Outstanding at September 30, 2014 1,448,069
65.30
4.25 $ 67,825,947
Vested and expected to vest at September 30, 2014 1,397,466
64.55
4.20 66,495,669
Exercisable at September 30, 2014 727,829
50.48
3.08 44,843,070



	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value of In-The- Money Options
Outstanding at December 31, 2014	1,394,888		$	66.03
Granted	6,718		120.46
Exercised	(140,880	)	48.97
Forfeited	(12,400	)	82.72
Outstanding at March 31, 2015	1,248,326		68.08		4.06	$	73,596,215
Vested and expected to vest at March 31, 2015	1,213,499		67.45		4.01	72,313,282
Exercisable at March 31, 2015	554,601		51.32		2.84	41,996,945

The aggregate intrinsic value of outstanding options shown in the table above represents the pretax intrinsic value based on our closing stock price of $~~112.09~~127.04 as of ~~September 30, 2014~~March 31, 2015. The total intrinsic value of options exercised during the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 was $~~7.7~~10.2 million and ~~$18.4 million, respectively, compared to~~ ~~$6.5 million~~ ~~and $18.4~~$7.2 million for the comparable ~~2013~~2014 period.

The table below provides information for restricted stock units under the 2006 Equity Incentive Plan for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015:


	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	682,347		$	65.93
Nonvested at December 31, 2014					614,666		$	79.92
Granted	197,687		107.85		53,219		125.99
Vested	(200,856	)	64.05		(4,613	)	71.69
Forfeited	(25,268	)	73.02		(9,994	)	80.52
Nonvested at September 30, 2014	653,910		78.91
Nonvested at March 31, 2015					653,278		83.73

Table of Contents


4.	Cash and Cash Equivalents

The following table details our cash and cash equivalents at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Cash and due from banks (1)	$	1,815,581	$	1,349,688	$	1,066,854	$	1,694,329
Securities purchased under agreements to resell (2)	50,834		172,989		236,027		95,611
Other short-term investment securities	6,122		16,102		5,122		6,122
Total cash and cash equivalents	$	1,872,537	$	1,538,779	$	1,308,003	$	1,796,062


(1)	At ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, $~~883~~236 million and $~~715~~861 million, respectively, of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate, and interest-earning deposits in other financial institutions were $~~442~~460 million and $~~300~~440 million, respectively.

(2)

At ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of $52244 million and $~~176~~98 million, respectively. None of these securities received as collateral were sold or ~~repledged~~pledged as of ~~September 30, 2014~~March 31, 2015 or December 31, ~~2013~~2014.


5.	Investment Securities

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

Available-for-Sale Securities

The ~~major~~ components of our available-for-sale investment securities portfolio at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 are as follows:


	September 30, 2014									March 31, 2015
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value
Available-for-sale securities, at fair value:
U.S. treasury securities	$	6,886,952	$	2,245	$	(12,898	)	$	6,876,299	$	7,842,942	$	71,447	$	(264	)	$	7,914,125
U.S. agency debentures	3,592,129		28,744		(15,040		)	3,605,833		3,271,203		43,675		(1,214		)	3,313,664
Residential mortgage-backed securities:
Agency-issued collateralized mortgage obligations—fixed rate	2,003,337		20,671		(18,075		)	2,005,933		1,769,610		15,005		(6,460		)	1,778,155
Agency-issued collateralized mortgage obligations—variable rate	830,139		5,818		—			835,957		733,999		5,207		(3		)	739,203
Equity securities	9,502		749		(837		)	9,414		1,948		121		(293		)	1,776
Total available-for-sale securities	$	13,322,059	$	58,227	$	(46,850	)	$	13,333,436	$	13,619,702	$	135,455	$	(8,234	)	$	13,746,923


	December 31, 2013									December 31, 2014
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Carrying Value
Available-for-sale securities, at fair value:
U.S. treasury securities										$	7,289,135	$	17,524	$	(4,386	)	$	7,302,273
U.S. agency debentures	$	4,344,652	$	41,365	$	(40,785	)	$	4,345,232	3,540,055		30,478		(8,977		)	$	3,561,556
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	2,472,528		17,189		(16,141		)	2,473,576
Agency-issued collateralized mortgage obligations—fixed rate	3,386,670		24,510		(85,422		)	3,325,758		1,884,450		14,851		(14,458		)	1,884,843
Agency-issued collateralized mortgage obligations—variable rate	1,183,333		3,363		(123		)	1,186,573		779,103		5,372		—			784,475
Agency-issued commercial mortgage-backed securities	581,475		552		(17,423		)	564,604
Municipal bonds and notes	82,024		4,024		(21		)	86,027
Equity securities	4,842		692		(483		)	5,051		5,202		2,628		(322		)	7,508
Total available-for-sale securities	$	12,055,524	$	91,695	$	(160,398	)	$	11,986,821	$	13,497,945	$	70,853	$	(28,143	)	$	13,540,655

1213

Table of Contents

The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months and 12 months or longer as of ~~September 30, 2014~~March 31, 2015:


	September 30, 2014															March 31, 2015
	Less than 12 months					12 months or longer					Total					Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses
Available-for-sale securities:
U.S. treasury securities	$	4,736,436	$	(12,898	)	$	—	$	—		$	4,736,436	$	(12,898	)	$	176,467	$	(264	)	$	—	$	—		$	176,467	$	(264	)
U.S. agency debentures	688,808		(2,373		)	553,231		(12,667		)	1,242,039		(15,040		)	390,034		(1,214		)	—		—			390,034		(1,214		)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities																—		—			—		—			—		—
Agency-issued collateralized mortgage obligations—fixed rate	659,886		(2,523		)	469,850		(15,552		)	1,129,736		(18,075		)	244,285		(244		)	428,635		(6,216		)	672,920		(6,460		)
Agency-issued collateralized mortgage obligations—variable rate																934		(3		)	—		—			934		(3		)
Equity securities	5,546		(837		)	—		—			5,546		(837		)	1,381		(293		)	—		—			1,381		(293		)
Total temporarily impaired securities: (1)	$	6,090,676	$	(18,631	)	$	1,023,081	$	(28,219	)	$	7,113,757	$	(46,850	)	$	813,101	$	(2,018	)	$	428,635	$	(6,216	)	$	1,241,736	$	(8,234	)

(1)

As of ~~September 30, 2014~~March 31, 2015, we identified a total of ~~182~~51 investments that were in unrealized loss positions, of which 3417 investments totaling $~~1.0 billion~~428.6 million with unrealized losses of $~~28.2~~6.2 million have been in an impaired position for a period of time greater than 12 months. As of ~~September 30, 2014~~March 31, 2015, we do not intend to sell any impaired fixed income investment securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis. Based on our analysis as of ~~September 30, 2014~~March 31, 2015, we deem all impairments to be temporary, and therefore changes in value for our temporarily impaired securities as of the same date are included in other comprehensive income. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis.

The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months and 12 months or longer as of December 31, ~~2013~~2014:


	December 31, 2013															December 31, 2014
	Less than 12 months					12 months or longer					Total					Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses
Available-for-sale securities:
U.S. treasury securities																$	2,297,895	$	(4,386	)	$	—	$	—		$	2,297,895	$	(4,386	)
U.S. agency debentures	$	1,821,045	$	(40,785	)	$	—	$	—		$	1,821,045	$	(40,785	)	249,266		(489		)	507,385		(8,488		)	756,651		(8,977		)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	1,480,870		(14,029		)	19,830		(2,112		)	1,500,700		(16,141		)	—		—			—		—			—		—
Agency-issued collateralized mortgage obligations—fixed rate	2,098,137		(79,519		)	134,420		(5,903		)	2,232,557		(85,422		)	662,092		(3,104		)	453,801		(11,354		)	1,115,893		(14,458		)
Agency-issued collateralized mortgage obligations—variable rate	109,699		(123		)	—		—			109,699		(123		)
Agency-issued commercial mortgage-backed securities	464,171		(17,423		)	—		—			464,171		(17,423		)
Municipal bonds and notes	3,404		(21		)	—		—			3,404		(21		)
Equity securities	910		(483		)	—		—			910		(483		)	568		(322		)	—		—			568		(322		)
Total temporarily impaired securities	$	5,978,236	$	(152,383	)	$	154,250	$	(8,015	)	$	6,132,486	$	(160,398	)
Total temporarily impaired securities:																$	3,209,821	$	(8,301	)	$	961,186	$	(19,842	)	$	4,171,007	$	(28,143	)

1314

Table of Contents

The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on fixed income investment securities classified as available-for-sale as of ~~September 30, 2014~~March 31, 2015. The weighted average yield is computed using the amortized cost of fixed income investment securities, which are reported at fair value. For U.S. ~~Treasury~~treasury securities, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for mortgage-backed securities may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. Mortgage-backed securities classified as available-for-sale typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower rate environments.


	September 30, 2014																				March 31, 2015
	Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years				Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years
(Dollars in thousands)	Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield		Carrying Value		Weighted- Average Yield
U.S. treasury securities	$	6,876,299	1.08	%	$	100,189	0.15	%	$	6,041,278	0.99	%	$	734,832	1.97	%	$	—	—	%	$	7,914,125	1.11	%	$	350,203	0.25	%	$	6,925,629	1.09	%	$	638,293	1.90	%	$	—	—	%
U.S. agency debentures	3,605,833		1.63		695,199		1.64		2,225,869		1.52		684,765		2.01		—		—		3,313,664		1.65		835,499		1.80		2,055,046		1.44		423,119		2.36		—		—
Residential mortgage-backed securities:
Agency-issued collateralized mortgage obligations - fixed rate	2,005,933		2.01		—		—		—		—		483,473		2.59		1,522,460		1.83		1,778,155		1.99		—		—		—		—		651,254		2.58		1,126,901		1.65
Agency-issued collateralized mortgage obligations - variable rate	835,957		0.71		—		—		—		—		—		—		835,957		0.71		739,203		0.71		—		—		—		—		—		—		739,203		0.71
Total	$	13,324,022	1.35		$	795,388	1.45		$	8,267,147	1.13		$	1,903,070	2.14		$	2,358,417	1.43		$	13,745,147	1.33		$	1,185,702	1.34		$	8,980,675	1.17		$	1,712,666	2.27		$	1,866,104	1.28

Table of Contents

Held-to-Maturity Securities

During the second quarter of 2014, we re-designated certain securities from the classification of “available-for-sale” to “held-to-maturity." The securities re-designated primarily consisted of agency-issued mortgage securities and collateralized mortgage obligations ("CMOs") with a total carrying value of $5.4 billion at June 1, 2014. At the time of re-designation the securities had net unrealized gains totaling $22.5 million, net of tax, recorded in other comprehensive income and are being amortized over the life of the securities in a manner consistent with the amortization of a premium or discount. Our decision to re-designate the securities was based on our ability and intent to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding. Held-to-maturity securities are carried on the balance sheet at amortized cost and the changes in the value of these securities, other than impairment charges, are not reported on the financial statements.

The ~~major~~ components of our held-to-maturity investment securities portfolio at ~~September 30,~~March 31, 2015 and December 31, 2014 are as follows:


	September 30, 2014									March 31, 2015
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Held-to-maturity securities, at cost:
U.S. agency debentures (1)	$	349,993	$	1,588	$	(1,165	)	$	350,416	$	473,373	$	8,700	$	—		$	482,073
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	2,919,715		16		(20,712		)	2,899,019		2,693,488		23,143		(501		)	2,716,130
Agency-issued collateralized mortgage obligations—fixed rate	2,489,538		384		(24,052		)	2,465,870		3,553,640		19,339		(6,328		)	3,566,651
Agency-issued collateralized mortgage obligations—variable rate	139,182		7		(14		)	139,175		124,195		337		(5		)	124,527
Agency-issued commercial mortgage-backed securities	679,379		350		(4,391		)	675,338		888,823		9,023		(498		)	897,348
Municipal bonds and notes	84,218		81		(224		)	84,075		83,278		126		(480		)	82,924
Total held-to-maturity securities	$	6,662,025	$	2,426	$	(50,558	)	$	6,613,893	$	7,816,797	$	60,668	$	(7,812	)	$	7,869,653


(1)	Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.



	December 31, 2014
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Held-to-maturity securities, at cost:
U.S. agency debentures (1)	$	405,899	$	4,589	$	(38	)	$	410,450
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	2,799,923		5,789		(2,320		)	2,803,392
Agency-issued collateralized mortgage obligations—fixed rate	3,185,109		4,521		(14,885		)	3,174,745
Agency-issued collateralized mortgage obligations—variable rate	131,580		371		—			131,951
Agency-issued commercial mortgage-backed securities	814,589		1,026		(3,800		)	811,815
Municipal bonds and notes	83,942		18		(657		)	83,303
Total held-to-maturity securities	$	7,421,042	$	16,314	$	(21,700	)	$	7,415,656


(1)	Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States.

Table of Contents

The following table summarizes our unrealized losses on our held-to-maturity securities portfolio into categories of less than 12 months and 12 months or longer as of ~~September 30, 2014~~March 31, 2015:


	September 30, 2014															March 31, 2015
	Less than 12 months					12 months or longer (1)					Total					Less than 12 months					12 months or longer				Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses
Held-to-maturity securities:
U.S. agency debentures	$	205,383	$	(837	)	$	47,987	$	(328	)	$	253,370	$	(1,165	)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	2,890,039		(20,712		)	—		—			2,890,039		(20,712		)	$	52,761	$	(501	)	$	—	$	—	$	52,761	$	(501	)
Agency-issued collateralized mortgage obligations—fixed rate	1,316,900		(12,438		)	806,042		(11,614		)	2,122,942		(24,052		)	622,767		(6,328		)	—		—		622,767		(6,328		)
Agency-issued collateralized mortgage obligations—variable rate	77,567		(14		)	—		—			77,567		(14		)	8,660		(5		)	—		—		8,660		(5		)
Agency-issued commercial mortgage-backed securities	578,687		(4,391		)	—		—			578,687		(4,391		)	164,668		(498		)	—		—		164,668		(498		)
Municipal bonds and notes	55,365		(224		)	—		—			55,365		(224		)	48,864		(480		)	—		—		48,864		(480		)
Total temporarily impaired securities (2):	$	5,123,941	$	(38,616	)	$	854,029	$	(11,942	)	$	5,977,970	$	(50,558	)
Total temporarily impaired securities (1):																$	897,720	$	(7,812	)	$	—	$	—	$	897,720	$	(7,812	)


(1)	~~Represents securities in an unrealized loss position for twelve months or longer in which the amortized cost basis was re-set for those securities re-designated from AFS to HTM effective June 1, 2014.~~

~~Table of Contents~~

~~(2)~~

As of ~~September 30, 2014~~March 31, 2015, we identified a total of ~~329~~120 investments that were in unrealized loss positions, noneof which28 ~~investments totaling~~ ~~$854.0 million~~ ~~with unrealized losses of~~ ~~$11.9 million~~ have been in an impaired position for a period of time greater than 12 months. As of ~~September 30, 2014~~March 31, 2015, we do not intend to sell any impaired fixed income investment securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis, which is consistent with our classification of these securities. Based on our analysis as of ~~September 30, 2014~~March 31, 2015, we deem all impairments to be temporary. Market valuations and impairment analyses on assets in the held-to-maturity securities portfolio are reviewed and monitored on a quarterly basis.

The following table summarizes our unrealized losses on our held-to-maturity securities portfolio into categories of less than 12 months and 12 months or longer as of December 31, 2014:



	December 31, 2014
	Less than 12 months					12 months or longer (1)					Total
(Dollars in thousands)	Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses			Fair Value of Investments		Unrealized Losses
Held-to-maturity securities:
U.S. agency debentures	$	48,335	$	(38	)	$	—	$	—		$	48,335	$	(38	)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	999,230		(2,320		)	—		—			999,230		(2,320		)
Agency-issued collateralized mortgage obligations—fixed rate	1,682,348		(9,705		)	783,558		(5,180		)	2,465,906		(14,885		)
Agency-issued commercial mortgage-backed securities	629,840		(3,800		)	—		—			629,840		(3,800		)
Municipal bonds and notes	79,141		(657		)	—		—			79,141		(657		)
Total temporarily impaired securities:	$	3,438,894	$	(16,520	)	$	783,558	$	(5,180	)	$	4,222,452	$	(21,700	)


(1)	Represents securities in an unrealized loss position for twelve months or longer in which the amortized cost basis was re-set for those securities re-designated from AFS to HTM effective June 1, 2014.

1517

Table of Contents

The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on fixed income investment securities classified as held-to-maturity as of ~~September 30, 2014~~March 31, 2015. Interest income on certain municipal bonds and notes (non-taxable investments) are presented on a fully taxable equivalent basis using the federal statutory tax rate of 35%. The weighted average yield is computed using the amortized cost of fixed income investment securities, which are reported at fair value. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for mortgage-backed securities may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. Mortgage-backed securities classified as held-to-maturity typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower rate environments.


	September 30, 2014																				March 31, 2015
	Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years				Total				One Year or Less				After One Year to Five Years				After Five Years to Ten Years				After Ten Years
(Dollars in thousands)	Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield		Amortized Cost		Weighted- Average Yield
U.S. agency debentures	$	349,993	2.90	%	$	—	—	%	$	—	—	%	$	349,993	2.90	%	$	—	—	%	$	473,373	2.69	%	$	—	—	%	$	—	—	%	$	473,373	2.69	%	$	—	—	%
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	2,919,715		2.42		—		—		45,081		2.39		901,721		2.20		1,972,913		2.52		2,693,488		2.42		—		—		42,382		2.38		794,716		2.23		1,856,390		2.51
Agency-issued collateralized mortgage obligations - fixed rate	2,489,538		1.68		—		—		—		—		—		—		2,489,538		1.68		3,553,640		1.65		—		—		—		—		—		—		3,553,640		1.65
Agency-issued collateralized mortgage obligations - variable rate	139,182		0.65		—		—		—		—		—		—		139,182		0.65		124,195		0.65		—		—		—		—		—		—		124,195		0.65
Agency-issued commercial mortgage-backed securities	679,379		2.16		—		—		—		—		—		—		679,379		2.16		888,823		2.16		—		—		—		—		—		—		888,823		2.16
Municipal bonds and notes	84,218		6.00		3,470		5.37		27,900		5.84		40,475		6.07		12,373		6.30		83,278		6.00		3,442		5.39		33,261		5.87		40,081		6.11		6,494		6.34
Total	$	6,662,025	2.15		$	3,470	5.37		$	72,981	3.71		$	1,292,189	2.51		$	5,293,385	2.03		$	7,816,797	2.07		$	3,442	5.39		$	75,643	3.91		$	1,308,170	2.52		$	6,429,542	1.95

1618

Table of Contents

Non-marketable and Other Securities

The ~~major~~ components of our non-marketable and other investment securities portfolio at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 are as follows:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Non-marketable and other securities:
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	$	1,078,911	$	862,972	$	1,195,303	$	1,130,882
Other venture capital investments (2)	43,863		32,839		78,850		71,204
Other securities (fair value accounting) (3)	181,265		321,374		11,936		108,251
Non-marketable securities (equity method accounting):
Other investments (4)	141,913		142,883		145,942		142,674
Low income housing tax credit funds	98,417		72,241
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments (5)	142,710		148,994		134,575		140,551
Other investments	16,471		14,191
Other investments (6)					14,910		13,423
Investments in qualified affordable housing projects (6)					125,357		121,155
Total non-marketable and other securities	$	1,703,550	$	1,595,494	$	1,706,873	$	1,728,140


(1)	The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and our ownership percentage of each fund at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 (fair value accounting):


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %		Amount		Ownership %		Amount		Ownership %
SVB Strategic Investors Fund, LP	$	25,625	12.6	%	$	29,104	12.6	%	$	23,953	12.6	%	$	24,645	12.6	%
SVB Strategic Investors Fund II, LP	92,681		8.6		96,185		8.6		89,219		8.6		97,250		8.6
SVB Strategic Investors Fund III, LP	248,816		5.9		260,272		5.9		257,539		5.9		269,821		5.9
SVB Strategic Investors Fund IV, LP	308,332		5.0		226,729		5.0		297,752		5.0		291,291		5.0
Strategic Investors Fund V Funds	214,863		Various		118,181		Various		260,292		Various		226,111		Various
Strategic Investors Fund VI Funds	56,958		0.2		7,944		0.2		127,721		—		89,605		—
Strategic Investors Fund VII Funds									2,212		—		—		—
SVB Capital Preferred Return Fund, LP	61,876		20.0		59,028		20.0		64,417		20.0		62,110		20.0
SVB Capital—NT Growth Partners, LP	61,818		33.0		61,126		33.0		64,078		33.0		61,973		33.0
SVB Capital Partners II, LP (i)	302		5.1		708		5.1		346		5.1		302		5.1
Other private equity fund (ii)	7,640		58.2		3,695		58.2		7,774		58.2		7,774		58.2
Total venture capital and private equity fund investments	$	1,078,911			$	862,972			$	1,195,303			$	1,130,882


(i)	At ~~September 30, 2014~~March 31, 2015, we had a direct ownership interest of 1.3 percent and an indirect ownership interest of 3.8 percent in the fund through our ownership interest of SVB Strategic Investors Fund II, LP.


(ii)	At ~~September 30, 2014~~March 31, 2015, we had a direct ownership interest of 41.5 percent and indirect ownership interests of 12.6 percent and 4.1 percent in the fund through our ownership interest of SVB Capital—NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.

Table of Contents


(2)	The following table shows the amounts of other venture capital investments held by the following consolidated funds and our ownership percentage of each fund at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 (fair value accounting):

~~Table of Contents~~


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %		Amount		Ownership %		Amount		Ownership %
Silicon Valley BancVentures, LP	$	5,616	10.7	%	$	6,564	10.7	%	$	3,390	10.7	%	$	3,291	10.7	%
SVB Capital Partners II, LP (i)	17,802		5.1		22,684		5.1		27,215		5.1		20,481		5.1
Capital Partners III, LP	15,000		0.4		—		—		41,055		—		41,055		—
SVB Capital Shanghai Yangpu Venture Capital Fund	5,445		6.8		3,591		6.8		7,190		6.8		6,377		6.8
Total other venture capital investments	$	43,863			$	32,839			$	78,850			$	71,204


(i)	At ~~September 30, 2014~~March 31, 2015, we had a direct ownership interest of 1.3 percent and an indirect ownership interest of 3.8 percent in the fund through our ownership of SVB Strategic Investors Fund II, LP.

(3)

Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. At ~~September 30,~~December 31, 2014, the amount primarily ~~includes~~included total unrealized gains of ~~$143.8 million~~ in one public company, FireEye, Inc. ("FireEye"). ~~The extent~~During the first quarter of 2015, our managed direct venture funds distributed the remaining 2.5 million shares of FireEye common stock to ~~which any unrealized~~their respective investors (including the Company), resulting in $15.9 million of realized gains ~~(or losses) will become realized is subject to a variety~~on investment securities ($3.3 million net of factors, including among other things, changes in prevailing market prices and the timing of any sales or distribution of securities, which are subject to our funds' separate discretionary securities sales/distribution and governance processes and may also be constrained by lock-up agreements. Nonenoncontrolling interests but inclusive of the Company's carried interests). As of March 31, 2015, we no longer hold any shares of FireEye ~~related investments currently are subject to a lock-up agreement.~~common stock, either directly or through our managed direct venture funds.


(4)	The following table shows the carrying value and our ownership percentage of each investment at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 (equity method accounting):


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %		Amount		Ownership %		Amount		Ownership %
Gold Hill Capital 2008, LP (i)	$	20,685	15.5	%	$	21,867	15.5	%	$	22,040	15.5	%	$	21,294	15.5	%
China Joint Venture investment	79,457		50.0		79,940		50.0		79,695		50.0		79,569		50.0
Other investments	41,771		Various		41,076		Various		44,207		Various		41,811		Various
Total other investments (equity method accounting)	$	141,913			$	142,883			$	145,942	��		$	142,674


(i)	At ~~September 30, 2014~~March 31, 2015, we had a direct ownership interest of 11.5 percent in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0 percent.

(5)

Represents investments in ~~281~~277 and ~~288~~281 funds (primarily venture capital funds) at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively, where our ownership interest is typically less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating activities and financial policies. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was $~~143~~135 million, and $~~240~~238 million, respectively, as of ~~September 30, 2014~~March 31, 2015. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was $~~149~~141 million and $~~215~~234 million, respectively, as of December 31, ~~2013~~2014.


(6)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

1820

Table of Contents

The following table presents the components of gains and losses (realized and unrealized) on investment securities for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014			2013			2014			2013			2015			2014
Gross gains on investment securities:
Available-for-sale securities, at fair value (1)	$	45		$	317		$	642		$	3,167		$	2,690		$	373
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments	69,044			35,826			268,483			107,546			58,489			111,436
Other venture capital investments	6,779			5,180			11,334			8,020			6,450			2,582
Other securities (fair value accounting) (2)	5,444			143,840			136,010			148,185
Other securities (fair value accounting)													19,601			116,750
Non-marketable securities (equity method accounting):
Other investments	2,239			6,569			8,767			14,038			4,188			3,642
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments	2,641			5,016			7,706			6,806			4,833			3,303
Other investments	19			34			5,174			370			358			134
Total gross gains on investment securities	86,211			196,782			438,116			288,132			96,609			238,220
Gross losses on investment securities:
Available-for-sale securities, at fair value (1)	(1,035		)	(98		)	(18,052		)	(2,218		)	(94		)	(313		)
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments	(25,584		)	(1,575		)	(76,243		)	(17,020		)	(11,635		)	(101		)
Other venture capital investments	(1,233		)	(587		)	(3,274		)	(2,241		)	—			(744		)
Other securities (fair value accounting) (2)	(52,264		)	(75		)	(166,051		)	(2,609		)
Other securities (fair value accounting)													(994		)	(12,773		)
Non-marketable securities (equity method accounting):
Other investments	(179		)	(1,944		)	(1,219		)	(2,421		)	(588		)	(212		)
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments ~~(3)~~(2)	(272		)	(689		)	(781		)	(1,462		)	(134		)	(156		)
Other investments	—			(3,952		)	(260		)	(4,300		)	(5		)	(9		)
Total gross losses on investment securities	(80,567		)	(8,920		)	(265,880		)	(32,271		)	(13,450		)	(14,308		)
Gains on investment securities, net	$	5,644		$	187,862		$	172,236		$	255,861		$	83,159		$	223,912


(1)	Includes realized gains (losses) on sales of available-for-sale equity securities that are recognized in the income statement. Unrealized gains (losses) on available-for-sale fixed income and equity securities are recognized in other comprehensive income. The cost basis of available-for-sale securities sold is determined on a specific identification basis.

(2)

~~Other securities (fair value accounting) includes net losses of~~ ~~$49.8 million~~ ~~for the three months ended September 30, 2014, and net losses of~~ ~~$21.7 million~~ ~~(including~~ ~~$66.5 million~~ of realized gains) for the nine months ended September 30, 2014, attributable to one public company, FireEye. The extent to which any unrealized gains (or losses) will become realized is subject to a variety of factors, including among other things, changes in prevailing market prices and the timing of any sales or distribution of securities, which are subject to our securities sales and governance processes and may also be constrained by lock-up agreements. None of the FireEye related investments currently are subject to a lock-up agreement.

~~(3)~~

For the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, includes OTTI losses of $~~0.3~~0.1 million from the declines in value for 59 of the ~~281~~277 investments and $~~0.4 million~~ ~~from the declines in value for~~12 ~~of the~~ ~~293~~ ~~investments, respectively. For the~~ ~~nine months endedSeptember 30, 2014~~ ~~and~~ ~~2013, includes OTTI losses of~~ ~~$0.7~~0.1 million from the declines in value for 227 of the ~~281~~ ~~investments and~~ ~~$1.2 million~~ ~~from the declines in value for~~ 37 ~~of the~~ ~~293~~282 investments, respectively. We concluded that any declines in value for the remaining investments were temporary, and as such, no OTTI was required to be recognized.

~~Table of Contents~~

~~6. Loans and Allowance for Loan Losses~~


6.	Loans and Allowance for Loan Losses

We serve a variety of ~~commercial~~ clients in the technology and life science ~~venture capital/private equity and premium wine~~& healthcare industries. Our technology clients ~~generally~~ tend to be in the industries ofof: hardware ~~(semiconductors,~~(such as semiconductors, communications, data storage, and electronics),; software and ~~related~~internet (such as infrastructure software, applications, software services, digital content and advertising technology), and energy and resource innovation ("ERI"). Because of the diverse nature of ERI products and services, for our loan-related reporting purposes, ERI-related loans are reported under ~~our~~ hardware ~~software, life science~~ and ~~other commercial loan categories,~~software, as applicable. Our life science & healthcare clients ~~are concentrated~~primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and ~~biotechnology sectors.~~healthcare services. Loans made to private equity/venture ~~capital/private equity~~capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls. Loans to the premium wine industry focus on vineyards and wineries that produce grapes and wines of high quality.

In addition to commercial loans, we make consumer loans through SVB Private Bank and provide real estate secured loans to eligible employees through our EHOP. Our private banking clients are primarily private equity/venture ~~capital/private equity~~capital professionals and executive leaders in the innovation companies they support. These products and services include real estate secured home equity lines of credit, which may be used to finance real estate investments and loans used to purchase, renovate or refinance personal residences. These products and services also include restricted stock purchase loans and capital call lines of credit.

Table of Contents

We also provide community development loans made as part of our responsibilities under the Community Reinvestment Act. These loans are included within “Construction loans” below and are primarily secured by real estate.

The composition of loans, net of unearned income of $95107 million and $89104 million at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively, is presented in the following table:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Commercial loans:
Software	$	4,503,369	$	4,102,636
Software and internet					$	4,871,574	$	4,954,676
Hardware	1,072,102		1,213,032		1,067,386		1,131,006
Venture capital/private equity	2,921,184		2,386,054
Life science	1,245,527		1,170,220
Private equity/venture capital					4,508,670		4,582,906
Life science & healthcare					1,399,449		1,289,904
Premium wine	186,675		149,841		186,070		187,568
Other	241,815		288,904		289,010		234,551
Total commercial loans	10,170,672		9,310,687		12,322,159		12,380,611
Real estate secured loans:
Premium wine (1)	562,893		514,993		613,114		606,753
Consumer loans (2)	1,047,935		873,255		1,209,153		1,118,115
Other	30,152		30,743		39,422		39,651
Total real estate secured loans	1,640,980		1,418,991		1,861,689		1,764,519
Construction loans	80,102		76,997		85,684		78,626
Consumer loans	125,427		99,711		170,042		160,520
Total loans, net of unearned income (3)	$	12,017,181	$	10,906,386	$	14,439,574	$	14,384,276


(1)	Included in our premium wine portfolio are gross construction loans of $~~111~~108 million and $112 million at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively.


(2)	Consumer loans secured by real estate at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 were comprised of the following:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Loans for personal residence	$	860,024	$	685,327	$	1,001,125	$	918,629
Loans to eligible employees	129,979		121,548		139,761		133,568
Home equity lines of credit	57,932		66,380		68,267		65,918
Consumer loans secured by real estate	$	1,047,935	$	873,255	$	1,209,153	$	1,118,115


(3)	Included within our total loan portfolio are credit card loans of $~~122~~154 million and $85131 million at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively.

2022

Table of Contents

Credit Quality

The composition of loans, net of unearned income of $95107 million and $89104 million at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively, broken out by portfolio segment and class of financing receivable, is as follows:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Commercial loans:
Software	$	4,503,369	$	4,102,636
Software and internet					$	4,871,574	$	4,954,676
Hardware	1,072,102		1,213,032		1,067,386		1,131,006
Venture capital/private equity	2,921,184		2,386,054
Life science	1,245,527		1,170,220
Private equity/venture capital					4,508,670		4,582,906
Life science & healthcare					1,399,449		1,289,904
Premium wine	749,568		664,834		799,184		794,321
Other	352,069		396,644		414,116		352,828
Total commercial loans	10,843,819		9,933,420		13,060,379		13,105,641
Consumer loans:
Real estate secured loans	1,047,935		873,255		1,209,153		1,118,115
Other consumer loans	125,427		99,711		170,042		160,520
Total consumer loans	1,173,362		972,966		1,379,195		1,278,635
Total loans, net of unearned income	$	12,017,181	$	10,906,386	$	14,439,574	$	14,384,276

2123

Table of Contents

The following table summarizes the aging of our gross loans, broken out by portfolio segment and class of financing receivable as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Loans Past Due 90 Days or More Still Accruing Interest		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Loans Past Due 90 Days or More Still Accruing Interest
September 30, 2014:
March 31, 2015:
Commercial loans:
Software		$	4,565	$	4,334	$	125	$	9,024	$	4,527,570	$	125
Software and internet														$	1,970	$	162	$	160	$	2,292	$	4,876,739	$	160
Hardware		247		3,609		—		3,856		1,078,234		—		298		9,219		—		9,517		1,066,598		—
Venture capital/private equity		5		3		—		8		2,948,327		—
Life science		265		2,573		—		2,838		1,253,292		—
Private equity/venture capital														11,462		—		—		11,462		4,536,175		—
Life science & healthcare														3,768		—		1,689		5,457		1,405,856		1,689
Premium wine		5		—		—		5		750,726		—		—		—		—		—		800,197		—
Other		66		65		—		131		354,456		—		1,074		—		—		1,074		410,752		—
Total commercial loans		5,153		10,584		125		15,862		10,912,605		125		18,572		9,381		1,849		29,802		13,096,317		1,849
Consumer loans:
Real estate secured loans		1,250		—		—		1,250		1,046,029		—		415		—		1,250		1,665		1,206,762		1,250
Other consumer loans		32		1		—		33		125,008		—		410		625		—		1,035		168,782		—
Total consumer loans		1,282		1		—		1,283		1,171,037		—		825		625		1,250		2,700		1,375,544		1,250
Total gross loans excluding impaired loans		6,435		10,585		125		17,145		12,083,642		125		19,397		10,006		3,099		32,502		14,471,861		3,099
Impaired loans		251		211		1,062		1,524		10,163		—		313		5,855		21,920		28,088		14,294		—
Total gross loans		$	6,686	$	10,796	$	1,187	$	18,669	$	12,093,805	$	125	$	19,710	$	15,861	$	25,019	$	60,590	$	14,486,155	$	3,099
December 31, 2013:
December 31, 2014:
Commercial loans:
Software		$	9,804	$	1,291	$	99	$	11,194	$	4,102,546	$	99
Software and internet														$	10,989	$	1,627	$	52	$	12,668	$	4,950,291	$	52
Hardware		2,679		3,965		—		6,644		1,198,169		—		13,424		126		—		13,550		1,124,423		—
Venture capital/private equity	��	4		—		—		4		2,408,382		—
Life science		395		131		—		526		1,179,462		—
Private equity/venture capital														40,773		—		—		40,773		4,580,526		—
Life science & healthcare														738		786		—		1,524		1,298,728		—
Premium wine		—		—		—		—		665,755		—		—		—		—		—		795,345		—
Other		1,580		142		—		1,722		397,416		—		178		3		—		181		354,939		—
Total commercial loans		14,462		5,529		99		20,090		9,951,730		99		66,102		2,542		52		68,696		13,104,252		52
Consumer loans:
Real estate secured loans		240		—		—		240		872,586		—		1,592		341		1,250		3,183		1,114,286		1,250
Other consumer loans		8		—		—		8		98,965		—		—		—		—		—		160,212		—
Total consumer loans		248		—		—		248		971,551		—		1,592		341		1,250		3,183		1,274,498		1,250
Total gross loans excluding impaired loans		14,710		5,529		99		20,338		10,923,281		99		67,694		2,883		1,302		71,879		14,378,750		1,302
Impaired loans		4,657		7,043		4,339		16,039		35,610		—		598		1,293		22,320		24,211		13,926		—
Total gross loans		$	19,367	$	12,572	$	4,438	$	36,377	$	10,958,891	$	99	$	68,292	$	4,176	$	23,622	$	96,090	$	14,392,676	$	1,302

2224

Table of Contents

The following table summarizes our impaired loans as they relate to our allowance for loan losses, broken out by portfolio segment and class of financing receivable as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)	Impaired loans for which there is a related allowance for loan losses		Impaired loans for which there is no related allowance for loan losses		Total carrying value of impaired loans		Total unpaid principal of impaired loans		Impaired loans for which there is a related allowance for loan losses		Impaired loans for which there is no related allowance for loan losses		Total carrying value of impaired loans		Total unpaid principal of impaired loans
September 30, 2014:
March 31, 2015:
Commercial loans:
Software	$	8,730	$	—	$	8,730	$	12,069
Life science	1,000		—		1,000		1,000
Software and internet									$	34,716	$	—	$	34,716	$	35,027
Hardware									510		—		510		525
Private equity/venture capital									—		—		—		—
Life science & healthcare									250		—		250		2,453
Premium wine	—		1,339		1,339		1,752		—		1,270		1,270		1,734
Other	186		—		186		798		5,356		—		5,356		5,360
Total commercial loans	9,916		1,339		11,255		15,619		40,832		1,270		42,102		45,099
Consumer loans:
Real estate secured loans	—		208		208		1,416		30		180		210		1,438
Other consumer loans	224		—		224		526		70		—		70		254
Total consumer loans	224		208		432		1,942		100		180		280		1,692
Total	$	10,140	$	1,547	$	11,687	$	17,561	$	40,932	$	1,450	$	42,382	$	46,791
December 31, 2013:
December 31, 2014:
Commercial loans:
Software	$	27,308	$	310	$	27,618	$	28,316
Software and internet									$	33,287	$	—	$	33,287	$	34,218
Hardware	19,329		338		19,667		35,317		1,403		1,118		2,521		2,535
Venture capital/private equity	40		—		40		40
Life science	—		1,278		1,278		4,727
Private equity/venture capital									—		—		—		—
Life science & healthcare									475		—		475		2,453
Premium wine	—		1,442		1,442		1,778		—		1,304		1,304		1,743
Other	690		—		690		718		233		—		233		233
Total commercial loans	47,367		3,368		50,735		70,896		35,398		2,422		37,820		41,182
Consumer loans:
Real estate secured loans	—		244		244		1,434		—		192		192		1,412
Other consumer loans	670		—		670		941		125		—		125		305
Total consumer loans	670		244		914		2,375		125		192		317		1,717
Total	$	48,037	$	3,612	$	51,649	$	73,271	$	35,523	$	2,614	$	38,137	$	42,899

2325

Table of Contents

The following table summarizes our average impaired loans, broken out by portfolio segment and class of financing receivable for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(Dollars in thousands)	2014		2013		2014		2013		2015		2014
Average impaired loans:
Commercial loans:
Software	$	10,651	$	4,306	$	13,690	$	4,631
Software and internet									$	33,725	$	14,677
Hardware	1,540		25,456		8,140		24,536		1,643		16,020
Venture capital/private equity	—		75		—		35
Life science	333		—		636		303
Life science & healthcare									400		1,022
Premium wine	1,364		1,502		1,398		2,458		1,282		1,433
Other	674		3,648		1,383		4,344		2,139		1,777
Total commercial loans	14,562		34,987		25,247		36,307		39,189		34,929
Consumer loans:
Real estate secured loans	212		3,426		224		3,391		195		237
Other consumer loans	261		866		375		1,021		88		489
Total consumer loans	473		4,292		599		4,412		283		726
Total average impaired loans	$	15,035	$	39,279	$	25,846	$	40,719	$	39,472	$	35,655

The following tables summarize the activity relating to our allowance for loan losses for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, broken out by portfolio segment:


Three months ended September 30, 2014 (dollars in thousands)	Beginning Balance June 30, 2014		Charge-offs			Recoveries		Provision for (Reduction of) Loan Losses			Ending Balance September 30, 2014
Three months ended March 31, 2015 (dollars in thousands)													Beginning Balance December 31, 2014		Charge-offs			Recoveries		Provision for (Reduction of) Loan Losses			Ending Balance March 31, 2015
Commercial loans:
Software	$	53,239	$	(6,907	)	$	790	$	11,078		$	58,200
Software and internet													$	80,981	$	(1,403	)	$	447	$	2,067		$	82,092
Hardware	24,780		(2,643		)	113		2,491			24,741		25,860		(3,210		)	928		(2,320		)	21,258
Venture capital/private equity	19,004		—			—		845			19,849
Life science	10,597		—			53		1,591			12,241
Private equity/venture capital													27,997		—			—		2,840			30,837
Life science & healthcare													15,208		(225		)	34		306			15,323
Premium wine	3,546		(35		)	—		710			4,221		4,473		—			—		30			4,503
Other	3,218		(1,072		)	1,306		(530		)	2,922		3,253		(649		)	10		3,537			6,151
Total commercial loans	114,384		(10,657		)	2,262		16,185			122,174		157,772		(5,487		)	1,419		6,460			160,164
Consumer loans	6,344		—			118		425			6,887		7,587		—			132		(8		)	7,711
Total allowance for loan losses	$	120,728	$	(10,657	)	$	2,380	$	16,610		$	129,061	$	165,359	$	(5,487	)	$	1,551	$	6,452		$	167,875



Three months ended March 31, 2014 (dollars in thousands)	Beginning Balance December 31, 2013		Charge-offs			Recoveries		Provision for (Reduction of) Loan Losses			Ending Balance March 31, 2014
Commercial loans:
Software and internet	$	64,084	$	(8,010	)	$	114	$	(947	)	$	55,241
Hardware	36,553		(12,175		)	775		83			25,236
Private equity/venture capital	16,385		—			—		1,291			17,676
Life science & healthcare	11,926		(681		)	98		131			11,474
Premium wine	3,914		—			219		(396		)	3,737
Other	3,680		(284		)	—		645			4,041
Total commercial loans	136,542		(21,150		)	1,206		807			117,405
Consumer loans	6,344		—			106		(313		)	6,137
Total allowance for loan losses	$	142,886	$	(21,150	)	$	1,312	$	494		$	123,542

