0000719739us-gaap:OtherAssetsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel3Memberus-gaap:NondesignatedMember2021-03-31

~~Table of Contents~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ 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~~001-39154

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Exchange on Which Registered

Common Stock, par value $0.001 per share

SIVB

The Nasdaq Stock Market LLC

Depositary shares, each representing a 1/40th ownership interest in a share of 5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series A

SIVBP

The Nasdaq Stock Market LLC

At ~~October 31, 2020, 51,796,902~~April 30, 2021, 54,315,140 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 Interim Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (Unaudited)	4

	Interim Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30, 2020~~March 3 1 , 202 1 and ~~2019~~20 20 (Unaudited)	5

	Interim Consolidated Statements of Comprehensive Income for the three mon ths ended Mar ch 3 1 , 202 1 and ~~nine months ended September 30, 2020 and 2019~~20 20 (Unaudited)	6

	Interim Consolidated Statements of Stockholders' Equity for the ~~nine~~three months ended ~~September 30, 2020~~Marc h 3 1 , 202 1 and ~~2019~~20 20 (Unaudited)	7

	Interim Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2020~~March 3 1 , 202 1 and ~~2019~~20 20 (Unaudited)	8

	Notes to Interim Consolidated Financial Statements (Unaudited)	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7560

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	~~127~~101

Item 4.	Controls and Procedures	~~130~~104

PART II - OTHER INFORMATION		~~131~~105

Item 1.	Legal Proceedings	~~131~~105

Item 1A.	Risk Factors	~~131~~105

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~133~~105

Item 3.	Defaults Upon Senior Securities	~~134~~105

Item 4.	Mine Safety Disclosures	~~134~~105

Item 5.	Other Information	~~134~~105

Item 6.	Exhibits	~~135~~106

SIGNATURES		~~136~~107

Table of Contents

Glossary of Acronyms that may be used in this Report

ACL — Allowance for Credit Losses

AFS— Available-for-Sale

ASC— Accounting Standards Codification

ASU— Accounting Standards Update

CECL — Current Expected Credit Losses

CET— Common Equity Tier

CMBS— Commercial Mortgage-Backed Securities

CMO— Collateralized Mortgage Obligations

EHOP— Employee Home Ownership Program of the Company

EPS— Earnings Per Share

ERI— Energy and Resource Innovation

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

HTM— Held-to-Maturity

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

MBS— Mortgage-Backed Securities

PPP — Paycheck Protection Program

SEC— Securities and Exchange Commission

SPAC - Special Purpose Acquisition Company

SPD-SVB— SPD Silicon Valley Bank Co., Ltd. (the Bank's joint venture bank in China)

TDR— Troubled Debt Restructuring

~~UK—~~U.K. — 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 (UNAUDITED)

(Dollars in thousands, except par value and share data) September 30,
2020 December 31,
2019
Assets:
Cash and cash equivalents $ 15,687,776 $ 6,781,783
Available-for-sale securities, at fair value (cost of $25,237,540 and $13,894,348, respectively) 25,904,324 14,014,919
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $291 and $0 (fair value of $13,612,463 and $14,115,272, respectively) (1) 12,982,223 13,842,946
Non-marketable and other equity securities 1,547,363 1,213,829
Total investment securities 40,433,910 29,071,694
Loans, amortized cost 38,413,891 33,164,636
Allowance for credit losses: loans (512,958) (304,924)
Net loans 37,900,933 32,859,712
Premises and equipment, net of accumulated depreciation and amortization 173,477 161,876
Goodwill 137,823 137,823
Other intangible assets, net 45,380 49,417
Lease right-of-use assets 220,493 197,365
Accrued interest receivable and other assets 2,316,979 1,745,233
Total assets $ 96,916,771 $ 71,004,903
Liabilities and total equity:
Liabilities:
Noninterest-bearing demand deposits $ 57,508,229 $ 40,841,570
Interest-bearing deposits 27,264,791 20,916,237
Total deposits 84,773,020 61,757,807
Short-term borrowings 19,068 17,430
Lease liabilities 246,652 218,847
Other liabilities 3,067,221 2,041,752
Long-term debt 843,430 347,987
Total liabilities 88,949,391 64,383,823
Commitments and contingencies (Note 15 and Note 18)
SVBFG stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 350,000 shares issued and outstanding 340,138 340,138
Common stock, $0.001 par value, 150,000,000 shares authorized; 51,787,972 shares and 51,655,607 shares issued and outstanding, respectively 52 52
Additional paid-in capital 1,548,918 1,470,071
Retained earnings 5,283,433 4,575,601
Accumulated other comprehensive income 620,394 84,445
Total SVBFG stockholders’ equity 7,792,935 6,470,307
Noncontrolling interests 174,445 150,773
Total equity 7,967,380 6,621,080
Total liabilities and total equity $ 96,916,771 $ 71,004,903

~~(1)~~Prior to our adoption of Accounting Standard Update (ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments) on January 1, 2020, the allowance for credit losses (ACL) related to held-to-maturity (HTM) securities was not applicable and is therefore presented as $0 at December 31, 2019. See "Adoption of New Accounting Standards" in Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.