2426

Table of Contents

Nine months ended September 30, 2014 (dollars in thousands) Beginning Balance December 31, 2013 Charge-offs Recoveries Provision for Loan Losses Ending Balance September 30, 2014
Commercial loans:
Software $ 64,084
$ (18,932 ) $ 1,023
$ 12,025
$ 58,200
Hardware 36,553
(15,230 ) 2,070
1,348
24,741
Venture capital/private equity 16,385
—
—
3,464
19,849
Life science 11,926
(930 ) 341
904
12,241
Premium wine 3,914
(35 ) 238
104
4,221
Other 3,680
(3,062 ) 1,316
988
2,922
Total commercial loans 136,542
(38,189 ) 4,988
18,833
122,174
Consumer loans 6,344
—
325
218
6,887
Total allowance for loan losses $ 142,886
$ (38,189 ) $ 5,313
$ 19,051
$ 129,061

Three months ended September 30, 2013 (dollars in thousands) Beginning Balance June 30, 2013 Charge-offs Recoveries
Provision for
(Reduction of) Loan Losses
Ending Balance September 30, 2013
Commercial loans:
Software $ 46,798
$ (2,527 ) $ 816
$ 4,369
$ 49,456
Hardware 33,188
(5,544 ) 1,149
7,370
36,163
Venture capital/private equity 13,593
—
—
617
14,210
Life science 11,741
(57 ) 246
(780 ) 11,150
Premium wine 3,793
—
4
81
3,878
Other 3,654
(21 ) 77
(24 ) 3,686
Total commercial loans 112,767
(8,149 ) 2,292
11,633
118,543
Consumer loans 6,804
—
382
(995 ) 6,191
Total allowance for loan losses $ 119,571
$ (8,149 ) $ 2,674
$ 10,638
$ 124,734

Nine months ended September 30, 2013 (dollars in thousands) Beginning Balance December 31, 2012 Charge-offs Recoveries
Provision for
(Reduction of) Loan Losses
Ending Balance September 30, 2013
Commercial loans:
Software $ 42,648
$ (7,619 ) $ 1,455
$ 12,972
$ 49,456
Hardware 29,761
(11,975 ) 1,998
16,379
36,163
Venture capital/private equity 9,963
—
—
4,247
14,210
Life science 13,606
(2,618 ) 1,335
(1,173 ) 11,150
Premium wine 3,523
—
135
220
3,878
Other 3,912
(6,069 ) 2,458
3,385
3,686
Total commercial loans 103,413
(28,281 ) 7,381
36,030
118,543
Consumer loans 7,238
(869 ) 829
(1,007 ) 6,191
Total allowance for loan losses $ 110,651
$ (29,150 ) $ 8,210
$ 35,023
$ 124,734

~~Table of Contents~~

The following table summarizes the allowance for loan losses individually and collectively evaluated for impairment as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, broken out by portfolio segment:


	September 30, 2014								December 31, 2013								March 31, 2015								December 31, 2014
	Individually Evaluated for Impairment				Collectively Evaluated for Impairment				Individually Evaluated for Impairment				Collectively Evaluated for Impairment				Individually Evaluated for Impairment				Collectively Evaluated for Impairment				Individually Evaluated for Impairment				Collectively Evaluated for Impairment
(Dollars in thousands)	Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans		Allowance for loan losses		Recorded investment in loans
Commercial loans:
Software	$	2,057	$	8,730	$	56,143	$	4,494,639	$	11,261	$	27,617	$	52,823	$	4,075,019
Software and internet																	$	20,942	$	34,716	$	61,150	$	4,836,858	$	13,695	$	33,287	$	67,286	$	4,921,389
Hardware	—		—		24,741		1,072,102		9,673		19,667		26,880		1,193,365		12		510		21,246		1,066,876		1,133		2,521		24,727		1,128,485
Venture capital/private equity	—		—		19,849		2,921,184		19		39		16,366		2,386,015
Life science	191		1,000		12,050		1,244,527		—		1,278		11,926		1,168,942
Private equity/venture capital																	—		—		30,837		4,508,670		—		—		27,997		4,582,906
Life science & healthcare																	63		250		15,260		1,399,199		121		475		15,087		1,289,429
Premium wine	—		1,339		4,221		748,229		—		1,442		3,914		663,392		—		1,270		4,503		797,914		—		1,304		4,473		793,017
Other	4		186		2,918		351,883		156		690		3,524		395,954		2,705		5,356		3,446		408,760		71		233		3,182		352,595
Total commercial loans	2,252		11,255		119,922		10,832,564		21,109		50,733		115,433		9,882,687		23,722		42,102		136,442		13,018,277		15,020		37,820		142,752		13,067,821
Consumer loans	73		432		6,814		1,172,930		168		915		6,176		972,051		100		280		7,611		1,378,915		31		317		7,556		1,278,318
Total	$	2,325	$	11,687	$	126,736	$	12,005,494	$	21,277	$	51,648	$	121,609	$	10,854,738	$	23,822	$	42,382	$	144,053	$	14,397,192	$	15,051	$	38,137	$	150,308	$	14,346,139

Credit Quality Indicators

For each individual client, we establish an internal credit risk rating for that loan, which is used for assessing and monitoring credit risk as well as performance of the loan and the overall portfolio. Our internal credit risk ratings are also used to summarize the risk of loss due to failure by an individual borrower to repay the loan. For our internal credit risk ratings, each individual loan is given a risk rating of 1 through 10. Loans risk-rated 1 through 4 are performing loans and translate to an internal rating of “Pass”, with loans risk-rated 1 being cash secured. Loans risk-rated 5 through 7 are performing loans, however, we consider them as demonstrating higher risk, which requires more frequent review of the individual exposures; these translate to an internal rating of “Performing (Criticized)”. A majority of our Performing (Criticized) loans are from our SVB Accelerator practice, serving our emerging or early stage clients. Loans risk-rated 8 and 9 are loans that are considered to be impaired and are on nonaccrual status. Loans are placed on nonaccrual status when they become 90 days past due as to principal or interest payments (unless the principal and interest are well secured and in the process of collection), or when we have determined, based upon most recent available information, that the timely collection of principal or interest is not probable; these loans are deemed “impaired” (For further description of nonaccrual loans, refer to Note 2—“Summary of Significant Accounting Policies” under Part II, Item 8 of our ~~2013~~2014 Form 10-K). Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators for performance and appropriateness of risk ratings as part of our evaluation process for our allowance for loan losses.

2627

Table of Contents

The following table summarizes the credit quality indicators, broken out by portfolio segment and class of financing receivables as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)	Pass		Performing (Criticized)		Impaired		Total		Pass		Performing (Criticized)		Impaired		Total
September 30, 2014:
March 31, 2015:
Commercial loans:
Software	$	4,179,638	$	356,956	$	8,730	$	4,545,324
Software and internet									$	4,483,199	$	395,832	$	34,716	$	4,913,747
Hardware	885,407		196,683		—		1,082,090		874,295		201,820		510		1,076,625
Venture capital/private equity	2,932,711		15,624		—		2,948,335
Life science	1,093,451		162,679		1,000		1,257,130
Private equity/venture capital									4,543,600		4,037		—		4,547,637
Life science & healthcare									1,282,275		129,038		250		1,411,563
Premium wine	732,605		18,126		1,339		752,070		780,710		19,487		1,270		801,467
Other	338,187		16,400		186		354,773		404,481		7,345		5,356		417,182
Total commercial loans	10,161,999		766,468		11,255		10,939,722		12,368,560		757,559		42,102		13,168,221
Consumer loans:
Real estate secured loans	1,042,547		4,732		208		1,047,487		1,199,907		8,520		210		1,208,637
Other consumer loans	122,736		2,305		224		125,265		165,914		3,903		70		169,887
Total consumer loans	1,165,283		7,037		432		1,172,752		1,365,821		12,423		280		1,378,524
Total gross loans	$	11,327,282	$	773,505	$	11,687	$	12,112,474	$	13,734,381	$	769,982	$	42,382	$	14,546,745
December 31, 2013:
December 31, 2014:
Commercial loans:
Software	$	3,875,043	$	238,697	$	27,618	$	4,141,358
Software and internet									$	4,611,253	$	351,706	$	33,287	$	4,996,246
Hardware	995,055		209,758		19,667		1,224,480		945,998		191,975		2,521		1,140,494
Venture capital/private equity	2,408,386		—		40		2,408,426
Life science	1,091,993		87,995		1,278		1,181,266
Private equity/venture capital									4,615,231		6,068		—		4,621,299
Life science & healthcare									1,165,266		134,986		475		1,300,727
Premium wine	652,747		13,008		1,442		667,197		774,962		20,383		1,304		796,649
Other	383,602		15,536		690		399,828		346,153		8,967		233		355,353
Total commercial loans	9,406,826		564,994		50,735		10,022,555		12,458,863		714,085		37,820		13,210,768
Consumer loans:
Real estate secured loans	868,789		4,037		244		873,070		1,112,396		5,073		192		1,117,661
Other consumer loans	95,586		3,387		670		99,643		158,162		2,050		125		160,337
Total consumer loans	964,375		7,424		914		972,713		1,270,558		7,123		317		1,277,998
Total gross loans	$	10,371,201	$	572,418	$	51,649	$	10,995,268	$	13,729,421	$	721,208	$	38,137	$	14,488,766

~~Table of Contents~~

TDRs

As of ~~September 30, 2014~~March 31, 2015 we had 10nine TDRs with a total carrying value of $~~10.3~~10.6 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were unfunded commitments available for funding of $~~0.8~~3.1 million to the clients associated with these TDRs as of ~~September 30, 2014~~March 31, 2015. The following table summarizes our loans modified in TDRs, broken out by portfolio segment and class of financing receivables at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:

Table of Contents


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Loans modified in TDRs:
Commercial loans:
Software	$	7,848	$	5,860
Software and internet					$	2,707	$	3,784
Hardware	—		13,329		4,510		1,118
Venture capital/ private equity	—		77
Premium wine	1,953		1,442		1,830		1,891
Other	275		1,055		191		233
Total commercial loans	10,076		21,763		9,238		7,026
Consumer loans:
Other consumer loans	224		670		1,350		125
Total consumer loans	224		670		1,350		125
Total	$	10,300	$	22,433	$	10,588	$	7,151

The following table summarizes the recorded investment in loans modified in TDRs, broken out by portfolio segment and class of financing receivable, for modifications made during the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(Dollars in thousands)	2014		2013		2014		2013		2015		2014
Loans modified in TDRs during the period:
Commercial loans:
Software	$	496	$	1,007	$	7,848	$	1,007
Software and internet									$	—	$	9,737
Hardware	—		6,330		—		7,783		4,000		—
Venture capital/ private equity	—		—		—		88
Premium wine	—		—		614		—		—		650
Other	—		—		—		734		—		1,746
Total commercial loans	496		7,337		8,462		9,612		4,000		12,133
Consumer loans:
Other consumer loans	—		—		—		41
Real estate secured loans									1,280		—
Total consumer loans	—		—		—		41		1,280		—
Total loans modified in TDRs during the period (1)	$	496	$	7,337	$	8,462	$	9,653	$	5,280	$	12,133


(1)	There were no partial charge-offs on loans classified as TDRs ~~for~~during the three ~~and nine~~ months ended ~~September 30, 2014. There were partial charge-offs of~~ ~~$1.2 million~~March 31, 2015 ~~and~~ ~~$2.4 million~~ ~~on loans classified as TDRs for the~~ ~~three and nine months endedSeptember 30, 2013, respectively.~~or March 31, 2014.

During the three months ended ~~September 30, 2014,~~March 31, 2015, new TDRs of ~~$0.5~~$5.3 million were modified through payment deferrals granted to our clients.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2014, new TDRs of ~~$7.1~~$2.8 million and $9.3 millionwere modified through forgiveness of principal and payment deferrals granted to our clients, ~~and $1.3 million were modified through partial forgiveness of principal.~~

~~During the three and nine months endedSeptember 30, 2013, new TDRs of $7.3 million and $9.7 million, respectively, were modified through payment deferrals granted to our clients and no principal or interest was forgiven.~~respectively.

The related allowance for loan losses for the majority of our TDRs is determined on an individual basis by comparing the carrying value of the loan to the present value of the estimated future cash flows, discounted at the pre-modification contractual

~~Table of Contents~~

interest rate. For certain TDRs, the related allowance for loan losses is determined based on the fair value of the collateral if the loan is collateral dependent.

~~There were no~~The following table summarizes the recorded investment in loans modified in TDRs within the previous 12 months that subsequently defaulted during the three ~~and nine~~ months ended ~~September 30, 2014~~ ~~and 2013.~~March 31, 2015. There were no TDRs modified, which defaulted during the three months ended March 31, 2014.

Table of Contents



	Three months ended March 31,
(Dollars in thousands)	2015
TDRs modified within the previous 12 months that defaulted during the period:
Consumer loans:
Real estate secured loans	$	30
Total TDRs modified within the previous 12 months that defaulted in the period	$	30

Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the allowance for loan losses, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and impaired loans as well as management’s overall outlook of macroeconomic factors that affect the reserve on the loan portfolio as a whole. After evaluating the charge-offs and defaults experienced on our TDRs we determined that no change to our reserving methodology was necessary to determine the allowance for loan losses as of ~~September 30, 2014.~~March 31, 2015.


7.	Disposal - Assets Held-for-Sale

The Company entered into a share purchase agreement to sell all of the outstanding capital stock of the Bank’s subsidiary, SVB India Finance Private Limited, a non-banking financial company in India (“SVBIF”) on January 15, 2015. The sale was completed on April 13, 2015. See Note 17 - "Subsequent Events" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report. As a result of the pending sale of SVBIF, the Company classified SVBIF's net assets as held-for-sale as applicable criteria were met. The following table presents the composition of SVBIF assets held-for-sale included in accrued interest receivable and other assets at March 31, 2015 and December 31, 2014:



(Dollars in thousands)	March 31, 2015		December 31, 2014
Assets:
Cash and due from banks	$	2,897	$	3,054
Securities purchased under agreement to resell and other short-term investments	6,419		11,898
Net loans	33,276		26,800
Premises and equipment, net	24		24
Accrued interest receivable and other assets	10,307		7,163
Total assets of SVBIF held-for-sale (1)	$	52,923	$	48,939
Liabilities:
Other liabilities	4,723		4,686
Total liabilities of SVBIF held-for-sale (1)	$	4,723	$	4,686


(1)	Net assets of $48.2 million and $44.3 million are included in our Global Commercial Bank operating segment as reported in Note 11—”Segment Reporting” of the “Notes to Interim Consolidated Financial Statements” under Part I, Item 1 of this report.

Table of Contents


8.	Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


				Carrying Value							Carrying Value
(Dollars in thousands)	Maturity	Principal value at September 30, 2014		September 30, 2014		December 31, 2013		Maturity	Principal value at March 31, 2015		March 31, 2015		December 31, 2014
Short-term borrowings:
Short-term FHLB advances								April 1, 2015	$	60,000	$	60,000	$	—
Other short-term borrowings	(1)	$	6,630	$	6,630	$	5,080	(1)	17,766		17,766		7,781
Total short-term borrowings				$	6,630	$	5,080				$	77,766	$	7,781
Long-term debt:
3.50% Senior Notes								January 29, 2025	$	350,000	$	349,710	$	—
5.375% Senior Notes	September 15, 2020	$	350,000	$	348,378	$	348,209	September 15, 2020	350,000		348,495		348,436
6.05% Subordinated Notes (2)	June 1, 2017	45,964		50,497		51,987		June 1, 2017	45,964		49,910		50,162
7.0% Junior Subordinated Debentures	October 15, 2033	50,000		54,889		55,020		October 15, 2033	50,000		54,802		54,845
Total long-term debt				$	453,764	$	455,216				$	802,917	$	453,443


(1)	Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor, ~~primarily for our~~which includes an interest rate swap agreement related to our 6.05% Subordinated Notes.


(2)	At ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, included in the carrying value of our 6.05% Subordinated Notes was an interest rate swap valued at $~~5.0~~4.3 million and $~~6.5~~4.6 million, respectively, related to hedge accounting associated with the notes.

Interest expense related to long-term debt was ~~$5.8 million and $17.4~~$8.0 million for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, and ~~$5.7 million and $17.4~~$5.8 million for the three ~~and nine~~ months ended ~~September 30, 2013.~~March 31, 2014. Interest expense is net of the hedge accounting impact from our interest rate swap agreement related to our 6.05% Subordinated Notes. The weighted average interest rate associated with our short-term borrowings as of ~~September 30, 2014~~March 31, 2015 was ~~0.07~~0.19 percent.

3.50% Senior Notes

On January 29, 2015, the Company issued $350 million of 3.50% Senior Notes due in January 2025 (“3.50% Senior Notes”). We received net proceeds from this offering of approximately $346.4 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.50% Senior Notes at March 31, 2015 was $349.7 million, which is reflective of a $0.3 million discount.

Available Lines of Credit

We have certain facilities in place to enable us to access short-term borrowings on a secured (using high-quality fixed income securities as collateral) and an unsecured basis. These include repurchase agreements and uncommitted federal funds lines with various financial institutions. As of ~~September 30, 2014~~March 31, 2015, we did not borrow against our uncommitted federal funds lines. We also pledge securities to the FHLB of San Francisco and the discount window at the Federal Reserve Bank. The market value of collateral pledged to the FHLB of San Francisco (comprised primarily of U.S. agency debentures and mortgage securities) at ~~September 30, 2014~~March 31, 2015 totaled $~~1.2~~1.3 billion, ~~all~~$60 million of which was ~~unused and~~used, with the remaining available to support additional borrowings. The market value of collateral pledged at the discount window of the Federal Reserve Bank at ~~September 30, 2014~~March 31, 2015 totaled $~~517~~979 million, all of which was unused and available to support additional borrowings.


8.9.	Derivative Financial Instruments

We primarily use derivative financial instruments to manage interest rate risk, currency exchange rate risk, and to assist customers with their risk management objectives. Also, in connection with negotiating credit facilities and certain other services, we often obtain equity warrant assets giving us the right to acquire stock in private, venture-backed companies in the technology and life science & healthcare industries.

2931

Table of Contents

Interest Rate Risk

Interest rate risk is our primary market risk and can result from timing and volume differences in the repricing of our interest rate-sensitive assets and liabilities and changes in market interest rates. To manage interest rate risk for our 6.05% Subordinated Notes, we entered into a fixed-for-floating interest rate swap agreement at the time of debt issuance based upon LIBOR with matched-terms. Net cash benefits associated with our interest rate swap is recorded as a reduction in “Interest expense—Borrowings,” a component of net interest income. The fair value of our interest rate ~~swap~~swaps is calculated using a discounted cash flow method and adjusted for credit valuation associated with counterparty risk. Changes in ~~the~~ fair value of the interest rate ~~swap~~swaps are reflected in either other assets ~~(if~~(for swaps in an asset position) or other liabilities ~~(if~~(for swaps in a liability position).

We assess hedge effectiveness under ASC 815, Derivatives and Hedging, using the long-haul method. Any differences associated with our interest rate swap that arise as a result of hedge ineffectiveness is recorded through net gains on derivative instruments, in noninterest income, a component of consolidated net income.

Currency Exchange Risk

We enter into foreign exchange forward contracts to economically reduce our foreign exchange exposure risk associated with the net difference between foreign currency denominated assets and liabilities, primarily in Pound Sterling and Euro. We do not designate any foreign exchange forward contracts as derivative instruments that qualify for hedge accounting. ~~Changes~~Gains or losses from changes in currency rates on foreign currency denominated instruments are included in other noninterest income, a component of noninterest income. We may experience ineffectiveness in the economic hedging relationship, because the instruments are revalued based upon changes in the currency’s spot rate on the principal value, while the forwards are revalued on a discounted cash flow basis. We record forward agreements in gain positions in other assets and loss positions in other liabilities, while net changes in fair value are recorded through net gains on derivative instruments, in noninterest income, a component of consolidated net income. Additionally, through our global banking operations we maintain customer deposits denominated in the Euro and Pound Sterling, which are used to fund certain loans in these currencies to limit our exposure to currency fluctuations.

Other Derivative Instruments

~~Equity Warrant Assets~~

~~Our~~Also included in our derivative instruments are equity warrant assets, are concentrated in private, venture-backed companies in the technology and life science industries. Most of these warrant agreements contain net share settlement provisions, which permit us to pay the warrant exercise price using shares issuable under the warrant (“cashless exercise”). We value our equity warrant assets using a modified Black-Scholes option pricing model, which incorporates assumptions about the underlying asset value, volatility, and the risk-free rate. We make valuation adjustments for estimated remaining life and marketability for warrants issued by private companies. Equity warrant assets are recorded at fair value in other assets, while changes in their fair value are recorded through net gains on derivative instruments, in noninterest income, a component of consolidated net income.

~~Loan Conversion Options~~

In connection with negotiating certain credit facilities, we occasionally extend loan facilities which have convertible option features. The convertible loans may be converted into a certain number of shares determined by dividing the principal amount of the loan by the applicable conversion price. Because our loan conversion options, have underlying and notional values and had no initial net investment, these assets qualify as derivative instruments. We value our loan conversion options using a modified Black-Scholes option pricing model, which incorporates assumptions about the underlying asset value, volatility, and the risk-free rate. Loan conversion options are recorded at fair value in other assets, while changes in their fair value are recorded through net gains on derivative instruments, in noninterest income, a component of consolidated net income.

~~Other Derivatives~~

~~We sell~~ forward and option contracts, to clients who wish to mitigate their foreign currency exposure. We economically reduce the currency risk from this business by entering into opposite way contracts with correspondent banks. These relationships do not qualify for hedge accounting. The contracts generally have terms of one year or less, although we may have contracts extending for up to five years. Generally, we have not experienced nonperformance on these contracts, have not incurred credit losses, and anticipate performance by all counterparties to such agreements. Contracts in an asset position are included in other assets and contracts in a liability position are included in other liabilities. The net change in the fair valueinterest rate contracts. For further description of these ~~contracts is recorded through net gains on~~other derivative instruments, ~~in noninterest income, a component~~refer to Note 2-“Summary of ~~consolidated net income.~~

We sell interest rate contracts to clients who wish to mitigate their interest rate exposure. We economically reduce the interest rate risk from this business by entering into opposite way contracts with correspondent banks. We do not designate anySignificant Accounting Policies" under Part II, Item 8 of these contracts (which are derivative instruments) as qualifying for hedge accounting. Contracts in an asset position are included in other assets and contracts in a liability position are included in other liabilities. The net change in the fair value of

~~Table of Contents~~

~~these derivatives is recorded through net gains on derivative instruments, in noninterest income, a component of consolidated net income.~~

our 2014 Form 10-K.

Counterparty Credit Risk

We are exposed to credit risk if counterparties to our derivative contracts do not perform as expected. We mitigate counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral, as appropriate. With respect to measuring counterparty credit risk for derivative instruments, we measure the fair value of a group of financial assets and financial liabilities on a net risk basis by counterparty portfolio.

Table of Contents

The total notional or contractual amounts, fair value, collateral and net exposure of our derivative financial instruments at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 were as follows:


		September 30, 2014										December 31, 2013											March 31, 2015										December 31, 2014
(Dollars in thousands)	Balance Sheet Location	Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)			Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)			Balance Sheet Location	Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)			Notional or Contractual Amount		Fair Value			Collateral (1)		Net Exposure (2)
Derivatives designated as hedging instruments:
Interest rate risks:
Interest rate swaps	Other assets	$	45,964	$	4,965		$	3,910	$	1,055		$	45,964	$	6,492		$	5,080	$	1,412		Other assets	$	45,964	$	4,340		$	2,970	$	1,370		$	45,964	$	4,609		$	2,970	$	1,639
Derivatives not designated as hedging instruments:
Currency exchange risks:
Foreign exchange forwards	Other assets	33,840		1,032			1,935		(903		)	140,760		1,423			—		1,423			Other assets	179,467		8,688			5,138		3,550			200,957		5,050			2,441		2,609
Foreign exchange forwards	Other liabilities	30,306		(387		)	—		(387		)	62,649		(634		)	—		(634		)	Other liabilities	3,916		(677		)	—		(677		)	6,226		(489		)	—		(489		)
Net exposure				645			1,935		(1,290		)			789			—		789						8,011			5,138		2,873					4,561			2,441		2,120
Other derivative instruments:
Equity warrant assets	Other assets	186,853		94,960			—		94,960			179,934		103,513			—		103,513			Other assets	198,864		124,456			—		124,456			197,878		116,604			—		116,604
Other derivatives:
Client foreign exchange forwards	Other assets	526,329		16,111			785		15,326			424,983		13,673			—		13,673			Other assets	772,019		45,284			9,658		35,626			801,487		28,954			2,370		26,584
Client foreign exchange forwards	Other liabilities	483,262		(15,355		)	—		(15,355		)	367,079		(11,549		)	—		(11,549		)	Other liabilities	694,943		(44,527		)	—		(44,527		)	774,355		(27,647		)	—		(27,647		)
Client foreign currency options	Other assets	6,500		91			—		91			91,854		434			—		434			Other assets	51,483		523			—		523			34,926		227			—		227
Client foreign currency options	Other liabilities	6,500		(91		)	—		(91		)	91,854		(434		)	—		(434		)	Other liabilities	51,483		(523		)	—		(523		)	34,926		(227		)	—		(227		)
Loan conversion options	Other assets	1,442		—			—		—			3,455		314			—		314
Client interest rate derivatives	Other assets	359,074		2,173			—		2,173			216,773		1,265			—		1,265			Other assets	377,530		2,907			—		2,907			387,410		2,546			—		2,546
Client interest rate derivatives	Other liabilities	359,074		(2,317		)	—		(2,317		)	216,773		(1,396		)	—		(1,396		)	Other liabilities	377,530		(3,166		)	—		(3,166		)	387,410		(2,748		)	—		(2,748		)
Net exposure				612			785		(173		)			2,307			—		2,307						498			9,658		(9,160		)			1,105			2,370		(1,265		)
Net				$	101,182		$	6,630	$	94,552				$	113,101		$	5,080	$	108,021					$	137,305		$	17,766	$	119,539				$	126,879		$	7,781	$	119,098


(1)	Cash collateral received from our counterparties in relation to market value exposures of derivative contracts in our favor is recorded as a component of “short-term borrowings” on our consolidated balance sheets.

(2)

Net exposure for contracts in a gain position reflects the replacement cost in the event of nonperformance by all such counterparties. The credit ratings of our institutional counterparties as of ~~September 30, 2014~~March 31, 2015 remain at investment grade or higher and there were no material changes in their credit ratings during the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015.

3133

Table of Contents

A summary of our derivative activity and the related impact on our consolidated statements of income for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	Statement of income location	2014			2013			2014			2013			Statement of income location	2015			2014
Derivatives designated as hedging instruments:
Interest rate risks:
Net cash benefit associated with interest rate swaps	Interest expense—borrowings	$	638		$	634		$	1,915		$	1,901		Interest expense—borrowings	$	638		$	639
Changes in fair value of interest rate swaps	Net gains on derivative instruments	(12		)	(7		)	(37		)	20			Net gains on derivative instruments	(3		)	(12		)
Net gains associated with interest rate risk derivatives		$	626		$	627		$	1,878		$	1,921			$	635		$	627
Derivatives not designated as hedging instruments:
Currency exchange risks:
(Losses) gains on revaluations of foreign currency instruments	Other noninterest income	$	(12,640	)	$	8,101		$	(12,347	)	$	451		Other noninterest income	$	(20,159	)	$	978
Gains (losses) on internal foreign exchange forward contracts, net	Net gains on derivative instruments	12,529			(8,423		)	12,038			(1,511		)	Net gains on derivative instruments	20,018			(1,029		)
Net (losses) associated with currency risk		$	(111	)	$	(322	)	$	(309	)	$	(1,060	)
Net losses associated with currency risk															$	(141	)	$	(51	)
Other derivative instruments:
Net gains on equity warrant assets	Net gains on derivative instruments	$	13,157		$	18,780		$	50,859		$	29,475		Net gains on derivative instruments	$	20,278		$	25,373
Gains (losses) on client foreign exchange forward contracts, net	Net gains on derivative instruments	$	886		$	(411	)	$	1,358		$	(237	)
Net (losses) gains on other derivatives (1)	Net gains on derivative instruments	$	(22	)	$	(517	)	$	(738	)	$	55
(Losses) gains on client foreign exchange forward contracts, net														Net gains on derivative instruments	$	(507	)	$	302
Net losses on other derivatives (1)														Net gains on derivative instruments	$	(57	)	$	(467	)


(1)	Primarily represents the change in fair value of loan conversion options.

Balance Sheet Offsetting

Certain of our derivative and other financial instruments are subject to enforceable master netting arrangements with our counterparties. These agreements provide for the net settlement of multiple contracts with a single counterparty through a single payment, in a single currency, in the event of default on or termination of any one contract.

The following table summarizes our assets subject to enforceable master netting arrangements as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:



								Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Assets		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Assets Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Received			Net Amount
March 31, 2015
Derivative Assets:
Interest rate swaps	$	4,340	$	—		$	4,340	$	(1,370	)	$	(2,970	)	$	—
Foreign exchange forwards	53,972		—			53,972		(24,627		)	(14,796		)	14,549
Foreign currency options	806		(283		)	523		(253		)	—			270
Client interest rate derivatives	2,907		—			2,907		(2,907		)	—			—
Total derivative assets:	62,025		(283		)	61,742		(29,157		)	(17,766		)	14,819
Reverse repurchase, securities borrowing, and similar arrangements	236,027		—			236,027		(236,027		)	—			—
Total	$	298,052	$	(283	)	$	297,769	$	(265,184	)	$	(17,766	)	$	14,819
December 31, 2014
Derivative Assets:
Interest rate swaps	$	4,609	$	—		$	4,609	$	(1,639	)	$	(2,970	)	$	—
Foreign exchange forwards	34,004		—			34,004		(17,843		)	(4,811		)	11,350
Foreign currency options	501		(274		)	227		(144		)	—			83
Client interest rate derivatives	2,546		—			2,546		(2,546		)	—			—
Total derivative assets:	41,660		(274		)	41,386		(22,172		)	(7,781		)	11,433
Reverse repurchase, securities borrowing, and similar arrangements	95,611		—			95,611		(95,611		)	—			—
Total	$	137,271	$	(274	)	$	136,997	$	(117,783	)	$	(7,781	)	$	11,433

3234

Table of Contents

Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands) Gross Amounts of Recognized Assets Gross Amounts offset in the Statement of Financial Position Net Amounts of Assets Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount
September 30, 2014
Derivative Assets:
   Interest rate swaps $ 4,965
$ —
$ 4,965
$ (1,055 ) $ (3,910 ) $ —
Foreign exchange forwards 17,143
—
17,143
(8,002 ) (2,720 ) 6,421
   Foreign currency options 92
(1 ) 91
(91 ) —
—
   Client interest rate derivatives 2,173
—
2,173
(2,173 ) —
—
Total derivative assets: 24,373
(1 ) 24,372
(11,321 ) (6,630 ) 6,421
Reverse repurchase, securities borrowing, and similar arrangements 50,834
—
50,834
(50,834 ) —
—
Total $ 75,207
$ (1 ) $ 75,206
$ (62,155 ) $ (6,630 ) $ 6,421
December 31, 2013
Derivative Assets:
   Interest rate swaps $ 6,492
$ —
$ 6,492
$ (1,412 ) $ (5,080 ) $ —
Foreign exchange forwards 15,096
—
15,096
(6,735 ) —
8,361
   Foreign currency options 504
(70 ) 434
(155 ) —
279
   Client interest rate derivatives 1,265
—
1,265
(256 ) —
1,009
Total derivative assets: 23,357
(70 ) 23,287
(8,558 ) (5,080 ) 9,649
Reverse repurchase, securities borrowing, and similar arrangements 172,989
—
172,989
(172,989 ) —
—
Total $ 196,346
$ (70 ) $ 196,276
$ (181,547 ) $ (5,080 ) $ 9,649

The following table summarizes our liabilities subject to enforceable master netting arrangements as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


								Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements														Gross Amounts Not Offset in the Statement of Financial Position But Subject to Master Netting Arrangements
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Liabilities Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Pledged		Net Amount		Gross Amounts of Recognized Liabilities		Gross Amounts offset in the Statement of Financial Position			Net Amounts of Liabilities Presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Pledged		Net Amount
September 30, 2014
March 31, 2015
Derivative Liabilities:
Foreign exchange forwards	$	15,742	$	��		$	15,742	$	(9,294	)	$	—	$	6,448	$	45,204	$	—		$	45,204	$	(8,467	)	$	—	$	36,737
Foreign currency options	92		(1		)	91		—			—		91		806		(283		)	523		(270		)	—		253
Client interest rate derivatives	2,317		—			2,317		(2,317		)	—		—		3,166		—			3,166		(3,166		)	—		—
Total derivative liabilities:	18,151		(1		)	18,150		(11,611		)	—		6,539		49,176		(283		)	48,893		(11,903		)	—		36,990
Repurchase, securities lending, and similar arrangements	—		—			—		—			—		—		—		—			—		—			—		—
Total	$	18,151	$	(1	)	$	18,150	$	(11,611	)	$	—	$	6,539	$	49,176	$	(283	)	$	48,893	$	(11,903	)	$	—	$	36,990
December 31, 2013
December 31, 2014
Derivative Liabilities:
Foreign exchange forwards	$	12,183	$	—		$	12,183	$	(8,282	)	$	—	$	3,901	$	28,136	$	—		$	28,136	$	(16,808	)	$	—	$	11,328
Foreign currency options	504		(70		)	434		(279		)	—		155		501		(274		)	227		(83		)	—		144
Client interest rate derivatives	1,396		—			1,396		(1,087		)	—		309		2,748		—			2,748		(2,748		)	—		—
Total derivative liabilities:	14,083		(70		)	14,013		(9,648		)	—		4,365		31,385		(274		)	31,111		(19,639		)	—		11,472
Repurchase, securities lending, and similar arrangements	—		—			—		—			—		—		—		—			—		—			—		—
Total	$	14,083	$	(70	)	$	14,013	$	(9,648	)	$	—	$	4,365	$	31,385	$	(274	)	$	31,111	$	(19,639	)	$	—	$	11,472

~~9. Other Noninterest (Loss) Income and Other Noninterest Expense~~


10.	Other Noninterest (Loss) Income and Other Noninterest Expense

A summary of other noninterest (loss) income for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,					Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	2014			2013		2014			2013		2015			2014
Fund management fees	$	3,574		$	2,822	$	9,888		$	8,531	$	3,722		$	2,755
Service-based fee income	2,180			1,901		6,459			5,706		2,150			2,027
(Losses) gains on revaluation of foreign currency instruments (1)	(12,640		)	8,069		(12,347		)	444		(20,159		)	978
Other (2)	1,525			4,369		10,601			9,667		5,207			5,440
Total other noninterest (loss) income	$	(5,361	)	$	17,161	$	14,601		$	24,348	$	(9,080	)	$	11,200


(1)	Represents the revaluation of foreign currency denominated financial instruments issued and held by us, primarily loans, deposits and cash.


(2)	Includes dividends on FHLB/FRB stock, correspondent bank rebate income and other fee income.

A summary of other noninterest expense for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(Dollars in thousands)	2014		2013		2014		2013		2015		2014
Client services	$	3,215	$	1,920	$	8,160	$	5,711	$	3,549	$	2,359
Tax credit fund amortization	2,228		1,519		6,758		4,174
Telephone									1,959		1,748
Data processing services	2,229		2,020		6,497		5,814		1,833		2,227
Telephone	1,931		1,571		5,217		4,640
Postage and supplies	763		559		2,248		1,777		765		769
Dues and publications	719		399		1,852		1,302		585		497
Other	4,711		2,661		9,381		6,855		4,907		1,562
Total other noninterest expense	$	15,796	$	10,649	$	40,113	$	30,273
Total other noninterest expense (1)									$	13,598	$	9,162

Table of Contents


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.


~~10.~~11.	Segment Reporting

We have three reportable segments for management reporting purposes: Global Commercial Bank, SVB Private Bank and SVB Capital. The results of our operating segments are based on our internal management reporting process.

Our operating segments’ primary source of revenue is from net interest income, which is primarily the difference between interest earned on loans, net of funds transfer pricing (“FTP”), and interest paid on deposits, net of FTP. Accordingly, our segments are reported using net interest income, net of FTP. FTP is an internal measurement framework designed to assess the financial impact of a financial institution’s sources and uses of funds. It is the mechanism by which an earnings credit is given for deposits raised, and an earnings charge is made for funded loans. FTP is calculated at an instrument level based on account characteristics.

We also evaluate performance based on provision for loan losses, noninterest income and noninterest expense, which are presented as components of segment operating profit or loss. In calculating each operating segment’s noninterest expense, we consider the direct costs incurred by the operating segment as well as certain allocated direct costs. As part of this review, we allocate certain corporate overhead costs to a corporate account. We do not allocate income taxes to our segments. Additionally, our management reporting model is predicated on average asset balances; therefore, period-end asset balances are not presented for segment reporting purposes. Changes in an individual client’s primary relationship designation have resulted, and in the future may result, in the inclusion of certain clients in different segments in different periods.

Unlike financial reporting, which benefits from the comprehensive structure provided by GAAP, our internal management reporting process is highly subjective, as there is no comprehensive, authoritative guidance for management reporting. Our management reporting process measures the performance of our operating segments based on our internal operating structure, which is subject to change from time to time, and is not necessarily comparable with similar information for other financial services companies.

~~Table of Contents~~

For reporting purposes, SVB Financial Group has three operating segments for which we report our financial information:

Global Commercial Bank is comprised of results from the following:

◦

Our Commercial Bank products and services are provided by the Bank and its subsidiaries to commercial clients in the technology, life science & healthcare and ~~clean technology (energy and resource innovation)~~private equity/venture capital industries. The Bank provides solutions to the financial needs of commercial clients, through credit, global treasury management, foreign exchange, global trade finance, and other services. It serves clients within the United States, as well as non-U.S. clients in key international ~~entrepreneurial~~innovation markets. In addition, the Bank and its subsidiaries offer a variety of investment services and solutions ~~including investment advisory and broker-dealer services.~~to its clients that enable them to effectively manage their assets.


◦	Our Private Equity Division provides banking products and services primarily to our private equity and venture capital ~~and private equity~~ clients.

◦

Our Wine practice provides banking products and services to our premium wine industry clients. This practice is formerly known as SVB Specialty Lending and included our Community Development Finance practice which makes loans as part of our responsibilities under the Community Reinvestment Act. During the third quarter of 2014, management realigned the organizational structure of our Community Development Finance practice in order to improve its oversight and compliance for loans made as part of our responsibilities under the Community Reinvestment Act. This practice, formerly included in the GCB results, has been moved into "Other Items". Prior period results have been recast to conform to the new composition of these reportable segments and had no material effect on either the Global Commercial Bank or Other reporting segments.clients, including vineyard development loans.


◦	SVB Analytics provides equity valuation services to companies and private equity/venture ~~capital/private equity~~capital firms.


◦	Debt Fund Investments is comprised of our investments in certain debt ~~funds.~~funds in which we are a strategic investor.

SVB Private Bank is the private banking division of the Bank, which provides ~~banking products and~~ a range of personal financial solutions for consumers. Our clients are primarily private equity/venture ~~capital/private equity~~capital professionals and executive leaders of the innovation companies they support. We offer a customized suite of private banking services, including mortgages, home equity lines of credit, restricted stock purchase loans, capital call lines of credit and other secured and unsecured lending, as well as cash and wealth management services.

SVB Capital is the venture capital investment arm of SVBFG, which focuses primarily on funds management. SVB Capital manages funds (primarily venture capital funds) on behalf of third party limited partners and, on a more limited basis, SVB Financial Group. The SVB Capital family of funds is comprised of direct venture funds that invest in companies and funds of funds ~~and direct~~that invest in other venture capital funds. SVB Capital generates income for the Company primarily ~~through~~from investment returns (including carried interest) and management ~~fees, carried interest arrangements and returns through the Company’s investments in the funds.~~fees.

The summary financial results of our operating segments are presented along with a reconciliation to our consolidated interim results.

3436

Table of Contents

Our segment information for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


(Dollars in thousands)	Global Commercial Bank (1)			SVB Private Bank			SVB Capital (1)			Other Items (2)			Total			Global Commercial Bank (1)			SVB Private Bank			SVB Capital (1)			Other Items (2)			Total
Three months ended September 30, 2014
Net interest income	$	187,184		$	7,344		$	12		$	26,025		$	220,565
(Provision for) loan losses	(16,185		)	(425		)	—			—			(16,610		)
Noninterest income	57,756			491			1,064			20,856			80,167
Noninterest expense (3)	(128,685		)	(2,574		)	(3,036		)	(47,694		)	(181,989		)
Income (loss) before income tax expense (4)	$	100,070		$	4,836		$	(1,960	)	$	(813	)	$	102,133
Total average loans, net of unearned income	$	10,192,945		$	1,190,986		$	—		$	55,590		$	11,439,521
Total average assets (5)	31,809,853			1,129,947			302,949			1,355,536			34,598,285
Total average deposits	28,795,499			877,701			—			53,084			29,726,284
Three months ended September 30, 2013
Net interest income	$	162,371		$	6,195		$	1		$	8,529		$	177,096
(Provision for) loan losses	(11,633		)	995			—			—			(10,638		)
Noninterest income	49,991			380			35,457			171,822			257,650
Noninterest expense (3)	(107,495		)	(2,484		)	(2,728		)	(47,817		)	(160,524		)
Income before income tax expense (4)	$	93,234		$	5,086		$	32,730		$	132,534		$	263,584
Total average loans, net of unearned income	$	8,576,443		$	942,411		$	—		$	27,087		$	9,545,941
Total average assets (5)	21,336,583			998,640			329,680			407,831			23,072,734
Total average deposits	18,994,374			535,611			—			29,903			19,559,888
Nine months ended September 30, 2014
Three months ended March 31, 2015
Net interest income	$	541,375		$	23,529		$	55		$	56,899		$	621,858		$	203,755		$	9,723		$	(24	)	$	25,436		$	238,890
(Provision for) reduction of loan losses	(18,833		)	(218		)	—			—			(19,051		)	(6,460		)	8			—			—			(6,452		)
Noninterest income	169,414			1,121			35,617			198,450			404,602			64,689			397			21,141			85,791			172,018
Noninterest expense (3)	(374,289		)	(7,709		)	(8,815		)	(137,058		)	(527,871		)	(136,282		)	(2,747		)	(3,891		)	(53,188		)	(196,108		)
Income before income tax expense (4)	$	317,667		$	16,723		$	26,857		$	118,291		$	479,538		$	125,702		$	7,381		$	17,226		$	58,039		$	208,348
Total average loans, net of unearned income	$	9,917,115		$	1,120,647		$	—		$	60,635		$	11,098,397		$	12,729,630		$	1,374,189		$	—		$	(57,450	)	$	14,046,369
Total average assets (5)	28,828,400			1,027,707			328,048			1,221,098			31,405,253			35,962,427			1,921,554			269,982			1,146,626			39,300,589
Total average deposits	26,020,715			805,167			—			56,231			26,882,113			32,472,827			1,251,939			—			133,013			33,857,779
Nine months ended September 30, 2013
Three months ended March 31, 2014
Net interest income	$	465,893		$	18,226		$	5		$	26,222		$	510,346		$	175,303		$	6,892		$	14		$	14,119		$	196,328
(Provision for) reduction of loan losses	(36,030		)	1,007			—			—			(35,023		)	(807		)	313			—			—			(494		)
Noninterest income	144,893			867			48,179			240,554			434,493			58,635			274			37,672			213,644			310,225
Noninterest expense (3)	(313,080		)	(6,263		)	(7,871		)	(125,616		)	(452,830		)	(120,706		)	(2,495		)	(2,635		)	(44,572		)	(170,408		)
Income before income tax expense (4)	$	261,676		$	13,837		$	40,313		$	141,160		$	456,986		$	112,425		$	4,984		$	35,051		$	183,191		$	335,651
Total average loans, net of unearned income	$	8,175,626		$	886,679		$	—		$	23,874		$	9,086,179		$	9,677,957		$	1,049,901		$	—		$	39,826		$	10,767,684
Total average assets (5)	20,732,425			910,551			277,136			575,980			22,496,092			25,504,407			967,873			340,990			954,363			27,767,633
Total average deposits	18,480,510			493,204			—			15,646			18,989,360			22,877,819			745,083			—			53,546			23,676,448


(1)	Global Commercial Bank’s and SVB Capital’s components of net interest income, noninterest income, noninterest expense and total average assets are shown net of noncontrolling interests for all periods presented. Noncontrolling interest is included within "Other Items" ~~as discussed below.~~.

(2)

The "Other Items" column reflects the adjustments necessary to reconcile the results of the operating segments to the consolidated financial statements prepared in conformity with GAAP. Noninterest income is primarily attributable to noncontrolling interests and gains on equity warrant assets. Noninterest expense primarily consists of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses. Additionally, average assets primarily consist of cash and cash equivalents and loans from our Community Development Finance practice as part of our responsibilities under the Community Reinvestment Act.

~~Table of Contents~~


(3)	The Global Commercial Bank segment includes direct depreciation and amortization of $~~5.4~~5.1 million and $4.9 million for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013, respectively and~~ ~~$15.4 million~~ ~~and~~ ~~$14.0 million~~ ~~for the~~ ~~nine months endedSeptember 30,~~ 2014 ~~and~~ ~~2013~~, respectively.


(4)	The internal reporting model used by management to assess segment performance does not calculate income tax expense by segment. Our effective tax rate is a reasonable approximation of the segment rates.


(5)	Total average assets equal the greater of total average assets or the sum of total liabilities and total stockholders’ equity for each segment.


~~11.~~12.	Off-Balance Sheet Arrangements, Guarantees and Other Commitments

Table of Contents

Commitments to Extend Credit

The following table summarizes information related to our commitments to extend credit at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Loan commitments available for funding: (1)
Fixed interest rate commitments	$	1,434,100	$	1,392,781	$	1,611,025	$	1,591,408
Variable interest rate commitments	12,059,816		9,101,973		12,618,196		11,860,039
Total loan commitments available for funding	13,493,916		10,494,754		14,229,221		13,451,447
Commercial and standby letters of credit (2)	1,137,721		975,968		1,256,293		1,254,338
Total unfunded credit commitments	$	14,631,637	$	11,470,722	$	15,485,514	$	14,705,785
Commitments unavailable for funding (3)	$	1,691,660	$	1,006,168	$	1,920,937	$	1,868,489
Maximum lending limits for accounts receivable factoring arrangements (4)	1,004,402		894,276		1,120,763		1,044,548
Reserve for unfunded credit commitments (5)	35,489		29,983		38,628		36,419


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


(2)	See below for additional information on our commercial and standby letters of credit.


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


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


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

Commercial and Standby Letters of Credit

The table below summarizes our commercial and standby letters of credit at ~~September 30, 2014~~March 31, 2015. The maximum potential amount of future payments represents the amount that could be remitted under letters of credit if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from the collateral held or pledged.


(Dollars in thousands)	Expires In One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments		Expires In One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments
Financial standby letters of credit	$	936,790	$	129,337	$	1,066,127	$	1,066,127	$	1,137,234	$	57,997	$	1,195,231	$	1,195,231
Performance standby letters of credit	57,058		8,162		65,220		65,220		45,105		6,550		51,655		51,655
Commercial letters of credit	6,374		—		6,374		6,374		9,407		—		9,407		9,407
Total	$	1,000,222	$	137,499	$	1,137,721	$	1,137,721	$	1,191,746	$	64,547	$	1,256,293	$	1,256,293

~~Table of Contents~~

Deferred fees related to financial and performance standby letters of credit were $~~8.4~~8.2 million at both ~~September 30, 2014~~March 31, 2015 and ~~$8.2 million at~~ December 31, ~~2013~~2014. At ~~September 30, 2014~~March 31, 2015, collateral in the form of cash of $~~465.3~~509.0 million and available-for-sale securities of $~~1.3~~1.5 million were available to us to reimburse losses, if any, under financial and performance standby letters of credit.

Table of Contents

Commitments to Invest in Venture Capital and Private Equity Funds

We make commitments to invest in venture capital and private equity funds, which in turn make investments generally in, or in some cases make loans to, privately-held companies. Commitments to invest in these funds are generally made for a 10-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from calling 100% of committed capital in one year, it is customary for these funds to generally call most of the capital commitments over 5 to 7 years; however in certain cases, the funds may not call 100% of committed capital over the life of the fund. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate. The following table details our total capital commitments, unfunded capital commitments, and our ownership percentage in each fund at ~~September 30, 2014~~March 31, 2015:


Our Ownership in Venture Capital/Private Equity Funds (Dollars in thousands)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund (4)
Our Ownership in Venture Capital and Private Equity Funds (Dollars in thousands)							SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund (4)
Silicon Valley BancVentures, LP	$	6,000	$	270	10.7	%	$	6,000	$	270	10.7	%
SVB Capital Partners II, LP (1)	1,200		162		5.1		1,200		162		5.1
Capital Partners III, LP	750		649		0.4		—		—		—
SVB Capital Shanghai Yangpu Venture Capital Fund	945		163		6.8		935		—		6.8
SVB Strategic Investors Fund, LP	15,300		688		12.6		15,300		688		12.6
SVB Strategic Investors Fund II, LP	15,000		1,050		8.6		15,000		1,050		8.6
SVB Strategic Investors Fund III, LP	15,000		1,425		5.9		15,000		1,275		5.9
SVB Strategic Investors Fund IV, LP	12,239		2,325		5.0		12,239		2,325		5.0
Strategic Investors Fund V Funds	515		239		Various		515		178		Various
Strategic Investors Fund VI Funds	500		402		0.2		—		—		—
Strategic Investors Fund VII Funds	500		500		0.2		—		—		—
SVB Capital Preferred Return Fund, LP	12,688		—		20.0		12,688		—		20.0
SVB Capital—NT Growth Partners, LP	24,670		1,340		33.0		24,670		1,340		33.0
Other private equity fund (2)	9,338		—		58.2		9,338		—		58.2
Partners for Growth, LP	25,000		9,750		50.0		25,000		9,750		50.0
Debt funds (equity method accounting)	64,574		4,950		Various		63,134		4,950		Various
Other fund investments (3)	300,461		22,909		Various		301,172		19,268		Various
Total	$	504,680	$	46,822			$	502,191	$	41,256


(1)	Our ownership includes direct ownership of 1.3 percent and indirect ownership interest of 3.8 percent through our investment in SVB Strategic Investors Fund II, LP.


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


(3)	Represents commitments to ~~286~~283 funds (primarily venture capital funds) where our ownership interest is generally less than 5 percent of the voting interests of each such fund.

(4)

We are subject to the Volcker Rule, which restricts or limits ~~our sponsorship of and~~us from sponsoring or having ownership of interests in “covered” funds including venture capital and private equity funds. For funds that we sponsor, the Volcker Rule limits the amount of our investment to 3% of the fund, and our aggregate investments in all such funds must not exceed 3% of our Tier 1 capital. The current deadline to conform to these limits is July 21, 2015. The time period to divest an investment that is not permitted by the final rule may be extended by the Federal Reserve Board for up to two one-year general extensions, and one additional extension up to five additional years for investments in funds that are considered illiquid. We intend to seek the maximum extensions available to us. However, there is no guarantee that the Federal Reserve Board will grant any of these extensions. See “Business - Supervision and Regulation” under Item 1 of Part I of our ~~2013~~2014 Form 10-K.

3739

Table of Contents

The following table details the amounts of remaining unfunded commitments to venture capital and private equity funds by our consolidated managed funds of funds (including our interest and the noncontrolling interests) at ~~September 30, 2014~~March 31, 2015:


Limited Partnership (Dollars in thousands)	Unfunded Commitments		Unfunded Commitments
SVB Strategic Investors Fund, LP	$	2,250	$	2,250
SVB Strategic Investors Fund II, LP	5,589		5,021
SVB Strategic Investors Fund III, LP	15,641		11,237
SVB Strategic Investors Fund IV, LP	41,205		32,730
Strategic Investors Fund V Funds	162,335		123,888
Strategic Investors Fund VI Funds	239,268		219,750
Strategic Investors Fund VII Funds			153,919
SVB Capital Preferred Return Fund, LP	5,886		4,448
SVB Capital—NT Growth Partners, LP	6,044		4,672
Other private equity fund	243		77
Total	$	478,461	$	557,992


~~12.~~13.	Income Taxes

We are subject to income tax in the U.S. federal jurisdiction and various state and foreign jurisdictions and have identified our federal tax return and tax returns in California and Massachusetts as major tax filings. ~~U.S. federal tax examinations through 2009 have been concluded.~~ Our U.S. federal tax returns for ~~2008, 2010~~2011 and subsequent years remain open to full examination. Our California tax returns for ~~2008~~2010 and subsequent tax years remain open to full examination. Massachusetts tax returns for ~~2008, 2010~~2011 and subsequent years remain open to full examination.

At ~~September 30, 2014,~~March 31, 2015, our unrecognized tax benefit was ~~$0.4~~$3.8 million, the recognition of which would reduce our income tax expense by ~~$0.3~~$2.7 million. We do not expect that our unrecognized tax benefit will materially change in the next 12 months.

We recognize interest and penalties related to income tax matters as part of income before income taxes. Interest and penalties were not material for the three ~~and nine~~ months ended ~~September 30, 2014.~~March 31, 2015.


~~13.~~14.	Fair Value of Financial Instruments

Fair Value Measurements

Our available-for-sale securities, derivative instruments and certain non-marketable and other securities are financial instruments recorded at fair value on a recurring basis. We make estimates regarding valuation of assets and liabilities measured at fair value in preparing our interim consolidated financial statements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (the “exit price”) in an orderly transaction between market participants at the measurement date. There is a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable and the significance of those inputs in the fair value measurement. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data and views of market participants. The three levels for measuring fair value are based on the reliability of inputs and are as follows:

Level 1

Fair value measurements based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. Assets utilizing Level 1 inputs include U.S. Treasury securities, exchange-traded equity securities and certain marketable securities accounted for under fair value accounting.

Level 2

Fair value measurements based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Valuations for the available-for-sale securities are provided by third party external pricing service providers. We review the methodologies used to determine the fair value, including understanding the nature and observability of the inputs used to determine the price. Additional corroboration, such as obtaining a non-binding price from a broker, may be obtained depending on the frequency of trades of the security and the level of liquidity or depth of the market. The valuation

3840

Table of Contents

methodology that is generally used for the Level 2 assets is the income approach. Below is a summary of the significant inputs used for each class of Level 2 assets and liabilities:

U.S. agency debentures: Fair value measurements of U.S. agency debentures are based on the characteristics specific to bonds held, such as issuer name, coupon rate, maturity date and any applicable issuer call option features. Valuations are based on market spreads relative to similar term benchmark market interest rates, generally U.S. Treasury securities.

Agency-issued mortgage-backed securities: Agency-issued mortgage-backed securities are pools of individual conventional mortgage loans underwritten to U.S. agency standards with similar coupon rates, tenor, and other attributes such as geographic location, loan size and origination vintage. Fair value measurements of these securities are based on observable price adjustments relative to benchmark market interest rates taking into consideration estimated loan prepayment speeds.

Agency-issued collateralized mortgage obligations: Agency-issued collateralized mortgage obligations are structured into classes or tranches with defined cash flow characteristics and are collateralized by U.S. agency-issued mortgage pass-through securities. Fair value measurements of these securities incorporate similar characteristics of mortgage pass-through securities such as coupon rate, tenor, geographic location, loan size and origination vintage, in addition to incorporating the effect of estimated prepayment speeds on the cash flow structure of the class or tranche. These measurements incorporate observable market spreads over an estimated average life after considering the inputs listed above.

Agency-issued commercial mortgage-backed securities: Fair value measurements of these securities are based on spreads to benchmark market interest rates (usually U.S. Treasury rates or rates observable in the swaps market), prepayment speeds, loan default rate assumptions and loan loss severity assumptions on underlying loans.

Municipal bonds and notes: Bonds issued by municipal governments generally have stated coupon rates, final maturity dates and are subject to being called ahead of the final maturity date at the option of the issuer. Fair value measurements of these securities are priced based on spreads to other municipal benchmark bonds with similar characteristics; or, relative to market rates on U.S. Treasury bonds of similar maturity.

Interest rate ~~swap assets:~~derivative assets and liabilities: Fair value measurements of interest rate ~~swaps~~derivatives are priced considering the coupon rate of the fixed leg of the contract and the variable coupon on the floating leg of the contract. Valuation is based on both spot and forward rates on the swap yield curve and the credit worthiness of the contract counterparty.

Foreign exchange forward and option contract assets and liabilities: Fair value measurements of these assets and liabilities are priced based on spot and forward foreign currency rates and option volatility ~~assumptions and the credit worthiness of the contract counterparty.~~assumptions.

Level 3

The fair value measurement is derived from valuation techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions we believe market participants would use in pricing the asset. Below is a summary of the valuation techniques used for each class of Level 3 assets:

Venture capital and private equity fund investments: Fair value measurements are based on the net asset value per share as obtained from the investee funds' management, as the funds do not have a readily determinable fair value and the funds prepare their financial statements using guidance consistent with fair value accounting. We account for differences between our measurement date and the date of the fund investment’s net asset value by using the most recent available financial information from the investee general partner, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

Other venture capital investments: Fair value measurements are based on consideration of a range of factors including, but not limited to, the price at which the investment was acquired, the term and nature of the investment, local market conditions, values for comparable securities, and as it relates to the private company, the current and projected operating performance, exit strategies and financing transactions subsequent to the acquisition of the investment. The significant unobservable inputs used in the fair value measurement include the information about each portfolio company, including actual and forecasted results, cash position, recent or planned transactions and market comparable companies. Significant changes to any one of these inputs in isolation could result in a significant change in the fair value measurement, however, we generally consider all factors available through ongoing communication with the portfolio companies and venture capital fund managers to determine whether there are changes to the portfolio company or the environment that indicate a change in the fair value measurement.

3941

Table of Contents

Other securities: Fair value measurements of equity securities of public companies are priced based on quoted market prices less a discount if the securities are subject to certain sales restrictions. Marketability discounts generally range from 10% to 20% depending on the duration of the sale restrictions which typically range from 3 to 6 months.

Equity warrant assets (public portfolio): Fair value measurements of equity warrant assets of publicly-traded portfolio companies are valued based on the Black-Scholes option pricing model. The model uses the price of publicly-traded companies (underlying stock price), stated strike prices, warrant expiration dates, the risk-free interest rate and market-observable option volatility assumptions. Modeled asset values are further adjusted by applying a discount of up to 20% for certain warrants that have lockup restrictions or other features that indicate a discount to fair value is warranted. As a lock-up term nears, and other sale restrictions are lifted, discounts are adjusted downward to 0 percent once all restrictions expire or are removed.

Equity warrant assets (private portfolio): Fair value measurements of equity warrant assets of private portfolio companies are priced based on a modified Black-Scholes option pricing model to estimate the asset value by using stated strike prices, option expiration dates, risk-free interest rates and option volatility assumptions. Option volatility assumptions used in the modified Black-Scholes model are based on public market indices whose members operate in similar industries as companies in our private company portfolio. Option expiration dates are modified to account for estimates to actual life relative to stated expiration. Overall model asset values are further adjusted for a general lack of liquidity due to the private nature of the associated underlying company. There is a direct correlation between changes in the volatility and remaining life assumptions in isolation and the fair value measurement while there is an inverse correlation between changes in the liquidity discount assumption and the fair value measurement.

It is our policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, we use quoted market prices to measure fair value. If market prices are not available, fair value measurement is based upon valuation techniques that use primarily market-based or independently-sourced market parameters, including interest rate yield curves, prepayment speeds, option volatilities and currency rates. Substantially all of our financial instruments use the foregoing methodologies, and are categorized as a Level 1 or Level 2 measurement in the fair value hierarchy. However, in certain cases, when market observable inputs for our valuation techniques may not be readily available, we are required to make judgments about assumptions we believe market participants would use in estimating the fair value of the financial instrument, and based on the significance of those judgments, the measurement may be determined to be a Level 3 fair value measurement.

The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not fully available, management judgment is necessary to estimate fair value. For inactive markets, there is little information, if any, to evaluate if individual transactions are orderly. Accordingly, we are required to estimate, based upon all available facts and circumstances, the degree to which orderly transactions are occurring and provide more weighting to price quotes that are based upon orderly transactions. In addition, changes in the market conditions may reduce the availability of quoted prices or observable data. For example, reduced liquidity in the capital markets or changes in secondary market activities could result in observable market inputs becoming unavailable. Therefore, when market data is not available, we use valuation techniques requiring more management judgment to estimate the appropriate fair value measurement. Accordingly, the degree of judgment exercised by management in determining fair value is greater for financial assets and liabilities categorized as Level 3.

4042

Table of Contents

The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of ~~September 30, 2014~~March 31, 2015:


(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at September 30, 2014		Level 1		Level 2		Level 3		Balance at March 31, 2015
Assets
Available-for-sale securities:
U.S. treasury securities	$	6,876,299	$	—	$	—	$	6,876,299	$	7,914,125	$	—	$	—	$	7,914,125
U.S. agency debentures	—		3,605,833		—		3,605,833		—		3,313,664		—		3,313,664
Residential mortgage-backed securities:
Agency-issued collateralized mortgage obligations - fixed rate	—		2,005,933		—		2,005,933		—		1,778,155		—		1,778,155
Agency-issued collateralized mortgage obligations - variable rate	—		835,957		—		835,957		—		739,203		—		739,203
Equity securities	4,211		5,203		—		9,414		1,382		394		—		1,776
Total available-for-sale securities	6,880,510		6,452,926		—		13,333,436		7,915,507		5,831,416		—		13,746,923
Non-marketable and other securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments	—		—		1,078,911		1,078,911		—		—		1,195,303		1,195,303
Other venture capital investments	—		—		43,863		43,863		—		—		78,850		78,850
Other securities	181,265		—		—		181,265		11,936		—		—		11,936
Total non-marketable and other securities (fair value accounting)	181,265		—		1,122,774		1,304,039		11,936		—		1,274,153		1,286,089
Other assets:
Interest rate swaps	—		4,965		—		4,965		—		4,340		—		4,340
Foreign exchange forward and option contracts	—		17,234		—		17,234		—		54,495		—		54,495
Equity warrant assets	—		1,563		93,397		94,960		—		2,195		122,261		124,456
Client interest rate derivatives	—		2,173		—		2,173		—		2,907		—		2,907
Total assets (1)	$	7,061,775	$	6,478,861	$	1,216,171	$	14,756,807	$	7,927,443	$	5,895,353	$	1,396,414	$	15,219,210
Liabilities
Foreign exchange forward and option contracts	$	—	$	15,833	$	—	$	15,833	$	—	$	45,727	$	—	$	45,727
Client interest rate derivatives	—		2,317		—		2,317		—		3,166		—		3,166
Total liabilities	$	—	$	18,150	$	—	$	18,150	$	—	$	48,893	$	—	$	48,893


(1)	Included in Level 1 and Level 3 assets are $~~163.6~~9 million and $~~1.0~~1.2 billion, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

4143

Table of Contents

The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, ~~2013~~2014:


(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2013		Level 1		Level 2		Level 3		Balance at December 31, 2014
Assets
Available-for-sale securities:
U.S. treasury securities									$	7,302,273	$	—	$	—	$	7,302,273
U.S. agency debentures	$	—	$	4,345,232	$	—	$	4,345,232	—		3,561,556		—		3,561,556
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	—		2,473,576		—		2,473,576
Agency-issued collateralized mortgage obligations - fixed rate	—		3,325,758		—		3,325,758		—		1,884,843		—		1,884,843
Agency-issued collateralized mortgage obligations - variable rate	—		1,186,573		—		1,186,573		—		784,475		—		784,475
Agency-issued commercial mortgage-backed securities	—		564,604		—		564,604
Municipal bonds and notes	—		86,027		—		86,027
Equity securities	3,732		1,319		—		5,051		4,290		3,218		—		7,508
Total available-for-sale securities	3,732		11,983,089		—		11,986,821		7,306,563		6,234,092		—		13,540,655
Non-marketable and other securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments	—		—		862,972		862,972		—		—		1,130,882		1,130,882
Other venture capital investments	—		—		32,839		32,839		—		—		71,204		71,204
Other Securities	2,125		—		319,249		321,374
Other securities									108,251		—		—		108,251
Total non-marketable and other securities (fair value accounting)	2,125		—		1,215,060		1,217,185		108,251		—		1,202,086		1,310,337
Other assets:
Interest rate swaps	—		6,492		—		6,492		—		4,609		—		4,609
Foreign exchange forward and option contracts	—		15,530		—		15,530		—		34,231		—		34,231
Equity warrant assets	—		3,622		99,891		103,513		—		1,906		114,698		116,604
Loan conversion options	—		314		—		314
Client interest rate derivatives	—		1,265		—		1,265		—		2,546		—		2,546
Total assets (1)	$	5,857	$	12,010,312	$	1,314,951	$	13,331,120	$	7,414,814	$	6,277,384	$	1,316,784	$	15,008,982
Liabilities
Foreign exchange forward and option contracts	$	—	$	12,617	$	—	$	12,617	$	—	$	28,363	$	—	$	28,363
Client interest rate derivatives	—		1,396		—		1,396		—		2,748		—		2,748
Total liabilities	$	—	$	14,013	$	—	$	14,013	$	—	$	31,111	$	—	$	31,111


(1)	Included in Level 1 and Level 3 assets are $~~2.0~~100 million and $1.1 billion, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

4244

Table of Contents

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively:


(Dollars in thousands)	Beginning Balance		Total Realized and Unrealized Gains (Losses) Included in Income		Purchases		Sales			Issuances		Distributions and Other Settlements			Transfers Out of Level 3			Ending Balance		Beginning Balance		Total Realized and Unrealized Gains Included in Income		Purchases		Sales			Issuances		Distributions and Other Settlements			Transfers Out of Level 3			Ending Balance
Three months ended September 30, 2014
Three months ended March 31, 2015
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	1,040,522	$	43,460	$	49,037	$	—		$	—	$	(54,108	)	$	—		$	1,078,911	$	1,130,882	$	46,854	$	58,670	$	—		$	—	$	(41,103	)	$	—		$	1,195,303
Other venture capital investments	43,747		5,546		6,304		(11,122		)	—		(612		)	—			43,863		71,204		6,450		1,370		(39		)	—		(135		)	—			78,850
Other securities (fair value accounting)	5,808		—		—		—			—		—			(5,808		)	—
Total non-marketable and other securities (fair value accounting)(1)	1,090,077		49,006		55,341		(11,122		)	—		(54,720		)	(5,808		)	1,122,774		1,202,086		53,304		60,040		(39		)	—		(41,238		)	—			1,274,153
Other assets:
Equity warrant assets (2)	87,151		13,805		—		(10,564		)	2,932		510			(437		)	93,397		114,698		20,084		—		(14,765		)	2,083		404			(243		)	122,261
Total assets	$	1,177,228	$	62,811	$	55,341	$	(21,686	)	$	2,932	$	(54,210	)	$	(6,245	)	$	1,216,171	$	1,316,784	$	73,388	$	60,040	$	(14,804	)	$	2,083	$	(40,834	)	$	(243	)	$	1,396,414
Three months ended September 30, 2013
Three months ended March 31, 2014
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	741,522	$	34,288	$	41,704	$	—		$	—	$	(44,015	)	$	—		$	773,499	$	862,972	$	111,335	$	44,455	$	—		$	—	$	(41,840	)	$	—		$	976,922
Other venture capital investments	123,493		4,530		1,016		4			—		(73,684		)	—			55,359		32,839		1,838		670		(3,514		)	—		(3,527		)	—			28,306
Other securities (fair value accounting)	—		143,301		—		—			—		73,753			—			217,054		319,249		102,694		—		(46,840		)	—		3,417			(16,033		)	362,487
Total non-marketable and other securities (fair value accounting) (1)	865,015		182,119		42,720		4			—		(43,946		)	—			1,045,912		1,215,060		215,867		45,125		(50,354		)	—		(41,950		)	(16,033		)	1,367,715
Other assets:
Equity warrant assets (2)	73,229		18,215		—		(6,366		)	2,995		365			(312		)	88,126		99,891		24,378		—		(39,993		)	3,417		626			(677		)	87,642
Total assets	$	938,244	$	200,334	$	42,720	$	(6,362	)	$	2,995	$	(43,581	)	$	(312	)	$	1,134,038	$	1,314,951	$	240,245	$	45,125	$	(90,347	)	$	3,417	$	(41,324	)	$	(16,710	)	$	1,455,357
Nine months ended September 30, 2014
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	862,972	$	192,240	$	159,448	$	—		$	—	$	(135,749	)	$	—		$	1,078,911
Other venture capital investments	32,839		8,060		22,800		(15,561		)	—		(4,149		)	(126		)	43,863
Other securities (fair value accounting)	319,249		104,310		—		(46,840		)	—		3,417			(380,136		)	—
Total non-marketable and other securities (fair value accounting) (1)	1,215,060		304,610		182,248		(62,401		)	—		(136,481		)	(380,262		)	1,122,774
Other assets:
Equity warrant assets (2)	99,891		51,325		—		(67,201		)	9,098		1,718			(1,434		)	93,397
Total assets	$	1,314,951	$	355,935	$	182,248	$	(129,602	)	$	9,098	$	(134,763	)	$	(381,696	)	$	1,216,171
Nine months ended September 30, 2013
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	665,921	$	90,526	$	107,022	$	—		$	—	$	(89,970	)	$	—		$	773,499
Other venture capital investments	127,091		5,779		1,210		(381		)	—		(74,779		)	(3,561		)	55,359
Other securities (fair value accounting)	—		143,301		—		—			—		73,753			—			217,054
Total non-marketable and other securities (fair value accounting) (1)	793,012		239,606		108,232		(381		)	—		(90,996		)	(3,561		)	1,045,912
Other assets:
Equity warrant assets (2)	66,129		26,142		—		(10,805		)	7,309		1,743			(2,392		)	88,126
Total assets	$	859,141	$	265,748	$	108,232	$	(11,186	)	$	7,309	$	(89,253	)	$	(5,953	)	$	1,134,038

~~Table of Contents~~


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


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

4445

Table of Contents

The following table presents the amount of unrealized gains (losses) included in earnings (which is inclusive of noncontrolling interest) attributable to Level 3 assets still held at ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,					Nine months ended September 30,				Three months ended March 31,
(Dollars in thousands)	2014			2013		2014		2013		2015		2014
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	57,967		$	32,694	$	207,885	$	89,705	$	45,935	$	111,856
Other venture capital investments	(1,231		)	4,603		78		5,720		6,379		(15		)
Other securities (fair value accounting)	—			143,301		78,967		143,301		—		78,968
Total non-marketable and other securities (fair value accounting) (1)	56,736			180,598		286,930		238,726		52,314		190,809
Other assets:
Equity warrant assets (2)	6,911			14,205		17,777		19,788		16,261		3,782
Total unrealized gains, net	$	63,647		$	194,803	$	304,707	$	258,514	$	68,575	$	194,591
Unrealized gains attributable to noncontrolling interests	$	47,165		$	164,871	$	193,841	$	215,340	$	49,617	$	176,085


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


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

The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013.~~2014. We have not included in this table our venture capital and private equity fund investments (fair value accounting) as we use net asset value per share (as obtained from the general partners of the investments) as a practical expedient to determine fair value.


(Dollars in thousands)	Fair value		Valuation Technique		Significant Unobservable Inputs		Weighted Average			Fair value			Valuation Technique		Significant Unobservable Inputs		Weighted Average
September 30, 2014:
March 31, 2015:
Other venture capital investments (fair value accounting)	$	43,863	Private company equity pricing		(1)		(1	)		$	78,850		Private company equity pricing		(1)		(1	)
Equity warrant assets (public portfolio)	529		Modified Black-Scholes option pricing model		Volatility		43.9	%		1,472			Modified Black-Scholes option pricing model		Volatility		46.6	%
				Risk-Free interest rate		2.1	%							Risk-Free interest rate		1.8	%
				Sales restrictions discount (2)		15.7	%							Sales restrictions discount (2)		15.2	%
Equity warrant assets (private portfolio)	92,868			Modified Black-Scholes option pricing model		Volatility		38.2	%		120,789			Modified Black-Scholes option pricing model		Volatility		38.1	%
					Risk-Free interest rate		1.0	%							Risk-Free interest rate		0.7	%
					Marketability discount (3)		20.0	%							Marketability discount (3)		18.1	%
					Remaining life assumption (4)		45.0	%							Remaining life assumption (4)		45.0	%
December 31, 2013:
December 31, 2014:
Other venture capital investments (fair value accounting)	$	32,839		Private company equity pricing		(1)		(1	)		$	71,204		Private company equity pricing		(1)		(1	)
Other securities	319,249		Modified stock price		Sales restrictions discount (2)		12.0	%
Equity warrant assets (public portfolio)	24,217		Modified Black-Scholes option pricing model		Volatility		41.3	%		1,681			Modified Black-Scholes option pricing model		Volatility		42.6	%
				Risk-Free interest rate		1.7	%							Risk-Free interest rate		1.7	%
				Sales restrictions discount (2)		13.7	%							Sales restrictions discount (2)		17.8	%
Equity warrant assets (private portfolio)	75,674			Modified Black-Scholes option pricing model		Volatility		40.1	%		113,017			Modified Black-Scholes option pricing model		Volatility		38.3	%
					Risk-Free interest rate		0.8	%							Risk-Free interest rate		0.9	%
					Marketability discount (3)		22.5	%							Marketability discount (3)		20.0	%
					Remaining life assumption (4)		45.0	%							Remaining life assumption (4)		45.0	%

(1)

In determining the fair value of our other venture capital investment portfolio, we evaluate a variety of factors related to each underlying private portfolio company including, but not limited to, actual and forecasted results, cash position, recent or planned transactions and market comparable companies. Additionally, we have ongoing communication with the portfolio companies and venture capital fund managers, to determine whether there is a material change in fair value. These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.

4546

Table of Contents

~~These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.~~


(2)	We adjust quoted market prices of public companies, which are subject to certain sales restrictions. Sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sales restrictions, which typically range from 3 to 6 months.

(3)

Our marketability discount is applied to all private company warrants to account for a general lack of liquidity due to the private nature of the associated underlying company. The quantitative measure used is based ~~on long-run averages and is influenced over time by~~upon various ~~factors, including market conditions.~~option-pricing models. On a quarterly basis, a sensitivity analysis is performed on our marketability discount.

(4)

We adjust the contractual remaining term of private company warrants based on our estimate of the actual remaining life, which we determine by utilizing historical data on cancellations and exercises. At ~~September 30, 2014~~March 31, 2015, the weighted average contractual remaining term was ~~6.25~~2.61 years, compared to our estimated remaining life of ~~2.81~~5.80 years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014, ~~and 2013,~~ we did not have any material transfers between Level 2 and Level 1.Transfers from Level 3 to Level 1 for the three months ended September 30, 2014 include $5.8 million as a result of the expiration of lockup and other restrictions on one of our other securities portfolio companies. Transfers from Level 3 to Level 1 for the nine months ended September 30,March 31, 2014 included ~~$380.1~~$16.0 million as a result of the expiration of lockup and other restrictions on certain of our other securities. ~~Transfers~~We did not have any transfers from Level 3 to Level 21 for the ~~nine~~three months ended ~~September 30, 2013 include $3.6 million due to the IPO of one of our portfolio companies.~~March 31, 2015.

All other transfers from Level 3 to Level 2 for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and~~ ~~2013~~ were due to the transfer of equity warrant assets from our private portfolio to our public portfolio (see our Level 3 reconciliation above). All amounts reported as transfers represent the fair value as of the date of the change in circumstances that caused the transfer.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

Net long-lived assets held-for-sale

The fair value of assets held-for-sale is estimated by their net realizable value, which represents the potential sales price less costs to sell. Valuation techniques utilized are significant assumptions not observable in the market, accordingly, we classify these assets as Level 3. The carrying value of $48.2 million of our net long-lived assets held-for-sale at March 31, 2015 approximates fair value. At December 31, 2014, the carrying value and fair value of our net long-lived assets held-for-sale was $44.3 million and $45.4 million, respectively.

Financial Instruments not Carried at Fair Value

FASB guidance over financial instruments requires that we disclose estimated fair values for our financial instruments not carried at fair value. Fair value estimates, methods and assumptions, set forth below for our financial instruments, are made solely to comply with these requirements.

Fair values are based on estimates or calculations at the transaction level using present value techniques in instances where quoted market prices are not available. Because broadly traded markets do not exist for many of our financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. The aggregation of the fair value calculations presented herein does not represent, and should not be construed to represent, the underlying value of the Company.

The following describes the methods and assumptions used in estimating the fair values of financial instruments ~~excluding~~for which carrying value approximates fair value and estimated fair values of financial instruments not recorded at fair value on a recurring basis and excludes financial instruments and assets and liabilities already recorded at fair value as described above.

~~Cash and Cash Equivalents~~Financial Instruments for which Carrying Value Approximates Fair Value

Cash and cash equivalents include cash on hand, cash balances due from banks, interest-earning deposits, securities purchased under agreements to resell and other short-term investment securities. The carrying amount is a reasonable estimate ofCertain financial instruments that are not carried at fair value ~~because of~~on the ~~insignificant risk of changes in~~Consolidated Balance Sheets are carried at amounts that approximate fair value, due to ~~changes in~~their short-term nature and generally negligible credit risk. These instruments include cash and cash equivalents; FHLB and FRB stock; accrued interest receivable; short-term borrowings; short-term time deposits; and accrued interest payable. In addition, U.S. GAAP requires that the fair value of deposit liabilities with no stated maturity (i.e., demand, savings and certain money market ~~interest rates, and~~deposits) be equal to their carrying value; recognition of the inherent funding value of these instruments ~~are purchased in conjunction with our cash management activities.~~is not permitted.

Estimated Fair Values of Financial Instruments Not Recorded at Fair Value on a Recurring Basis

Held-to-Maturity Securities

Held-to-maturity securities include similar investments held in our available-for-sale securities portfolio and are valued using the same methodologies. All securities included in our held-to-maturity securities portfolio are valued using Level 2 inputs. Refer to Level 2 fair value measurements above for significant inputs used in the valuation of our held-to-maturity investment securities.

Table of Contents

Non-Marketable Securities (Cost and Equity Method Accounting)

Non-marketable securities includes other investments ~~(equity method accounting), low income housing tax credit funds~~ (equity method accounting), venture capital and private equity fund investments (cost method accounting), and other venture capital investments (cost method accounting). Other investments (equity method accounting) ~~include~~includes our investment in ~~SPD Silicon Valley Bank ("SPD-SVB"),~~SPD-SVB, our joint venture bank in China. At this time, the carrying value of our investment in SPD-SVB is a reasonable estimate of fair value. The fair value of the remaining other investments (equity method accounting) and the fair value of venture capital and private equity fund investments (cost method accounting) and other venture capital investments

~~Table of Contents~~

~~(cost~~ (cost method accounting) is based on financial information obtained from the investee or obtained from the fund investments’ or debt fund investments’ respective general partners. For private company investments, estimated fair value is based on consideration of a range of factors including, but not limited to, the price at which the investment was acquired, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, and financing transactions subsequent to the acquisition of the investment. For our fund investments, we utilize the net asset value per share as obtained from the general partners of the investments. We adjust the net asset value per share for differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example ~~June 30~~December 31^thst, for our ~~September 30~~March 31^thst consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period. ~~The carrying value of our low income housing tax credit funds (equity method accounting) is a reasonable estimate of fair value.~~

Loans

The fair value of fixed and variable rate loans is estimated by discounting contractual cash flows using rates that reflect current pricing for similar loans and the projected forward yield curve. This method is not based on the exit price concept of fair value required under ASC 820, Fair Value Measurements and Disclosures.

~~FHLB and Federal Reserve Bank Stock~~

Investments in FHLB and Federal Reserve Bank stock are recorded at cost. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and they do not have a readily determinable market value.

~~Accrued Interest Receivable and Payable~~

~~The carrying amounts of accrued interest receivable and payable are reasonable estimates of fair value due to the short-term nature of these balances.~~

Long-Term Deposits

The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits is equal to the amount payable on demand at the measurement date. The fair value oflong-term time deposits is estimated by discounting the cash flows using our cost of borrowings and the projected forward yield curve over their remaining contractual term.

~~Short-Term Borrowings~~

~~Short-term borrowings at both~~ ~~September 30, 2014~~ ~~and~~ ~~December 31, 2013~~ included cash collateral received from our counterparties in relation to derivative contracts where the net market value is in our favor, primarily for our interest rate swap agreement related to our 6.05% Subordinated Notes. The carrying amount of the cash collateral is a reasonable estimate of fair value.

Long-Term Debt

~~Long-term debt at~~ ~~September 30, 2014~~ ~~and~~ ~~December 31, 2013~~ ~~included our 5.375% Senior Notes, 7.0% Junior Subordinated Debentures and 6.05% Subordinated Notes.~~ The fair value of long-term debt is generally based on quoted market prices, when available, or is estimated based on calculations utilizing third-party pricing services and current market spread, price indications from reputable dealers or observable market prices of the underlying instrument(s), whichever is deemed more reliable. Also included in the estimated fair value of our 6.05% Subordinated Notes are amounts related to hedge accounting associated with the ~~note.~~notes.

Off-Balance Sheet Financial Instruments

The fair value of net available commitments to extend credit is estimated based on the average amount we would receive or pay to execute a new agreement with identical terms and pricing, while taking into account the counterparties’ credit standing.

Letters of credit are carried at their fair value, which was equivalent to the residual premium or fee at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014. Commitments to extend credit and letters of credit typically result in loans with a market interest rate if funded.