(Dollars in thousands, except par value and share data)	March 31, 2021		December 31, 2020
Assets:
Cash and cash equivalents	$	21,254,859	$	17,674,763
Available-for-sale securities, at fair value (cost of $26,159,161 and $30,244,896, respectively)	25,986,471		30,912,438
Held-to-maturity securities, at amortized cost and net of allowance for credit losses of $1,112 and $392 (fair value of $41,186,735 and $17,216,871, respectively)	41,164,620		16,592,153
Non-marketable and other equity securities	1,857,761		1,802,235
Total investment securities	69,008,852		49,306,826
Loans, amortized cost	47,675,166		45,181,488
Allowance for credit losses: loans	(391,751)		(447,765)
Net loans	47,283,415		44,733,723
Premises and equipment, net of accumulated depreciation and amortization	179,674		175,818
Goodwill	142,685		142,685
Other intangible assets, net	59,325		61,435
Lease right-of-use assets	233,696		209,932
Accrued interest receivable and other assets	4,184,114		3,205,825
Total assets	$	142,346,620	$	115,511,007
Liabilities and total equity:
Liabilities:
Noninterest-bearing demand deposits	$	84,439,997	$	66,519,240
Interest-bearing deposits	39,710,109		35,462,567
Total deposits	124,150,106		101,981,807
Short-term borrowings	38,434		20,553
Lease liabilities	287,413		259,554
Other liabilities	6,411,705		3,971,974
Long-term debt	1,338,183		843,628
Total liabilities	132,225,841		107,077,516
Commitments and contingencies (Note 14 and Note 17)	0		0
SVBFG stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 357,500 and 350,000 shares issued and outstanding, respectively	1,079,333		340,138
Common stock, $0.001 par value, 150,000,000 shares authorized; 54,001,797 shares and 51,888,463 shares issued and outstanding, respectively	54		52
Additional paid-in capital	2,590,576		1,585,244
Retained earnings	6,203,969		5,671,749
Accumulated other comprehensive income	20,960		622,517
Total SVBFG stockholders’ equity	9,894,892		8,219,700
Noncontrolling interests	225,887		213,791
Total equity	10,120,779		8,433,491
Total liabilities and total equity	$	142,346,620	$	115,511,007

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)	(Dollars in thousands, except per share amounts)	2020		2019		2020		2019		(Dollars in thousands, except per share amounts)	2021		2020
Interest income:	Interest income:									Interest income:
Loans	Loans	$	368,981	$	394,246	$	1,116,660	$	1,202,467	Loans	$	430,422	$	382,569
Investment securities:	Investment securities:									Investment securities:
Taxable	Taxable	156,517		149,656		452,449		410,768		Taxable	224,162		154,385
Non-taxable	Non-taxable	14,912		11,123		42,200		32,991		Non-taxable	20,897		12,824
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities	Federal funds sold, securities purchased under agreements to resell and other short-term investment securities	2,717		28,867		22,743		74,447		Federal funds sold, securities purchased under agreements to resell and other short-term investment securities	3,265		17,624
Total interest income	Total interest income	543,127		583,892		1,634,052		1,720,673		Total interest income	678,746		567,402
Interest expense:	Interest expense:									Interest expense:
Deposits	Deposits	8,218		55,106		51,310		130,163		Deposits	10,437		37,398
Borrowings	Borrowings	7,169		8,142		17,938		27,577		Borrowings	8,730		5,867
Total interest expense	Total interest expense	15,387		63,248		69,248		157,740		Total interest expense	19,167		43,265
Net interest income	Net interest income	527,740		520,644		1,564,804		1,562,933		Net interest income	659,579		524,137
(Reduction) provision for credit losses		(52,018)		36,536		257,943		89,033
Provision for credit losses										Provision for credit losses	18,679		243,480
Net interest income after provision for credit losses	Net interest income after provision for credit losses	579,758		484,108		1,306,861		1,473,900		Net interest income after provision for credit losses	640,900		280,657
Noninterest income:	Noninterest income:									Noninterest income:
Gains on investment securities, net	Gains on investment securities, net	189,837		29,849		270,760		106,575		Gains on investment securities, net	167,078		46,055
Gains on equity warrant assets, net	Gains on equity warrant assets, net	53,766		37,561		93,667		107,213		Gains on equity warrant assets, net	221,685		13,395
Client investment fees	Client investment fees	31,914		46,679		107,192		136,905		Client investment fees	20,065		43,393
Foreign exchange fees	Foreign exchange fees	43,881		40,309		127,642		116,863		Foreign exchange fees	57,393		47,505
Credit card fees	Credit card fees	22,756		30,158		72,348		86,431		Credit card fees	27,567		28,304
Deposit service charges	Deposit service charges	22,015		22,482		67,115		65,496		Deposit service charges	25,151		24,589
Lending related fees	Lending related fees	13,562		11,707		37,851		36,857		Lending related fees	15,657		13,125
Letters of credit and standby letters of credit fees	Letters of credit and standby letters of credit fees	12,192		10,842		35,155		31,205		Letters of credit and standby letters of credit fees	13,051		11,542
Investment banking revenue	Investment banking revenue	92,181		38,516		280,551		137,005		Investment banking revenue	142,302		46,867
Commissions	Commissions	16,257		12,275		49,197		40,812		Commissions	24,439		16,022
Other	Other	49,222		13,631		76,887		42,773		Other	29,792		11,137
Total noninterest income	Total noninterest income	547,583		294,009		1,218,365		908,135		Total noninterest income	744,180		301,934
Noninterest expense:	Noninterest expense:									Noninterest expense:
Compensation and benefits	Compensation and benefits	327,369		233,840		902,752		715,073		Compensation and benefits	445,425		255,586
Professional services	Professional services	67,215		55,202		169,748		133,018		Professional services	81,343		38,705
Premises and equipment	Premises and equipment	30,772		26,775		85,420		72,386		Premises and equipment	32,822		26,940
Net occupancy	Net occupancy	18,965		16,981		56,156		49,716		Net occupancy	17,681		18,346
Business development and travel	Business development and travel	2,214		19,539		19,277		51,915		Business development and travel	3,811		14,071
FDIC and state assessments	FDIC and state assessments	6,933		4,881		18,986		13,343		FDIC and state assessments	9,463		5,234
Other	Other	37,553		34,106		117,903		105,059		Other	45,456		40,703
Total noninterest expense	Total noninterest expense	491,021		391,324		1,370,242		1,140,510		Total noninterest expense	636,001		399,585
Income before income tax expense	Income before income tax expense	636,320		386,793		1,154,984		1,241,525		Income before income tax expense	749,079		183,006
Income tax expense	Income tax expense	162,265		105,075		299,491		331,624		Income tax expense	187,315		49,357
Net income before noncontrolling interests	Net income before noncontrolling interests	474,055		281,718		855,493		909,901		Net income before noncontrolling interests	561,764		133,649
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(27,748)		(14,437)		(40,035)		(35,901)		Net income attributable to noncontrolling interests	(24,950)		1,973
Preferred stock dividends	Preferred stock dividends	(4,594)		0		(12,557)		0		Preferred stock dividends	(4,594)		(3,369)
Net income available to common stockholders	Net income available to common stockholders	$	441,713	$	267,281	$	802,901	$	874,000	Net income available to common stockholders	$	532,220	$	132,253
Earnings per common share—basic	Earnings per common share—basic	$	8.53	$	5.19	$	15.55	$	16.80	Earnings per common share—basic	$	10.20	$	2.56
Earnings per common share—diluted	Earnings per common share—diluted	8.47		5.15		15.46		16.67		Earnings per common share—diluted	10.03		2.55