4748

Table of Contents

The following fair value hierarchy table presents the estimated fair values of our financial instruments that are not carried at fair value at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


			Estimated Fair Value								Estimated Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Carrying Amount		Level 1		Level 2		Level 3
September 30, 2014:
March 31, 2015:
Financial assets:
Cash and cash equivalents	$	1,872,537	$	1,872,537	$	—	$	—	$	1,308,003	$	1,308,003	$	—	$	—
Held-to-maturity securities	6,662,025		—		6,613,893		—		7,816,797		—		7,869,653		—
Non-marketable and other securities (cost and equity method accounting)	399,511		—		—		497,855
Non-marketable securities (cost and equity method accounting)									295,427		—		—		402,301
Net commercial loans									12,900,215		—		—		13,034,516
Net consumer loans									1,371,484		—		—		1,347,284
FHLB and Federal Reserve Bank stock									53,496		—		—		53,496
Accrued interest receivable									91,415		—		91,415		—
Financial liabilities:
Short-term FHLB advances									60,000		60,000		—		—
Other short-term borrowings									17,766		17,766		—		—
Non-maturity deposits (1)									33,752,797		33,752,797		—		—
Time deposits									98,778		—		98,740		—
3.50% Senior Notes									349,710		—		348,639		—
5.375% Senior Notes									348,495		—		396,799		—
6.05% Subordinated Notes (2)									49,910		—		52,963		—
7.0% Junior Subordinated Debentures									54,802		—		53,109		—
Accrued interest payable									5,038		—		5,038		—
Off-balance sheet financial assets:
Commitments to extend credit									—		—		—		30,135
December 31, 2014:
Financial assets:
Cash and cash equivalents									$	1,796,062	$	1,796,062	$	—	$	—
Held-to-maturity securities									7,421,042		—		7,415,656		—
Non-marketable securities (cost and equity method accounting)									296,648		—		—		390,570
Net commercial loans	10,721,645		—		—		10,884,474		12,947,869		—		—		13,082,487
Net consumer loans	1,166,475		—		—		1,121,639		1,271,048		—		—		1,247,336
FHLB and Federal Reserve Bank stock	41,026		—		—		41,026		53,496		—		—		53,496
Accrued interest receivable	81,334		—		81,334		—		94,180		—		94,180		—
Financial liabilities:
Other short-term borrowings	6,630		6,630		—		—		7,781		7,781		—		—
Non-maturity deposits (1)	30,963,491		30,963,491		—		—		34,215,372		34,215,372		—		—
Time deposits	159,644		—		159,644		—		128,127		—		128,107		—
5.375% Senior Notes	348,378		—		390,740		—		348,436		—		392,616		—
6.05% Subordinated Notes (2)	50,497		—		54,423		—		50,162		—		53,537		—
7.0% Junior Subordinated Debentures	54,889		—		52,722		—		54,845		—		52,990		—
Accrued interest payable	2,932		—		2,932		—		6,998		—		6,998		—
Off-balance sheet financial assets:
Commitments to extend credit	—		—		—		29,731		—		—		—		29,097
December 31, 2013:
Financial assets:
Cash and cash equivalents	$	1,538,779	$	1,538,779	$	—	$	—
Non-marketable and other securities (cost and equity method accounting)	378,309		—		—		447,783
Net commercial loans	9,796,878		—		—		9,935,917
Net consumer loans	966,622		—		—		1,005,080
FHLB and Federal Reserve Bank stock	40,632		—		—		40,632
Accrued interest receivable	67,772		—		67,772		—
Financial liabilities:
Other short-term borrowings	5,080		5,080		—		—
Non-maturity deposits (1)	22,259,119		22,259,119		—		—
Time deposits	213,860		—		213,874		—
5.375% Senior Notes	348,209		—		383,782		—
6.05% Subordinated Notes (2)	51,987		—		56,297		—
7.0% Junior Subordinated Debentures	55,020		—		51,915		—
Accrued interest payable	6,858		—		6,858		—
Off-balance sheet financial assets:
Commitments to extend credit	—		—		—		24,285


(1)	Includes noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits.


(2)	At ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, included in the carrying value and estimated fair value of our 6.05% Subordinated Notes was an interest rate swap valued at $~~5.0~~4.3 million and $~~6.5~~4.6 million, respectively, related to hedge accounting associated with the notes.

4849

Table of Contents

Investments in Entities that Calculate Net Asset Value Per Share

FASB guidance over certain fund investments requires that we disclose the fair value of funds, significant investment strategies of the investees, redemption features of the investees, restrictions on the ability to sell investments, estimate of the period of time over which the underlying assets are expected to be liquidated by the investee, and unfunded commitments related to the investments.

Our investments in debt funds and venture capital and private equity fund investments generally cannot be redeemed. Alternatively, we expect distributions, if any, to be received primarily through IPOs and M&A activity of the underlying assets of the fund. Subject to applicable requirements under the Volcker Rule, we do not have any plans to sell any of these fund investments. If we decide to sell these investments in the future, the investee fund’s management must approve of the buyer before the sale of the investments can be completed. The fair values of the fund investments have been estimated using the net asset value per share of the investments, adjusted for any differences between our measurement date and the date of the fund investment’s net asset value by using the most recently available financial information from the investee general partner, for example ~~June 30~~December 31^thst, for our ~~September 30~~March 31^thst consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

The following table is a summary of the estimated fair values of these investments and remaining unfunded commitments for each major category of these investments as of ~~September 30, 2014~~March 31, 2015:


(Dollars in thousands)	Carrying Amount		Fair Value		Unfunded Commitments		Carrying Amount		Fair Value		Unfunded Commitments
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	$	1,078,911	$	1,078,911	$	478,461	$	1,195,303	$	1,195,303	$	557,992
Non-marketable securities (equity method accounting):
Other investments (2)	47,662		49,064		5,836		50,132		51,323		5,836
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments (3)	142,710		239,857		22,022		134,575		238,293		15,985
Total	$	1,269,283	$	1,367,832	$	506,319	$	1,380,010	$	1,484,919	$	579,813

(1)

Venture capital and private equity fund investments within non-marketable securities (fair value accounting) include investments made by our managed funds of funds and one of our direct venture funds. These investments represent investments in venture capital and private equity funds that invest primarily in U.S. and global technology and life ~~sciences~~science & healthcare companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are $~~995 million~~1.1 billion and $~~474~~555 million, respectively, attributable to noncontrolling interests. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of terms of the funds.

(2)

Other investments within non-marketable securities (equity method accounting) include investments in debt funds and venture capital and private equity fund investments that invest in or lend money to primarily U.S. and global technology and life ~~sciences~~science & healthcare companies. It is estimated that we will receive distributions from the fund investments over the next 510 to 713 years, depending on the age of the funds.

(3)

Venture capital and private equity fund investments within non-marketable securities (cost method accounting) include investments in venture capital and private equity fund investments that invest primarily in U.S. and global technology and life ~~sciences~~science & healthcare companies. It is estimated that we will receive distributions from the fund investments over the next 510 to 713 years, depending on the age of the funds and any potential extensions of the terms of the funds.

Table of Contents


~~14.~~15.	Legal Matters

Certain lawsuits and claims arising in the ordinary course of business have been filed or are pending against us or our affiliates. In accordance with applicable accounting guidance, we establish accruals for all lawsuits, claims and expected settlements when we believe it is probable that a loss has been incurred and the amount of the loss is reasonably estimable. When a loss contingency is not both probable and estimable, we do not establish an accrual. Any such loss estimates are inherently uncertain, based on currently available information and are subject to management’s judgment and various assumptions. Due to the inherent subjectivity of these estimates and unpredictability of outcomes of legal proceedings, any amounts accrued may not represent the ultimate resolution of such matters.

To the extent we believe any potential loss relating to such lawsuits and claims may have a material impact on our liquidity, consolidated financial position, results of operations, and/or our business as a whole and is reasonably possible but not probable,

we disclose information relating to any such potential loss, whether in excess of any established accruals or where there is no established accrual. We also disclose information relating to any material potential loss that is probable but not reasonably estimable. Where reasonably practicable, we will provide an estimate of loss or range of potential loss. No disclosures are generally made for any loss contingencies that are deemed to be remote.

Based upon information available to us, our review of lawsuits and claims filed or pending against us to date and consultation with our outside legal counsel, we have not recognized a material accrual liability for these matters, nor do we currently expect it is reasonably possible that these matters will result in a material liability to the Company. However, the outcome of litigation and other legal and regulatory matters is inherently uncertain, and it is possible that one or more of such matters currently pending or threatened could have an unanticipated material adverse effect on our liquidity, consolidated financial position, results of operations, and/or our business as a whole, in the future.


~~15.~~16.	Related Parties

~~SVB Financial has commitments under two partially-syndicated revolving line of credit facilities totaling~~ ~~$65.0 million~~ ~~to Gold Hill Capital 2008 LP, a venture debt fund, and an affiliated fund, for which SVB Financial has ownership interests. Of the~~ ~~$65.0 million, $6.0 million is syndicated to another lender. SVB Financial has an~~ ~~11.5 percent~~ ~~direct ownership interest and a~~ ~~4.0 percent~~ ~~indirect ownership interest in Gold Hill Capital 2008 LP through our~~ ~~83.8 percent~~ ~~interest in its general partner, Gold Hill Capital 08, LLC. The lines of credit are secured and bear an interest rate of~~ ~~national Prime plus one percent. The highest outstanding balance under SVB Financial's portion of the facility for~~During the three months ended ~~September 30, 2014~~ ~~was $19.1 million. SVB Financial's portion of the outstanding balance was $5.0 million at~~ ~~September 30, 2014~~ ~~and $23.0 million at December~~March 31, ~~2013.~~

~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~,2015, the Bank made loans to related parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of ten percent or more of the equity securities of such companies. Such loans: (a) were made in the ordinary course of business; (b) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other non-related persons; and (c) did not involve more than the normal risk of collectability or present other unfavorable features. Additionally, we also provide real estate secured loans to eligible employees through our EHOP.


~~16.~~17.	Subsequent Events

~~Update~~The sale of all of the outstanding capital stock of SVBIF to Temasek, a Singapore investment company was completed on ~~Investments in FireEye~~

AsApril 13, 2015. The final settlement of September 30, 2014, our managed funds (including SVB Financial's interest) held approximately 4.9 million shares of FireEye common stock ("FireEye Shares"). From September 30, 2014 to November 6, 2014, the market share price of FireEye’s common stock has slightly decreased from $30.56 to $30.04 and as such there has not been a significant decline in the valuation of our remaining FireEye related investments.

~~Investment gains (or losses) relating to the remaining 4.9 million FireEye Shares held by our managed funds are based on valuation changes or~~ the sale of such securities, and are subject to FireEye’s stock price, which is subject to market conditions and various other factors. Additionally, any future gains and losses with respect to the remaining shares held bydid not have a material impact on our managed funds at September 30, 2014 are currently unrealized, and the extent such gains (or losses) will become realized is subject to a variety of factors, including among other things, changes in prevailing market prices and timing of any salesfirst quarter 2015 results, or ~~distribution of securities, which are subject to our funds' separate discretionary securities sales/distribution and governance processes.~~subsequent results thereof.

4951

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q, including in particular “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part I, Item 2 of this report, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. ~~Management~~In addition, management has in the past and might in the future make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements are statements that are not historical facts. Broadly speaking, forward-looking statements include, but are not limited to, the following:


▪	Projections of our net interest income, noninterest income, earnings per share, noninterest expenses (including professional services, compliance, compensation and other costs), cash flows, balance sheet positions, capital expenditures, liquidity and capitalization or other financial items


▪	Descriptions of our strategic initiatives, plans or objectives for future operations, including pending sales or acquisitions


▪	Forecasts of private equity/venture ~~capital/private equity~~capital funding and investment levels


▪	Forecasts of future interest rates, economic performance, and income from investments


▪	Forecasts of expected levels of provisions for loan losses, loan growth and client funds


▪	Descriptions of assumptions underlying or relating to any of the foregoing

~~In this Quarterly Report on Form 10-Q, we make forward-looking statements, including, but not limited to, those discussing our management’s expectations about:~~

~~Market and economic conditions (including interest rate environment, and levels of public offerings, mergers/acquisitions and venture capital financing activities) and the associated impact on us~~

The sufficiency of our capital, including sources of capital (such as deposits and funds generated through retained earnings), the extent to which capital may be used or required, our capital category classification, and management of our capital ratios

~~The adequacy of our liquidity position, including sources of liquidity (such as funds generated through retained earnings)~~

~~Our overall investment plans, strategies and activities, including venture capital/private equity funding and investments, and our investment of excess cash/liquidity~~

The realization, timing, valuation and performance of equity or other investments, including the impact of changes in our valuation of our investments (such as FireEye), and the volatility of any gains or losses

~~The likelihood that the market value of our temporarily impaired investments will recover~~

~~Our intent to sell our available-for-sale securities prior to recovery of our cost basis, or the likelihood of such~~

~~Our ability and intent to hold our held-to-maturity securities until maturity~~

~~The impact on our interest income from mortgage prepayment levels as it relates to our premium amortization expense, and from changes in loan yields due to shifts in loan mix~~

~~Expected cash requirements for unfunded commitments to certain investments, including capital calls~~

Our overall management of interest rate risk, including managing the sensitivity of our interest-earning assets and interest-bearing liabilities to interest rates, and the impact to earnings from a change in interest rates

~~The credit quality of our loan portfolio, including levels and trends of nonperforming loans, impaired loans, criticized loans and troubled debt restructurings~~

~~The adequacy of reserves (including allowance for loan and lease losses) and the appropriateness of our methodology for calculating such reserves~~

~~The level of loan and deposit and client investment fund balances~~

~~The level of client investment fees and associated margins~~

~~The profitability of our products and services, including loan yields, loan pricing, and interest margins~~

~~Table of Contents~~

~~Our strategic initiatives, including the expansion of operations and business activities in China, Hong Kong, India, Israel, the UK and elsewhere domestically or internationally~~

~~The expansion and growth of our noninterest income sources~~

~~Distributions of venture capital, private equity or debt fund investment proceeds; intentions to sell such fund investments~~

~~The changes in, or adequacy of, our unrecognized tax benefits and any associated impact~~

~~The realization of certain deferred tax assets, and of any benefit stemming from certain net operating loss carryforwards~~

~~The extent to which counterparties, including those to our forward and option contracts, will perform their contractual obligations~~

~~The condition and suitability of our properties~~

~~The manner in which we compete~~

~~The effect of application of accounting pronouncements and regulatory requirements~~

~~The effect of lawsuits and claims~~

Regulatory developments, including the nature and timing of the adoption and effectiveness of requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), new capital requirements and other applicable Federal, State and International laws and regulations, and any related impact on us

~~The expected impact of the "Volcker Rule" under the Dodd-Frank Act, including our intention to seek the maximum extensions to the conformance period applicable to us~~

You can identify these and other forward-looking statements by the use of words such as “becoming,” “may,” “will,” “should,” "could," "would," ~~“predicts,~~“predict,” “potential,” “continue,” ~~“anticipates,~~“anticipate,” ~~“believes,~~“believe,” ~~“estimates,~~“estimate,” ~~“seeks,~~“seek,” ~~“expects,~~“expect,” ~~“plans,~~“plan,” ~~“intends,~~“intend,” the negative of such words, or comparable terminology. Forward-looking statements are neither historical facts nor assurances of future performance. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we have based these expectations on our current beliefs as well as our assumptions, and such expectations may prove to be incorrect. 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 of 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.

~~Factors~~ Important factors that could cause our actual results and financial condition to differ from the expectations stated in the forward-looking statements include, ~~but are not limited~~among others:

Market and economic conditions, including the interest rate environment, and the associated impact on us

The credit profile and credit quality of our loan portfolio and volatility of our levels of nonperforming assets and charge-offs

The adequacy of our allowance for loan losses and the need to make provisions for loan losses for any period

The borrowing needs of our clients

The sufficiency of our capital and liquidity positions

The levels of loans, deposits and client investment fund balances

The performance of our portfolio investments; the general condition of the public and private equity and mergers and acquisitions markets and their impact on our investments, including equity warrant assets, venture capital and private equity funds and direct equity investments

Our overall investment plans and strategies; the realization, timing, valuation and performance of our equity or other investments

The levels of public offerings, mergers and acquisitions and venture capital investment activity of our clients that may impact the borrowing needs of our clients

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

Expansion of our business internationally

The impact of legal requirements and regulations limiting or restricting our activities or resulting in higher costs or increased compliance responsibilities, including the Volcker rule

The impact of lawsuits and claims

Changes in accounting standards

The levels of equity capital available to our client or portfolio companies

Our ability to maintain or increase our market share, including through successfully implementing our business strategy and undertaking new business initiatives

Table of Contents

Other factors as discussed ~~elsewhere~~ in ~~this Quarterly Report on Form 10-Q, under~~ “Risk Factors” ~~set forth~~under Part I, Item 1A in our ~~Annual Report on~~2014 Form 10-K ~~for the year ended~~ ~~December 31, 2013~~ (“~~2013~~ ~~Form 10-K”), as filed with the SEC on February 27, 2014, and other documents we file with the SEC.~~

We urge investors to consider all of these factors carefully in evaluating the forward-looking statements contained in this ~~report.~~Quarterly Report on Form 10-Q. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included in this filing are made only as of the date of this filing. We assume no obligation and do not intend to revise or update any forward-looking statements contained in this Quarterly Report on Form 10-Q, except as ~~applicable~~required by law.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our interim unaudited consolidated financial statements and accompanying notes as presented in Part I, Item 1 of this report and in conjunction with our ~~2013~~2014 Form 10-K.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentations.

Management’s Overview of ~~Third~~First Quarter ~~2014~~2015 Performance

Overall, we had a strong ~~third~~first quarter in ~~2014,~~2015, which was reflective of ~~continued strong balance sheet~~healthy average loan growth, ~~healthy loan and fee activity and~~ solid credit ~~quality.~~quality and strong venture capital investment and warrant gains. We continued to perform well as a result of our focus on innovation companies and their investors, continued positive business conditions for our clients, ~~and~~ our efforts to secure client ~~relationships.~~relationships and continued solid credit quality of our loan portfolio. We had net income available to common stockholders of ~~$63.0~~$88.5 million and diluted EPS of ~~$1.22~~$1.71 for the ~~third~~first quarter of ~~2014.~~2015. This compares to net income of ~~$67.6~~$91.0 million and diluted EPS of ~~$1.46~~$1.95 in the ~~third~~first quarter of ~~2013.~~2014. In the ~~third~~first quarter of ~~2014, compared to the third quarter of 2013,~~2015, we experienced strong growth in net interest income as a result of the increase in interest earned from our fixed income investment ~~portfolio due to~~and loan portfolios. These increases are reflective of an increase in average investments of ~~$8.1~~$8.9 billion and average loan growth of $3.3 billion, driven by our significant deposit ~~growth, with record high quarterly average deposits of $29.7 billion, and loan growth of $1.9 billion.~~growth. In addition, we had solid gains on our venture capital investments and equity warrant assets, growth in core fee income and continued strength in our liquidity and capital base. ~~Net gains on investment securities of $55.4 million, excluding FireEye losses of $49.8 million, were also strong in the third quarter of 2014.~~ Our total client funds, which consist of on-balance sheet deposits and off-balance sheet client investment funds, also increased,

~~Table of Contents~~

reflecting growth from our existing and new clients. WeNoninterest expense increased $25.7 million primarily from increases in compensation and benefits, as well as, professional services related to the continued ~~to invest~~investment in the improvement and expansion of our product offerings and infrastructure, which resulted in a $21.5 million increase in our noninterest expense primarily from increases in professional services, business development and travel and other expenses supporting client services.infrastructure.

~~Third~~First quarter ~~2014~~2015 results (compared to the ~~third~~first quarter ~~2013~~2014, where applicable) included:


▪	Continued strong growth in our lending business with record high average loan balances of ~~$11.4~~$14.0 billion, an increase of ~~$1.9~~$3.3 billion, or ~~19.8~~30.4 percent. Period-end loan balances were ~~$12.0~~$14.4 billion, an increase of ~~$2.2~~$3.6 billion, or ~~22.3~~33.3 percent.


▪	Average investment securities, excluding non-marketable and other securities, of ~~$18.2~~$21.1 billion, an increase of ~~$8.1~~$8.9 billion, or ~~80.7~~72.6 percent. Period-end investment securities, excluding non-marketable and other securities, of ~~$20.0~~$21.6 billion, an increase of ~~$9.8~~$8.7 billion, or ~~95.8~~67.9 percent.


▪	Average deposit balances of ~~$29.7~~$33.9 billion, an increase of $10.2 billion, or ~~52.0~~43.0 percent. Period-end deposit balances of ~~$31.1~~$33.9 billion, an increase of ~~$11.1~~$8.4 billion, or ~~55.6~~32.9 percent.


▪	Average total client funds (comprised of on-balance sheet deposits and off-balance sheet client investment funds) were ~~$60.7~~$67.5 billion, an increase of ~~$16.2~~$16.7 billion, or ~~36.4~~32.8 percent. Period-end total client funds were ~~$62.3~~$69.0 billion, an increase of ~~$17.0~~$15.3 billion, or ~~37.4~~28.5 percent.


▪	Issuance of $350.0 million of 3.50% Senior Notes due January 2025, resulting in net proceeds of approximately $346 million after deducting underwriting discounts and commissions and issuance costs.

▪

Net interest income (fully taxable equivalent basis) of ~~$221.0~~$239.3 million, an increase of ~~$43.5~~$42.5 million, or ~~24.5~~21.6 percent, primarily due to an increase in interest income from fixed income investment securities and loans, attributable to growth in average investment and loan balances of ~~$8.1~~$8.9 billion and ~~$1.9~~$3.3 billion, respectively, driven by the strong average deposit growth mentioned above.

▪

Net interest margin of ~~2.73~~2.64 percent, compared to ~~3.32~~3.13 percent, primarily ~~reflective of a 49~~due to an 80 basis point decrease in the overall yield of our loan portfolio and a 26 basis point decrease in our fixed income investment portfolio yield. These decreases are primarily a result of a low rate market environment as well as the shift in the composition of our interest earning assets from our higher-yielding loan portfolio to ~~our~~ lower-yielding fixed income investments ~~portfolio.~~portfolio reflective of our strong deposit growth.

▪

Provision for loan losses of ~~$16.6~~$6.5 million, compared to ~~$10.6~~$0.5 million. The provision of $~~16.6~~6.5 million was primarily driven by ~~$8.3~~an increase of $8.7 million ~~in net charge-offs, $7.0 million from period-end loan growth and $3.7 million due to a change in the composition of our performing loan portfolio, offset by a~~ ~~$2.4 million~~ ~~decrease~~ in the reserve for impaired loans, ~~resulting from lower impaired loan balances.~~reflective of an increase in the reserve for a previously

Table of Contents

impaired loan, as well as net charge-offs of $3.9 million. These increases were offset by a decrease of $6.8 million due to the improvement in the credit quality of our performing loans.

▪

Non-GAAP core fee income (deposit service charges, letters of ~~$53.3~~credit fees, credit card fees, lending related fees, client investment fees, and foreign exchange fees) of $58.2 million, an increase of ~~$10.1~~$7.3 million, or ~~23.5~~14.3 percent, primarily from an increase in ~~foreign exchange and~~ credit card fee income, reflective of increased client activity and transaction ~~volumes.~~volumes, and lending related fees. (See non-GAAP reconciliation under the section "Results of Operations—Noninterest Income").

▪

Net gains on investment securities of ~~$5.6~~$83.2 million, compared to net gains of ~~$187.9~~$223.9 million. [Non-GAAP net ~~losses~~gains on investment securities, net of noncontrolling interests were ~~$1.1~~$19.6 million, compared to net gains of ~~$36.5~~$37.4 million (See non-GAAP reconciliation under the section "Results of Operations—Noninterest Income—Gains on Investment Securities, Net").] The decrease in net gains primarily resulted from ~~losses on~~lower gains of our FireEye related investments. Specifically, we had ~~losses~~gains on investment securities related to FireEye of ~~$49.8~~$15.9 million ($~~9.5~~3.3 million net of noncontrolling interests and inclusive of the Company's carried interests) from our managed funds distribution of approximately 2.5 million shares of FireEye common stock to their respective investors (including the Company) during the first quarter of 2015 compared to $113.0 million of gains from FireEye ($21.8 million net of noncontrolling interests) during the ~~third~~first quarter of ~~2014, compared to FireEye related gains of $138.7 million ($26.6 million net of noncontrolling interests) for the third quarter of 2013. See~~2014. (See "Results of Operations—Noninterest Income—Gains on Investment Securities, Net" ~~for details about our FireEye related investments during the three and nine months ended September 30, 2014.~~).

▪

Net gains on equity warrant assets of $~~13.2~~20.3 million, a decrease of $~~5.6~~5.1 million, or ~~29.9~~20.1 percent, compared to $~~18.8~~25.4 million. This decrease was primarily ~~driven by~~due to the exercise of our FireEye warrants during the first quarter of 2014, which were held in our equity warrant asset portfolio ~~during the third quarter of 2013~~ and contributed to an ~~$8.1~~$18.4 million gain from the increased valuation of the warrants during the ~~third quarter of 2013.~~quarter. The decrease of ~~$8.1~~$14.4 million isfor the first quarter of 2015 compared to the first quarter of 2014 was partially offset by an increase in ~~the number~~gains of ~~equity warrant assets held at September 30, 2014 as well as gains~~$9.5 million due to increases in valuations across the equity warrant asset portfolio.

▪

Noninterest expense of ~~$182.0~~$196.1 million, an increase of ~~$21.5~~$25.7 million, or ~~13.4~~15.1 percent. This increase was primarily due to increased ~~professional services,~~ compensation and benefits as a result of an increase in average FTEs ~~business development~~ and ~~travel and other expenses.~~higher professional services expense. Average FTEs increased by ~~10.4~~12.7 percent to ~~1,850~~1,955 for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~1,675~~1,735 FTEs for the comparable ~~2013~~2014 period.

▪

Implementation of the new "Basel III" regulatory capital rules, effective January 1, 2015 contributing to a decrease in our risk-based regulatory capital ratios for SVB Financial Group and partially offsetting the increase in Silicon Valley Bank's risk-based regulatory capital ratios after the contribution of the net proceeds from our 3.50% Senior Notes issuance noted above. See Capital Ratios section under "Capital Resources" in Part I, Item 2 of this report for further details.

5254

Table of Contents

A summary of our performance for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,									Nine months ended September 30,									Three months ended March 31,
(Dollars in thousands, except per share data and ratios)	2014			2013			% Change			2014			2013			% Change
(Dollars in thousands, except per share data, employees and ratios)																			2015			2014			% Change
Income Statement:
Diluted earnings per share(1)	$	1.22		$	1.46		(16.4	)	%	$	4.17		$	3.43		21.6		%	$	1.71		$	1.95		(12.3	)	%
Net income available to common stockholders(1)	62,995			67,621			(6.8	)		205,093			157,096			30.6			88,516			90,950			(2.7	)
Net interest income	220,565			177,096			24.5			621,858			510,346			21.9			238,890			196,328			21.7
Net interest margin	2.73		%	3.32		%	(59	)	bps	2.87		%	3.32		%	(45	)	bps	2.64		%	3.13		%	(49	)	bps
Provision for loan losses	$	16,610		$	10,638		56.1		%	$	19,051		$	35,023		(45.6	)	%	$	6,452		$	494		NM
Noninterest income	80,167			257,650			(68.9	)		404,602			434,493			(6.9	)		172,018			310,225			(44.6	)	%
Noninterest expense(1)	181,989			160,524			13.4			527,871			452,830			16.6			196,108			170,408			15.1
Non-GAAP core fee income ~~(1)~~(2)	53,346			43,205			23.5			154,285			126,482			22.0			58,210			50,946			14.3
Non-GAAP noninterest income, net of noncontrolling interests ~~(1)~~(2)	75,256			105,820			(28.9	)		248,298			229,422			8.2			109,824			123,507			(11.1	)
Non-GAAP noninterest expense, net of noncontrolling interests (2)	177,246			157,234			12.7			514,540			443,813			15.9
Non-GAAP noninterest expense, net of noncontrolling interests (1) (3)																			190,645			167,087			14.1
Balance Sheet:
Average available-for-sale securities	$	12,446,821		$	10,082,202		23.5		%	$	12,698,395		$	10,462,238		21.4		%	$	13,571,213		$	12,248,925		10.8		%
Average held-to-maturity securities ~~(3)~~(4)	5,775,602			—			—			2,544,256			—			—			7,569,755			—			—
Average loans, net of unearned income	11,439,521			9,545,941			19.8			11,098,397			9,086,179			22.1			14,046,369			10,767,684			30.4
Average noninterest-bearing demand deposits	21,502,469			13,665,460			57.3			19,302,107			13,437,503			43.6			25,168,987			16,880,520			49.1
Average interest-bearing deposits	8,223,815			5,894,428			39.5			7,580,006			5,551,857			36.5			8,688,792			6,795,928			27.9
Average total deposits	29,726,284			19,559,888			52.0			26,882,113			18,989,360			41.6			33,857,779			23,676,448			43.0
Earnings Ratios:
Return on average assets (annualized) (4)	0.72		%	1.16		%	(37.9	)	%	0.87		%	0.93		%	(6.5	)	%
Return on average SVBFG stockholders’ equity (annualized) (5)	9.16			14.05			(34.8	)		11.33			11.06			2.4
Return on average assets (annualized) (1) (5)																			0.91		%	1.33		%	(31.6	)	%
Return on average SVBFG stockholders’ equity (annualized) (1) (6)																			12.38			17.57			(29.5	)
Asset Quality Ratios:
Allowance for loan losses as a percentage of total period-end gross loans	1.07		%	1.26		%	(19	)	bps	1.07		%	1.26		%	(19	)	bps	1.15		%	1.13		%	2		bps
Allowance for loan losses for performing loans as a percentage of total gross performing loans	1.05			1.13			(8	)		1.05			1.13			(8	)		0.99			1.07			(8	)
Gross loan charge-offs as a percentage of average total gross loans (annualized)	0.37			0.34			3			0.46			0.43			3			0.16			0.79			(63	)
Net loan charge-offs as a percentage of average total gross loans (annualized)	0.28			0.23			5			0.39			0.31			8			0.11			0.74			(63	)
Capital Ratios:
Total risk-based capital ratio	14.97		%	14.16		%	81		bps	14.97		%	14.16		%	81		bps
CET 1 risk-based capital ratio (7)																			12.21		%	—		%	—		bps
Tier 1 risk-based capital ratio(8)	14.03			12.95			108			14.03			12.95			108			12.42			12.35			7
Tier 1 leverage ratio	8.22			8.75			(53	)		8.22			8.75			(53	)
Tangible common equity to tangible assets (6)	7.55			8.19			(64	)		7.55			8.19			(64	)
Tangible common equity to risk-weighted assets (6)	13.97			12.96			101			13.97			12.96			101
Bank total risk-based capital ratio	13.06			12.31			75			13.06			12.31			75
Bank tier 1 risk-based capital ratio	12.11			11.08			103			12.11			11.08			103
Bank tier 1 leverage ratio	7.05			7.46			(41	)		7.05			7.46			(41	)
Bank tangible common equity to tangible assets (6)	6.76			7.34			(58	)		6.76			7.34			(58	)
Bank tangible common equity to risk-weighted assets (6)	12.14			11.17			97			12.14			11.17			97
Total risk-based capital ratio (8)																			13.38			13.41			(3	)
Tier 1 leverage ratio (8)																			7.71			7.99			(28	)
Tangible common equity to tangible assets (1) (9)																			7.49			7.03			46
Tangible common equity to risk-weighted assets (1) (8) (9)																			12.60			12.15			45
Bank CET 1 risk-based capital ratio (7)																			12.36			—			—
Bank tier 1 risk-based capital ratio (8)																			12.36			10.39			197
Bank total risk-based capital ratio (8)																			13.35			11.47			188
Bank tier 1 leverage ratio (8)																			7.43			6.72			71
Bank tangible common equity to tangible assets (1) (9)																			7.60			6.19			141
Bank tangible common equity to risk-weighted assets (1) (8) (9)																			12.77			10.26			251
Other Ratios:
Operating efficiency ratio (7)	60.43		%	36.89		%	63.8		%	51.36		%	47.86		%	7.3		%
Non-GAAP operating efficiency ratio (2)	59.83			55.50			7.8			59.05			59.89			(1.4	)
Book value per common share (8)	$	53.56		$	42.64		25.6			$	53.56		$	42.64		25.6
GAAP operating efficiency ratio (1) (10)																			47.73		%	33.64		%	41.9		%
Non-GAAP operating efficiency ratio (1) (3)																			54.61			52.17			4.7
Book value per common share (1) (11)																			$	58.16		$	45.48		27.9
Other Statistics:
Average full-time equivalent employees	1,850			1,675			10.4		%	1,784			1,662			7.3		%	1,955			1,735			12.7		%
Period-end full-time equivalent employees	1,881			1,683			11.8			1,881			1,683			11.8			1,965			1,737			13.1

~~Table of Contents~~

NM - Not meaningful


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Table of Contents


(2)	See “Results of Operations–Noninterest Income” for a description and reconciliation of non-GAAP core fee income and noninterest income.


~~(2)~~(3)	See “Results of Operations–Noninterest Expense” for a description and reconciliation of non-GAAP noninterest expense and non-GAAP operating efficiency ratio.


~~(3)~~(4)	~~Three and nine months endedSeptember 30,~~Effective June 1, 2014, ~~average balances are reflective~~ we re-designated securities with a carrying value of ~~the re-designation~~$5.4 billion from available-for-sale to ~~held-to-maturity effective June 1, 2014.~~


~~(4)~~	~~Ratio represents annualized consolidated net income available to common stockholders divided by quarterly and year-to-date average assets.~~held-to-maturity.


(5)	Ratio represents annualized consolidated net income available to common stockholders divided by quarterly ~~and year-to-date~~average assets.


(6)	Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average SVBFG stockholders’ equity.


~~(6)~~(7)	As of March 31, 2015, Common Equity Tier 1 ("CET 1") is a new ratio requirement under the Basel III Capital Rules and represents, common stock, plus related surplus and retained earnings, plus limited amounts of minority interest in the form of common stock, less certain regulatory deductions, divided by total risk-weighted assets.


(8)	Ratios as of March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for prior periods represent the previous capital rules under Basel I.


(9)	See “Capital Resources–Capital Ratios” for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.


~~(7)~~(10)	The operating efficiency ratio is calculated by dividing total noninterest expense by total taxable-equivalent net interest income plus noninterest income.


~~(8)~~(11)	Book value per common share is calculated by dividing total SVBFG stockholders’ equity by total outstanding common shares at period-end.

For more information with respect to our capital ratios, please refer to “Capital Ratios” under “Consolidated Financial Condition-Capital Ratios” below.

Critical Accounting Policies and Estimates

The accompanying management’s discussion and analysis of results of operations and financial condition is based upon our unaudited interim consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. Management evaluates estimates and assumptions on an ongoing basis. Management bases its estimates on historical experiences and various other factors and assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

Our accounting policy relating to income taxes was impacted by the adoption of ASU-2014-01 (Investments - Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects). Upon the adoption of ASU 2014-01, we elected to use the proportional amortization method to account for our investments in affordable housing projects and have applied this election retrospectively. As a result, all prior period deferred tax assets related to our investments in qualified affordable housing projects were written off as the tax credit fund amortization expense for those investments is no longer classified as a temporary difference and is included in the estimate for the provision for income taxes. The impact of this change resulted in a higher effective tax rate.

There have been no other significant changes during the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 to the items that we disclosed as our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II, Item 7 of our ~~2013~~2014 Form 10-K.

Results of Operations

Net Interest Income and Margin (Fully Taxable Equivalent Basis)

Net interest income is defined as the difference between interest earned on loans, fixed income investment portfolio (available-for-sale and held-to-maturity securities), short-term investment securities and interest paid on funding sources. Net interest income is our principal source of revenue. Net interest margin is defined as the amount of annualized net interest income, on a fully taxable equivalent basis, expressed as a percentage of average interest-earning assets. Net interest income and net interest margin are presented on a fully taxable equivalent basis to consistently reflect income from taxable loans and securities and tax-exempt securities based on the federal statutory tax rate of 35 percent.

Analysis of Net Interest Income Changes Due to Volume and Rate (Fully Taxable Equivalent Basis)

Net interest income is affected by changes in the amount and composition of interest-earning assets and interest-bearing liabilities, referred to as “volume change.” Net interest income is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities, referred to as “rate change.” The following table sets forth changes in interest income for each major category of interest-earning assets and interest expense for each major category of interest-bearing liabilities. The table also reflects the amount of simultaneous changes attributable to both volume and rate changes for the periods indicated. For this table, changes that are not solely due to either volume or rate are allocated in proportion to the percentage changes in average volume and average rate.

5456

Table of Contents


	2014 Compared to 2013									2014 Compared to 2013									2015 Compared to 2014
	Three months ended September 30, increase (decrease) due to change in									Nine months ended September 30, increase (decrease) due to change in									Three months ended March 31, increase (decrease) due to change in
(Dollars in thousands)	Volume			Rate			Total			Volume			Rate			Total			Volume			Rate			Total
Interest income:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell, trade receivables purchased and other short-term investment securities	$	626		$	(56	)	$	570		$	3,342		$	(646	)	$	2,696		$	(688	)	$	337		$	(351	)
Fixed income investment portfolio (taxable)	33,195			(3,259		)	29,936			60,699			(3,328		)	57,371			27,947			(1,093		)	26,854
Fixed income investment portfolio (non-taxable)	35			(73		)	(38		)	9			(72		)	(63		)	27			(64		)	(37		)
Loans, net of unearned income	25,966			(12,361		)	13,605			82,964			(29,036		)	53,928			40,707			(23,421		)	17,286
Increase (decrease) in interest income, net	59,822			(15,749		)	44,073			147,014			(33,082		)	113,932			67,993			(24,241		)	43,752
Interest expense:
NOW deposits	28			132			160			59			153			212			54			(66		)	(12		)
Money market deposits	1,061			(595		)	466			3,241			(849		)	2,392			827			(1,707		)	(880		)
Money market deposits in foreign offices	8			(30		)	(22		)	38			(36		)	2			4			(30		)	(26		)
Time deposits	(32		)	(29		)	(61		)	(33		)	(178		)	(211		)	(41		)	1			(40		)
Sweep deposits in foreign offices	44			(23		)	21			40			(35		)	5			52			(55		)	(3		)
Total increase (decrease) in deposits expense	1,109			(545		)	564			3,345			(945		)	2,400			896			(1,857		)	(961		)
Short-term borrowings	(3		)	—			(3		)	(74		)	—			(74		)	—			12			12
3.50% Senior Notes																			2,126			—			2,126
5.375% Senior Notes	—			43			43			8			49			57			—			7			7
Junior Subordinated Debentures	—			1			1			(8		)	32			24			(3		)	4			1
6.05% Subordinated Notes	(4		)	16			12			(14		)	49			35			(5		)	23			18
Total increase (decrease) in borrowings expense	(7		)	60			53			(88		)	130			42
Total increase in borrowings expense																			2,118			46			2,164
Increase (decrease) in interest expense, net	1,102			(485		)	617			3,257			(815		)	2,442			3,014			(1,811		)	1,203
Increase (decrease) in net interest income	$	58,720		$	(15,264	)	$	43,456		$	143,757		$	(32,267	)	$	111,490		$	64,979		$	(22,430	)	$	42,549

Net Interest Income (Fully Taxable Equivalent Basis)

Three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014

Net interest income increased by ~~$43.5~~$42.5 million to ~~$221.0~~$239.3 million for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$177.5~~$196.8 million for the comparable ~~2013~~2014 period. Overall, we saw an increase in our net interest income primarily from increased interest earned on our fixed income investments reflective of higher average fixed income investment balances due to ~~higher~~our strong deposit growth, as well as from an increase in average loan ~~and investment securities~~ balances. These increases were partially offset by ~~lower~~a shift in the mix of our overall loan portfolio into higher credit quality, lower yielding loans. Our loan yields were also impacted by the overall low market rate environment and ~~investment yields.~~continued competition in the marketplace.

The main factors affecting interest income and interest expense for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to the comparable ~~2013~~2014 period are discussed below:

Interest income for the three months ended ~~September 30, 2014~~March 31, 2015 increased by ~~$44.1~~$43.8 million primarily due to:

◦

A ~~$29.9~~$26.9 million increase in interest income on investment securities to $~~74.7~~82.5 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to $~~44.8~~55.6 million for the comparable ~~2013~~2014 period. The increase was reflective of an increase in average investment securities balances of ~~$8.1~~$8.9 billion as a result of deposit growth, offset by a decrease in the overall yield on our investment securities portfolio, which decreased 13 basis points to 1.63 percent. Lower reinvestment yields, resulting from a lower overall market rate environment and an increase in purchasesas well as through reinvestments of ~~U.S. Treasury securities during the~~ ~~three months endedSeptember 30, 2014, contributed to a decrease in yields of 28 basis points. This decrease was offset by a 15 basis point benefit~~maturing fixed income investments. Interest income benefited from lower premium amortization ~~expense.~~expense due to lower prepayments. As of ~~September 30, 2014~~March 31, 2015, the remaining unamortized net premium balance on our investment securities portfolio was ~~$12.0~~$16.4 million (net of discounts of ~~$94.6~~$85.9 million), compared to ~~$87.8~~$38.8 million (net of discounts of ~~$20.6~~$63.0 million) as of the comparable ~~2013~~2014 period.

◦

A $~~13.6~~17.3 million increase in interest income on loans to $~~153.3~~165.5 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to $~~139.7~~148.2 million for the comparable ~~2013~~2014 period. This increase was reflective of an increase in average loan balances of $~~1.9~~3.3 billion, partially offset by a decrease in both gross loan and loan fee yields. Gross loan yields, excluding loan interest recoveries and loan fees, decreased to ~~4.39~~4.09 percent from ~~4.78~~4.58 percent, reflective of a continued change in the mix of our overall loan portfolio. Consistent with recent quarters, our

5557

Table of Contents

~~reflective of a continued change in the mix of our overall loan portfolio. Consistent with recent quarters, our~~ average loan growth during the ~~third~~first quarter of ~~2014~~2015 was primarily driven by private equity/venture ~~capital/private equity~~capital loans which, on average, tend to have lower yields. The overall low market rate environment and increased price competition also continued to put pressure on loan yields. Loan fee yields decreased 626 basis points to 9066 basis points, from 9692 basis points in the comparable ~~2013~~2014 period, as a result of the decrease in prepayment fees, as well as, regular amortizing fee income, ~~as a percentage~~reflective of ~~total interest income.~~the continued growth of our private equity/venture capital call lines which tend to have lower fees.