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

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Net income before noncontrolling interests $ 474,055 $ 281,718 $ 855,493 $ 909,901
Other comprehensive income, net of tax:
Change in foreign currency cumulative translation gains and losses:
Foreign currency translation gains (losses) 10,279 (6,213) 1,323 (6,307)
Related tax (expense) benefit (2,804) 1,731 (452) 1,757
Change in unrealized gains and losses on available-for-sale securities:
Unrealized holding gains 13,860 70,185 604,479 236,203
Related tax expense (3,842) (19,547) (167,542) (65,786)
Reclassification adjustment for losses (gains) included in net income 0 0 (61,165) 3,905
Related tax (benefit) expense 0 0 16,953 (1,087)
Amortization of unrealized holding gains on securities transferred from available-for-sale to held-to-maturity (368) (374) (1,058) (1,767)
Related tax benefit 102 104 293 492
Change in unrealized gains and losses on cash flow hedges:
Unrealized gains 0 9,810 231,920 28,466
Related tax expense 0 (2,733) (64,281) (7,930)
Reclassification adjustment for (gains) losses included in net income (16,004) 2,713 (33,924) 3,224
Related tax expense (benefit) 4,436 (755) 9,403 (897)
Other comprehensive income, net of tax 5,659 54,921 535,949 190,273
Comprehensive income 479,714 336,639 1,391,442 1,100,174
Comprehensive income attributable to noncontrolling interests (27,748) (14,437) (40,035) (35,901)
Comprehensive income attributable to SVBFG $ 451,966 $ 322,202 $ 1,351,407 $ 1,064,273


	Three months ended March 31,
(Dollars in thousands)	2021		2020
Net income before noncontrolling interests	$	561,764	$	133,649
Other comprehensive (loss) income, net of tax:
Change in foreign currency cumulative translation gains and losses:
Foreign currency translation losses	(43)		(9,120)
Related tax benefit	13		2,556
Change in unrealized gains and losses on available-for-sale securities:
Unrealized holding (losses) gains	(823,329)		543,881
Related tax benefit (expense)	228,876		(150,746)
Reclassification adjustment for gains included in net income	0		(61,165)
Related tax expense	0		16,953
Cumulative-effect adjustment for unrealized gains on securities transferred from available-for-sale to held-to-maturity	8,710		0
Related tax expense	(2,421)		0
Amortization of unrealized holding losses on securities transferred from available-for-sale to held-to-maturity	(2,851)		(552)
Related tax benefit	793		153
Change in unrealized gains and losses on cash flow hedges:
Unrealized gains	0		231,920
Related tax expense	0		(64,281)
Reclassification adjustment for gains included in net income	(15,657)		(2,089)
Related tax expense	4,352		579
Other comprehensive (loss) income, net of tax	(601,557)		508,089
Comprehensive (loss) income	(39,793)		641,738
Comprehensive (income) loss attributable to noncontrolling interests	(24,950)		1,973
Comprehensive (loss) income attributable to SVBFG	$	(64,743)	$	643,711

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

Table of Contents

SVB FINANCIAL GROUP AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Preferred Stock 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
Balance at December 31, 2018 $ 0 52,586,498 $ 53 $ 1,378,438 $ 3,791,838 $ (54,120) $ 5,116,209 $ 148,634 $ 5,264,843
Cumulative adjustment for the adoption of premium amortization on purchased callable debt securities, net of tax (ASU 2017-08) — — — — (583) — (583) — (583)
Acquisition of SVB Leerink — — — — — — — 5,256 5,256
Common stock issued under employee benefit plans, net of restricted stock cancellations — 487,101 0 9,236 — — 9,236 — 9,236
Common stock issued under ESOP — 14,442 — 3,506 — — 3,506 — 3,506
Net income — — — — 874,000 — 874,000 35,901 909,901
Capital calls and distributions, net — — — — — — — (32,002) (32,002)
Net change in unrealized gains and losses on AFS securities, net of tax — — — — — 173,235 173,235 — 173,235
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax — — — — — (1,275) (1,275) — (1,275)
Foreign currency translation adjustments, net of tax — — — — — (4,550) (4,550) — (4,550)
Net change in unrealized gains and losses on cash flow hedges, net of tax — — — — — 22,863 22,863 — 22,863
Share-based compensation, net — — — 50,550 — — 50,550 — 50,550
Common stock repurchases — (1,532,210) (1) — (352,510) — (352,511) — (352,511)
Balance at September 30, 2019 $ 0 51,555,831 $ 52 $ 1,441,730 $ 4,312,745 $ 136,153 $ 5,890,680 $ 157,789 $ 6,048,469
Balance at December 31, 2019 $ 340,138 51,655,607 $ 52 $ 1,470,071 $ 4,575,601 $ 84,445 $ 6,470,307 $ 150,773 $ 6,621,080
Cumulative adjustment for the day one adoption of ASC 326, net of tax (1) — — — — (35,049) — (35,049) — (35,049)
Common stock issued under employee benefit plans, net of restricted stock cancellations — 364,494 0 15,691 — — 15,691 — 15,691
Common stock issued under ESOP — 12,094 — 2,447 — — 2,447 — 2,447
Net income — — — — 815,458 — 815,458 40,035 855,493
Capital calls and distributions, net — — — — — — — (16,363) (16,363)
Net change in unrealized gains and losses on AFS securities, net of tax — — — — — 392,725 392,725 — 392,725
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax — — — — — (765) (765) — (765)
Foreign currency translation adjustments, net of tax — — — — — 871 871 — 871
Net change in unrealized gains and losses on cash flow hedges, net of tax — — — — — 143,118 143,118 — 143,118
Share-based compensation, net — — — 60,733 — — 60,733 — 60,733
Common stock repurchases — (244,223) 0 — (60,020) — (60,020) — (60,020)
Dividends on preferred stock — — — — (12,557) — (12,557) — (12,557)
Other, net — — — (24) — — (24) — (24)
Balance at September 30, 2020 $ 340,138 51,787,972 $ 52 $ 1,548,918 $ 5,283,433 $ 620,394 $ 7,792,935 $ 174,445 $ 7,967,380

~~(1)~~See "Adoption of New Accounting Standards" in Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.


	Preferred Stock		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
Balance at December 31, 2019	$	340,138	51,655,607	$	52	$	1,470,071	$	4,575,601	$	84,445	$	6,470,307	$	150,773	$	6,621,080
Cumulative adjustment for the day one adoption of ASC 326 ("CECL"), net of tax	—		—	—		—		(35,049)		—		(35,049)		—		(35,049)
Common stock issued under employee benefit plans, net of restricted stock cancellations	—		66,864	0		(3,031)		—		—		(3,031)		—		(3,031)
Common stock issued under ESOP	—		12,094	—		2,447		—		—		2,447		—		2,447
Net income (loss)	—		—	—		—		135,622		—		135,622		(1,973)		133,649
Capital calls and distributions, net	—		—	—		—		—		—		—		(328)		(328)
Net change in unrealized gains and losses on AFS securities, net of tax	—		—	—		—		—		348,923		348,923		—		348,923
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax	—		—	—		—		—		(399)		(399)		—		(399)
Foreign currency translation adjustments, net of tax	—		—	—		—		—		(6,564)		(6,564)		—		(6,564)
Net change in unrealized gains and losses on cash flow hedges, net of tax	—		—	—		—		—		166,129		166,129		—		166,129
Share-based compensation, net	—		—	—		19,171		—		—		19,171		—		19,171
Common stock repurchases	—		(244,223)	0		—		(60,020)		—		(60,020)		—		(60,020)
Dividends on preferred stock	—		—	—		—		(3,369)		—		(3,369)		—		(3,369)
Other, net	—		—	—		582		—		—		582		—		582
Balance at March 31, 2020	$	340,138	51,490,342	$	52	$	1,489,240	$	4,612,785	$	592,534	$	7,034,749	$	148,472	$	7,183,221
Balance at December 31, 2020	$	340,138	51,888,463	$	52	$	1,585,244	$	5,671,749	$	622,517	$	8,219,700	$	213,791	$	8,433,491

Common stock issued under employee benefit plans, net of restricted stock cancellations	—		107,234	0		(1,421)		—		—		(1,421)		—		(1,421)
Common stock issued under ESOP	—		6,100	—		3,138		—		—		3,138		—		3,138
Issuance of Common Stock	—		2,000,000	2		972,113		—		—		972,115		—		972,115
Issuance of Series B Preferred Stock	739,195		—	—		—		—		—		739,195		—		739,195
Net income	—		—	—		—		536,814		—		536,814		24,950		561,764
Capital calls and distributions, net	—		—	—		—		—		—		—		(12,854)		(12,854)
Net change in unrealized gains and losses on AFS securities, net of tax	—		—	—		—		—		(594,453)		(594,453)		—		(594,453)
Amortization of unrealized holding gains and losses on securities transferred from AFS to HTM, net of tax	—		—	—		—		—		4,231		4,231		—		4,231
Foreign currency translation adjustments, net of tax	—		—	—		—		—		(30)		(30)		—		(30)
Net change in unrealized gains and losses on cash flow hedges, net of tax	—		—	—		—		—		(11,305)		(11,305)		—		(11,305)

Share-based compensation, net	—		—	—		26,691		—		—		26,691		—		26,691

Dividends on preferred stock	—		—	—		—		(4,594)		—		(4,594)		—		(4,594)
Other, net	—		—	—		4,811		—		—		4,811		—		4,811
Balance at March 31, 2021	$	1,079,333	54,001,797	$	54	$	2,590,576	$	6,203,969	$	20,960	$	9,894,892	$	225,887	$	10,120,779