Interest expense for the three months ended ~~September 30, 2014~~March 31, 2015 increased to $~~8.8~~9.9 million, compared to $~~8.1~~8.7 million for the comparable ~~2013~~2014 period. The increase in interest expense was primarily ~~from interest-bearing money market deposits of~~ ~~$0.5 million, mainly~~ attributable to ~~growth of $1.9 billion in our average money market deposits.~~

~~Nine months endedSeptember 30, 2014~~ ~~and~~ ~~2013~~

~~Net interest income increased by $111.5 million to $623.1 million for the nine months ended September 30, 2014, compared to $511.6 million for the comparable 2013 period. Overall,~~ the increase in long-term debt interest expense of $2.1 million reflective of the $350.0 million issuance of our ~~net~~3.50% Senior Notes in late January 2015, partially offset by a decrease of $1.0 million in interest ~~income was primarily due to higher average loan balances and growth in~~paid on our ~~investment securities portfolio, which has increased~~interest-bearing deposits as a result of ~~the continued growth in deposits. These increases were partially offset by lower overall loan and investments yields.~~

~~The main factors affecting interest income and interest expense for the nine months ended September 30, 2014, compared to the comparable 2013 period are discussed below:~~

~~Interest income~~ ~~for the nine months ended September 30, 2014 increased by $113.9 million primarily due to:~~

◦

A ~~$57.3 million~~ increase in interest income on investment securities with the majority of the increase due to a $4.8 billion increase in average balances due to strong deposit growth. Interest income was offset by a decrease in the overall yield on our investment securities portfolio, which decreased 5 basis points to 1.71 percent. Lower reinvestment yields, resulting from a lower overall market rate environment and an increase in purchases of U.S. Treasury securities during the ~~nine months endedSeptember 30, 2014, contributed to a decrease in yields of 15 basis points. This decrease was offset by a 10 basis point benefit from lower premium amortization expense.~~

◦

A ~~$53.9 million~~ increase in interest income on loans, primarily due to an increase in average loan balances of $2.0 billion. Gross loan yields, excluding loan interest recoveries and loan fees, decreased, reflective of a continued change in the mix of our overall loan portfolio. As mentioned above, our loan growth through the ~~third~~ ~~quarter of~~ ~~2014~~ primarily came from our venture capital/private equity loan portfolio which, on average, tend to have lower yielding loans. In addition, driven primarily by early loan repayments, non-recurring loan fee income increased $9.2 million to $30.0 million for the nine months ended September 30, 2014 compared to $20.8 million for the comparable 2013 period. The overall low market rate environment and increased price competition also continued to put pressure on loan yields.

~~Interest expense~~ ~~for the~~ ~~nine months endedSeptember 30, 2014~~ ~~increased to~~ ~~$26.3 million, compared to~~ ~~$23.9 million~~ ~~for the comparable~~ ~~2013~~ ~~period. The increase in interest expense was primarily from interest-bearing money~~ market ~~deposits of~~ ~~$2.4 million, mainly attributable to growth of $1.9 billion in our average money market deposit balances.~~rate adjustments.

Net Interest Margin (Fully Taxable Equivalent Basis)

Our net interest margin decreased by 5949 basis points to ~~2.73~~2.64 percent for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~3.32~~3.13 percent for the comparable ~~2013 period.~~

~~Our net interest margin decreased by 45 basis points to 2.87 percent for the nine months ended September 30,~~ 2014 ~~compared to 3.32 percent for the comparable 2013~~ period.

The decrease in our net interest margin for ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2014,~~March 31, 2015, was primarily reflective of the shift in the composition of our interest-earning assets as a result of the significant growth in deposits (higher average ~~cash and~~ investment securities balances and lower average loan balances as a percentage of total earning assets) and, as noted above, lower overall loan ~~and investment yields, partially offset by lower premium amortization expense on investment securities.~~yields. Our loan portfolio (higher-yielding assets) comprised ~~36 percent, and~~ 38 percent of our average interest-earning assets during the three ~~and nine~~ months ended ~~September 30, 2014,~~March 31, 2015, respectively, compared to 4542 percent ~~and 44 percent, respectively,~~ for the comparable ~~2013 periods.~~2014 period.

~~Table of Contents~~

Average Balances, Yields and Rates Paid (Fully Taxable Equivalent Basis)

The average yield earned on interest-earning assets is the amount of annualized fully taxable equivalent interest income expressed as a percentage of average interest-earning assets. The average rate paid on funding sources is the amount of annualized interest expense expressed as a percentage of average funding sources. The following tables set forth average assets, liabilities, noncontrolling interests and SVBFG stockholders’ equity, interest income, interest expense, annualized yields and rates, and the composition of our annualized net interest margin for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:

5758

Table of Contents

Average Balances, Rates and Yields for the Three Months Ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014


	Three months ended September 30,																Three months ended March 31,
	2014								2013								2015								2014
(Dollars in thousands)	Average Balance			Interest Income/ Expense			Yield/ Rate		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)	$	2,472,205		$	1,722		0.28	%	$	1,596,003		$	1,152		0.29	%	$	1,570,586		$	1,285		0.33	%	$	2,482,190		$	1,636		0.27	%
Investment securities:
Available-for-sale securities: (2)
Taxable	12,446,821			43,519			1.39		10,000,154			43,604			1.73		13,571,213			44,009			1.32		12,167,143			54,420			1.81
Non-taxable (3)	—			—			—		82,048			1,226			5.93		—			—			—		81,782			1,225			6.07
Held-to-maturity securities:
Taxable	5,691,201			30,021			2.09		—			—			—		7,486,164			37,265			2.02		—			—			—
Non-taxable (3)	84,401			1,188			5.58		—			—			—		83,591			1,188			5.76		—			—			—
Total loans, net of unearned income (4) (5)	11,439,521			153,292			5.32		9,545,941			139,687			5.81		14,046,369			165,458			4.78		10,767,684			148,172			5.58
Total interest-earning assets	32,134,149			229,742			2.84		21,224,146			185,669			3.47		36,757,923			249,205			2.75		25,498,799			205,453			3.27
Cash and due from banks	299,964								253,364								244,512								264,478
Allowance for loan losses	(128,598		)						(124,254		)						(171,222		)						(141,073		)
Other assets (6)	2,292,770								1,719,478								2,469,376								2,145,429
Total assets	$	34,598,285							$	23,072,734							$	39,300,589							$	27,767,633
Funding sources:
Interest-bearing liabilities:
NOW deposits	$	161,793		$	279		0.68	%	$	134,545		$	119		0.35	%	$	228,532		$	124		0.22	%	$	150,737		$	136		0.37	%
Money market deposits	5,649,971			2,332			0.16		3,755,620			1,866			0.20		5,956,920			1,532			0.10		4,582,863			2,412			0.21
Money market deposits in foreign offices	228,142			26			0.05		194,870			48			0.10		207,502			20			0.04		191,715			46			0.10
Time deposits	162,182			96			0.23		165,632			157			0.38		111,017			60			0.22		168,050			100			0.24
Sweep deposits in foreign offices	2,021,727			228			0.04		1,643,761			207			0.05		2,184,821			207			0.04		1,702,563			210			0.05
Total interest-bearing deposits	8,223,815			2,961			0.14		5,894,428			2,397			0.16		8,688,792			1,943			0.09		6,795,928			2,904			0.17
Short-term borrowings	5,538			—			—		6,316			3			0.19		43,618			12			0.11		4,984			—			—
3.50% Senior Notes																	240,909			2,126			3.58		-			—			—
5.375% Senior Notes	348,341			4,832			5.50		348,119			4,789			5.46		348,456			4,835			5.63		348,229			4,828			5.62
Junior Subordinated Debentures	54,918			834			6.02		55,094			833			6.00		54,830			840			6.21		55,005			839			6.19
6.05% Subordinated Notes	50,937			134			1.04		52,551			122			0.92		50,133			143			1.16		51,968			125			0.98
Total interest-bearing liabilities	8,683,549			8,761			0.40		6,356,508			8,144			0.51		9,426,738			9,899			0.43		7,256,114			8,696			0.49
Portion of noninterest-bearing funding sources	23,450,600								14,867,638								27,331,185								18,242,685
Total funding sources	32,134,149			8,761			0.11		21,224,146			8,144			0.15		36,757,923			9,899			0.11		25,498,799			8,696			0.14
Noninterest-bearing funding sources:
Demand deposits	21,502,469								13,665,460								25,168,987								16,880,520
Other liabilities	402,231								298,455								570,954								396,203
SVBFG stockholders’ equity	2,729,862								1,909,462								2,900,546								2,099,819
Noncontrolling interests	1,280,174								842,849								1,233,364								1,134,977
Portion used to fund interest-earning assets	(23,450,600		)						(14,867,638		)						(27,331,185		)						(18,242,685		)
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	$	34,598,285							$	23,072,734							$	39,300,589							$	27,767,633
Net interest income and margin				$	220,981		2.73	%				$	177,525		3.32	%				$	239,306		2.64	%				$	196,757		3.13	%
Total deposits	$	29,726,284							$	19,559,888							$	33,857,779							$	23,676,448
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis				(416		)						(429		)						(416		)						(429		)
Net interest income, as reported				$	220,565							$	177,096							$	238,890							$	196,328

(1)

Includes average interest-earning deposits in other financial institutions of $~~408~~509 million and $~~191~~317 million for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively. For the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, balances also include $~~2.0~~0.9 billion and $~~1.3~~2.0 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, and therefore do not give effect to unrealized changes in fair value that are reflected in other comprehensive income.


(3)	Interest income on non-taxable investment securities are presented on a fully taxable-equivalent basis using the federal statutory income tax rate of 35.0 percent for all periods presented.


(4)	Nonaccrual loans are reflected in the average balances of loans.

Table of Contents


(5)	Interest income includes loan fees of $~~26.0~~23.0 million and $~~23.0~~24.3 million for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively.

~~Table of Contents~~


(6)	Average investment securities of $1.8 billion and $~~1.3~~1.6 billion for the three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable and other securities.

~~Average Balances, Rates and Yields for the Nine Months Ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013~~

Nine months ended September 30,
2014 2013
(Dollars in thousands)
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) $ 2,721,501
$ 5,301
0.26 % $ 1,040,073
$ 2,605
0.33 %
Investment securities:
Available-for-sale securities: (2)
Taxable 12,653,194
151,854
1.60
10,379,311
134,013
1.73
Non-taxable (3) 45,201
2,040
6.03
82,927
3,697
5.96
Held-to-maturity securities:
Taxable 2,506,315
39,530
2.11
—
—
—
Non-taxable (3) 37,941
1,594
5.62
—
—
—
Total loans, net of unearned income (4) (5) 11,098,397
449,144
5.41
9,086,179
395,216
5.82
Total interest-earning assets 29,062,549
649,463
2.99
20,588,490
535,531
3.48
Cash and due from banks 208,502
277,382

Allowance for loan losses (132,667 ) (119,491 )
Other assets (6) 2,266,869
1,749,711

Total assets $ 31,405,253
$ 22,496,092

Funding sources:

Interest-bearing liabilities:
NOW deposits $ 157,322
$ 570
0.48 % $ 136,899
$ 358
0.35 %
Money market deposits 5,194,449
7,305
0.19
3,342,363
4,913
0.20
Money market deposits in foreign offices 207,359
110
0.07
148,161
108
0.10
Time deposits 160,300
288
0.24
172,439
499
0.39
Sweep deposits in foreign offices 1,860,576
660
0.05
1,751,995
655
0.05
Total interest-bearing deposits 7,580,006
8,933
0.16
5,551,857
6,533
0.16
Short-term borrowings 5,027
—
—
34,840
74
0.28
5.375% Senior Notes 348,285
14,490
5.56
348,067
14,433
5.54
Junior Subordinated Debentures 54,962
2,521
6.13
55,137
2,497
6.05
6.05% Subordinated Notes 51,454
389
1.01
53,527
354
0.88
Total interest-bearing liabilities 8,039,734
26,333
0.44
6,043,428
23,891
0.53
Portion of noninterest-bearing funding sources 21,022,815
14,545,062

Total funding sources 29,062,549
26,333
0.12
20,588,490
23,891
0.16
Noninterest-bearing funding sources:

Demand deposits 19,302,107
13,437,503

Other liabilities 399,349
316,024

SVBFG stockholders’ equity 2,420,695
1,899,783

Noncontrolling interests 1,243,368
799,354

Portion used to fund interest-earning assets (21,022,815 ) (14,545,062 )
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity $ 31,405,253
$ 22,496,092

Net interest income and margin $ 623,130
2.87 % $ 511,640
3.32 %
Total deposits $ 26,882,113
$ 18,989,360

Reconciliation to reported net interest income:

Adjustments for taxable equivalent basis (1,272 ) (1,294 )
Net interest income, as reported $ 621,858
$ 510,346

~~(1)~~

~~Includes average interest-earning deposits in other financial institutions of~~ ~~$356 million~~ ~~and~~ ~~$175 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, balances also include~~ ~~$2.2 billion~~ ~~and~~ ~~$0.7 billion, respectively, deposited at the FRB, earning interest at the Federal Funds target rate.~~


~~(2)~~	~~Yields on available-for-sale securities are based on amortized cost, and therefore do not give effect to unrealized changes in fair value that are reflected in other comprehensive income.~~


~~(3)~~	~~Interest income on non-taxable investment securities are presented on a fully taxable-equivalent basis using the federal statutory income tax rate of 35.0 percent for all periods presented.~~

~~Table of Contents~~


~~(4)~~	~~Nonaccrual loans are reflected in the average balances of loans.~~


~~(5)~~	~~Interest income includes loan fees of~~ ~~$71.6 million~~ ~~and~~ ~~$60.0 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively.~~


~~(6)~~	~~Average investment securities of~~ ~~$1.8 billion~~ ~~and~~ ~~$1.3 billion~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable and other securities.~~

Provision for Loan Losses

Our provision for loan losses is based on our evaluation of the existing allowance for loan losses in relation to total gross loans using historical and other objective information, and on our qualitative assessment of the inherent and identified credit risks of the loan portfolio. The following table summarizes our allowance for loan losses for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013:~~2014:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014			2013			2014			2013			2015			2014
Allowance for loan losses, beginning balance	$	120,728		$	119,571		$	142,886		$	110,651		$	165,359		$	142,886
Provision for loan losses	16,610			10,638			19,051			35,023			6,452			494
Gross loan charge-offs	(10,657		)	(8,149		)	(38,189		)	(29,150		)	(5,487		)	(21,150		)
Loan recoveries	2,380			2,674			5,313			8,210			1,551			1,312
Allowance for loan losses, ending balance	$	129,061		$	124,734		$	129,061		$	124,734		$	167,875		$	123,542
Provision for loan losses as a percentage of period-end total gross loans (annualized)	0.54		%	0.43		%	0.21		%	0.47		%	0.18		%	0.02		%
Gross loan charge-offs as a percentage of average total gross loans (annualized)	0.37			0.34			0.46			0.43			0.16			0.79
Net loan charge-offs as a percentage of average total gross loans (annualized)	0.28			0.23			0.39			0.31			0.11			0.74
Allowance for loan losses as a percentage of period-end total gross loans	1.07			1.26			1.07			1.26			1.15			1.13
Period-end total gross loans	$	12,112,474		$	9,914,199		$	12,112,474		$	9,914,199		$	14,546,745		$	10,920,482
Average total gross loans	11,528,172			9,627,912			11,184,840			9,164,538			14,148,842			10,852,905

Three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014

Our provision for loan losses was ~~$16.6~~$6.5 million for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to a provision of ~~$10.6~~$0.5 million for the comparable ~~2013~~2014 period. The provision of $~~16.6~~6.5 million for the ~~third~~first quarter of ~~2014~~2015 was primarily driven by ~~$8.3~~an increase of $8.7 million ~~in net charge-offs, $7.0 million from period-end loan growth and $3.7 million due to a change in the composition of our performing loan portfolio, offset by a $2.4 million decrease~~ in the reserve for impaired loans, ~~resulting from lower~~primarily reflective of an increase in the reserve for a previously impaired loan, ~~balances.~~as well as an increase in the reserve of $3.9 million for net charge-offs. These increases were offset by a decrease of $6.8 million in the reserve due to the improvement in the credit quality of our performing loans. The provision of $~~10.6~~0.5 million for the three months ended ~~September 30, 2013~~March 31, 2014 was primarily driven by ~~$5.5~~$19.8 million in net charge-offs, ~~an increase of $3.1 million in the reserve for impaired loans and $2.3 million related to new loans during the quarter.~~

~~Gross loan charge-offs of~~ ~~$10.7 million~~ ~~for the~~ ~~third~~ ~~quarter of~~ ~~2014~~primarily came from our early-stage software and hardware loan portfolios. Net loan charge-offs of $8.3 million represented 0.28 percent of average total gross loans, compared to net charge offs of $5.5 million, or 0.23 percent of average total gross loans for the comparable 2013 period.

~~Nine months endedSeptember 30, 2014~~ ~~and~~ ~~2013~~

~~We had a provision for loan losses of~~ ~~$19.1 million~~ ~~for the~~ ~~nine months endedSeptember 30, 2014, compared to a provision of~~ ~~$35.0 million~~ ~~for the comparable~~ ~~2013~~ ~~period. The provision of $19.1 million for the nine months ended September 30, 2014 was primarily due to $32.9 million of net charge-offs and $12.2 million from period-end loan growth,~~partially offset by a ~~$19.0~~$14.5 million decrease in the reserve for impaired loans resulting from a decrease in impaired loan balances from repayments, and a ~~reserve release~~decrease of ~~$7.1~~$4.8 million related to lower reserves due to improvement in the ~~improvement of the~~overall credit quality of ~~our overall loan portfolio. The provision of $35.0 million for the nine months ended September 30, 2013 was primarily driven by net charge-offs of $20.9 million and period-end loan growth~~.gross performing loans.

Gross loan charge-offs of ~~$38.2~~$5.5 million for the ~~nine months ended September 30, 2014 were~~ first quarter of 2015primarily came from two early-stage client loans within our hardware ~~and software client portfolios. Loan recoveries~~loan portfolio. Net loan charge-offs of ~~$5.3~~$3.9 million represented 0.11 percent of average total gross loans, compared to net charge offs of $19.8 million, or 0.74 percent of average total gross loans for the ~~nine months ended September 30,~~comparable 2014 ~~were primarily from our hardware client portfolio.~~period.

See “Consolidated Financial Condition—Credit Quality and Allowance for Loan Losses” below and Note 6—“Loans and Allowance for Loan Losses” of the “Notes to Interim Consolidated Financial ~~Statements (unaudited)”~~Statements” under Part I, Item 1 of this report for further details on our allowance for loan losses.

Table of Contents

Noninterest Income

A summary of noninterest income for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2014 2013 % Change 2014 2013 % Change
Non-GAAP core fee income:
Foreign exchange fees $ 17,911
$ 13,667
31.1 % $ 53,035
$ 41,529
27.7 %
Credit card fees 10,909
8,188
33.2
31,440
23,245
35.3
Deposit service charges 10,126
8,902
13.7
29,344
26,602
10.3
Lending related fees (1) 6,029
5,265
14.5
18,208
13,835
31.6
Letters of credit and standby letters of credit fees 4,557
3,790
20.2
11,507
10,879
5.8
Client investment fees 3,814
3,393
12.4
10,751
10,392
3.5
Total non-GAAP core fee income (2) 53,346
43,205
23.5
154,285
126,482
22.0
Gains on investment securities, net 5,644
187,862
(97.0 ) 172,236
255,861
(32.7 )
Gains on derivative instruments, net 26,538
9,422
181.7
63,480
27,802
128.3
Other (5,361 ) 17,161
(131.2 ) 14,601
24,348
(40.0 )
Total noninterest income $ 80,167
$ 257,650
(68.9 ) $ 404,602
$ 434,493
(6.9 )


~~(1)~~	Lending related fees consists of fee income associated with credit commitments such as unused commitment fees, syndication fees and other loan processing fees and, historically, has been included in other noninterest income. Prior period amounts have been reclassified to conform to the current period presentation.


~~(2)~~	~~The following table provides a reconciliation of GAAP noninterest income to non-GAAP core fee income:~~

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2014 2013 % Change 2014 2013 % Change
GAAP noninterest income (as reported) $ 80,167
$ 257,650
(68.9 )% $ 404,602
$ 434,493
(6.9 )%
Less: gains on investment securities, net 5,644
187,862
(97.0 ) 172,236
255,861
(32.7 )
Less: gains on derivative instruments, net 26,538
9,422
181.7
63,480
27,802
128.3
Less: other noninterest income (5,361 ) 17,161
(131.2 ) 14,601
24,348
(40.0 )
Non-GAAP core fee income (1) $ 53,346
$ 43,205
23.5
$ 154,285
$ 126,482
22.0



	Three months ended March 31,
(Dollars in thousands)	2015			2014		% Change
Non-GAAP core fee income (1):
Foreign exchange fees	$	17,678		$	17,196	2.8	%
Credit card fees	12,090			10,282		17.6
Deposit service charges	10,736			9,607		11.8
Lending related fees	8,022			6,303		27.3
Letters of credit and standby letters of credit fees	5,202			4,140		25.7
Client investment fees	4,482			3,418		31.1
Total non-GAAP core fee income	58,210			50,946		14.3
Gains on investment securities, net	83,159			223,912		(62.9	)
Gains on derivative instruments, net	39,729			24,167		64.4
Other	(9,080		)	11,200		(181.1	)
GAAP noninterest income	$	172,018		$	310,225	(44.6	)


(1)	This non-GAAP measure represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control.

Included in net income is income and expense attributable to noncontrolling interests. We recognize, as part of our investment funds management business through SVB Capital and Debt Fund Investments, the entire income or loss from funds where we own significantly less than 100% of the investment. We are required under GAAP to consolidate 100% of the results of entities that we are deemed to control, even though we may own less than 100% of such entities. The relevant amounts attributable to investors other than us are reflected under “Net Income Attributable to Noncontrolling Interests” on our statements of income. Where applicable, the non-GAAP tables presented below for noninterest income and net gains on investment securities exclude noncontrolling interests. We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that represent income attributable to investors other than us and our subsidiaries. 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. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or preferable to, financial measures prepared in accordance with GAAP.

~~Table of Contents~~

The following table provides a summary of non-GAAP noninterest income, net of noncontrolling interests for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013:~~2014:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
Non-GAAP noninterest income, net of noncontrolling interests (Dollars in thousands)	2014		2013		% Change		2014		2013		% Change		2015		2014		% Change
GAAP noninterest income (as reported)	$	80,167	$	257,650	(68.9	)%	$	404,602	$	434,493	(6.9	)%	$	172,018	$	310,225	(44.6	)%
Less: income attributable to noncontrolling interests, including carried interest	4,911		151,830		(96.8	)	156,304		205,071		(23.8	)	62,194		186,718		(66.7	)
Non-GAAP noninterest income, net of noncontrolling interests	$	75,256	$	105,820	(28.9	)	$	248,298	$	229,422	8.2		$	109,824	$	123,507	(11.1	)

Gains ~~(losses)~~ on Investment Securities, Net

Net gains ~~(losses)~~ on investment securities include both gains and losses from our non-marketable and other securities, as well as gains and losses from sales of our available-for-sale securities portfolio, when applicable.

Our available-for-sale and held-to-maturity securities portfolios are primarily fixed income investment portfolios that are managed to earn an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/liability management objectives. Sales of equity securities held as a result of our exercised warrants, result in net gains or losses on investment securities. These sales are consistent with the guidelines of our investment policy related to the management of our liquidity position and interest rate risk. Though infrequent, sales of investment securities in our fixed income portfolio may result in net gains or losses and are also within the guidelines of our investment policy.

Table of Contents

Our non-marketable and other securities portfolio primarily represents investments in venture capital and private equity funds, venture debt funds and private and public portfolio companies. We experience variability in the performance of our non-marketable and other securities from quarter to quarter, which results in net gains or losses on investment securities (both realized and unrealized). This variability is due to a number of factors, including unrealized changes in the values of our investments, changes in the amount of realized gains from distributions, or changes in liquidity events and general economic and market conditions. Unrealized gains from non-marketable and other securities for any single period are typically driven by valuation changes, and are therefore subject to potential increases or decreases in future periods. Such variability may lead to volatility in the gains from investment securities and as such our results for a particular period are not necessarily indicative of our expected performance in a future period.

The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which these equity securities may be subject to (i.e. lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities and the timing of such actual ~~sales.~~sales or distributions.

For the three months ended ~~September 30, 2014~~March 31, 2015, we had net gains on investment securities of ~~$5.6~~$83.2 million, compared to net gains of ~~$187.9~~$223.9 million for the comparable ~~2013~~2014 period. Net ~~losses~~gains on investment securities, net of noncontrolling interests, were ~~$1.1 million~~ ~~for the~~ ~~three months endedSeptember 30, 2014, compared to net gains of $36.5 million for the comparable~~ ~~2013~~ ~~period.~~

~~Net losses, net of noncontrolling interests, of $1.1~~$19.6 million for the three months ended ~~September 30,~~ March 31, 2015, compared to net gains of $37.4 million for the comparable 2014 period.

Net gains on investment securities, net of noncontrolling interests, of $19.6 million for the three months ended March 31, 2015 were primarily driven by the following:

~~Losses of~~ ~~$8.5 million~~ from our managed direct venture funds, mainly related to valuation declines due to the decrease in the public company stock price of FireEye. During the third quarter of 2014, FireEye contributed to $9.5 million in losses, offset by net gains of $1.1 million from the remaining portfolio investments.

Gains of ~~$4.0 million from our managed funds of funds, primarily related to unrealized valuation adjustments of two of our funds of funds.~~

~~Gains of $3.5~~$7.4 million from our strategic and other investments, primarily driven by strong distributions from our strategic venture capital fund ~~investments.~~investments;

~~For the nine months ended~~Gains of ~~September 30, 2014, we had net gains on investment securities of $172.2~~$5.1 million ~~compared to $255.9 million for the comparable~~ ~~2013~~ ~~period. Net~~from our managed direct venture funds, primarily related to realized gains ~~on investment securities, net~~from distributions of ~~noncontrolling interests, were $14.2 million for~~investments from our managed direct venture funds, including the ~~nine months ended~~ ~~September 30, 2014, compared to net gains~~remaining shares of ~~$51.1 million for the comparable~~ ~~2013~~ ~~period.~~FireEye common stock, as well as unrealized valuation increases;

~~The gains, net of noncontrolling interests, of $14.2 million for the nine months ended September 30, 2014 were primarily driven by the following:~~

~~Table of Contents~~

Gains of ~~$16.9~~$3.5 million from our managed funds of funds, primarily related to unrealized valuation ~~adjustments of two of our funds of funds.~~increases; and

Gains of ~~$15.8~~$2.6 million from ~~our strategic and other investments, primarily driven by distributions from strategic venture capital fund investments as well as~~ the ~~acquisition~~sales of ~~one~~certain of our ~~direct~~ equity ~~investments during the second quarter~~security holdings in public companies received as a result of ~~2014, for which we recorded a gain of $4.7 million.~~

Losses of $17.4 million from our equity securities holdings, primarily attributable to the sale of shares of FireEye common stock (acquired through the exercise of certain warrants) during the second quarter of 2014.warrant exercises.

The following tables provide a summary of non-GAAP net gains (losses) ~~gains~~ on investment securities, net of noncontrolling interests, for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:

(Dollars in thousands)
Managed
Funds of
Funds

Managed
Direct
Venture
Funds

Debt
Funds

Available-
For-Sale
Securities

Strategic
and Other
Investments
Total
Three months ended September 30, 2014
Total gains (losses) on investment securities, net $ 42,159
$ (39,973 ) $ 973
$ (990 ) $ 3,475
$ 5,644
Less: gains (losses) attributable to noncontrolling interests, including carried interest 38,187
(31,429 ) (1 ) —
—
6,757
Non-GAAP net (losses) gains on investment securities, net of noncontrolling interests $ 3,972
$ (8,544 ) $ 974
$ (990 ) $ 3,475
$ (1,113 )

Three months ended September 30, 2013
Total gains on investment securities, net $ 34,633
$ 147,976
$ 3,508
$ 219
$ 1,526
$ 187,862
Less: gains (losses) attributable to noncontrolling interests, including carried interest 31,551
119,810
(1 ) —
—
151,360
Non-GAAP net gains on investment securities, net of noncontrolling interests $ 3,082
$ 28,166
$ 3,509
$ 219
$ 1,526
$ 36,502

Nine months ended September 30, 2014
Total gains (losses) on investment securities, net $ 192,085
$ (21,819 ) $ 3,618
$ (17,410 ) $ 15,762
$ 172,236
Less: gains (losses) attributable to noncontrolling interests, including carried interest 175,145
(17,061 ) (15 ) —
—
158,069
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests $ 16,940
$ (4,758 ) $ 3,633
$ (17,410 ) $ 15,762
$ 14,167

Nine months ended September 30, 2013
Total gains on investment securities, net $ 91,061
$ 150,819
$ 7,060
$ 949
$ 5,972
$ 255,861
Less: gains (losses) attributable to noncontrolling interests, including carried interest 82,374
122,353
(4 ) —
—
204,723
Non-GAAP net gains on investment securities, net of noncontrolling interests $ 8,687
$ 28,466
$ 7,064
$ 949
$ 5,972
$ 51,138



(Dollars in thousands)	Managed Funds of Funds		Managed Direct Venture Funds		Debt Funds			Available- For-Sale Securities		Strategic and Other Investments		Total
Three months ended March 31, 2015
Total gains on investment securities, net	$	47,666	$	24,557	$	917		$	2,596	$	7,423	$	83,159
Less: income attributable to noncontrolling interests, including carried interest	44,162		19,442		—			—		—		63,604
Non-GAAP net gains on investment securities, net of noncontrolling interests	$	3,504	$	5,115	$	917		$	2,596	$	7,423	$	19,555

Three months ended March 31, 2014
Total gains on investment securities, net	$	111,448	$	105,702	$	3,001		$	60	$	3,701	$	223,912
Less: income (losses) attributable to noncontrolling interests, including carried interest	101,451		85,114		(13		)	—		—		186,552
Non-GAAP net gains on investment securities, net of noncontrolling interests	$	9,997	$	20,588	$	3,014		$	60	$	3,701	$	37,360

6362

Table of Contents

Gains on Derivative Instruments, Net

A summary of gains on derivative instruments, net, for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(Dollars in thousands)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
Equity warrant assets (1)
Gains on exercises, net	$	6,788		$	4,458		52.3	%	$	28,743		$	6,883		NM		$	4,043		$	18,402		(78.0	)%
Cancellations and expirations	(61		)	(149		)	(59.1	)	(577		)	(371		)	55.5		(292		)	(87		)	NM
Changes in fair value	6,430			14,471			(55.6	)	22,693			22,963			(1.2	)	16,527			7,058			134.2
Net gains on equity warrant assets	13,157			18,780			(29.9	)	50,859			29,475			72.5		20,278			25,373			(20.1	)
Gains on foreign exchange forward contracts, net:
Gains (losses) on client foreign exchange forward contracts, net (2)	886			(411		)	NM		1,358			(237		)	NM
(Losses) gains on client foreign exchange forward contracts, net (2)																	(507		)	302			NM
Gains (losses) on internal foreign exchange forward contracts, net (3)	12,529			(8,423		)	NM		12,038			(1,511		)	NM		20,018			(1,029		)	NM
Total gains (losses) on foreign exchange forward contracts, net	13,415			(8,834		)	NM		13,396			(1,748		)	NM		19,511			(727		)	NM
Changes in fair value of interest rate swaps	(12		)	(7		)	71.4		(37		)	20			NM		(3		)	(12		)	(75.0	)
Net (losses) gains on other derivatives (4)	(22		)	(517		)	(95.7	)	(738		)	55			NM
Net losses on other derivatives (4)																	(57		)	(467		)	(87.8	)
Gains on derivative instruments, net	$	26,538		$	9,422		181.7		$	63,480		$	27,802		128.3		$	39,729		$	24,167		64.4

NM—Not meaningful


(1)	At ~~September 30, 2014~~March 31, 2015, we held warrants in ~~1,415~~1,525 companies, compared to ~~1,309~~1,343 companies at ~~September 30, 2013~~March 31, 2014. The total value of our warrant portfolio was $124 million at March 31, 2015 and $91 million at March 31, 2014. Of the 1,525 companies, 25 companies made up approximately 40 percent of the fair value of the portfolio at March 31, 2015.


(2)	Represents the net (losses) gains for foreign exchange forward contracts executed on behalf of clients, excluding any spread or fees earned in connection with these trades.


(3)	Represents the change in the fair value of foreign exchange forward contracts used to economically reduce our foreign exchange exposure related to certain foreign currency denominated instruments. Refer to revaluation of foreign currency instruments included in the line item "other" within noninterest income for the amount we were able to partially offset.


(4)	Primarily represents the change in fair value of loan conversion ~~options held by SVB Financial and our interest rate swap.~~options.

Net gains on derivative instruments were ~~$26.5~~$39.7 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to net gains of ~~$9.4~~$24.2 million for the comparable ~~2013~~2014 period. ~~The increase in net~~Net gains on derivative instruments was primarily attributable to the following:

Net gains on equity warrant assets of $~~13.2~~20.3 million, which consisted of:

Net gains of $16.5 million from changes in warrant valuations for the three months ended ~~September 30, 2014~~March 31, 2015, compared to ~~$18.8~~$7.1 million for the comparable ~~2013~~2014 period. The ~~$5.6 million decrease was~~warrant valuation gains were primarily ~~due to net gains of $6.4 million~~ from ~~increases in warrant valuations, primarily attributable to~~ our private company warrant portfolio, of which $10.9 million was attributable to four companies.

Net gains of $4.0 million from the exercise of equity warrant assets for the three months ended March 31, 2015, compared to $18.4 million for the comparable 2014 period. The net gains of ~~$14.5~~$4.0 million ~~for the comparable~~ ~~2013~~ ~~period, from increases~~ were comprised of various exercises in ~~warrant valuations, primarily attributable to~~ our ~~public~~private company warrant ~~portfolio which included~~portfolio. For the three months ended March 31, 2014, $15.2 million in gains were reflective of the exercise of FireEye ~~and Twitter~~equity warrants.

Net gains of $~~12.5~~20.0 million on internal foreign exchange forward contracts ~~hedging certain of~~used to economically reduce our foreign exchange exposure to foreign currency denominated instruments for the three months ended~~September 30, 2014~~, March 31, 2015, compared to net losses of ~~$8.4~~$1.0 million for the comparable ~~2013~~2014 period. The ~~higher~~net gains ~~for the~~ ~~three months endedSeptember 30, 2014~~of $20.0 million were ~~primarily attributable to the strengthening of the U.S. Dollar against the Euro and Pound Sterling. These gains are~~ offset by net losses of ~~$12.6~~$20.2 million from the revaluation of foreign currency denominated instruments that are included in the line item "other" within noninterest income as noted below.

~~Net gains on derivative instruments were $63.5 million for the nine months ended~~ ~~September 30, 2014, compared to net gains of $27.8 million for the comparable~~ ~~2013~~ ~~period. The increase in net gains on derivative instruments was primarily attributable to the following:~~

~~Net gains on equity warrant assets of~~ ~~$50.9 million~~ ~~for the~~ ~~nine months endedSeptember 30, 2014, compared to~~ ~~$29.5 million~~ ~~for the comparable~~ ~~2013~~ ~~period. The $21.4 million increase was primarily due to net gains of $28.7~~

~~Table of Contents~~

million from the exercise of equity warrant assets, primarily reflective of the exercise and conversion of several of our public equity warrants including, FireEye and Twitter, compared to $6.9 million for the comparable ~~2013~~ ~~period.~~

~~Net gains of $12.0 million on foreign exchange forward contracts hedging certain of our foreign currency denominated instruments for the~~ ~~nine months endedSeptember 30, 2014, compared to net losses of~~ ~~$1.5 million~~ ~~for the comparable~~ ~~2013~~ ~~period. The gains recognized for the nine months ended~~ ~~September 30, 2014~~ were primarily attributable to the strengthening of the U.S. Dollar against the Euro and Pound Sterling, however, the gains are offset by losses of $12.3 million from the revaluation of foreign currency denominated instruments that are included in the line item "other" within noninterest income as noted below.

Foreign Exchange Fees

Foreign exchange fees were $~~17.9~~17.7 million ~~and $53.0 million~~ for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $~~13.7~~17.2 million ~~and $41.5 million~~ for the comparable ~~2013~~2014 ~~periods.~~period. The increase was primarily due to increased utilization of foreign currency products by our clients, resulting in an increase in the number of trades and commissioned notional ~~volumes.~~volumes, offset by continued pressure on spreads.

Table of Contents

Credit Card Fees

Credit card fees were $~~10.9~~12.1 million ~~and $31.4 million~~ for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $~~8.2~~10.3 million ~~and $23.2 million~~ for the comparable ~~2013~~2014 ~~periods.~~period. The increase ~~reflects~~reflected increased client utilization of our credit card products and custom payment solutions by new and existing clients.

Deposit Service Charges

Deposit service charges were ~~$10.1 million and $29.3~~$10.7 million for the three ~~and nine~~ months ended ~~September 30, 2014, respectively,~~March 31, 2015, compared to ~~$8.9 million and $26.6~~$9.6 million for the comparable ~~2013 periods.~~2014 period. The ~~increases are~~increase was reflective of the increase in the number of deposit clients, as well as increases in transaction volumes and size, during the three ~~and nine~~ months ended ~~September 30, 2014.~~March 31, 2015.

Lending Related Fees

Lending related fees were ~~$6.0 million and $18.2~~$8.0 million for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $~~5.3~~6.3 million ~~and $13.8 million~~ for the comparable ~~2013~~2014 ~~periods.~~period. The increase was primarily due to an increase in loan syndication fee income and an increase in unused commitment fees for the first quarter of 2015. Loan syndication fees increased from $0.8 million to $1.8 million as a result of an increase in syndication activity for the three months ended March 31, 2015 compared to the three months ended March 31, 2014. Unused loan commitments also increased as our loan commitments available for funding balance increased from ~~$9.8~~$11.4 billion to ~~$13.5~~$14.2 billion.

Letters of Credit and Standby letters of Credit Fees

Letters of credit and standby letters of credit fees were $5.2 million for the three months ended March 31, 2015, compared to $4.1 million for the comparable 2014 period. The increase was primarily driven by an increase in deferred fee income reflective of an increase in larger letter of credit issuances during the fourth quarter of 2014.

Client Investment Fees

Client investment fees were $~~3.8~~4.5 million ~~and $10.8 million~~ for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $3.4 million ~~and $10.4 million~~ for the comparable ~~2013~~2014 ~~periods.~~period. The ~~nominal change~~increase was reflective of an increase in average client investment funds partially offset by lower margins earned on certain products due to low rates in the short-term fixed income markets. ~~There was an~~The increase in average client investment funds driven by our clients’ increased utilization of our off-balance sheet products managed by SVB Asset Management, as well as our cash sweep product. The ~~increases in average balances were partially offset by historically low yields on certain products. The~~ following table summarizes average client investment funds for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~:2014:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in millions)	2014		2013		% Change		2014		2013		% Change		2015		2014		% Change
Client directed investment assets (1)	$	7,168	$	7,412	(3.3	)%	$	7,288	$	7,052	3.3	%	$	7,017	$	7,182	(2.3	)%
Client investment assets under management (2)	17,006		11,925		42.6		15,541		11,577		34.2		17,712		13,537		30.8
Sweep money market funds	6,814		5,622		21.2		6,597		4,920		34.1		8,896		6,416		38.7
Total average client investment funds (3)	$	30,988	$	24,959	24.2		$	29,426	$	23,549	25.0		$	33,625	$	27,135	23.9


(1)	Comprised of mutual funds and Repurchase Agreement Program assets.


(2)	These funds represent investments in third party money market mutual funds and fixed-income securities managed by SVB Asset Management.


(3)	Client investment funds are maintained at third party financial institutions and are not recorded on our balance sheet.

~~Table of Contents~~

The following table summarizes period-end client investment funds at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in millions)	September 30, 2014		December 31, 2013		% Change		March 31, 2015		December 31, 2014		% Change
Client directed investment assets	$	6,491	$	7,073	(8.2	)%	$	7,344	$	6,158	19.3	%
Client investment assets under management	17,376		12,677		37.1		17,956		18,253		(1.6	)
Sweep money market funds	7,277		6,613		10.0		9,870		7,957		24.0
Total period-end client investment funds	$	31,144	$	26,363	18.1		$	35,170	$	32,368	8.7

Table of Contents

Other Noninterest (Loss) Income

A summary of other noninterest (loss) income for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,							Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	2014			2013		% Change		2014			2013		% Change		2015			2014		% Change
Fund management fees	$	3,574		$	2,822	26.6	%	$	9,888		$	8,531	15.9	%	$	3,722		$	2,755	35.1	%
Service-based fee income	2,180			1,901		14.7		6,459			5,706		13.2		2,150			2,027		6.1
(Losses) gains on revaluation of foreign currency instruments (1)	(12,640		)	8,069		NM		(12,347		)	444		NM		(20,159		)	978		NM
Other (2)	1,525			4,369		(65.1	)	10,601			9,667		9.7		5,207			5,440		(4.3	)
Total other noninterest (loss) income	$	(5,361	)	$	17,161	(131.2	)	$	14,601		$	24,348	(40.0	)	$	(9,080	)	$	11,200	(181.1	)

NM—Not meaningful


(1)	Represents the revaluation of foreign currency denominated financial instruments issued and held by us, primarily loans, deposits and cash. These instruments partially offset the impact of changes in internal foreign exchange forward contracts. Refer to internal foreign exchange forward contracts, net included within gains on derivative instruments as noted above.


(2)	Includes dividends on FHLB/FRB stock, correspondent bank rebate income and other fee income.

Total loss in other noninterest income was ~~$5.4~~$9.1 million for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to income of ~~$17.2~~$11.2 million for the comparable ~~2013~~2014 period. The ~~income in other noninterest income was $14.6 million for the nine months ended September 30, 2014, compared to $24.3 million for the comparable 2013 period. The decreases~~decrease of ~~$22.6 million and $9.7~~$20.3 million for the three ~~and nine~~ months ended ~~September 30, 2014, respectively, were~~March 31, 2015 was primarily due to losses of ~~$12.6~~$20.2 million ~~and $12.3 million, respectively,~~ from the revaluation of foreign currency instruments, compared to net gains of ~~$8.1~~$1.0 million ~~and $0.4 million, respectively,~~ for the comparable ~~periods~~period of ~~2013.~~2014. The losses from the revaluation of foreign currency instruments were offset by net gains of ~~$12.5 million and $12.0~~$20.0 million for the three ~~and nine~~ months ended ~~September 30, 2014, respectively,~~March 31, 2015, compared to net losses of ~~$8.4~~$1.0 million ~~and $1.5 million, respectively~~ for the comparable ~~periods~~period of ~~2013,~~2014, on internal foreign exchange forward contracts economically hedging certain of these instruments, which are included within noninterest income in the line item "gains on derivative instruments" as noted above.

Overall Summary of Investments in FireEye

~~Our FireEye-related investments held during~~During the ~~third~~first quarter of ~~2014 were primarily shares of FireEye common stock ("FireEye Shares") held by~~2015, our managed direct venture funds ~~from prior investments. As of September 30, 2014, our managed funds (including SVB Financial's interest) held approximately 4.9 million shares of FireEye Shares.~~

~~During~~distributed the nine months ended September 30, 2014, net losses, related to FireEye Shares held by our managed direct venture funds, were $21.7 million ($4.2 million net of noncontrolling interests) and primarily consisted of unrealized losses resulting from the decline in the common stock price of FireEye.

~~As of September 30, 2014, our managed funds (including SVB Financial's interest) held approximately 4.9~~remaining 2.5 million shares of FireEye common stock ~~("FireEye Shares")~~to their respective investors (including the Company), resulting in $15.9 million of realized gains on investment securities ($3.3 million net of noncontrolling interests and inclusive of the Company's carried interests). ~~From September 30, 2014 to November 5, 2014, the market share price~~All distributed shares of ~~FireEye’s~~FireEye common stock ~~has slightly decreased from $30.56~~ to ~~$30.04~~the Company were sold during the first quarter of 2015 and as ~~such there has not been a significant decline in the valuation~~ of ~~our remaining~~March 31, 2015, we no longer hold any shares of FireEye ~~related investments.~~

~~Investment gains (or losses) relating to the remaining 4.9 million FireEye Shares held by~~common stock, either directly or through our managed ~~funds are based on valuation changes or the sale of any securities, and are subject to FireEye's stock price, which is subject to market conditions and~~

~~Table of Contents~~

various other factors. Additionally, any future gains and losses reported above with respect to the remaining shares held by our managed funds at September 30, 2014 are currently unrealized, and the extent such gains (or losses) will become realized is subject to a variety of factors, including among other things, changes in prevailing market prices and the timing of any sales or distribution of securities, which are subject to our funds' separate discretionary securities sales/distribution governance processes.

direct venture funds.

Noninterest Expense

A summary of noninterest expense for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014		2013		% Change		2014		2013		% Change		2015		2014		% Change
Compensation and benefits	$	99,932	$	96,869	3.2	%	$	302,259	$	270,315	11.8	%	$	115,770	$	102,507	12.9	%
Professional services	26,081		18,966		37.5		68,383		52,759		29.6		24,185		21,189		14.1
Premises and equipment	12,631		12,171		3.8		36,267		34,298		5.7		12,657		11,582		9.3
Business development and travel	10,022		7,378		35.8		29,465		23,433		25.7		11,112		10,194		9.0
Net occupancy	7,437		5,898		26.1		22,436		17,460		28.5		7,313		7,320		(0.1	)
FDIC assessments	4,587		2,913		57.5		13,660		9,148		49.3
FDIC and state assessments													5,789		4,128		40.2
Correspondent bank fees	3,278		2,906		12.8		9,755		9,009		8.3		3,421		3,203		6.8
Provision for unfunded credit commitments	2,225		2,774		(19.8	)	5,533		6,135		(9.8	)	2,263		1,123		101.5
Other(1)	15,796		10,649		48.3		40,113		30,273		32.5		13,598		9,162		48.4
Total noninterest expense(1)	$	181,989	$	160,524	13.4		$	527,871	$	452,830	16.6		$	196,108	$	170,408	15.1


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Table of Contents

Included in noninterest expense is expense attributable to noncontrolling interests. See below for a summary of non-GAAP noninterest expense and non-GAAP operating efficiency ratio, both of which exclude noncontrolling interests.

Non-GAAP Noninterest Expense

We use and report non-GAAP noninterest expense, non-GAAP taxable equivalent revenue and non-GAAP operating efficiency ratio, which excludes noncontrolling interests. We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by: (i) excluding certain items that represent expenses attributable to investors other than us and our subsidiaries, or certain items that do not occur every reporting period; 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. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or preferable to, financial measures prepared in accordance with GAAP. The table below provides a summary of non-GAAP noninterest expense and non-GAAP operating efficiency ratio, both net of noncontrolling interests for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:

~~Table of Contents~~


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
Non-GAAP operating efficiency ratio, net of noncontrolling interests (Dollars in thousands, except ratios)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
GAAP noninterest expense(1)	$	181,989		$	160,524		13.4	%	$	527,871		$	452,830		16.6	%	$	196,108		$	170,408		15.1	%
Less: amounts attributable to noncontrolling interests	4,743			3,290			44.2		13,331			9,017			47.8		5,463			3,321			64.5
Non-GAAP noninterest expense, net of noncontrolling interests	$	177,246		$	157,234		12.7		$	514,540		$	443,813		15.9		$	190,645		$	167,087		14.1
GAAP taxable equivalent net interest income	$	220,981		$	177,525		24.5		$	623,130		$	511,640		21.8
GAAP net interest income																	$	238,890		$	196,328		21.7
Adjustments for taxable equivalent basis																	416			429			(3.0	)
Non-GAAP taxable equivalent net interest income																	$	239,306		$	196,757		21.6
Less: income attributable to noncontrolling interests	9			19			(52.6	)	12			63			(81.0	)	35			8			NM
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests	$	220,972		$	177,506		24.5		$	623,118		$	511,577		21.8		$	239,271		$	196,749		21.6
GAAP noninterest income	$	80,167		$	257,650		(68.9	)	$	404,602		$	434,493		(6.9	)	$	172,018		$	310,225		(44.6	)
Non-GAAP noninterest income, net of noncontrolling interests	75,256			105,820			(28.9	)	248,298			229,422			8.2		109,824			123,507			(11.1	)
GAAP taxable equivalent revenue	$	301,148		$	435,175		(30.8	)	$	1,027,732		$	946,133		8.6
GAAP total revenue																	$	410,908		$	506,553		(18.9	)
Non-GAAP taxable equivalent revenue, net of noncontrolling interests	$	296,228		$	283,326		4.6		$	871,416		$	740,999		17.6		$	349,095		$	320,256		9.0
GAAP operating efficiency ratio	60.43		%	36.89		%	63.8		51.36		%	47.86		%	7.3		47.73		%	33.64		%	41.9
Non-GAAP operating efficiency ratio (1)	59.83		%	55.50		%	7.8		59.05		%	59.89		%	(1.4	)
Non-GAAP operating efficiency ratio (2)																	54.61			52.17			4.7

NM—Not meaningful


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.


(2)	The non-GAAP operating efficiency ratio is calculated by dividing non-GAAP noninterest expense, net of noncontrolling interests, by non-GAAP taxable-equivalent revenue, net of noncontrolling interests.

Compensation and Benefits Expense

The following table provides a summary of our compensation and benefits expense for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014		2013		% Change		2014		2013		% Change		2015		2014		% Change
Compensation and benefits
Salaries and wages	$	47,106	$	39,926	18.0	%	$	136,616	$	118,458	15.3	%	$	51,425	$	44,353	15.9	%
Incentive compensation & ESOP	26,161		30,599		(14.5	)	80,355		74,452		7.9		28,543		26,448		7.9
Other employee benefits (1)	26,665		26,344		1.2		85,288		77,405		10.2		35,802		31,706		12.9
Total compensation and benefits	$	99,932	$	96,869	3.2		$	302,259	$	270,315	11.8		$	115,770	$	102,507	12.9
Period-end full-time equivalent employees	1,881		1,683		11.8		1,881		1,683		11.8		1,965		1,737		13.1
Average full-time equivalent employees	1,850		1,675		10.4		1,784		1,662		7.3		1,955		1,735		12.7


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

Compensation and benefits expense was ~~$99.9~~$115.8 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to ~~$96.9~~$102.5 million for the comparable ~~2013~~2014 period. The key changes in factors affecting compensation and benefits expense were as follows:

An increase of ~~$7.2~~$7.1 million in salaries and wages, ~~expense,~~ primarily due to an increase in the number of average ~~FTEs.~~full-time employees ("FTE") as well as annual merit increases that took effect during the first quarter of 2015. Average FTEs increased by ~~175~~220 to ~~1,850~~1,955 FTEs for the three months ended ~~September 30, 2014~~March 31, 2015, compared to ~~1,675~~1,735 FTEs for the comparable ~~2013~~2014 ~~period,~~period.

An increase of $4.1 million in other employee benefits, primarily due to ~~support~~expenses related to our ~~product development, operational and sales and advisory teams,~~Warrant Incentive Plan driven by gains recorded on our equity warrant assets during the first quarter of 2015, as well as ~~to support~~higher employer payroll taxes, 401(k) contribution expense, and share-based plan expense, primarily as a result of the increase in the valuation of our ~~commercial banking operations and initiatives.~~

common stock.

~~A decrease~~An increase of $~~4.4~~2.1 million in incentive compensation and ESOP expense, primarily reflective of current expectations for our internal performance targets for ~~2014.~~

~~Table of Contents~~

~~Compensation and benefits expense was~~ ~~$302.3 million~~ ~~for the~~ ~~nine months endedSeptember 30, 2014, compared to~~ ~~$270.3 million~~ ~~for the comparable~~ ~~2013~~ ~~period. The key changes in factors affecting compensation and benefits expense were as follows:~~

~~An increase of~~ ~~$18.2 million~~ ~~in salaries and wages expense, primarily due to an increase in the number of average FTEs. Average FTEs increased by~~ ~~122~~ to ~~1,784~~ ~~FTEs for thenine months endedSeptember 30, 2014, compared to~~ ~~1,662~~ ~~FTEs for the comparable~~ ~~2013~~ ~~period.~~

~~An increase of~~ ~~$5.9 million~~ ~~in incentive compensation and ESOP expense, primarily reflective of our continued strong performance in 2014 and an increase in the number of average FTEs compared to the~~ ~~nine months endedSeptember 30, 2014~~.

~~An increase of~~ ~~$7.9 million~~ in other employee benefits, primarily due to an increase in share-based compensation expense mainly as a result of the increase in the valuation of our common stock as well as an increase in contract agency fees primarily supporting our commercial banking operations. These increases were offset by a decrease in warrant incentive compensation expense, which was higher in the third quarter of 2013 due to the impact of the increase in valuation related to FireEye after its IPO.2015.

Our variable compensation plans primarily consist of our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, 401(k) and ESOP Plan, Retention Program and Warrant Incentive Plan (See descriptions in our ~~2013~~2014 Form 10-K). Total costs incurred under these plans were ~~$29.6 million~~ ~~and $94.6~~$38.9 million for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $~~36.4~~34.8 million ~~and $89.4 million~~ for the comparable ~~2013~~2014 ~~periods, respectively.~~period. These amounts are included in total compensation and benefits expense discussed above.

Professional Services

Professional services expense was $~~26.1~~24.2 million ~~and $68.4 million~~ for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to $~~19.0~~21.2 million ~~and $52.8 million~~ for the comparable ~~2013~~2014 ~~periods.~~period. The increase was primarily due to increased activities to support our expansion of product offerings as well as our continued investment into ongoing business and IT infrastructure initiatives.

Premises and Equipment

Premises and equipment expense was $12.7 million for the three months ended March 31, 2015, compared to $11.6 million for the comparable 2014 period. The increase was primarily due to increased spending to enhance and maintain our IT infrastructure.

Business Development and Travel

Business development and travel was ~~$10.0 million and $29.5~~$11.1 million for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to ~~$7.4 million and $23.4~~$10.2 million for the comparable ~~2013~~2014 ~~periods.~~period. The increase was primarily due to ~~an increase in client related events supporting~~the increased business development efforts during the first quarter of 2015 to support the growth of our ~~business as well as employee related expenses due to the increase in average FTEs.~~business.

~~Net Occupancy~~

Table of Contents

FDIC and State Assessments

~~Net occupancy~~FDIC and state assessments expense was ~~$7.4 million and $22.4~~$5.8 million for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, ~~respectively,~~ compared to ~~$5.9 million and $17.5~~$4.1 million for the comparable ~~2013~~2014 ~~periods. The increase was reflective of lease renewals at higher rates, reflective of market conditions, and the expansion of certain existing offices.~~

~~FDIC Assessments~~

~~FDIC assessments expense was $4.6 million and $13.7 million for the three and nine months ended~~ ~~September 30, 2014, respectively, compared to $2.9 million and $9.1 million for the comparable~~ ~~2013~~ ~~periods, respectively.~~period. The increase was primarily due to the increase of $11.5 billion in average assets ~~since~~for the ~~third~~first quarter of ~~2013.~~2015.

Provision for Unfunded Credit Commitments

We recorded a provision for unfunded credit commitments of $~~2.2 million~~ ~~and $5.5 million for the three and nine months ended~~ ~~September 30, 2014, respectively, compared to a provision of~~ ~~$2.8 million~~ ~~and $6.1 million for the comparable~~ ~~2013~~ ~~periods, respectively. The provision of~~ ~~$2.2~~2.3 million for the three months ended ~~September 30,~~ March 31, 2015, compared to a provision of $1.1 million for the comparable 2014 ~~was primarily reflective of a $1.1 billion increase in total unfunded commitments during the third quarter of 2014.~~period. The provision of ~~$5.5~~$2.3 million ~~for the nine months ended September 30, 2014~~ was primarily ~~reflective of a $3.2 billion increase~~due to growth in total ~~unfunded~~loan commitments available for funding and commercial and standby letters of credit, ~~commitments during the nine months ended September 30,~~which increased by $779.7 million to $15.5 billion at March 31, 2015 from $14.7 billion at December 31, 2014.

~~Table of Contents~~

Other Noninterest Expense

A summary of other noninterest expense for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 is as follows:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014		2013		% Change		2014		2013		% Change		2015		2014		% Change
Client services	$	3,215	$	1,920	67.4	%	$	8,160	$	5,711	42.9	%	$	3,549	$	2,359	50.4	%
Tax credit fund amortization	2,228		1,519		46.7		6,758		4,174		61.9
Telephone													1,959		1,748		12.1
Data processing services	2,229		2,020		10.3		6,497		5,814		11.7		1,833		2,227		(17.7	)
Telephone	1,931		1,571		22.9		5,217		4,640		12.4
Postage and supplies	763		559		36.5		2,248		1,777		26.5		765		769		(0.5	)
Dues and publications	719		399		80.2		1,852		1,302		42.2		585		497		17.7
Other	4,711		2,661		77.0		9,381		6,855		36.8		4,907		1,562		NM
Total other noninterest expense	$	15,796	$	10,649	48.3		$	40,113	$	30,273	32.5
Total other noninterest expense (1)													$	13,598	$	9,162	48.4

NM—Not meaningful


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Other noninterest expense was ~~$15.8~~$13.6 million for the three months ended ~~September 30, 2014~~,March 31, 2015, compared to ~~$10.6~~$9.2 million for the comparable ~~2013~~2014 period. The increase of ~~$5.2~~$4.4 million for the three month period was primarily due to a ~~$1.3~~$1.1 million increase in client services, related to increased transaction processing volumes and $0.7 million increase in tax credit fund amortization expense reflective of approximately $28.3 million in additional tax credit fund investment purchases since September 30, 2013 and $0.7 million for increased marketing expense for advertising/promotion in new and existing markets, included in other.

~~Other noninterest expense was $40.1 million for the~~ ~~nine months endedSeptember 30, 2014, compared to $30.3 million for the comparable~~ ~~2013~~ period. The increase of $9.8 million for the nine month period was primarily due to the increase in tax credit fund amortization expense of $2.6 million reflective of approximately $28.3 million in additional tax credit fund investment purchases since September 30, 2013 and an increase of $2.4 million in client services expense, related to increased transaction processing volumes, and $1.0 million for increased marketing expense for advertising/promotion in new and existing markets, included in other.volumes.

Net Income Attributable to Noncontrolling Interests

Included in net income is income and expense attributable to noncontrolling interests. The relevant amounts allocated to investors in our consolidated subsidiaries, other than us, are reflected under “Net Income Attributable to Noncontrolling Interests” on our statements of income.

In the table below, noninterest income consists primarily of investment gains and losses from our consolidated funds. Noninterest expense is primarily related to management fees paid by our managed funds to SVB Financial’s subsidiaries as the funds’ general partners. A summary of net income attributable to noncontrolling interests for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~ is as follows:

Table of Contents


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(Dollars in thousands)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
Net interest income (1)	$	(9	)	$	(19	)	(52.6	)%	$	(12	)	$	(63	)	(81.0	)%	$	(35	)	$	(8	)	NM
Noninterest income (1)	(1,185		)	(169,126		)	(99.3	)	(159,362		)	(223,912		)	(28.8	)	(66,895		)	(202,138		)	(66.9	)
Noninterest expense (1)	4,743			3,290			44.2		13,331			9,017			47.8		5,463			3,321			64.5
Carried interest (loss) income (2)	(3,726		)	17,296			(121.5	)	3,058			18,841			(83.8	)
Carried interest income (2)																	4,701			15,420			(69.5	)
Net income attributable to noncontrolling interests	$	(177	)	$	(148,559	)	(99.9	)	$	(142,985	)	$	(196,117	)	(27.1	)	$	(56,766	)	$	(183,405	)	(69.0	)

NM—Not meaningful


(1)	Represents noncontrolling interests’ share in net interest income, noninterest income and noninterest expense.


(2)	Represents the preferred allocation of income (or change in income) earned by us as the general partner of certain consolidated funds.

Net income attributable to noncontrolling interests was ~~$0.2~~$56.8 million for the ~~third~~first quarter of ~~2014,~~2015, compared to ~~$148.6~~$183.4 million for the comparable ~~2013~~2014 period. Net income attributable to noncontrolling interests of ~~$0.2~~$56.8 million for the ~~third~~first quarter of ~~2014~~2015 was primarily a result of the following:

~~Noninterest income of $1.2 million consisting primarily of the following:~~

~~Table of Contents~~

Net gains on investment securities (including carried interest) attributable to noncontrolling interests of ~~$6.8~~$63.6 million ($~~3.1~~68.3 million excluding carried interest) primarily from gains of ~~$38.2~~$44.2 million from our managed funds of funds ~~partially offset by losses~~and gains of ~~$31.4~~$19.4 million from our managed direct venture funds primarily related to ~~the decline in the FireEye valuation.~~valuation increases. See "Results of Operations—Noninterest Income—Gains on Investment Securities, Net". The decrease of ~~$21.1~~$10.7 million in carried interest income is primarily related to ~~a loss of $3.7 million for the third quarter of 2014 compared to income of $17.3 million for the comparable 2013 period, also primarily reflects the impact of the decline in FireEye valuations~~lower gains in our managed direct venture funds ~~and~~

~~Net losses attributable to noncontrolling interests of $1.7 million, included in noninterest income,~~ from foreign currency translation adjustments on our foreign investments, in our managed funds of funds, as a result of the significant increase in the value of the U.S. dollar during the third quarter of 2014.FireEye; and

Noninterest expense of ~~$4.7~~$5.5 million, primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as the general partner.

Net income attributable to noncontrolling interests was $143.0 million for the nine months ended September 30, 2014, compared to $196.1 million for the comparable 2013 period. Net income attributable to noncontrolling interests of $143.0 million for the nine months ended September 30, 2014 was primarily a result of the following:

~~Noninterest income of $159.4 million consisting primarily of the following:~~

Net gains on investment securities (including carried interest) attributable to noncontrolling interests of $158.1 million ($161.1 million excluding carried interest) primarily from gains of $175.1 million from our managed funds of funds partially offset by losses of $17.1 million from our managed direct venture funds primarily related to the decline in the FireEye valuation. "Results of Operations—Noninterest Income—Gains on Investment Securities, Net". The decrease of $15.7 million in carried interest income, to $3.1 million for the nine months ended September 30, 2014 compared to $18.8 million for the comparable 2013 period, also primarily reflects the impact of the decline in FireEye valuations in our managed direct funds, and

Net losses attributable to noncontrolling interests of $1.5 million, included in noninterest income, from foreign currency translation adjustments on our foreign investments, in our managed funds of funds, as a result of the significant increase in the value of the U.S. dollar during the third quarter of 2014.

~~Noninterest expense of $13.3 million, primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as the general partner.~~

~~Table of Contents~~

Income Taxes

Our effective income tax expense rate was ~~38.2~~41.6 percent for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~41.2~~40.3 percent for the three months ended ~~September 30, 2013.~~ March 31, 2014.Results, and the related tax effect, for prior periods were revised to reflect the retrospective application of adopting new accounting guidance in 2015 related to our investments in qualified affordable housing projects (ASU 2014-01).

The components of our tax rate were consistent for both the ~~third~~first quarter of 2015 and first three quarters of 2014 and 2013, respectively. Our effective income tax expense rate was 39.1 percent for the nine months ended September 30, 2014, compared to 39.8 percent for the comparable 2013 period.2014. The ~~decrease~~increase in our effective tax rate is primarily attributable to ~~increased~~the unremitted earnings from the pending sale of SVBIF.

For prior periods, pursuant to ASU 2014-01, (i) amortization expense related to our low income housing tax credits was reclassified from Other noninterest expense to Income tax expense, (ii) additional amortization, net of the associated tax benefits, was recognized ~~on tax-exempt investments~~in Income tax expense as a result of ~~additional purchases made during~~our adoption of the ~~three~~proportional amortization method and ~~nine months ended September 30,~~(iii) net deferred tax assets, related to our low income housing tax investments, were written-off. The cumulative effect to retained earnings as of January 1, 2015 of adopting this guidance was a reduction of $4.7 million, inclusive of a $4.6 million reduction to retained earnings as of January 1, 2014. Our previously reported net income for the first quarter of 2014 decreased $0.4 million. This reduction had no impact on first quarter 2014 diluted earnings per share.

Our effective tax 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.

Operating Segment Results

~~Table of Contents~~

We have three segments for which we report our financial information: Global Commercial Bank, SVB Private Bank and SVB Capital.

We report segment information based on the “management” approach, which designates the internal reporting used by management for making decisions and assessing performance as the source of our reporting segments. Please refer to Note ~~10—~~11—”Segment Reporting” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.

Our primary source of revenue is from net interest income, which is primarily the difference between interest earned on loans, net of FTP, and interest paid on deposits, net of FTP. Accordingly, our segments are reported using net interest income, net of FTP. FTP is an internal measurement framework designed to assess the financial impact of a financial institution’s sources and uses of funds. It is the mechanism by which an earnings credit is given for deposits raised, and an earnings charge is made for funded loans.

~~Changes in an individual client’s primary relationship designation have resulted, and in the future may result, in the inclusion of certain clients in different segments in different periods.~~ The following is our reportable segment information for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014:

Table of Contents

Global Commercial Bank


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(Dollars in thousands)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
Net interest income	$	187,184		$	162,371		15.3	%	$	541,375		$	465,893		16.2	%	$	203,755		$	175,303		16.2	%
Provision for loan losses	(16,185		)	(11,633		)	39.1		(18,833		)	(36,030		)	(47.7	)	(6,460		)	(807		)	NM
Noninterest income	57,756			49,991			15.5		169,414			144,893			16.9		64,689			58,635			10.3
Noninterest expense	(128,685		)	(107,495		)	19.7		(374,289		)	(313,080		)	19.6		(136,282		)	(120,706		)	12.9
Income before income tax expense	$	100,070		$	93,234		7.3		$	317,667		$	261,676		21.4		$	125,702		$	112,425		11.8
Total average loans, net of unearned income	$	10,192,945		$	8,576,443		18.8		$	9,917,115		$	8,175,626		21.3		$	12,729,630		$	9,677,957		31.5
Total average assets	31,809,853			21,336,583			49.1		28,828,400			20,732,425			39.0		35,962,427			25,504,407			41.0
Total average deposits	28,795,499			18,994,374			51.6		26,020,715			18,480,510			40.8		32,472,827			22,877,819			41.9

NM—Not meaningful

Three months ended ~~September 30, 2014~~March 31, 2015 compared to the three months ended ~~September 30, 2013~~March 31, 2014

Income before income tax expense from our Global Commercial Bank (“GCB”) increased to ~~$100.1~~$125.7 million for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$93.2~~$112.4 million for the comparable ~~2013~~2014 period. Income before income tax expense was primarily driven by higher net interest income due to strong average loan growth. The key components of GCB's performance for the three months ended ~~September 30, 2014~~March 31, 2015 compared to the comparable ~~2013~~2014 period are discussed below.

Net interest income from ~~our~~ GCB increased by $~~24.8~~28.5 million for the three months ended ~~September 30, 2014~~March 31, 2015, primarily due to a ~~$13.8~~$15.3 million increase in loan interest income resulting mainly from an increase in average loan balances, partially offset by lower loan yields. Additionally, GCB had a ~~$19.0~~$17.6 million increase in the FTP earned for deposits due to strong average deposit growth. These increases were partially offset by a ~~$4.0~~$3.3 million decrease in the FTP earned for deposits from decreases in market interest rates.

GCB had a provision for loan losses of $6.5 million for the three months ended March 31, 2015, compared to $0.8 million for the comparable 2014 period. The provision of $6.5 million for the three months ended March 31, 2015 was primarily driven by an increase of $8.7 million in the reserve for impaired loans, primarily reflective of an increase in the reserve for a previously impaired loan, as well as $3.9 million for net charge-offs. These increases were offset by a $6.8 million decrease in the reserve due to the improvement of the credit quality of our performing loans.

The provision of $0.8 million for the three months ended March 31, 2014 was primarily attributable to net charge-offs, a decrease in our reserve for impaired loans due to repayments on impaired loan balances and improvement in the overall credit quality of gross performing loans.

Noninterest income increased by $~~16.2~~6.1 million for the three months ended ~~September 30, 2014, compared to~~ ~~$11.6 million~~ for the comparable 2013 period. The provision of $16.2 million for the three months ended September 30, 2014 was primarily driven from net charge-offs, period-end loan growth and the change in composition of our performing loan portfolio, offset by a decrease in the reserve for impaired loans resulting from a decrease in impaired loan balances. The provision of $11.6 million for the three months ended September 30, 2013 was primarily attributable to net charge-offs, an increase in our reserve for impaired loans and period-end loan growth.

~~Noninterest income increased by~~ ~~$7.8 million~~ ~~for the~~ ~~three months endedSeptember 30, 2014~~March 31, 2015, primarily related to higher ~~foreign exchange~~credit card fees, ~~credit card~~lending related fees and deposit service charges. The increase in ~~foreign exchange~~credit card fees ~~was primarily due to~~

~~Table of Contents~~

reflects increased client utilization of ~~foreign currency~~our credit card products and custom payment solutions by ~~our clients, resulting~~new and existing clients. The increase in lending related fees is due to an increase in ~~the number of trades~~loan syndication fee income and ~~commissioned notional volumes. The~~an increase in ~~credit card~~unused commitment fees ~~was primarily due to increases in client volumes and~~for the ~~addition~~first quarter of ~~new credit card clients.~~2015. The increase in deposit service charges is reflective of the increase in the number of deposit clients, as well as increases in transaction volumes and size.

Noninterest expense increased by ~~$21.2~~$15.6 million for the three months ended ~~September 30, 2014,~~March 31, 2015, primarily due to ~~increased activities to support our expansion of product offerings as well as our continued investment into ongoing business and IT infrastructure initiatives. Also,~~ increases in compensation and benefits expenses related to our salaries and wages ~~contributed to the increase.~~expenses. The increase in our salaries and wages expenses was primarily due to an increase in the average number of FTEs at GCB, which increased by ~~151~~162 to ~~1,503~~1,532 FTEs for the three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~1,352~~1,370 FTEs for the comparable ~~2013~~2014 period. The increase in average FTEs was attributable to increases in positions for product development, operational and sales and advisory, as well as to support our commercial banking operations and initiatives. ~~Net occupancy costs~~Higher expenses for ~~GCB~~FDIC and state assessments, and premises and equipment, also ~~increased due~~contributed to the ~~impact of lease renewals at higher rates, reflective of market conditions, and the expansion of certain existing offices.~~

~~Nine months endedSeptember 30, 2014~~ ~~compared to the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2013~~

~~Net interest income from our Global Commercial Bank (“GCB”) increased by $75.5 million~~increase in noninterest expense for the nine months ended September 30, 2014, primarily due to an increase in loan interest income resulting mainly from an increase in average loan balances and an increase in the FTP earned for deposits due to deposit growth.GCB segment. These increases were ~~partially offset by~~ a ~~decrease~~result of the continued growth of the GCB segment, in ~~the FTP earned for deposits from decreases in market interest rates.~~

~~We had a provision for loan losses for GCB~~which average assets increased $10.5 billion to $36.0 billion as of ~~$18.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014, compared to a provision~~March 31, 2015.

Table of ~~$36.0 million for the comparable~~ ~~2013~~ ~~period. The provision of~~ ~~$18.8 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ was primarily due to net charge-offs and period-end loan growth, offset by a decrease in our reserve for impaired loans due to a decrease in impaired loan balances and a reserve release reflective of improvement in the overall credit quality of gross performing loans. The provision for the comparable ~~2013~~ ~~period was primarily attributable to net charge-offs, an increase in our reserve for impaired loans and, due to period-end loan growth.~~Contents

Noninterest income increased by $24.5 million for the nine months ended September 30, 2014, primarily due to an increase in foreign exchange fees, credit card fees and unused commitment fees. The increase in foreign exchange fees was primarily due to increased utilization of foreign currency products by our clients, resulting in an increase in the number of trades and commissioned notional volumes. The increase in credit card fees was primarily due to the addition of new credit card clients and an increase in client activity. The increase in unused commitment fees was primarily due to an increase in unfunded credit commitments.

Noninterest expense increased by $61.2 million for the nine months ended September 30, 2014, primarily due to an increase in salaries and wages, net occupancy and professional services. The increase in salaries and wages was primarily due to an increase in the average number of FTEs at GCB, which increased by 107 to 1,448 for the nine months ended September 30, 2014, compared to 1,341 for the comparable 2013 period. The increase in average FTEs was attributable to increases in positions for product development, operational and sales and advisory, as well as to support our commercial banking operations and initiatives. The increase in professional services was due to increased activities to support our expansion of product offerings as well as our continued investment into ongoing business and IT infrastructure initiatives. Net occupancy costs increased due to the impact of lease renewals at higher rates, reflective of market conditions, and the expansion of certain existing offices.

SVB Private Bank


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(Dollars in thousands)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
Net interest income	$	7,344		$	6,195		18.5	%	$	23,529		$	18,226		29.1	%	$	9,723		$	6,892		41.1	%
(Provision for) reduction of loan losses	(425		)	995			(142.7	)	(218		)	1,007			(121.6	)
Reduction of loan losses																	8			313			(97.4	)
Noninterest income	491			380			29.2		1,121			867			29.3		397			274			44.9
Noninterest expense	(2,574		)	(2,484		)	3.6		(7,709		)	(6,263		)	23.1		(2,747		)	(2,495		)	10.1
Income before income tax expense	$	4,836		$	5,086		(4.9	)	$	16,723		$	13,837		20.9		$	7,381		$	4,984		48.1
Total average loans, net of unearned income	$	1,190,986		$	942,411		26.4		$	1,120,647		$	886,679		26.4		$	1,374,189		$	1,049,901		30.9
Total average assets	1,129,947			998,640			13.1		1,027,707			910,551			12.9		1,921,554			967,873			98.5
Total average deposits	877,701			535,611			63.9		805,167			493,204			63.3		1,251,939			745,083			68.0

~~Table of Contents~~

Three months ended~~September 30, 2014~~ March 31, 2015 compared to the three months ended~~September 30, 2013~~ March 31, 2014

Net interest income from SVB Private Bank increased by ~~$1.1~~$2.8 million for the three months ended ~~September 30, 2014, primarily due to an increase in loan interest income resulting primarily from an increase in average loan balances and loan yields.~~

We had a provision for loan losses from SVB Private Bank of $0.4 million for the three months ended September 30, 2014, primarily due to period-end loan growth. For the three months ended September 30, 2013, the reduction of loan losses of $1.0 million was primarily due to a decrease in the reserve for impaired loans resulting from lower impaired loan balances.

~~Nine months endedSeptember 30, 2014~~ ~~compared to the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2013~~

~~Net interest income from SVB Private Bank increased by $5.3 million for the nine months ended September 30, 2014,~~March 31, 2015, primarily due to an increase in loan interest income resulting from an increase in average loan ~~balances.~~balances as well as an increase in the FTP earned for deposits due to strong average deposit growth.

~~Noninterest expense increased by $1.4 million for the nine months ended September 30, 2014, primarily driven by expenses related to our new Wealth Advisory practice.~~

SVB Capital


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(Dollars in thousands)	2014			2013			% Change		2014			2013			% Change		2015			2014			% Change
Net interest income	$	12		$	1		NM		$	55		$	5		NM
Net interest (loss) income																	$	(24	)	$	14		NM
Noninterest income	1,064			35,457			(97.0	)	35,617			48,179			(26.1	)	21,141			37,672			(43.9	)
Noninterest expense	(3,036		)	(2,728		)	11.3		(8,815		)	(7,871		)	12.0		(3,891		)	(2,635		)	47.7
(Loss) income before income tax expense	$	(1,960	)	$	32,730		(106.0	)	$	26,857		$	40,313		(33.4	)
Income before income tax expense																	$	17,226		$	35,051		(50.9	)
Total average assets	$	302,949		$	329,680		(8.1	)	$	328,048		$	277,136		18.4		$	269,982		$	340,990		(20.8	)

NM - Not meaningful

SVB Capital’s components of noninterest ~~(loss)~~ income primarily include net gains and losses on non-marketable and other securities, carried interest and fund management fees. All components of ~~(loss)~~ income before income tax expense discussed below are net of noncontrolling interests.

We experience variability in the performance of SVB Capital from quarter to quarter due to a number of factors, including changes in the values of our funds’ underlying investments, changes in the amount of distributions and general economic and market conditions. Such variability may lead to volatility in the gains and losses from investment securities and cause our results to differ from period to period. ~~Results for a particular period may not be indicative of future performance.~~

Three months ended ~~September 30, 2014~~March 31, 2015 compared to the three months ended ~~September 30, 2013~~March 31, 2014

SVB Capital had noninterest income of $~~1.1~~21.1 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to noninterest income of ~~$35.5~~$37.7 million for the comparable ~~2013~~2014 period. The decrease in noninterest income was primarily due to ~~net losses~~a decrease in gains on investment securities ~~related~~compared to ~~valuation declines.~~the first quarter of 2014. SVB Capital’s components of noninterest income primarily include the following:

Net ~~losses~~gains on investment securities of ~~$2.1~~$15.4 million for the three months ended ~~September 30, 2014~~March 31, 2015, compared to net gains of ~~$31.8~~$34.3 million for the comparable ~~2013~~2014 period. The net ~~losses~~gains on investment securities of ~~$2.1~~$15.4 million for the three months ended ~~September 30, 2014~~March 31, 2015 were primarily driven by gains from distributions of investments, including the remaining shares of FireEye common stock, as well as unrealized valuation losses and reductions in carried interest allocations in two of our managed direct venture funds, related to FireEye. These losses were partially offset by gains from our managed funds of funds primarily related to unrealized valuation adjustments of two of our funds of funds and strategic and other investments, primarily driven by strong distributions from strategic venture capital fund investments.increases.

Fund management fees of $~~3.6~~3.7 million ~~and~~compared to $2.8 million for the ~~three months ended~~ ~~September 30,~~comparable 2014 ~~and~~ ~~2013, respectively.~~ period. The increase is primarily due to the addition of the Capital Partners III, LP fund in ~~2014.~~the second quarter of 2014 and the Strategic Investors Fund VII Funds in the first quarter of 2015.

~~Nine months endedSeptember 30, 2014~~ ~~compared to the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2013~~

~~Noninterest income decreased by~~ ~~$12.6 million~~ ~~to $35.6 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014, primarily due to valuation declines in our investment securities. SVB Capital’s components of noninterest income primarily include the following:~~

7570

Table of Contents

~~Net gains on investment securities of $25.4 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014, compared to net gains of $39.0 million for the comparable~~ ~~2013~~ ~~period. The net gains on investment securities of $25.4 million for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ were primarily driven by unrealized valuation gains from our managed funds of funds and gains from our strategic and other investments, which were primarily driven by strong distributions from strategic venture capital fund investments as well as the sale of one of our direct equity investments, for which we recorded a realized gain of $4.7 million, partially offset by losses from two of our managed direct venture funds, related to FireEye.

~~Fund management fees of~~ ~~$9.9 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014, compared to~~ ~~$8.5 million~~ ~~for the comparable~~ ~~2013~~ ~~period. Fund management fees increased primarily due to the addition of the Capital Partners III, LP fund in 2014.~~

Consolidated Financial Condition

Our total assets, total liabilities and stockholders' equity were $~~36.0~~39.7 billion at ~~September 30,~~March 31, 2015 compared to $39.3 billion at December 31, 2014,, an increase of $~~9.6~~0.4 billion, or ~~36.4~~0.9 percent~~, compared to~~ ~~$26.4 billion~~ at ~~December 31, 2013~~. Below is a summary of the individual components driving the changes in total assets, total liabilities and stockholders' equity.

Cash and Cash Equivalents

Cash and cash equivalents totaled $~~1.9~~1.3 billion at ~~September 30, 2014~~March 31, 2015, ~~an increase~~a decrease of ~~$0.4~~$0.5 billion, or ~~21.7~~27.2 percent, compared to $~~1.5~~1.8 billion at December 31, ~~2013~~2014. The ~~increase~~decrease in cash flows was primarily reflective of ~~a $7.3 billion~~the increase ~~in average deposits and $0.4~~of $0.6 billion in ~~net proceeds from our stock offering in the second quarter of 2014, offset by an increase of $4.6 billion in average~~fixed income investment ~~securities and $1.7 billion in average loans.~~securities.

As of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, ~~$883~~$236 million and $~~715~~861 million, respectively, of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate, and interest-earning deposits in other financial institutions were $~~442~~460 million and $~~300~~440 million, respectively.

Investment Securities

Investment securities totaled $~~21.7~~23.3 billion at ~~September 30, 2014~~March 31, 2015, an increase of $~~8.1~~0.6 billion, or ~~59.8~~2.6 percent, compared to $~~13.6~~22.7 billion at December 31, ~~2013~~2014. Our investment securities portfolio consists of an available-for-sale securities portfolio and a held-to-maturity securities portfolio, both of which primarily represent ~~interest-earning investment securities,~~fixed income investments, and a non-marketable and other securities portfolio, which primarily represents investments managed as part of our funds management business. The increase of ~~$8.1~~$0.6 billion ~~included an increase of $8.0 billion~~was primarily in our fixed income securities portfolio ~~as well as an increase of $0.1 billion in~~with our non-marketable and other securities ~~reflective of our significant deposit growth during the nine months ended September 30, 2014.~~portfolio remaining relatively flat. The major components of the change are explained below.

Available-for-Sale Securities

Our available-for-sale securities portfolio is a fixed income investment portfolio that is managed to earn an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/

~~Table of Contents~~

liability management objectives. ~~Available-for-sale~~Period-end available-for-sale securities were ~~$13.3~~$13.7 billion at ~~September 30,~~March 31, 2015 compared to $13.5 billion at December 31, 2014, an increase of ~~$1.3~~$0.2 billion, or ~~11.2 percent, compared to $12.0 billion at December 31, 2013.~~1.5 percent. The increase was due to purchases of new available-for-sale securities of ~~$8.1~~$0.6 billion, which were ~~primarily~~entirely comprised of fixed-rate U.S. Treasury securities, partially offset by ~~a $5.4~~$0.4 billion ~~transfer of securities out of our available-for-sale securities portfolio into a held-to-maturity securities portfolio as discussed below and~~in paydowns, scheduled maturities and called ~~maturities~~maturities. A decrease in market interest rates at period-end resulted in an increase in the fair value of ~~$1.4 billion.~~our AFS securities portfolio of $87.1 million. The $87.1 million increase in fair value is reflected as a $51.9 million (net of tax) increase in accumulated other comprehensive income.

Securities classified as available-for-sale are carried at fair market value with changes in fair market value recorded as unrealized gains or losses in a separate component of shareholders equity.

Held-to-Maturity Securities

During the second quarter of 2014, we re-designated certain securities from the classification of “available-for-sale” to “held-to-maturity." The securities re-designated primarily consisted of agency-issued mortgage securities and CMOs with a total carrying value of $5.4 billion at June 1, 2014. At the time of re-designation the securities had unrealized gains totaling $22.5 million, net of tax, recorded in accumulated other comprehensive income and are being amortized over the life of the securities in a manner consistent with the amortization of a premium or discount. Our decision to re-designate the securities was based on our ability and intent to hold these securities to maturity. Factors used in assessing the ability to hold these securities to maturity were future liquidity needs and sources of funding.

Period-end held-to-maturity securities were ~~$6.7~~$7.8 billion at ~~September 30, 2014. During the nine months ended~~March 31, 2015 compared to $7.4 billion at December 31, 2014, an increase of ~~2014, there were~~$0.4 billion, or 5.3 percent. The increase was due to purchases of ~~$1.6~~$0.7 billion, which were primarily comprised of ~~agency-issued mortgage~~Government National Mortgage Association ("GNMA") backed securities, partially offset by paydowns and maturities of $0.3 billion. ~~Average held-to-maturity securities were $2.5 billion for the nine months ended at September 30, 2014.~~

Securities classified as held-to-maturity are accounted for at cost with no adjustments for changes in fair value. For securities re-designated as held-to-maturity from available-for-sale, the unrealized gains at the date of transfer will continue to be reported as a separate component of shareholders' equity and amortized as mentioned above.