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

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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)	(Dollars in thousands)	2020		2019		(Dollars in thousands)	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income before noncontrolling interests	Net income before noncontrolling interests	$	855,493	$	909,901	Net income before noncontrolling interests	$	561,764	$	133,649
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	Provision for credit losses	257,943		89,033		Provision for credit losses	18,679		243,480
Changes in fair values of equity warrant assets, net of proceeds from exercises	Changes in fair values of equity warrant assets, net of proceeds from exercises	(4,270)		12,801		Changes in fair values of equity warrant assets, net of proceeds from exercises	(29,445)		18,574
Changes in fair values of derivatives, net	Changes in fair values of derivatives, net	(87,740)		(29,472)		Changes in fair values of derivatives, net	13,533		(63,034)
Gains on investment securities, net	Gains on investment securities, net	(270,760)		(106,575)		Gains on investment securities, net	(167,078)		(46,055)
Distributions of earnings from non-marketable and other equity securities	Distributions of earnings from non-marketable and other equity securities	64,703		77,584		Distributions of earnings from non-marketable and other equity securities	21,581		12,346
Depreciation and amortization	Depreciation and amortization	73,607		60,408		Depreciation and amortization	30,949		24,824
Amortization of premiums and discounts on investment securities, net	Amortization of premiums and discounts on investment securities, net	54,918		9,646		Amortization of premiums and discounts on investment securities, net	49,161		13,565
Amortization of share-based compensation	Amortization of share-based compensation	60,733		50,550		Amortization of share-based compensation	26,691		19,171
Amortization of deferred loan fees	Amortization of deferred loan fees	(123,305)		(112,383)		Amortization of deferred loan fees	(52,903)		(33,016)
Deferred income tax benefit		(4,124)		(1,720)
Deferred income tax expense (benefit)						Deferred income tax expense (benefit)	57,513		(60,126)
Excess tax benefit from exercise of stock options and vesting of restricted shares	Excess tax benefit from exercise of stock options and vesting of restricted shares	(3,449)		(7,931)		Excess tax benefit from exercise of stock options and vesting of restricted shares	(10,888)		(2,575)
Losses from the write-off of premises and equipment		0		185

Changes in other assets and liabilities:	Changes in other assets and liabilities:					Changes in other assets and liabilities:
Accrued interest receivable and payable, net	Accrued interest receivable and payable, net	15,565		(10,429)		Accrued interest receivable and payable, net	(40,913)		23,982
Accounts receivable and payable, net	Accounts receivable and payable, net	17,534		(18,278)		Accounts receivable and payable, net	10,462		(45,311)
Income tax receivable and payable, net	Income tax receivable and payable, net	(15,267)		(59,527)		Income tax receivable and payable, net	92,515		66,581
Accrued compensation	Accrued compensation	(634)		(109,837)		Accrued compensation	(279,210)		(236,834)
Foreign exchange spot contracts, net	Foreign exchange spot contracts, net	147,021		34,304		Foreign exchange spot contracts, net	107,418		(12,583)
Proceeds from termination of interest rate swaps	Proceeds from termination of interest rate swaps	227,500		0		Proceeds from termination of interest rate swaps	0		180,500
Other, net	Other, net	(212,177)		(78,516)		Other, net	(195,907)		(69,013)
Net cash provided by operating activities	Net cash provided by operating activities	1,053,291		709,744		Net cash provided by operating activities	213,922		168,125
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of available-for-sale securities	Purchases of available-for-sale securities	(16,614,960)		(7,832,282)		Purchases of available-for-sale securities	(450,009)		(1,538,553)
Proceeds from sales of available-for-sale securities	Proceeds from sales of available-for-sale securities	2,654,212		2,189,087		Proceeds from sales of available-for-sale securities	0		2,654,212
Proceeds from maturities and paydowns of available-for-sale securities	Proceeds from maturities and paydowns of available-for-sale securities	2,634,123		801,605		Proceeds from maturities and paydowns of available-for-sale securities	1,653,915		785,692
Purchases of held-to-maturity securities	Purchases of held-to-maturity securities	(1,756,920)		(408,479)		Purchases of held-to-maturity securities	(21,685,125)		(358,650)
Proceeds from maturities and paydowns of held-to-maturity securities	Proceeds from maturities and paydowns of held-to-maturity securities	2,833,290		1,516,340		Proceeds from maturities and paydowns of held-to-maturity securities	1,769,795		646,212
Purchases of non-marketable and other equity securities	Purchases of non-marketable and other equity securities	(163,817)		(100,068)		Purchases of non-marketable and other equity securities	(20,626)		(12,177)
Proceeds from sales and distributions of capital of non-marketable and other equity securities	Proceeds from sales and distributions of capital of non-marketable and other equity securities	84,850		90,371		Proceeds from sales and distributions of capital of non-marketable and other equity securities	274,435		45,720
Net increase in loans	Net increase in loans	(5,193,146)		(2,685,151)		Net increase in loans	(2,538,473)		(2,796,409)
Purchases of premises and equipment	Purchases of premises and equipment	(66,003)		(33,871)		Purchases of premises and equipment	(13,851)		(25,088)
Acquisition of SVB Leerink, net of cash acquired		0		(102,328)

Net cash used for investing activities	Net cash used for investing activities	(15,588,371)		(6,564,776)		Net cash used for investing activities	(21,009,939)		(599,041)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Net increase in deposits	Net increase in deposits	23,015,213		10,213,974		Net increase in deposits	22,168,299		154,150
Net increase (decrease) in short-term borrowings		1,638		(612,514)
Proceeds from issuance of 3.125% Senior Notes		495,024		0
Net increase in short-term borrowings						Net increase in short-term borrowings	17,881		3,120,732
Proceeds from issuance of long-term debt						Proceeds from issuance of long-term debt	494,355		0
(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(16,363)		(32,002)		(Distributions to noncontrolling interests), net of contributions from noncontrolling interests	(12,854)		(328)
Net proceeds from the issuance of preferred stock						Net proceeds from the issuance of preferred stock	739,195		0
Payment of preferred stock dividend	Payment of preferred stock dividend	(12,557)		0		Payment of preferred stock dividend	(4,594)		(3,369)
Common stock repurchases	Common stock repurchases	(60,020)		(352,511)		Common stock repurchases	0		(60,020)
Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	18,138		12,742		Proceeds from issuance of common stock, ESPP and ESOP, net of restricted stock awards	973,831		(584)
Net cash provided by financing activities	Net cash provided by financing activities	23,441,073		9,229,689		Net cash provided by financing activities	24,376,113		3,210,581
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	8,905,993		3,374,657		Net increase in cash and cash equivalents	3,580,096		2,779,665
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	6,781,783		3,571,539		Cash and cash equivalents at beginning of period	17,674,763		6,781,783
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	15,687,776	$	6,946,196	Cash and cash equivalents at end of period	$	21,254,859	$	9,561,448
Supplemental disclosures:	Supplemental disclosures:					Supplemental disclosures:
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Interest	Interest	$	67,012	$	164,503	Interest	$	16,720	$	46,145
Income taxes	Income taxes	287,098		379,579		Income taxes	28,841		31,988
Noncash items during the period:	Noncash items during the period:					Noncash items during the period:
Changes in unrealized gains and losses on available-for-sale securities, net of tax	Changes in unrealized gains and losses on available-for-sale securities, net of tax	$	392,725	$	173,235	Changes in unrealized gains and losses on available-for-sale securities, net of tax	$	(594,453)	$	348,923
Distributions of stock from investments		11,574		7,770

Transfers from available-for-sale securities to held-to-maturity						Transfers from available-for-sale securities to held-to-maturity	2,867,891		0

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

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~~SVB FINANCIAL GROUP AND SUBSIDIARIES~~

~~NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)~~

1. Basis of Presentation

SVB Financial Group is a diversified financial services company, as well as a bank holding company and a financial holding company. SVB Financial was incorporated in the state of Delaware in March 1999. Through our various subsidiaries and divisions, we offer a diverse set 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 unaudited interim 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 (not including subsidiaries).

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, 2020~~March 31, 2021 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, ~~2019~~2020 (“~~2019~~2020 Form 10-K”).

Use of Estimates and Assumptions

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~~include: 1) measurements of fair value, the valuation of non-marketable and other equity securities and the valuation of equity warrant assets, 2) income taxes, and 3) the adequacy of the allowance for credit losses for loans and for unfunded credit commitments.

Principles of Consolidation and Presentation

Our unaudited interim consolidated financial statements include the accounts of SVB Financial Group and consolidated entities. We consolidate voting entities in which we have control through voting interests or entities through which we have a controlling financial interest in a variable interest entity (“VIE”). We determine whether we have a controlling financial interest in a VIE by determining if we have: (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses or (c) the right to receive the expected returns of the entity. Generally, we have significant variable interests if our commitments to a limited partnership investment represent a significant amount of the total commitments to the entity. We also evaluate the impact of related parties on our determination of variable interests in our consolidation conclusions. We consolidate VIEs in which we are the primary beneficiary based on a controlling financial interest. If we are not the primary beneficiary of a VIE, we record our pro-rata interests based on our ownership percentage.

VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity or (c) the right to receive the expected returns of the entity. We assess VIEs to determine if we are the primary beneficiary of a VIE. A primary beneficiary is defined as a variable interest holder that has a controlling financial interest. A controlling financial interest requires both: (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) obligation to absorb losses or receive benefits of a VIE that could potentially be significant to a VIE. Under this analysis, we also evaluate kick-out rights and other participating rights, which could provide us a controlling financial interest. The primary beneficiary of a VIE is required to consolidate the VIE.

We also evaluate fees paid to managers of our limited partnership investments. We exclude those fee arrangements that are not deemed to be variable interests from the analysis of our interests in our investments in VIEs and the determination of a primary beneficiary, if any. Fee arrangements based on terms that are customary and commensurate with the services provided are deemed not to be variable interests and are, therefore, excluded.

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All significant intercompany accounts and transactions with consolidated entities have been eliminated. We have not provided financial or other support during the periods presented to any VIE that we were not previously contractually required to provide.

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Reclassifications

Certain prior period amounts primarily related to presentation changes to our table summarizing the adoption of the Accounting Standard Update (ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments) ("ASU 2016-13" or "CECL") as mentioned belowactivity relating to our allowance for credit losses for loans, have been reclassified to conform to current period ~~presentations.~~presentation.

Summary of Significant Accounting Policies

~~With the exception of the updated accounting policies listed below, the~~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 ~~2019~~2020 Form 10-K.

~~Loans~~

Loans are reported at amortized cost which consists of the principal amount outstanding, net of unearned loan fees. Unearned loan fees reflect unamortized deferred loan origination and commitment fees net of unamortized deferred loan origination costs. In addition to cash loan fees, we often obtain equity warrant assets that give us an option to purchase a position in a client company's stock in consideration for providing credit facilities. The grant date fair values of these equity warrant assets are deemed to be loan fees and are deferred as unearned income and recognized as an adjustment of loan yield through loan interest income. The net amount of unearned loan fees is amortized into loan interest income over the contractual terms of the underlying loans and commitments using the constant effective yield method, adjusted for actual loan prepayment experience, or the straight-line method, as applicable.

~~Allowance for Credit Losses: Loans~~

The allowance for credit losses for loans considers credit risk and is adjusted by a provision for expected credit losses ("ECL") charged to expense and reduced by the charge-off of loan amounts, net of recoveries. Our allowance for credit losses is an estimate of expected losses inherent with the Company's existing loans at the balance sheet date. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain.

~~Portfolio Segments and Risk-Based Segments~~

The process to estimate the ECL on loans involves procedures to appropriately consider the unique characteristics of our six loan portfolio segments. Our six portfolio segments are determined by using the following risk dimensions: (i) underwriting methodology, (ii) industry niche and (iii) life stage. The 6 portfolio segments are further disaggregated into 11 classes of financing receivable, or risk-based segments, and represents the level at which credit risk is monitored. Credit quality is assessed and monitored by evaluating various attributes and the results of those evaluations are utilized in underwriting new loans and in our process to estimate ECL. Additionally, all of our loan and allowance for credit loss disclosures are presented at the risk-based segment level of disaggregation. For further information refer to Note 7 — “Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report. The following provides additional information regarding our six portfolio segments and the additional disaggregation of our 11 risk-based segments:

~~Global Fund Banking~~

The vast majority of our Global Fund Banking (formerly Private Equity/Venture Capital) portfolio segment consists of 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 certain private equity and venture capital firms. These facilities are generally governed by meaningful financial covenants oriented towards ensuring that the funds' remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are often secured by an assignment of the general partner's right to call capital from the fund's limited partner investors.