Table of Contents

Portfolio duration is a standard measure used to approximate changes in the market value of fixed income instruments due to a change in market interest rates. The measure is an estimate based on the level of current market interest rates, expectations for changes in the path of forward rates and the effect of forward rates on mortgage prepayment speed assumptions. As such, portfolio duration will fluctuate with changes in market interest rates. Changes in portfolio duration are also impacted by changes in the mix of longer versus shorter term-to-maturity securities. At ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013,~~2014, our estimated fixed income securities portfolio duration was ~~3.0~~2.7 years and ~~3.3~~2.8 years, respectively.

Non-Marketable and Other Securities

Our non-marketable and other securities portfolio primarily represents investments in venture capital and private equity funds, debt funds and private and public portfolio companies. A majority of these investments are managed through our SVB Capital funds business in funds of funds and direct venture and private equity funds. Included in our non-marketable and other securities carried under fair value accounting are amounts that are attributable to noncontrolling interests. We are required under GAAP to consolidate 100% of these investments that we are deemed to control, even though we may own less than 100% of such entities. See below for a summary of the carrying value (as reported) of non-marketable and other securities compared to the amounts attributable to SVBFG.

Non-marketable and other securities were $1.7 billion at ~~September 30,~~March 31, 2015 compared to $1.7 billion at December 31, 2014,~~, an increase~~ a decrease of $~~0.1 billion~~21.3 million, or ~~6.8~~1.2 percent~~, compared to~~ ~~$1.6 billion~~ ~~at December 31, 2013.~~. The ~~increase~~decrease was primarily ~~attributable~~due to ~~valuation gains~~distributions received from funds in our managed funds of funds ~~driven by valuation gains in fund investments. The increase was partially offset by valuation declines in~~and distributions of investments from our managed direct venture funds, ~~primarily attributable to declines~~partially offset by capital calls made by our managed funds of funds and valuation increases in ~~the market share price~~our managed funds of ~~FireEye.~~funds. The following table summarizes the carrying value (as reported) of non-marketable and other securities compared to the amounts attributable to SVBFG (which generally represents the carrying value times our ownership percentage) at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:



	March 31, 2015				December 31, 2014
(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	$	1,195,303	$	84,462	$	1,130,882	$	84,368
Other venture capital investments (2)	78,850		2,231		71,204		1,823
Other securities (fair value accounting) (3)	11,936		2,793		108,251		7,802
Non-marketable securities (equity method accounting):
Other investments	145,942		145,942		142,674		142,674
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments	134,575		134,575		140,551		140,551
Other investments (4)	14,910		14,910		13,423		13,423
Investments in qualified affordable housing projects (4)	125,357		125,357		121,155		121,155
Total non-marketable and other securities	$	1,706,873	$	510,270	$	1,728,140	$	511,796

7772

Table of Contents

September 30, 2014 December 31, 2013
(Dollars in thousands)
Carrying value
(as reported)

Amount attributable
to SVBFG

Carrying value
(as reported)

Amount attributable
to SVBFG
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1) $ 1,078,911
$ 83,546
$ 862,972
$ 76,505
Other venture capital investments (2) 43,863
1,938
32,839
2,097
Other securities (fair value accounting) (3) 181,265
17,652
321,374
23,058
Non-marketable securities (equity method accounting):
Other investments 141,913
141,913
142,883
142,883
Low income housing tax credit funds 98,417
98,417
72,241
72,241
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments 142,710
142,710
148,994
148,994
Other investments 16,471
16,471
14,191
14,191
Total non-marketable and other securities $ 1,703,550
$ 502,647
$ 1,595,494
$ 479,969


(1)	The following table shows the amounts of venture capital and private equity fund investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
SVB Strategic Investors Fund, LP	$	25,625	$	3,219	$	29,104	$	3,656	$	23,953	$	3,009	$	24,645	$	3,096
SVB Strategic Investors Fund II, LP	92,681		7,944		96,185		8,244		89,219		7,647		97,250		8,336
SVB Strategic Investors Fund III, LP	248,816		14,608		260,272		15,280		257,539		15,120		269,821		15,841
SVB Strategic Investors Fund IV, LP	308,332		15,417		226,729		11,337		297,752		14,888		291,291		14,564
Strategic Investors Fund V Funds	214,863		327		118,181		184		260,292		405		226,111		350
Strategic Investors Fund VI Funds	56,958		88		7,944		12		127,721		—		89,605		—
Strategic Investors Fund VII Funds									2,212		—		—		—
SVB Capital Preferred Return Fund, LP	61,876		13,335		59,028		12,722		64,417		13,883		62,110		13,386
SVB Capital—NT Growth Partners, LP	61,818		20,953		61,126		21,339		64,078		21,719		61,973		21,006
SVB Capital Partners II, LP	302		15		708		36		346		17		302		15
Other private equity fund	7,640		7,640		3,695		3,695		7,774		7,774		7,774		7,774
Total venture capital and private equity fund investments	$	1,078,911	$	83,546	$	862,972	$	76,505	$	1,195,303	$	84,462	$	1,130,882	$	84,368


(2)	The following table shows the amounts of other venture capital investments held by the following consolidated funds and amounts attributable to SVBFG for each fund at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Silicon Valley BancVentures, LP	$	5,616	$	601	$	6,564	$	702	$	3,390	$	363	$	3,291	$	352
SVB Capital Partners II, LP	17,802		904		22,684		1,152		27,215		1,382		20,481		1,040
Capital Partners III, LP	15,000		65		—		—		41,055		—		41,055		—
SVB Capital Shanghai Yangpu Venture Capital Fund	5,445		368		3,591		243		7,190		486		6,377		431
Total other venture capital investments	$	43,863	$	1,938	$	32,839	$	2,097	$	78,850	$	2,231	$	71,204	$	1,823

(3)

Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. At ~~September 30,~~December 31, 2014, the amount primarily ~~includes~~included total unrealized gains of ~~$143.8 million~~ in one public company, FireEye. ~~The extent such~~During the first quarter of 2015, our managed direct venture funds distributed the remaining 2.5 million FireEye Shares to their respective investors (including the Company), resulting in $15.9 million of realized gains ~~(or losses) will become realized is subject~~on investment securities ($3.3 million net of noncontrolling interests but inclusive of the Company's carried interests). All distributed shares of FireEye common stock to ~~a variety~~the Company were sold during the first quarter of ~~factors,~~2015 and as of March 31, 2015, we no longer hold any shares of FireEye common stock, either directly or through our managed direct venture funds.

~~Table of Contents~~

including among other things, changes in prevailing market prices and the timing of any sales or distribution of securities, which are subject to our funds' separate discretionary securities sales/distribution governance processes.


(4)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Volcker Rule

As discussed in "Business - Supervision and Regulation" under Item 1 of Part I of our ~~2013~~2014 Form 10-K, ~~federal regulatory agencies adopted final rules implementing~~ the ~~Volcker Rule~~“Volcker Rule” under the Dodd-Frank Act ~~which,~~restricts, among other things, ~~restricts~~a bank's proprietary trading activities and a bank's ability to sponsor or ~~limits banks and~~invest in certain ~~of their affiliates from sponsoring or having ownership interests in "covered funds"~~privately offered funds, including certain venture capital, hedge and private equity funds. ~~Under~~On December 10, 2013, the federal bank regulatory agencies, the SEC and the CFTC adopted final regulations implementing the Volcker ~~Rule, these~~Rule. The final regulations became effective on April 1, 2014, subject to a conformance timeline pursuant to which affected entities (referred to as "banking entities") are required to bring their activities and investments into conformance with the prohibitions and restrictions ~~will~~of the Volcker Rule and the final regulations thereunder.

Table of Contents

Subject to certain exceptions, the Volcker Rule prohibits a banking entity from engaging in “proprietary trading,” which is defined as engaging as principal for the “trading account” of the banking entity in securities or certain other financial instruments. Certain forms of proprietary trading may qualify as “permitted activities,” and thus not be subject to the ban on proprietary trading, such as market-making related activities, risk-mitigating hedging activities, trading in U.S. government or agency obligations, or certain other U.S. state or municipal obligations, and the obligations of Fannie Mae, Freddie Mac or Ginnie Mae. Based on this definition and the exceptions provided under the recently-issued regulations, we do not believe that we engage in any proprietary trading that is prohibited under the Volcker Rule.

Additionally, subject to certain exceptions, the rule prohibits a banking entity from sponsoring or investing in “covered funds,” which includes many venture capital, private equity and hedge funds. One such exception permits a banking entity to sponsor and invest in a covered fund that it organizes and offers to customers, provided that additional requirements are met. These permitted investments generally are limited to three percent of the total ownership interests in each covered fund. In addition, the aggregate investments a banking entity makes in all covered funds generally are limited to three percent of the institution’s Tier 1 capital.

Under the final regulations, the Volcker Rule’s prohibitions and restrictions apply to SVB Financial, the Bank and any affiliate of SVB Financial or the ~~Bank (including the SVB Capital funds).~~Bank. SVB Financial maintains investments in certain venture capital and private equity funds ~~which are covered funds under the Volcker Rule,~~ that it did not ~~organize;~~sponsor; maintains investments in ~~covered funds~~sponsored-funds that ~~it organized, which investments~~ exceed a three percent ~~per fund limit that is generally imposed by the Volcker Rule;~~of each such fund’s total ownership interests; and ~~it has~~its aggregate investments in all covered funds ~~that~~ may exceed three percent of its Tier 1 ~~capital, which is another limit generally imposed by the Volcker Rule.~~capital. SVB Financial (including its affiliates) expects, therefore, that it will be required to reduce the level of its investments in covered funds over time and to forego investment opportunities in certain funds in the future. SVB Financial is generally required by the final rules to come into conformance with ~~these~~the Volcker Rule’s requirements regarding covered funds by July ~~2015.~~21, 2016 with respect to covered funds in which SVB Financial invested or SVB Financial sponsored as of December 31, 2013. The ~~time period~~Federal Reserve Board has indicated that it intends to ~~divest an investment that is not permitted by the final rule may be extended by~~extend this conformance deadline to July 21, 2017. In addition, the Federal Reserve Board may extend the conformance deadline for up to ~~two one-year extensions (which may be granted on a case-by-case or industry-wide basis), and~~ an additional ~~extension of up to~~ five years (until July 21, 2022) for ~~ownership interests in funds~~investments that are considered illiquid. We intend to seek the maximum extensions (up to July 21, 2022) available to us. However, there is no guarantee that the Federal Reserve Board will grant any of these extensions. ~~If we are not successful in obtaining one or more of these extensions or if the Federal Reserve does not otherwise provide any relief of from the restrictions under~~

We estimate that our total venture capital and private equity fund investments deemed to be prohibited covered fund interests and therefore subject to the Volcker ~~Rule, we may be forced to divest certain of our investments on terms that may not be favorable to us.~~

~~We currently estimate that the covered fund ownership interests that we hold which are prohibited by the Volcker Rule~~Rule’s restrictions, ~~have,~~had, as of ~~September 30, 2014,~~March 31, 2015, an aggregate carrying value of approximately ~~$250~~$237 million (and an aggregate fair value of ~~$345~~$339 million). These covered fund ~~ownership~~ interests are ~~our ownership~~comprised of interests ~~(excluding any noncontrolling interests)~~attributable, solely, to the Company in our consolidated managed funds and certain of our non-marketable securities.

We continue to assess the financial impact of ~~the Volcker Rule~~these rules on our fund investments, as well as the impact of other Volcker Rule restrictions on other areas of our business. The actual and expected financial impact from these restrictions on our investments, if any, will be dependent on a variety of factors, including: our ability to obtain regulatory extensions; our ability to sell the investments; our carrying value at the time of any sale; the actual sales price realized; the timing of such sales; and any subsequently-issued regulatory guidance or interpretations of the rules. (See “Risk Factors” under Item 1A of Part I of our ~~2013~~2014 Form 10-K.)

Loans

Loans, net of unearned income ~~were $12.0~~increased by $55.3 million to $14.4 billion at ~~September 30, 2014, an increase of $1.1 billion, or 10.2 percent,~~March 31, 2015, compared to ~~$10.9~~$14.4 billion at December 31, ~~2013.~~2014. Unearned income was ~~$95~~$107.2 million at ~~September 30, 2014~~March 31, 2015 and ~~$89~~$104.5 million at December 31, ~~2013.~~2014. Total gross loans were ~~$12.1~~$14.5 billion at ~~September 30, 2014,~~March 31, 2015, an increase of ~~$1.1 billion, or 10.2 percent,~~$58.0 million, compared to ~~$11.0~~$14.5 billion at December 31, ~~2013.~~ 2014.Period-end loan growth came primarily from our ~~technology~~life science and ~~life sciences~~healthcare and ~~venture capital/private equity loan~~consumer loans portfolios. The breakdown of total gross loans and total loans as a percentage of total gross loans by category is as follows:

7974

Table of Contents


	September 30, 2014				December 31, 2013				March 31, 2015				December 31, 2014
(Dollars in thousands)	Amount		Percentage		Amount		Percentage		Amount		Percentage		Amount		Percentage
Commercial loans:
Software	$	4,545,324	37.5	%	$	4,141,358	37.7	%
Software and internet									$	4,913,747	33.8	%	$	4,996,246	34.5	%
Hardware	1,082,090		8.9		1,224,480		11.1		1,076,625		7.4		1,140,494		7.9
Venture capital/private equity	2,948,335		24.3		2,408,426		21.9
Life science	1,257,130		10.4		1,181,266		10.7
Private equity/venture capital									4,547,637		31.2		4,621,299		31.9
Life science & healthcare									1,411,563		9.7		1,300,727		9.0
Premium wine	188,415		1.6		151,255		1.4		187,681		1.3		189,142		1.3
Other	244,067		2.0		291,630		2.7		291,513		2.0		236,519		1.6
Total commercial loans	10,265,361		84.7		9,398,415		85.5		12,428,766		85.4		12,484,427		86.2
Real estate secured loans:
Premium wine	563,655		4.7		515,942		4.7		613,786		4.2		607,507		4.2
Consumer	1,047,487		8.6		873,070		7.9		1,208,637		8.3		1,117,661		7.7
Other	30,433		0.3		31,033		0.3		39,763		0.3		39,983		0.3
Total real estate secured loans	1,641,575		13.6		1,420,045		12.9		1,862,186		12.8		1,765,151		12.2
Construction loans	80,273		0.7		77,165		0.7		85,906		0.6		78,851		0.5
Consumer loans	125,265		1.0		99,643		0.9		169,887		1.2		160,337		1.1
Total gross loans	$	12,112,474	100.0		$	10,995,268	100.0		$	14,546,745	100.0		$	14,488,766	100.0

Loan Concentration

The following table provides a summary of loans by size and category. The breakout of the categories is based on total client balances (individually or in the aggregate) as of ~~September 30, 2014~~March 31, 2015:


	September 30, 2014												March 31, 2015
(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Commercial loans:
Software	$	1,175,657	$	641,936	$	1,127,447	$	913,954	$	686,330	$	4,545,324
Software and internet													$	1,260,920	$	710,163	$	1,131,750	$	949,232	$	861,682	$	4,913,747
Hardware	222,205		188,390		268,112		98,991		304,392		1,082,090		209,985		173,100		192,084		255,133		246,323		1,076,625
Venture capital/private equity	385,885		364,155		505,735		427,908		1,264,652		2,948,335
Life science	314,294		283,420		230,209		198,403		230,804		1,257,130
Private equity/venture capital													476,151		384,079		619,386		534,209		2,533,812		4,547,637
Life science & healthcare													343,139		248,020		343,008		256,166		221,230		1,411,563
Premium wine	78,377		35,250		46,363		28,425		—		188,415		82,062		28,110		49,627		27,882		—		187,681
Other	121,453		30,376		57,238		—		35,000		244,067		135,570		32,740		28,892		23,156		71,155		291,513
Commercial loans	2,297,871		1,543,527		2,235,104		1,667,681		2,521,178		10,265,361		2,507,827		1,576,212		2,364,747		2,045,778		3,934,202		12,428,766
Real estate secured loans:
Premium wine	153,846		159,018		169,327		81,464		—		563,655		157,425		165,439		210,831		80,091		—		613,786
Consumer	912,095		111,670		23,722		—		—		1,047,487		1,060,639		137,611		10,387		—		—		1,208,637
Other	2,500		5,000		—		22,933		—		30,433		—		5,980		11,250		22,533		—		39,763
Real estate secured loans	1,068,441		275,688		193,049		104,397		—		1,641,575		1,218,064		309,030		232,468		102,624		—		1,862,186
Construction loans	11,927		41,881		26,465		—		—		80,273		13,988		31,398		40,520		—		—		85,906
Consumer loans	61,923		20,989		12,353		—		30,000		125,265		71,443		16,868		18,576		20,000		43,000		169,887
Total gross loans	$	3,440,162	$	1,882,085	$	2,466,971	$	1,772,078	$	2,551,178	$	12,112,474	$	3,811,322	$	1,933,508	$	2,656,311	$	2,168,402	$	3,977,202	$	14,546,745

At ~~September 30, 2014,~~March 31, 2015, gross loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$4.3~~$6.1 billion, or ~~35.7~~42.2 percent of our portfolio. These loans represented ~~127~~167 clients, and of these loans, ~~none~~$27.5 million were on nonaccrual status as of ~~September 30, 2014.~~March 31, 2015.

8075

Table of Contents

The following table provides a summary of loans by size and category. The breakout of the categories is based on total client balances (individually or in the aggregate) as of December 31, ~~2013~~2014:


	December 31, 2013												December 31, 2014
(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Commercial loans:
Software	$	1,031,179	$	647,060	$	905,815	$	832,375	$	724,929	$	4,141,358
Software and internet													$	1,214,082	$	670,212	$	1,174,410	$	917,546	$	1,019,996	$	4,996,246
Hardware	280,794		205,705		187,140		235,973		314,868		1,224,480		204,513		226,135		240,039		146,826		322,981		1,140,494
Venture capital/private equity	328,073		248,787		371,980		201,193		1,258,393		2,408,426
Life science	332,991		262,420		249,749		122,426		213,680		1,181,266
Private equity/venture capital													426,985		445,677		677,568		568,743		2,502,326		4,621,299
Life science & healthcare													340,214		238,585		284,618		216,805		220,505		1,300,727
Premium wine (1)	77,431		24,667		24,810		24,347		—		151,255		77,409		38,413		45,222		28,098		—		189,142
Other	131,351		48,698		—		76,581		35,000		291,630		101,779		42,906		36,904		23,235		31,695		236,519
Commercial loans	2,181,819		1,437,337		1,739,494		1,492,895		2,546,870		9,398,415		2,364,982		1,661,928		2,458,761		1,901,253		4,097,503		12,484,427
Real estate secured loans:
Premium wine (1)	136,748		128,291		146,439		73,594		30,870		515,942		151,314		169,719		205,692		80,782		—		607,507
Consumer loans (2)	760,693		82,545		9,832		20,000		—		873,070		977,747		139,914		—		—		—		1,117,661
Other	2,500		5,000		—		23,533		—		31,033		—		6,000		11,250		22,733		—		39,983
Real estate secured loans	899,941		215,836		156,271		117,127		30,870		1,420,045		1,129,061		315,633		216,942		103,515		—		1,765,151
Construction loans	16,432		48,359		12,374		—		—		77,165		14,069		24,194		40,588		—		—		78,851
Consumer loans (2)	46,019		20,022		600		3,003		29,999		99,643		65,326		22,593		16,418		20,000		36,000		160,337
Total gross loans	$	3,144,211	$	1,721,554	$	1,908,739	$	1,613,025	$	2,607,739	$	10,995,268	$	3,573,438	$	2,024,348	$	2,732,709	$	2,024,768	$	4,133,503	$	14,488,766

At December 31, ~~2013,~~2014, gross loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$4.2~~$6.2 billion, or ~~38.4~~42.5 percent of our portfolio. These loans represented ~~122~~170 clients, and of these loans, ~~none~~$28 million were on nonaccrual status as of December 31, ~~2013.~~2014.

The credit profile of our clients varies across our loan portfolio, based on the nature of the lending we do for different market segments. Our technology and life ~~sciences~~science & healthcare loan ~~portfolio~~portfolios includes loans to clients at all stages of their life cycles, beginning with our SVB Accelerator practice, which serves our emerging or early-stage clients. Loans provided to early-stage clients represent a relatively small percentage of our overall portfolio at ~~10.5~~6.5 percent of total gross loans at ~~September 30, 2014~~March 31, 2015, compared to ~~9.2~~7.9 percent at December 31, ~~2013~~2014. Typically these loans are made to companies with modest or negative cash flows and no established record of profitable operations. Repayment of these loans may be dependent upon receipt by borrowers of additional equity financing from venture capitalist firms or others, or in some cases, a successful sale to a third party or an IPO. Venture capital firms may provide financing at lower levels, more selectively or on less favorable terms, which may have an adverse effect on our borrowers that are otherwise dependent on such financing to repay their loans to us. When repayment is dependent upon the next round of venture investment and there is an indication that further investment is unlikely or will not occur, it is often likely the company would need to be sold to repay debt in full. If reasonable efforts have not yielded a likely buyer willing to repay all debt at the close of the sale or on commercially viable terms, the account will most likely be deemed to be impaired.

At ~~September 30, 2014~~March 31, 2015, our lending to private equity/venture ~~capital/private equity~~capital firms represented ~~24.3~~31.2 percent of total gross loans, compared to ~~21.9~~31.9 percent of total gross loans at December 31, ~~2013~~2014. Many of these clients have capital call lines of credit, the repayment of which is dependent on the payment of capital calls by the underlying limited partner investors in the funds managed by these firms.

At ~~September 30, 2014~~March 31, 2015, sponsor-led buyout loans represented ~~15.5~~12.8 percent of total gross loans, compared to ~~12.5~~13.2 percent of total gross loans at December 31, ~~2013~~2014. These loans are typically larger in nature and repayment is generally dependent upon the cash flows of the acquired company. However, these loans are typically highly-secured and therefore carry lower credit risk.~~The increase from December 31, 2013 to September 30, 2014 was primarily due to the use, by us, of an expanded definition for loans in the sponsor-led buyout loan portfolio.~~

At ~~September 30, 2014~~March 31, 2015, our asset-based lending, which consists primarily of working capital lines and accounts receivable factoring represented ~~7.3~~6.5 percent and ~~3.8~~3.1 percent, respectively, of total gross loans, compared to ~~7.3~~7.1 percent and ~~4.2~~3.8 percent, respectively, at December 31, ~~2013~~2014. The repayment of these arrangements is dependent on the financial condition, and payment ability, of third parties with whom our clients do business.

Approximately ~~36.3~~34.9 percent and 10.5 percent of our outstanding total gross loan balances as of ~~September 30, 2014~~March 31, 2015 were to borrowers based in California and New York, respectively, compared to ~~39.7~~34.5 percent and 9.6 percent as of December 31, ~~2013~~2014. Other than California and New York, there are no states with gross loan balances greater than 10 percent.

8176

Table of Contents

See generally “Risk Factors–Credit Risks” set forth under Item 1A, Part I in our ~~2013~~2014 Form 10-K.

Credit Quality Indicators

As of ~~September 30, 2014~~March 31, 2015, our criticized and impaired loans represented ~~6.5~~5.6 percent of our total gross loans compared to ~~5.7~~5.2 percent at December 31, ~~2013~~2014. A majority of our criticized loans are from our SVB Accelerator portfolio, serving our emerging or early stage clients. Loans to early stage clients make up ~~10.5~~6.5 percent of our loan portfolio. It is common for an emerging or early stage client’s remaining liquidity to fall temporarily below the threshold for a pass-rated credit during its capital-raising period for a new round of funding. This situation typically lasts a limited number of weeks and, in our experience, generally resolves itself with a subsequent round of venture funding. As a result, we expect that each of our early-stage clients will be managed through our criticized portfolio during a portion of their life cycle. Criticized loan levels will continue to vary but are expected to remain within the current range.

Credit Quality and Allowance for Loan Losses

Nonperforming assets consist of loans on nonaccrual status, loans past due 90 days or more still accruing interest, and Other Real Estate Owned ("OREO") and other foreclosed assets. We measure all loans placed on nonaccrual status for impairment based on the fair value of the underlying collateral or the net present value of the expected cash flows. The table below sets forth certain data and ratios between nonperforming loans, nonperforming assets and the allowance for loan losses:


(Dollars in thousands)	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
Gross nonperforming, past due, and restructured loans:
Impaired loans	$	11,687		$	51,649		$	42,382		$	38,137
Loans past due 90 days or more still accruing interest	125			99			3,099			1,302
Total nonperforming loans	11,812			51,748			45,481			39,439
OREO and other foreclosed assets	561			1,001			545			561
Total nonperforming assets	$	12,373		$	52,749		$	46,026		$	40,000
Performing TDRs	$	890		$	403		$	5,809		$	587
Nonperforming loans as a percentage of total gross loans	0.10		%	0.47		%	0.31		%	0.27		%
Nonperforming assets as a percentage of total assets	0.03			0.20			0.12			0.10
Allowance for loan losses	$	129,061		$	142,886		$	167,875		$	165,359
As a percentage of total gross loans	1.07		%	1.30		%	1.15		%	1.14		%
As a percentage of total gross nonperforming loans	1,092.63			276.12			369.11			419.28
Allowance for loan losses for impaired loans	$	2,325		$	21,277		$	23,822		$	15,051
As a percentage of total gross loans	0.02		%	0.19		%	0.16		%	0.10		%
As a percentage of total gross nonperforming loans	19.68			41.12			52.38			38.16
Allowance for loan losses for total gross performing loans	$	126,736		$	121,609		$	144,053		$	150,308
As a percentage of total gross loans	1.05		%	1.11		%	0.99		%	1.04		%
As a percentage of total gross performing loans	1.05			1.11			0.99			1.04
Total gross loans	$	12,112,474		$	10,995,268		$	14,546,745		$	14,488,766
Total gross performing loans	12,100,662			10,943,520			14,501,264			14,449,327
Reserve for unfunded credit commitments (1)	35,489			29,983			38,628			36,419
As a percentage of total unfunded credit commitments	0.24		%	0.26		%	0.25		%	0.25		%
Total unfunded credit commitments (2)	$	14,631,637		$	11,470,722		$	15,485,514		$	14,705,785


(1)	The “Reserve for unfunded credit commitments” is included as a component of other liabilities. See “Provision for Unfunded Credit Commitments” above for a discussion of the changes to the reserve.


(2)	Includes unfunded loan commitments and letters of credit.

Our allowance for loan losses as a percentage of total gross loans ~~decreased~~increased to ~~1.07~~1.15 percent at ~~September 30, 2014~~,March 31, 2015, compared to ~~1.30~~1.14 percent at December 31, ~~2013.~~2014. This ~~decrease~~increase was primarily driven by ~~a decrease~~an increase in reserves for a previously impaired ~~loans primarily due to repayments of impaired loans as well as the improvement in the credit quality of the~~loan, partially offset by a lower reserve for our gross performing loan portfolio. Our reserve percentage for performing loans

8277

Table of Contents

~~reserve percentage for performing loans~~ decreased to ~~1.05~~0.99 percent at ~~September 30, 2014,~~March 31, 2015, compared to ~~1.11~~1.04 percent at December 31, ~~2013, primarily due to~~2014, reflective of the continued ~~strong performance~~shift in the mix of our ~~performing~~overall loan portfolio to our higher quality private equity/venture capital loan portfolio.

Our nonperforming loans were $~~11.8~~45.5 million at ~~September 30, 2014~~March 31, 2015, compared to $~~51.7~~39.4 million at December 31, ~~2013~~2014. Our impaired loan balance ~~decreased $40.0~~increased $4.3 million as a result of ~~$34.7 million in net repayments and $21.1 million in charge-offs, offset by $15.9~~$9.3 million in new impaired ~~loans.~~loans, partially offset by $2.5 million in charge-offs and $2.5 million in repayments. The allowance for loan losses ~~related to~~for impaired loans was ~~$2.3~~$23.8 million at ~~September 30, 2014,~~March 31, 2015, compared to ~~$21.3~~$15.1 million at December 31, ~~2013.~~2014.

Average impaired loans for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 were ~~$15.0~~$39.5 million ~~and $25.8 million, respectively,~~ compared to ~~$39.3 million and $40.7~~$35.7 million for the comparable ~~2013 periods.~~2014 period. If the impaired loans had not been impaired, ~~$0.2 million and $1.0~~$0.3 million in interest income would have been recorded for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015, compared to ~~$0.2 million and $1.4~~$0.4 million for the comparable ~~2013 periods.~~2014 period.

Accrued Interest Receivable and Other Assets

A summary of accrued interest receivable and other assets at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 is as follows:


(Dollars in thousands)	September 30, 2014		December 31, 2013		% Change		March 31, 2015		December 31, 2014		% Change
Derivative assets, gross (1)	$	119,332	$	127,114	(6.1	)%	$	186,198	$	157,990	17.9	%
Foreign exchange spot contract assets, gross	83,185		73,423		13.3		265,135		51,972		NM
Accrued interest receivable	81,334		67,772		20.0		91,415		94,180		(2.9	)
FHLB and Federal Reserve Bank stock	41,026		40,632		1.0		53,496		53,496		—
Accounts receivable	30,573		15,773		93.8		23,443		20,092		16.7
Deferred tax assets(2)	40,525		68,237		(40.6	)	10,838		45,979		(76.4	)
Other assets	110,989		72,159		53.8		132,446		131,580		0.7
Total accrued interest receivable and other assets	$	506,964	$	465,110	9.0		$	762,971	$	555,289	37.4

NM—Not meaningful


(1)	See “Derivatives” section below.


(2)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted during the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Foreign Exchange Spot Contract Assets

Foreign exchange spot contract assets represent unsettled client trades at the end of the period. The increase of $9.8 million was primarily due to increased client trade activity at period-end, and is consistent with the increase in foreign exchange spot contract liabilities (see “Other Liabilities” section below).

~~Accrued Interest Receivable~~

~~Accrued interest receivable consists of interest on our investment securities and loans.The increase of $13.6~~$213.2 million was primarily due to an overall increase in activity which included several large client trades at period-end.

Accrued Interest Receivable

The decrease of $2.8 million in accrued interest ~~receivable on our loans due~~is primarily reflective of two fewer days in the first quarter of 2015 (compared to ~~an increase in our average loan portfolio as well as an increase in interest receivable on our investment securities from growth in our fixed income investment portfolio.~~the fourth quarter of 2014).

Net Deferred Tax Assets

AsThe decrease of ~~September 30, 2014, we were~~$35.1 million in a net deferred tax ~~asset position of$40.5 million, compared~~assets primarily relates to ~~a net deferred tax asset position of $68.2 million at December 31, 2013. The decrease in our net deferred tax asset position of $27.7 million is primarily reflective of~~ the increase in the fair value of our ~~investment~~available-for-sale securities portfolio ~~due to the decrease~~resulting from decreases in period-end market interest rates.

8378

Table of Contents

Derivatives

Derivative instruments are recorded as a component of other assets and other liabilities on the balance sheet. The following table provides a summary of derivative assets and liabilities, net at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:


(Dollars in thousands)	September 30, 2014			December 31, 2013			% Change		March 31, 2015			December 31, 2014			% Change
Assets:
Equity warrant assets	$	94,960		$	103,513		(8.3	)%	$	124,456		$	116,604		6.7	%
Foreign exchange forward and option contracts	17,234			15,530			11.0		54,495			34,231			59.2
Interest rate swaps	4,965			6,492			(23.5	)	4,340			4,609			(5.8	)
Loan conversion options	—			314			(100.0	)
Client interest rate derivatives	2,173			1,265			71.8		2,907			2,546			14.2
Total derivative assets	$	119,332		$	127,114		(6.1	)	$	186,198		$	157,990		17.9
Liabilities:
Foreign exchange forward and option contracts	$	(15,833	)	$	(12,617	)	25.5		$	(45,727	)	$	(28,363	)	61.2
Client interest rate derivatives	(2,317		)	(1,396		)	66.0		(3,166		)	(2,748		)	15.2
Total derivative liabilities	$	(18,150	)	$	(14,013	)	29.5		$	(48,893	)	$	(31,111	)	57.2

Equity Warrant Assets

In connection with negotiating credit facilities and certain other services, we often obtain rights to acquire stock in the form of equity warrant assets in primarily private, venture-backed companies in the technology and life science & healthcare industries. At ~~September 30, 2014~~,March 31, 2015, we held warrants in ~~1,415~~1,525 companies, compared to ~~1,320~~1,478 companies at December 31, ~~2013~~.2014. Of the 1,525 companies, 25 companies made up approximately 40 percent of the fair value of the portfolio at March 31, 2015. The change in fair value of equity warrant assets is recorded in gains on derivatives instruments, net, in noninterest income, a component of consolidated net income. The following table provides a summary of transactions and valuation changes for equity warrant assets for the three ~~and nine~~ months ended ~~September 30, 2014~~March 31, 2015 and ~~2013:~~2014:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2014 2013 2014 2013
Balance, beginning of period $ 88,905
$ 76,584
$ 103,513
$ 74,272
New equity warrant assets 3,488
4,490
10,919
10,934
Non-cash increases in fair value 6,430
14,471
23,262
22,963
Exercised equity warrant assets (1) (3,802 ) (3,144 ) (42,157 ) (15,546 )
Terminated equity warrant assets (61 ) (149 ) (577 ) (371 )
Balance, end of period $ 94,960
$ 92,252
$ 94,960
$ 92,252

~~(1) Includes the exercise of several of our public equity warrants, including FireEye and Twitter, during the nine months ended September 30, 2014.~~



	Three months ended March 31,
(Dollars in thousands)	2015			2014
Balance, beginning of period	$	116,604		$	103,513
New equity warrant assets	2,487			4,079
Non-cash increases in fair value	16,527			7,058
Exercised equity warrant assets	(10,870		)	(23,428		)
Terminated equity warrant assets	(292		)	(87		)
Balance, end of period	$	124,456		$	91,135

Foreign Exchange Forward and Foreign Currency Option Contracts

We enter into foreign exchange forward contracts and foreign currency option contracts with clients involved in foreign activities, either as the purchaser or seller, depending upon the clients’ need. For each forward or option contract entered into with our clients, we enter into an opposite way forward or option contract with a correspondent bank, which mitigates the risk of fluctuations in currency rates. We also enter into forward contracts with correspondent banks to economically reduce our foreign exchange exposure related to certain foreign currency denominated instruments. Revaluations of foreign currency denominated instruments are recorded inon the line item “Other” as part of noninterest income, a component of consolidated net income. We have not experienced nonperformance by any of our counterparties and therefore have not incurred any related losses. Further, we anticipate performance by all counterparties. As a result of cash collateral received, we did not have any net exposure for foreign exchange forward and foreign currency option contracts at ~~September 30, 2014~~March 31, 2015 and our net exposure at December 31, ~~2013~~2014 was ~~$2.9~~$1.1 million. For additional information on our foreign exchange forward contracts and foreign currency option contracts, see Note 8-9- “Derivative Financial Instruments” of the “Notes to the Consolidated Financial Statements” under Part I, Item I in this report.

~~Table of Contents~~

Interest Rate Swaps

For information on our interest rate swaps, see Note 8–9–“Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial ~~Statements (unaudited)”~~Statements” under Part I, Item 1 of this report.

Table of Contents

Deposits

Deposits were $~~31.1~~33.9 billion at ~~September 30, 2014~~March 31, 2015, ~~an increase~~a decrease of $~~8.7~~$0.4 billion,, or ~~38.5~~1.4 percent, compared to $~~22.5~~34.3 billion at December 31, ~~2013~~2014. The ~~increase~~overall decrease in deposit balances was ~~driven by increases in our noninterest-demand and money market deposits of $6.6 billion and $2.1 billion, respectively,~~ primarily ~~related to strong financing, IPO and M&A activity in 2014 resulting in increased balances from existing clients and also~~ reflective of the increased utilization of off-balance sheet client investment funds by our clients at the end of the first quarter of 2015 contributing to a decrease of approximately $1.2 billion. This decrease was offset by $0.8 billion in period-end deposit growth primarily from ~~new~~our Accelerator/Early-stage clients ~~including strong levels~~resulting from continued venture capital funding activity during the first quarter of early-stage and venture capital/private client additions. During the nine months ended September 30, 2014, we experienced significant growth in our deposit levels and expect to see continued growth into 2015. At ~~September 30, 2014~~, ~~27.8~~March 31, 2015, 24.0 percent of our total deposits were interest-bearing deposits, compared to ~~29.3~~28.4 percent at December 31, ~~2013~~.2014.

At ~~September 30, 2014~~,March 31, 2015, the aggregate balance of time deposit accounts individually equal to or greater than $100,000 totaled ~~$147~~$87.5 million, compared to $~~197~~$116.0 million at December 31, ~~2013~~.2014. At ~~September 30, 2014, all~~March 31, 2015, $87.3 million of the time deposit accounts individually equal to or greater than $100,000 were scheduled to mature within one year. No material portion of our deposits has been obtained from a single depositor and the loss of any one depositor would not materially affect our business.

Short-Term Borrowings

Short-term borrowings were $~~6.6~~77.8 million at ~~September 30, 2014~~March 31, 2015, compared to $~~5.1~~7.8 million at December 31, ~~2013~~2014. The increase was due to a $60.0 million short-term advance from our FHLB line of credit and an increase of $10.0 million in ~~the amount of~~ collateral held from our counterparties in relation to exposures in our favor on outstanding derivative contracts.

Long-Term Debt

Our long-term debt was $~~454 million~~ at ~~September 30, 2014~~ ~~and $455~~$802.9 million at March 31, 2015 and $453.4 million at December 31, ~~2013~~2014. The increase in our long-term debt was due to the issuance of 3.50% Senior Notes during the first quarter of 2015.

. As of ~~both~~ ~~September 30, 2014~~ ~~and~~ ~~December~~March 31, ~~2013~~2015, long-term debt included our 3.50% Senior Notes, 5.375% Senior Notes, 6.05% Subordinated Notes and 7.0% Junior Subordinated Debentures. For more information on our long-term debt, see Note 7–8–“Short-term Borrowings and Long-Term Debt” of the “Notes to ~~Interim~~the Consolidated Financial ~~Statements (unaudited).”~~Statements” under Part I, Item I in this report.

Other Liabilities

A summary of other liabilities at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 is as follows:


(Dollars in thousands)	September 30, 2014		December 31, 2013		% Change		March 31, 2015		December 31, 2014		% Change
Foreign exchange spot contract liabilities, gross	$	197,844	$	90,725	118.1	%	$	342,096	$	94,999	NM
Accrued compensation	92,893		117,134		(20.7	)	46,227		120,841		(61.7	)
Reserve for unfunded credit commitments	35,489		29,983		18.4		38,628		36,419		6.1
Derivative liabilities, gross (1)	18,150		14,013		29.5		48,893		31,111		57.2
Other	173,086		152,731		13.3		210,657		200,123		5.3
Total other liabilities	$	517,462	$	404,586	27.9		$	686,501	$	483,493	42.0

NM—Not meaningful


(1)	See “Derivatives” section above.

Foreign Exchange Spot Contract Liabilities

Foreign exchange spot contract liabilities represent unsettled client trades at the end of the period. The increase of ~~$107~~$247.1 million was primarily due to ~~increased client trade activity at period-end, and is consistent with the~~an overall increase in ~~foreign exchange spot contract assets. (See “Accrued Interest Receivable and Other Assets” section above).~~activity which included several large client trades at period-end.

Accrued Compensation

Accrued compensation includes amounts for our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, ESOP/profit sharing and other compensation arrangements. The decrease of ~~$24.2~~$74.6 million was primarily the result of ~~2013~~2014 incentive compensation payouts during the first quarter of ~~2014,~~2015, partially offset by additional accruals for the ~~nine~~three months ended ~~September 30, 2014.~~March 31, 2015.

~~Table of Contents~~

Reserve for Unfunded Credit Commitments

Our reserve for unfunded credit commitments increased to ~~$35.5~~$38.6 million at ~~September 30, 2014~~March 31, 2015, compared to ~~$30.0~~$36.4 million at December 31, ~~2013~~2014, due ~~primarily~~ to a ~~$3.1 billion~~$780 million increase in unfunded credit commitments ~~from $11.5 billion to $14.6 billion for~~during the ~~nine months ended September 30, 2014.~~first quarter of 2015.

Table of Contents

Noncontrolling Interests

Noncontrolling interests totaled $~~1.2~~1.3 billion and $~~1.1~~1.2 billion at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, respectively. The increase ~~of $0.1 billion~~ was primarily due to net income attributable to noncontrolling interests of ~~$143.0~~$56.8 million for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, driven by gains on investment securities and carried interest of ~~$175.1~~$44.2 million from our managed funds of funds ~~partially offset by losses of $17.1~~and $19.4 million from our managed direct venture ~~funds.~~funds, partially offset by $5.5 million in non-interest expenses primarily related to management fees paid by the noncontrolling interests to our subsidiaries that serve as the general partner.

Fair Value Measurements

The following table summarizes our financial assets and liabilities that are measured at fair value on a recurring basis as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014.