~~Investor Dependent - Accelerator (Early-Stage) and Growth (Mid-Stage and Later-Stage)~~

Investor Dependent loans are comprised of 2 portfolio segments: (i) Accelerator, which is comprised of Early-Stage clients, and (ii) Growth, which is comprised of Mid-Stage and Later-Stage clients. Our Investor Dependent loans are made primarily to technology and life science/healthcare companies. Investor Dependent loans typically have modest or negative cash flows and no established record of profitable operations. Repayment of these loans may be dependent

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upon receipt by borrowers of additional equity financing from venture capital firms or others, or in some cases, a successful sale to a third party or an IPO. Venture capital firms may provide financing selectively, at reduced amounts, or on less favorable terms, which may have an adverse effect on our borrowers' ability 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 that the company would need to be sold to repay the 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 non-performing or charged-off.

Our Accelerator, or Early-Stage, portfolio segment consists of pre-revenue, development-stage companies and companies that are in the early phases of commercialization, with revenues of up to $5 million. Our Growth portfolio segment is disaggregated into two risk-based segments for disclosure purposes; Mid-Stage and Later-Stage. Mid-Stage companies consist of growth-stage enterprises with revenues of between $5 million and $15 million or, in the case of biotechnology, pre-revenue clinical-stage companies. Later-Stage consists of companies with revenues of $15 million or more. This disaggregation of our Investor Dependent loans is based in part on the materially different historical loss rate we have experienced with each risk-based segment, with historical loss rates being the highest in the Early-Stage portfolio segment, and declining in the Mid-Stage and Later-Stage risk-based segments, as a function of the relatively higher enterprise value and asset coverage that is created as a company progresses through the various stages of development.

~~Cash Flow and Balance Sheet Dependent~~

Our Cash Flow and Balance Sheet Dependent portfolio segment is disaggregated into Cash Flow Dependent and Balance Sheet Dependent loans. Additionally, our Cash Flow Dependent loans are disaggregated into two risk-based segments for disclosure purposes: (i) Sponsor Led Buyout and (ii) Other. Our Cash Flow Dependent loans are made primarily to technology and life science/healthcare companies and require the borrower to maintain cash flow from operations that is sufficient to service all debt. Borrowers must demonstrate normalized cash flow in excess of all fixed charges associated with operating the business. Sponsor Led Buyout loans are typically used to assist a select group of experienced private equity sponsors with the acquisition of businesses, are larger in size, and repayment is generally dependent upon the cash flows of the acquired company. The acquired companies are typically established, later-stage businesses of scale and characterized by reasonable levels of leverage with loan structures that include meaningful financial covenants. The sponsor's equity contribution is often 50 percent or more of the acquisition price.

Balance Sheet Dependent loans are made primarily to technology and life science/healthcare companies, which include asset-based loans, and are structured to require constant current asset coverage (i.e., cash, cash equivalents, accounts receivable and, to a much lesser extent, inventory) in an amount that exceeds the outstanding debt. These loans are generally made to companies in our Growth and Corporate Finance practices. The repayment of these arrangements is dependent on the financial condition, and payment ability, of third parties with whom our clients do business. As a result of the adoption of CECL and in connection with the revised approach to portfolio disaggregation discussed above, certain loans that were previously considered to be Balance Sheet Dependent have been reclassified as Investor Dependent - Later-Stage.

~~Private Bank~~

Our Private Bank clients are primarily private equity/venture capital professionals and executives in the innovation companies they support. We offer a customized suite of private banking services, including mortgages, home equity lines of credit, restricted and private stock loans, capital call lines of credit, lines of credit against liquid assets and other secured and unsecured lending products, as well as cash and wealth management services. In addition, we provide owner occupied commercial mortgages to Private Bank clients and real estate secured loans to eligible employees through our EHOP.

~~Other~~

Our Other portfolio segment consists of two risk-based segments for disclosure purposes: (i) Premium Wine and (ii) Other. Our Premium Wine clients primarily consist of premium wine producers, vineyards and wine industry or hospitality related businesses across the Western United States, primarily in California's Napa Valley, Sonoma County and Central Coast regions, as well as the Pacific Northwest. Our Other risk-based segment primarily includes our community development loans made as part of our responsibilities under the Community Reinvestment Act.

~~SBA Loans~~

~~The U.S. Small Business Administration’s ("SBA") loans are included across all~~of our six portfolio segments and are separately disclosed as a single risk-based segment. We participated in the SBA's Paycheck Protection Program ("PPP") to support small businesses across the United States. Under this program, the SBA provides a guarantee to banks making unsecured term loans of up to $10 million for qualified small businesses, as defined by the SBA. We are no longer taking

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applications for this program and have begun accepting forgiveness applications from clients, whereby clients apply for loans to be forgiven (paid off) by the SBA. Loans funded under this program were primarily made to clients in the technology, life science/healthcare, premium wine and energy resource industries. While the recipients were located across the United States, more than half were made to clients that applied from the western United States.

We maintain a systematic process for the evaluation of individual loans and portfolio segments for inherent risk of estimated credit losses for loans. At the time of approval, each loan in our portfolio is assigned a credit risk rating. Credit risk ratings are assigned on a scale of 1 to 10, with 1 representing loans with a low risk of nonpayment, 9 representing loans with the highest risk of nonpayment and 10 representing loans which have been charged-off. The credit risk ratings for each loan are monitored and updated on an ongoing basis. This credit risk rating process includes, but is not limited to, consideration of such factors as payment status, the financial condition and operating performance of the borrower, borrower compliance with loan covenants, underlying collateral values and performance trends, the degree of access to additional capital, the presence of credit enhancements such as third party guarantees (where applicable), the degree to which the borrower is sensitive to external factors and the depth and experience of the borrower's management team. Our policies require a committee of senior management to review, at least quarterly, credit relationships with a credit risk rating of 5 through 9 that exceed specific dollar values.