September 30, 2014 December 31, 2013
(Dollars in thousands) Total Balance Level 3 Total Balance Level 3
Assets carried at fair value $ 14,756,807
$ 1,216,171
$ 13,331,120
$ 1,314,951
As a percentage of total assets 40.9 % 3.4 % 50.5 % 5.0 %
Liabilities carried at fair value $ 18,150
$ —
$ 14,013
$ —
As a percentage of total liabilities 0.1 % — % 0.1 % — %
Level 1 and 2 Level 3 Level 1 and 2 Level 3
Percentage of assets measured at fair value 91.8 % 8.2 % 90.1 % 9.9 %

~~As of~~ ~~September 30, 2014, our available-for-sale securities, consisting primarily of U.S. Treasuries, agency-issued mortgage-backed securities and debentures issued by the U.S. government and its agencies, totaled $13.3 billion, or~~ ~~90.4 percent~~ ~~of our portfolio of assets measured at fair value on a recurring basis, compared to $12.0 billion, or~~ ~~89.9 percent, as of~~ ~~December 31, 2013~~. With the exception of U.S. Treasuries, which are classified as Level 1, these instruments were classified as Level 2 because their valuations were based on indicative prices corroborated by observable market quotes or valuation techniques with all significant inputs derived from or corroborated by observable market data. The fair value of our available-for-sale securities portfolio is sensitive to changes in levels of market interest rates and market perceptions of credit quality of the underlying securities. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis. Assets valued using Level 2 measurements also include equity warrant assets in shares of public company capital stock, marketable securities, interest rate swaps, foreign exchange forward and option contracts, loan conversion options and client interest rate derivatives.



	March 31, 2015						December 31, 2014
(Dollars in thousands)	Total Balance			Level 3			Total Balance			Level 3
Assets carried at fair value	$	15,219,210		$	1,396,414		$	15,008,982		$	1,316,784
As a percentage of total assets	38.3		%	3.5		%	38.2		%	3.3		%
Liabilities carried at fair value	$	48,893		$	—		$	31,111		$	—
As a percentage of total liabilities	0.1		%	—		%	0.1		%	—		%
	Level 1 and 2			Level 3			Level 1 and 2			Level 3
Percentage of assets measured at fair value	90.8		%	9.2		%	91.2		%	8.8		%

Financial assets valued using Level 3 measurements consist of our ~~investments~~non-marketable securities (investments in venture capital and private equity funds and direct equity investments in ~~privately~~privately-held companies, and ~~publicly held companies, as well as~~other investment securities in shares of public company stock subject to certain sales restrictions for which the sales restriction has not been lifted) and equity warrant assets ~~in shares~~(shares of private and public company capital ~~stock.~~

~~During the three and nine months ended~~ ~~September 30, 2014, the Level 3 assets that are measured at~~stock). The valuation methodologies of our non-marketable securities carried under fair value ~~on a recurring basis experienced net realized and unrealized gains of~~ ~~$62.8 million~~ and $355.9 million (which is inclusive of noncontrolling interest), respectively, primarily due to valuation increases in underlying fund investments in our managed funds and from our equity warrant assets, as well as gains from liquidity events and distributions. During the three and nine months ended ~~September 30, 2013, the Level 3 assets that are measured at fair value on a recurring basis experienced net realized and unrealized gains of~~ ~~$200.3 million~~ ~~and $265.7 million (which is inclusive of noncontrolling interest), respectively.~~

~~The valuation of non-marketable securities~~accounting and equity warrant assets ~~in shares~~involve a significant degree of ~~private company capital stock is subject~~management judgment. Refer to Note 14—“Fair Value of Financial Instruments” of the “Notes to Interim Consolidated Financial Statements” under Part I, Item 1 of this report for a summary of the valuation techniques and significant ~~judgment.~~ inputs used for each class of Level 3 assets.

The inherent uncertainty in the process of valuing securities for which a ready market does not exist may cause our estimated values of these securities to differ significantly from the values that would have been derived had a ready market for the securities existed, and those differences could be material. The timing and amount of changes in fair value, if any, of these financial instruments depend upon factors beyond our control, including the performance of the underlying companies, fluctuations in the market prices of the preferred or common stock of the underlying companies, general volatility and interest rate market factors, and legal and contractual restrictions. The timing and amount of actual net proceeds, if any, from the disposition of these financial instruments depend upon factors beyond our control, including investor demand for IPOs, levels of M&A activity, legal and contractual restrictions on our ability to sell, and the perceived and actual performance of

portfolio companies. All of these factors are difficult to predict and there can be no assurances that we will realize the full value of these securities, which could result in significant ~~losses.~~losses (See “Risk Factors” set forth in our ~~2013~~2014 Form 10-K).

During the three months ended March 31, 2015, the Level 3 assets that are measured at fair value on a recurring basis experienced net realized and unrealized gains of $73.4 million (which is inclusive of noncontrolling interest), primarily due to valuation increases in underlying investments in our managed funds, as well as gains from liquidity events and distributions. During the three months ended March 31, 2014, the Level 3 assets that are measured at fair value on a recurring basis experienced net realized and unrealized gains of $240.2 million (which is inclusive of noncontrolling interest).

Capital Resources

We maintain an adequate capital base to support anticipated asset growth, operating needs and ~~unexpected~~ credit risks, and to ensure that SVB Financial and the Bank are in compliance with all regulatory capital guidelines. Our primary sources of new capital include retained earnings and proceeds from the sale and issuance of our capital stock or other securities. In consultation with the Finance Committee of our Board of Directors, management engages in regular capital planning processes in an effort to optimize the use of the capital available to us and to appropriately plan for our future capital needs. The capital plan considers capital needs for the foreseeable future and allocates capital to both existing and future business activities. Expected future use or activities for which capital may be set aside include balance sheet growth and associated relative increases in market or credit exposure, investment activity, potential product and business expansions, acquisitions and strategic or infrastructure investments. In addition, we conduct capital stress tests as part of our annual capital planning process. The stress tests allow us to assess the impact of adverse changes in the economy and interest rates on our capital adequacy position.

~~Common Stock~~

~~To support the continued growth~~

Table of our balance sheet, during the second quarter of 2014, we issued and sold in a registered public offering 4,485,000 shares of common stock at a price of $101.00 per share. We received net proceeds of $434.9 million after deducting underwriting discounts and commissions, of which $400 million was contributed to the Bank for capital purposes.Contents

SVBFG Stockholders’ Equity

SVBFG stockholders’ equity totaled ~~$2.7~~$3.0 billion at ~~September 30, 2014,~~March 31, 2015, an increase of ~~$0.7~~$0.2 billion, or ~~38.4~~5.6 percent, compared to ~~$2.0~~$2.8 billion at December 31, ~~2013.~~2014. This increase was primarily due to ~~the $434.9 million in proceeds received in conjunction with the common stock equity offering as mentioned above and~~ net income of ~~$205.1~~$89 million for the ~~nine~~three months ended ~~September 30, 2014.~~March 31, 2015. Additionally, the increase in the net balance of our accumulated other comprehensive income to ~~$18.7~~$93 million from ~~a net loss of $48.8~~$43 million at December 31, ~~2013,~~2014, was primarily driven by a ~~$96.3~~$87 million increase in the fair value of our fixed income security portfolios ($~~57.5~~52 million net of tax), which resulted from a decrease in the period-end market interest rates for the ~~nine~~three months ended ~~September 30, 2014.~~March 31, 2015.

Funds generated through retained earnings are a significant source of capital and liquidity and are expected to continue to be so in the future.

Capital Ratios

Both SVB Financial and the Bank are subject to various capital adequacy guidelines issued by the Federal Reserve Board and the California Department of Financial Institutions. To be classified as “adequately capitalized” under these capital guidelines, minimum ratios for (i) total risk-based capital, (ii) tier 1 risk-based capital, (iii) CET 1 risk-based capital and ~~(iii)~~(iv) tier 1 leverage ratio for bank holding companies and banks are 8.0%, ~~4.0%~~ 6.0%, 4.5%and 4.0%, respectively.

To be classified as “well capitalized” under these capital guidelines, minimum ratios for total risk-based capital, tier 1 risk-based capital and ~~tier~~CET 1 risk-based capital for bank holding companies and banks are 10.0%, 8.0% and ~~6.0%~~6.5%, respectively. Under the same capital adequacy guidelines, a well-capitalized state member bank must maintain a minimum tier 1 leverage ratio of 5.0%. There is no tier 1 leverage requirement for a holding company to be deemed well-capitalized.

Beginning in 2015, SVB Financial and the Bank are subject to a new regulatory capital measure called "Common Equity Tier 1" ("CET1") and a related regulatory capital ratio of CET 1 to risk-weighted assets implemented under "Basel III" regulatory capital reforms and changes required by the Dodd-Frank Act.

Regulatory capital ratios for SVB Financial and the Bank exceeded minimum federal regulatory guidelines for a well-capitalized depository institution as of ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~.2014. Capital ratios for SVB Financial and the Bank, compared to the minimum regulatory ratios to be considered “well capitalized” and “adequately capitalized”, are set forth below:

~~Table of Contents~~

September 30, 2014 December 31, 2013
Minimum ratio to be
“Well Capitalized”

Minimum ratio to be
“Adequately Capitalized”
SVB Financial:
Total risk-based capital ratio 14.97 % 13.13 % 10.0 % 8.0 %
Tier 1 risk-based capital ratio 14.03
11.94
6.0
4.0
Tier 1 leverage ratio 8.22
8.31
N/A
4.0
Tangible common equity to tangible assets ratio (1)(2) 7.55
7.44
N/A
N/A
Tangible common equity to risk-weighted assets ratio (1)(2) 13.97
11.63
N/A
N/A
Bank:
Total risk-based capital ratio 13.06 % 11.32 % 10.0 % 8.0 %
Tier 1 risk-based capital ratio 12.11
10.11
6.0
4.0
Tier 1 leverage ratio 7.05
7.04
5.0
4.0
Tangible common equity to tangible assets ratio (1)(2) 6.76
6.59
N/A
N/A
Tangible common equity to risk-weighted assets ratio (1)(2) 12.14
9.87
N/A
N/A



	March 31, 2015		December 31, 2014		Minimum ratio to be “Well Capitalized”		Minimum ratio to be “Adequately Capitalized”
SVB Financial:
CET 1 risk-based capital ratio (1)	12.21	%	—	%	6.5	%	4.5	%
Tier 1 risk-based capital ratio (2)	12.42		12.91		8.0		6.0
Total risk-based capital ratio (2)	13.38		13.92		10.0		8.0
Tier 1 leverage ratio (2)	7.71		7.74		N/A		4.0
Tangible common equity to tangible assets ratio (3)(4)(5)	7.49		7.15		N/A		N/A
Tangible common equity to risk-weighted assets ratio (3)(4)(5)	12.60		12.93		N/A		N/A
Bank:
CET 1 risk-based capital ratio (1)	12.36	%	—	%	6.5	%	4.5	%
Tier 1 risk-based capital ratio (2)	12.36		11.09		8.0		6.0
Total risk-based capital ratio (2)	13.35		12.12		10.0		8.0
Tier 1 leverage ratio (2)	7.43		6.64		5.0		4.0
Tangible common equity to tangible assets ratio (3)(4)(5)	7.60		6.38		N/A		N/A
Tangible common equity to risk-weighted assets ratio (3)(4)(5)	12.77		11.19		N/A		N/A


(1)	As of March 31, 2015, Common Equity Tier 1 ("CET 1") is a new ratio requirement under the Basel III Capital Rules and represents, common stock, plus related surplus and retained earnings, plus limited amounts of minority interest in the form of common stock, less certain regulatory deductions, divided by total risk-weighted assets.


(2)	Ratios as of March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Ratios for prior periods represent the previous capital rules under Basel I.


(3)	See below for a reconciliation of non-GAAP tangible common equity to tangible assets and tangible common equity to risk-weighted assets.


~~(2)~~(4)	The Federal Reserve Bank has not issued any minimum guidelines for the tangible common equity to tangible assets ratio or the tangible common equity to risk-weighted assets ratio. However, we believe these ratios provide meaningful supplemental information regarding our capital levels and are therefore provided above.

Table of Contents


(5)	Prior period ratios have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.

Our total risk-based capital ratio and tier 1 capital ratio, for ~~both SVB Financial and the Bank, increased~~compared to December 31, 2013, primarily reflective of growth in retained earnings and SVB Financial's common stock offering during May 2014, which resulted in the issuance of 4,485,000 shares and net proceeds of $434.9 million, of which $400 million was contributed to the Bank and had a positive impact on Bank level capital ratios. The increase in our total risk-based capital ratios and tier 1 risk-based capital ratios reflect the increase in regulatory capital partially offset by the increase in risk-weighted assets during the period, primarily due to growth in our loans and our period-end unfunded commitments. The tier 1 leverage ratio for SVB Financial decreased compared to December 31, ~~2013 due~~2014, primarily reflective of the treatment of certain unused commitments and equity exposures under the new regulatory capital rules implementing the "Basel III" capital standards, which became effective January 1, 2015. For the Bank, our total risk-based capital, tier 1 capital, and leverage ratios as of March 31, 2015 increased compared to the same ratios as of December 31, 2014. This increase ~~in total average assets during the period, primarily due~~was a result of SVB Financial's contribution of capital to the ~~significant growth in client deposits that flowed into our investment securities portfolio, cash and loans,~~Bank totaling $350 million, which ~~more than offset~~was funded primarily by the ~~increase in regulatory capital.Our tier 1 leverage ratio for~~net proceeds from the Bank held relatively flat as our growth in regulatory capital matched our growth in assets. We continue to target a tier 1 leverage ratio for the Bank generally between 7 and 8 percent; though we may, from time to time, manage at levels outside of the target range based on various considerations, including changes in assets or capital mix, market conditions and management's expectations. While we expect our earnings to support a meaningful amountissuance of our ~~deposit growth, we will continue to evaluate the options available to us to support our growth and tier 1 leverage ratio for the Bank, such as contributing~~ ~~cash~~3.50% Senior Notes. The capital contribution from SVB Financial to the Bank ~~or potentially raising capital, including debt securities.~~ provides continued support of our clients' growth. The increases in the Bank's ratios, resulting from the contribution, were partially offset by the impact of the new regulatory requirements discussed above. All of our capital ratios are above the levels to be considered “well capitalized" under banking regulations.

The tangible common equity to tangible assets ratio and the tangible common equity to risk-weighted assets ratios are not required by GAAP or applicable bank regulatory requirements. However, we believe these ratios provide meaningful supplemental information regarding our capital levels. Our management uses, and believes that investors benefit from referring to, these ratios in evaluating the adequacy of the Company’s capital levels; however, this financial measure should be considered in addition to, not as a substitute for or preferable to, comparable financial measures prepared in accordance with GAAP. These ratios are calculated by dividing total SVBFG stockholder’s equity, by total period-end assets and risk-weighted assets, after reducing both amounts by acquired intangibles, if any. The manner in which this ratio is calculated varies among companies. Accordingly, our ratio is not necessarily comparable to similar measures of other companies. The following table provides a reconciliation of non-GAAP financial measures with financial measures defined by GAAP for SVB Financial and the Bank for the periods ending ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014:

~~Table of Contents~~


	SVB Financial						Bank						SVB Financial						Bank
Non-GAAP tangible common equity and tangible assets (dollars in thousands, except ratios)	September 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014
GAAP SVBFG stockholders’ equity(1)	$	2,721,957		$	1,966,270		$	2,324,461		$	1,639,024		$	2,971,637		$	2,813,072		$	2,886,173		$	2,399,411
Tangible common equity(1)	$	2,721,957		$	1,966,270		$	2,324,461		$	1,639,024		$	2,971,637		$	2,813,072		$	2,886,173		$	2,399,411
GAAP Total assets(1)	$	36,041,007		$	26,417,189		$	34,363,687		$	24,854,119		$	39,695,990		$	39,339,950		$	37,974,587		$	37,607,973
Tangible assets(1)	$	36,041,007		$	26,417,189		$	34,363,687		$	24,854,119		$	39,695,990		$	39,339,950		$	37,974,587		$	37,607,973
Risk-weighted assets(2)	$	19,482,333		$	16,901,501		$	19,144,527		$	16,612,870		$	23,576,724		$	21,755,091		$	22,602,065		$	21,450,480
Tangible common equity to tangible assets(1)	7.55		%	7.44		%	6.76		%	6.59		%	7.49		%	7.15		%	7.60		%	6.38		%
Tangible common equity to risk-weighted assets	13.97			11.63			12.14			9.87
Tangible common equity to risk-weighted assets (1) (2)													12.60			12.93			12.77			11.19


(1)	Prior period amounts have been revised to reflect the retrospective application of new accounting guidance adopted in the first quarter of 2015 related to our investments in qualified affordable housing projects (ASU 2014-01). See Note 1 - "Basis of Presentation" of the "Notes to Interim Consolidated Financial Statements" under Part I, Item 1 in this report.


(2)	Amounts and ratios as of March 31, 2015 reflect the adoption of the Basel III Capital Rules in effect beginning January 1, 2015. Amounts and ratios for prior periods represent the previous capital rules under Basel I.

The tangible common equity to tangible assets ratio increased for SVB Financial and the Bank due to increases in total equity. See "SVBFG Stockholders’ Equity" above for further details on changes to the individual components of our equity balance.

For ~~both~~ SVB Financial, ~~and~~the tangible common equity to risk-weighted assets ratio decreased due to increases in risk-weighted assets, partially offset by increases in common equity, which primarily reflects the impact of the new regulatory requirements discussed above. For the Bank, the tangible common equity to risk-weighted assets ~~ratios~~ratio increased due to increases in ~~total~~tangible common equity, partially offset by increases in risk-weighted ~~assets, which primarily reflects growth~~assets. These increases were a result of SVB Financial's contribution of capital to the Bank, partially offset by the impact of the new regulatory requirements discussed above.

As discussed in our ~~loan balances~~Annual Report on Form 10-K for the year ended December 31, 2014 in Item 1 “Business” under “Supervision and Regulation-Regulatory Capital”, in July 2013, the Federal Reserve Board, FDIC and OCC published final rules establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. The new rules became effective for SVB Financial and the Bank in January 2015, with some rules being transitioned into full effectiveness over two to four years. For comparative period-over-period purposes, we have published capital ratios for SVB Financial above as of March 31, 2015 using our ~~period-end unfunded loan commitments.~~historical methodology

Table of Contents

in our investor materials and this Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2015. Unlike the Bank, SVB Financial holds interests in funds which make its capital calculations more complex, both due to the new capital rules that became effective in January 2015 and to the application of GAAP, including ASU 2015-02, Consolidation (Topic 810), as described in Note 1 of the Notes to Consolidated Financial Statements. SVB Financial is still confirming its capital ratios as of March 31, 2015 under these new rules. Subject to such confirmation, actual capital ratios (common equity tier 1, tier 1 capital, total risk based capital and tier 1 leverage ratios) for SVB Financial (but not for the Bank) may be lower within a preliminary estimated range of 0.50% to 1.25% each than those set forth above; however, SVB Financial expects that these ratios will still exceed minimum federal regulatory ratios for a “well-capitalized” institution as of March 31, 2015. SVB Financial currently intends to early adopt ASU 2015-02 during the second quarter of 2015, which would be expected to mitigate such impact.

Off-Balance Sheet Arrangements

In the normal course of business, we use financial instruments with off-balance sheet risk to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commercial and standby letters of credit and commitments to invest in venture capital and private equity fund investments. These instruments involve, to varying degrees, elements of credit risk. Credit risk is defined as the possibility of sustaining a loss because other parties to the financial instrument fail to perform in accordance with the terms of the contract. For details of our commitments to extend credit, and commercial and standby letters of credit, please refer to Note ~~11—~~12—“Off-Balance Sheet Arrangements, Guarantees, and Other Commitments” of the “Notes to Interim Consolidated Financial ~~Statements (unaudited)”~~Statements” under Part I, Item 1 of this report.

Commitments to Invest in Venture Capital/Private Equity Funds

Subject to applicable regulatory requirements, including the Volcker Rule, we make investments. We make commitments to invest in venture capital and private equity funds, which in turn make investments generally in, or in some cases make loans to, privately-held companies. Commitments to invest in these funds are generally made for a 10~~-year~~10-year period from the inception of the fund. Although the limited partnership agreements governing these investments typically do not restrict the general partners from calling 100% of committed capital in one year, it is customary for these funds to generally call most of the capital commitments over 5 to 7 years; however in certain cases, the funds may not call 100% of committed capital over the life of the fund. The actual timing of future cash requirements to fund these commitments is generally dependent upon the investment cycle, overall market conditions, and the nature and type of industry in which the privately held companies operate.

For further details on our commitments to invest in venture capital and private equity funds, refer to Note ~~11—~~12—“Off-Balance Sheet Arrangements, Guarantees, and Other Commitments” of the “Notes to Interim Consolidated Financial ~~Statements (unaudited)”~~Statements” under Part I, Item 1 of this report.

Liquidity

The objective of liquidity management is to ensure that funds are available in a timely manner to meet our financial obligations, including, as necessary, paying creditors, meeting depositors’ needs, accommodating loan demand and growth, funding investments, repurchasing securities and other operating or capital needs, without incurring undue cost or risk, or causing a disruption to normal operating conditions.

We regularly assess the amount and likelihood of projected funding requirements through a review of factors such as historical deposit volatility and funding patterns, present and forecasted market and economic conditions, individual client funding needs, and existing and planned business activities. Our Asset/Liability Committee (“ALCO”), which is a management committee, provides oversight to the liquidity management process and recommends policy guidelines for the approval of the Finance Committee of our Board of Directors, and courses of action to address our actual and projected liquidity needs.

Our deposit base is, and historically has been, our primary source of liquidity. Our deposit levels and cost of deposits may fluctuate from time to time due to a variety of factors, including market conditions, prevailing interest rates, changes in client deposit behaviors, availability of insurance protection, and our offering of deposit products. We may also offer more investment alternatives off the balance sheet which may impact deposit levels. At ~~September 30, 2014,~~March 31, 2015, our period-end total deposit balances

~~Table of Contents~~

~~increased~~ decreased by ~~$8.6~~$0.4 billion to ~~$31.1~~$33.9 billion, compared to ~~$22.5~~$34.3 billion at December 31, ~~2013.~~2014. The overall ~~increase~~decrease in deposit balances was ~~due to~~primarily reflective of the ~~addition~~increased utilization of ~~new clients and increased fundraising activity~~off-balance sheet client investment funds by our clients at the end of the first quarter of 2015 contributing to a decrease of approximately $1.2 billion. This decrease was offset by $0.8 billion in period-end deposit growth primarily from our Accelerator/Early-stage clients resulting from continued venture ~~capital/private equity clients.~~capital funding activity during the first quarter of 2015.

Our liquidity requirements can also be met through the use of our portfolio of liquid assets. Our definition of liquid assets includes cash and cash equivalents in excess of the minimum levels necessary to carry out normal business operations, short-term investment securities maturing within one year, available-for-sale securities eligible and available for financing or pledging purposes with a maturity in excess of one year and anticipated near-term cash flows from investments.

Table of Contents

On a stand-alone basis, SVB Financial’s primary liquidity channels include dividends from the Bank, its portfolio of liquid assets, and its ability to raise debt and capital. The ability of the Bank to pay dividends is subject to certain regulations described in “Business—Supervision and Regulation—Restriction on Dividends” under Part I, Item 1 of our ~~2013~~2014 Form 10-K.

Consolidated Summary of Cash Flows

Below is a summary of our average cash position and statement of cash flows for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014. For further details, see our "Interim Consolidated Statements of Cash ~~Flows"~~Flows (Unaudited)" under Part I, Item 1 of this report.


	Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	2014			2013			2015			2014
Average cash and cash equivalents	$	2,930,003		$	1,317,455		$	1,815,098		$	2,746,668
Percentage of total average assets	9.3		%	5.9		%	4.6		%	9.9		%
Net cash provided by operating activities	$	207,207		$	98,042		$	47,616		$	49,990
Net cash (used for) provided by investing activities	(8,947,778		)	124,879
Net cash provided by financing activities	9,074,329			710,840
Net increase in cash and cash equivalents	$	333,758		$	933,761
Net cash used for investing activities							(488,590		)	(716,619		)
Net cash (used for) provided by financing activities							(52,721		)	2,990,314
Net (decrease) increase in cash and cash equivalents							$	(493,695	)	$	2,323,685

Average cash and cash equivalents ~~increased~~decreased by $~~1.6~~0.9 billion, or ~~122.4~~33.9 percent, to $~~2.9~~1.8 billion for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015, compared to $~~1.3~~2.7 billion for the comparable ~~2013~~2014 period. The ~~increase~~decrease was primarily due to the ~~continued~~deployment of cash into our fixed income investment portfolio and to fund our strong ~~growth in client deposit balances.~~loan growth. Average ~~deposits~~investments increased by ~~$7.9~~$8.9 billion to ~~$26.9~~$21.1 billion for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, compared to ~~$19.0~~$12.2 billion for the comparable ~~2013~~2014 period. Average loans increased $3.2 billion to $14.0 billion for the three months ended March 31, 2015, compared to $10.8 billion for the comparable 2014 period.

Cash provided by operating activities was ~~$207~~$48 million for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, primarily reflective of net income before noncontrolling interests of ~~$348~~$145 million and an increase in cash from unsettled client purchases of foreign exchange spot contracts of ~~$97~~$34 million partially offset by non-cash net gains on investment securities of ~~$172~~$83 million and incentive compensation payouts during the first quarter of 2015 of $75 million.

Cash used for investing activities of ~~$8.9 billion~~$489 million for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 included ~~$9.6~~$1.3 billion for purchases of fixed income securities, ~~and $1.1 billion for the increase in loan balances,~~ partially offset by ~~$1.7 billion~~$761 million from maturities and paydowns from our fixed income securities investments.

Cash ~~provided by~~used for financing activities was ~~$9.1 billion~~$53 million for the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, primarily reflective of a net ~~increase~~decrease of ~~$8.7 billion~~$492 million in deposits and ~~$435~~partially offset by $416 million in increased borrowing, primarily related to the net proceeds ~~received in conjunction with~~from the ~~common stock equity offering in the second quarter~~issuance of ~~2014.~~our 3.50% Senior Notes of approximately $346 million.

Cash and cash equivalents were $~~1.9~~1.3 billion at ~~both,~~ ~~September 30,~~March 31, 2015, compared to $3.9 billion at March 31, 2014 ~~and~~ ~~September 30, 2013~~.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk Management

Market risk is defined as the risk of adverse fluctuations in the market value of financial instruments due to changes in market interest rates. Interest rate risk is our primary market risk and can result from timing and volume differences in the repricing of our rate-sensitive assets and liabilities, widening or tightening of credit spreads, changes in the general level of market interest rates and changes in the shape and level of the benchmark LIBOR/SWAP yield curve. Additionally, changes in interest rates can influence the rate of principal prepayments on mortgage securities which affects the rate of amortization of purchase premiums and discounts. Other market risks include foreign currency exchange risk and equity price risk. These risks are not considered significant interest rate sensitive risks and no separate quantitative information concerning them is presented herein.

Interest rate risk is managed by our ALCO. ALCO reviews the market valuation and 12-month forward looking earnings sensitivity of assets and liabilities to changes in interest rates, structural changes in investment and funding portfolios, loan and deposit activity and current market conditions. Adherence to relevant policies, which are approved by the Finance Committee of our Board of Directors, is monitored on an ongoing basis.

~~Table of Contents~~

Management of interest rate risk is carried out primarily through strategies involving our fixed income securities portfolio, available funding channels and capital market activities. In addition, our policies permit the use of off-balance sheet derivative instruments to assist in managing interest rate risk.

We utilize a simulation model to perform sensitivity analysis on the economic value of equity and net interest income under a variety of interest rate scenarios, balance sheet forecasts and proposed strategies. The simulation model provides a dynamic assessment of interest rate sensitivity embedded in our balance sheet which measures the potential variability in forecasted results relating to changes in market interest rates over time. We review our interest rate risk position on a quarterly basis at a minimum.

Table of Contents

Model Simulation and Sensitivity Analysis

One application of the aforementioned simulation model involves measurement of the impact of market interest rate changes on our economic value of equity (“EVE”). EVE is defined as the market value of assets, less the market value of liabilities, adjusted for any off-balance sheet items. A second application of the simulation model measures the impact of market interest rate changes on our net interest income (“NII”) assuming a static balance sheet as of the period-end reporting date. The market interest rate changes that affect us are principally short-term interest rates and include the following: (1) National Prime and SVB Prime rates; (2) 1-month and 3-month LIBOR; and (3) Fed Funds target rate. Changes in these short-term rates impact interest earned on our variable rate loans, variable rate investment securities and balances held as cash and cash equivalents. Additionally, deposit pricing generally follows overall changes in short-term interest rates.

The following table presents our EVE and NII sensitivity exposure at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014, related to an instantaneous and sustained parallel shift in market interest rates of 100 and 200 basis points.


	Estimated		Estimated Increase/(Decrease) In EVE					Estimated		Estimated Increase/ (Decrease) In NII					Estimated		Estimated Increase/(Decrease) In EVE					Estimated		Estimated Increase/ (Decrease) In NII
Change in interest rates (basis points)	EVE		Amount			Percent		NII		Amount			Percent		EVE		Amount			Percent		NII		Amount			Percent
	(Dollars in thousands)														(Dollars in thousands)
September 30, 2014:
March 31, 2015:
+200	$	6,122,674	$	958,409		18.6	%	$	1,101,195	$	170,682		18.3	%	$	6,170,314	$	1,331,570		27.5	%	$	1,232,699	$	223,812		22.2	%
+100	5,655,385		491,120			9.5		1,009,031		78,518			8.4		5,509,774		671,030			13.9		1,115,237		106,350			10.5
—	5,164,265		—			—		930,513		—			—		4,838,744		—			—		1,008,887		—			—
-100	4,821,473		(342,792		)	(6.6	)	902,796		(27,717		)	(3.0	)	5,122,695		283,951			5.9		970,130		(38,757		)	(3.8	)
-200	5,075,194		(89,071		)	(1.7	)	875,798		(54,715		)	(5.9	)	5,168,953		330,209			6.8		949,883		(59,004		)	(5.8	)
December 31, 2013:
December 31, 2014:
+200	$	4,656,411	$	477,866		11.4	%	$	990,190	$	161,314		19.5	%	$	6,201,773	$	1,237,900		24.9	%	$	1,242,321	$	223,059		21.9	%
+100	4,382,397		203,852			4.9		899,336		70,460			8.5		5,598,887		635,014			12.8		1,124,643		105,381			10.3
—	4,178,545		—			—		828,876		—			—		4,963,873		—			—		1,019,262		—			—
-100	3,960,086		(218,459		)	(5.2	)	826,222		(2,654		)	(0.3	)	4,927,749		(36,124		)	(0.7	)	979,982		(39,280		)	(3.9	)
-200	4,041,604		(136,941		)	(3.3	)	822,448		(6,428		)	(0.8	)	5,119,636		155,763			3.1		953,556		(65,706		)	(6.4	)

Economic Value of Equity

The estimated EVE in the preceding table is based on a combination of valuation methodologies including a discounted cash flow analysis and a multi-path lattice based valuation. Both methodologies use publicly available market interest rates. The model simulations and calculations are highly assumption-dependent and will change regularly as our asset/liability structure changes, as interest rate environments evolve, and as we change our assumptions in response to relevant market or business circumstances. These calculations do not reflect the changes that we anticipate or may make to reduce our EVE exposure in response to a change in market interest rates as a part of our overall interest rate risk management strategy.

As with any method of measuring interest rate risk, certain limitations are inherent in the method of analysis presented in the preceding table. We are exposed to yield curve risk, prepayment risk and basis risk, which cannot be fully modeled and expressed using the above methodology. Accordingly, the results in the preceding table should not be relied upon as a precise indicator of actual results in the event of changing market interest rates. Additionally, the resulting EVE and NII estimates are not intended to represent, and should not be construed to represent the underlying value. In addition, we assume different deposit balance decay rates for each interest rate scenario based on a historical deposit study of our clients.

Our base case EVE at ~~September 30, 2014 increased~~March 31, 2015 decreased from December 31, ~~2013~~2014 by ~~$986~~$125 million, primarily caused by a flatter yield curve due to market conditions and the change in balance sheet ~~mix, offset by flatter market yield curves due to market conditions.~~mix. The flatter market yield curve ~~has~~negatively impacted the EVE by $183 million. The change in balance sheet mix had a ~~$326~~positive impact of $58 million to our base. This net impact was reflective of a $602 million increase in fixed income investment securities, a $492 million decrease in deposits, and a $55 million increase in our period-end loan portfolio. This positive impact was offset by an increase of $419 million in borrowings, and a $488 million decrease in cash and cash equivalents. EVE sensitivity increased in the simulated upward interest rate movements due to a $1.1 billion increase in noninterest-bearing deposits. In the simulated downward interest rate movements, EVE sensitivity increased due to lower rates in the long-end of the yield curve reducing the down-rate shock effects for the noninterest-bearing deposits, while the positive impact from the loan and investment portfolios further increased EVE sensitivity.

9086

Table of Contents

12-Month Net Interest Income Simulation

Our estimated 12-month NII at March 31, 2015 decreased from December 31, 2014 by $10 million ~~negative impact on the EVE, which offsets some of the positive impacts from~~primarily due to the change in the balance sheet mix. The ~~change~~NII was impacted by the increase of $419 million in ~~balance sheet mix~~borrowings, the decrease of $488 million in cash and cash equivalents, and lower yields on loans. This impact was ~~reflective of period-end increases of $8.0~~positively offset by the decrease in interest-bearing deposits by $1.6 billion and the increase in fixed income investment securities ~~and $1.1 billion in loans, partially offset~~ by ~~an increase of $8.7 billion in deposits. EVE~~$602 million. NII sensitivity ~~increased~~remained flat in both the simulated upward and downward interest rate ~~movements~~movements. In the simulated upward scenarios, the sensitivity remained approximately stable due to the ~~increase in~~relatively unchanged mix between fixed ~~income securities~~ and ~~the $6.6 billion increase in noninterest-bearing deposits.~~variable assets at March 31, 2015 as compared to December 31, 2014. In the simulated downward ~~200 bps interest rate movement, a relatively smaller decrease in EVE is~~scenarios, sensitivity remained flat for the loan and investment securities due to ~~the limited market value impact on deposits. The limited impact on deposits is attributed to deposit~~ rates being at or near their ~~absolute~~ floors ~~and a relative increase deposit balances.~~

~~12-Month Net Interest Income Simulation~~

~~Our expected 12-month net interest income at September 30, 2014 increased by $102 million as compared to December 31, 2013, primarily due to an increase~~ in the period-end total interest earning assets attributable to an increase of $8.0 billion in our fixed income securities portfolio and an increase of $1.1 billion in our loans. These increases were partially offset by lower yields on investments and loans as well as an increase of $2.1 billion in interest-bearing deposits. The slight change in the intermediate portion of the yield curve attributed $7.4 million to the increase. Net interest income sensitivity in the simulated upward interestcurrent rate movement, measured as a percentage change from the base, decreased slightly due to growth in interest-bearing deposits offsetting some of the benefits from the upward rate movement. The NII sensitivity increased in the simulated downward interest rate movements due to a lower market yield curve compared to levels at December 31, 2013. The change in the market yield curve increased the estimated prepayment of mortgage securities, which are assumed to be reinvested at lower market rates and, in turn, reduce interest income earned.environment.

The simulation model used in the above analysis embeds floors in our interest rate scenarios, which prevent model benchmark rates from moving below 0.0%. In addition, we assume different deposit balance decay rates for each interest rate scenario based on a historical deposit study of our clients. These assumptions may change in future periods based on management discretion. Actual changes in our deposit pricing strategies may differ from our current model assumptions and may have an impact on our overall sensitivity.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, among other things, processes, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of our most recently completed fiscal quarter, pursuant to Exchange Act Rule 13a-15(b). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

9187

Table of Contents

PART II–OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note ~~14–~~15–“Legal Matters” of the “Notes to Interim Consolidated Financial ~~Statements (unaudited)”~~Statements” under Part I, Item 1 of this report.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors set forth in our ~~2013~~2014 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See Index to Exhibits at end of report.

9288

Table of Contents

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 thereunto duly authorized.



		SVB Financial Group

Date: ~~November 7, 2014~~May 11, 2015		/s/ MICHAEL DESCHENEAUX
		Michael Descheneaux
		Chief Financial Officer
		(Principal Financial Officer)

		SVB Financial Group

Date: ~~November 7, 2014~~May 11, 2015		/s/ KAMRAN HUSAIN
		Kamran Husain
		Chief Accounting Officer
		(Principal Accounting Officer)

9389

Table of Contents

INDEX TO EXHIBITS

Exhibit
Number
Exhibit Description Incorporated by Reference
Filed
Herewith
Form File No. Exhibit   Filing Date
3.1 Restated Certificate of Incorporation 8-K 000-15637 3.1 May 31, 2005
3.2 Amended and Restated Bylaws 8-K 000-15637 3.2 July 27, 2010
3.3 Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock 8-K 000-15637 3.3 December 8, 2008
3.4 Certificate of Designations of Fixed Rate Cumulative Perpetual Preferred Stock, Series B 8-K 000-15637 3.4 December 15, 2008
4.1 Junior Subordinated Indenture, dated as of October 30, 2003 between SVB Financial and Wilmington Trust Company, as trustee 8-K 000-15637 4.12 November 19, 2003
4.2 7.0% Junior Subordinated Deferrable Interest Debenture due October 15, 2033 of SVB Financial 8-K 000-15637 4.13 November 19, 2003
4.3 Amended and Restated Trust Agreement, dated as of October 30, 2003, by and among SVB Financial as Depositor, Wilmington Trust Company as Property Trustee, Wilmington Trust Company as Delaware Trustee, and the Administrative Trustees named therein 8-K 000-15637 4.14 November 19, 2003
4.4 Certificate Evidencing 7% Cumulative Trust Preferred Securities of SVB Capital II, dated as of October 30, 2003 8-K 000-15637 4.15 November 19, 2003
4.5 Guarantee Agreement, dated as of October 30, 2003, between SVB Financial and Wilmington Trust Company, as Trustee 8-K 000-15637 4.16 November 19, 2003
4.6 Agreement as to Expenses and Liabilities, dated as of October 30, 2003, between SVB Financial and SVB Capital II 8-K 000-15637 4.17 November 19, 2003
4.7 Certificate Evidencing 7% Common Securities of SVB Capital II, dated as of October 30, 2003 8-K 000-15637 4.18 November 19, 2003
4.8 Officers’ Certificate and Company Order, dated as of October 30, 2003, relating to the 7.0% Junior Subordinated Deferrable Interest Debentures due October 15, 2033 8-K 000-15637 4.19 November 19, 2003
4.9 Indenture, dated September 20, 2010, by and between SVB Financial Group and U.S. Bank National Association, as trustee 8-K 000-15637 4.1 September 20, 2010
4.10 Form of 5.375% Senior Note due 2020 8-K 000-15637 4.2 September 20, 2010
31.1 Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer X
31.2 Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer X
32.1 Section 1350 Certifications **
101.INS XBRL Instance Document X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase Document X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X

Exhibit

Number

Exhibit Description

Incorporated by Reference

Filed

Herewith

Form

File No.

Exhibit

Filing Date

4.1

Officer's Certificate, dated as of January 29, 2015, relating to the 3.50% Senior Notes due 2025

8-K

000-15637

4.2

January 29, 2015

4.2

Form of 3.50% Senior Note due 2025

8-K

000-15637

4.3

January 29, 2015

10.1

Form of Incentive Stock Option Agreement under 2006 Equity Incentive Plan

8-K

000-15637

10.2

January 9, 2015

10.2

Form of Nonqualified Stock Option Agreement under 2006 Equity Incentive Plan

8-K

000-15637

10.3

January 9, 2015

10.3

Form of Restricted Stock Unit Agreement under 2006 Equity Incentive Plan (Subject to Time-Based Vesting)

8-K

000-15637

10.4

January 9, 2015

10.4

Form of Restricted Stock Unit Agreement under 2006 Equity Incentive Plan (Subject to Performance-Based Vesting)

8-K

000-15637

10.5

January 9, 2015

10.5

Form of Restricted Stock Award Agreement under 2006 Equity Incentive Plan

8-K

000-15637

10.6

January 9, 2015

10.6

Form of Stock Appreciation Rights Agreement under 2006 Equity Incentive Plan

8-K

000-15637

10.7

January 9, 2015

31.1

Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer

31.2

Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer

32.1

Section 1350 Certifications

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document



*	Denotes management contract or any compensatory plan, contract or arrangement
**	Furnished herewith

9490



Three months ended September 30, 2013 (dollars in thousands)	Beginning Balance June 30, 2013		Charge-offs			Recoveries		Provision for (Reduction of) Loan Losses			Ending Balance September 30, 2013
Commercial loans:
Software	$	46,798	$	(2,527	)	$	816	$	4,369		$	49,456
Hardware	33,188		(5,544		)	1,149		7,370			36,163
Venture capital/private equity	13,593		—			—		617			14,210
Life science	11,741		(57		)	246		(780		)	11,150
Premium wine	3,793		—			4		81			3,878
Other	3,654		(21		)	77		(24		)	3,686
Total commercial loans	112,767		(8,149		)	2,292		11,633			118,543
Consumer loans	6,804		—			382		(995		)	6,191
Total allowance for loan losses	$	119,571	$	(8,149	)	$	2,674	$	10,638		$	124,734



Nine months ended September 30, 2013 (dollars in thousands)	Beginning Balance December 31, 2012		Charge-offs			Recoveries		Provision for (Reduction of) Loan Losses			Ending Balance September 30, 2013
Commercial loans:
Software	$	42,648	$	(7,619	)	$	1,455	$	12,972		$	49,456
Hardware	29,761		(11,975		)	1,998		16,379			36,163
Venture capital/private equity	9,963		—			—		4,247			14,210
Life science	13,606		(2,618		)	1,335		(1,173		)	11,150
Premium wine	3,523		—			135		220			3,878
Other	3,912		(6,069		)	2,458		3,385			3,686
Total commercial loans	103,413		(28,281		)	7,381		36,030			118,543
Consumer loans	7,238		(869		)	829		(1,007		)	6,191
Total allowance for loan losses	$	110,651	$	(29,150	)	$	8,210	$	35,023		$	124,734