~~Expected Credit Loss Measurement~~

The methodology for estimating the amount of ECL reported in the allowance for credit losses is the sum of two main components: (1) ECL assessed on a collective basis for pools of loans that share similar risk characteristics which includes a qualitative adjustment based on management’s assessment of the risks that may lead to a future loan loss experience different from our historical loan loss experience and (2) ECL assessed for individual loans that do not share similar risk characteristics with other loans. We do not estimate ECL on accrued interest receivable ("AIR") on loans as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled $109.3 million at September 30, 2020 and $119.1 million at December 31, 2019 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

While the evaluation process of our allowance for credit losses on loans uses historical and other objective information, the classification of loans and the estimate of the allowance for credit losses for loans rely on the judgment and experience of our management. A committee comprised of senior management evaluates the adequacy of the allowance for credit losses for loans, which includes review of loan portfolio segmentation, quantitative models, internal and external data inputs, economic forecasts, credit risk ratings and qualitative adjustments.

~~Loans That Share Similar Risk Characteristics with Other Loans~~

~~We derive an estimated ECL assumption from a non-discounted cash flow approach based on our portfolio segments discussed above. This approach incorporates a calculation of three predictive metrics: (1) probability of default ("PD"), (2) loss giv~~en default ("LGD") and (3) exposure at default ("EAD"), over the estimated life of the exposure. PD and LGD assumptions are developed based on quantitative models and inherent risk of credit loss, both of which involve significant judgment. Renewals and extensions within our control are not considered in the estimated contractual term of a loan. However, we include potential extensions if management has a reasonable expectation that we will execute a TDR with the borrower. The quantitative models are based on historical credit loss experience, adjusted for probability-weighted economic scenarios. These scenarios are used to support a reasonable and supportable forecast period of three years for all portfolio segments. To the extent the remaining contractual lives of loans in the portfolio extend beyond this three-year period, we revert to historical averages using an autoregressive model of mean reversion that will continue to gradually trend towards the mean historical loss over the remaining contractual lives, adjusted for prepayments. The macroeconomic scenarios are reviewed on a quarterly basis.

We also apply a qualitative factor adjustment to the results obtained through our quantitative ECL models to consider model imprecision, emerging risk assessments, trends and other subjective factors that may not be adequately represented in the quantitative ECL models. These adjustments reflect our assessment of the extent that current conditions and reasonable and supportable forecasts differ from conditions that existed during the period over which historical information was evaluated. These adjustments are aggregated to become our qualitative allocation. Based on our qualitative assessment estimate of changing risks in the lending environment, the qualitative allocation may vary significantly from period to period and may include, but is not limited to, consideration of the following factors:

•~~Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;~~

•Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

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•~~Changes in the nature and volume of the portfolio and in the terms of loans;~~

•~~Changes in the experience, ability and depth of lending management and other relevant staff;~~

•~~Changes in the volume and severity of past due loans, the volume of nonaccrual loans and the volume and severity of adversely classified or graded loans;~~

•~~Changes in the quality of our loan review system;~~

•~~Changes in the value of underlying collateral for collateral-dependent loans;~~

•~~The existence and effect of any concentrations of credit, and changes in the level of such concentrations;~~

•~~The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in our existing portfolio; and~~

•~~The effect of limitations of available data, model imprecision and recent macro-economic factors that may not be reflected in the forecast information.~~

~~Loans That Do Not Share Similar Risk Characteristics~~

We monitor our loan pools to ensure all assets therein continue to share similar risk characteristics with other financial assets inside the pool. Changes in credit risk, borrower circumstances or the recognition of write-offs may indicate that a loan's risk profile has changed, and the asset should be removed from its current pool. For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on the net realizable value, that is, the difference between the discounted value of the expected future cash flows and the amortized cost basis of the loan. When a loan is collateral-dependent and the repayment is expected to be provided substantially through the operation or sale of the collateral, the ECL is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral will be determined by the most recent appraisal, as adjusted to reflect a reasonable marketing period for the sale of the asset(s) and an estimate of reasonable selling expenses. Collateral-dependent loans will have independent appraisals completed and accepted at least annually.

~~Allowance for Credit Losses: Unfunded Credit Commitments~~

We maintain a separate allowance for credit losses for unfunded credit commitments which is included in other liabilities and the related ECL in our provision for credit losses. We estimate the amount of expected losses by using historical trends to calculate a probability of an unfunded credit commitment being funded and derive historical lifetime expected loss factors for each portfolio segment similar to our funded loan ECL. The collectively assessed ECL for unfunded credit commitments also includes the same qualitative allocations applied for our funded loan ECL. For unfunded credit commitments related to loans that do not share similar risk characteristics with other loans, where applicable, a separate estimate of ECL will be included in our total allowance for credit losses on unfunded credit commitments. Loan commitments that are determined to be unconditionally cancellable by the Company do not require an allowance for credit losses on unfunded commitments.

~~Investment Securities~~

~~Available-for-Sale Securities and the Allowance for Credit Losses on 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 and meeting our asset/liability management objectives. Unrealized gains and losses on available-for-sale securities, net of applicable taxes, are reported in accumulated other comprehensive income, which is a separate component of SVBFG's stockholders' equity, until realized.

We analyze available-for-sale securities for impairment related to credit losses each quarter. Market valuations represent the current fair value of a security at a specified point in time and incorporates the risk of timing of interest due and the return of principal over the contractual life of each security. Gains and losses on securities are realized when there is a sale of the security prior to maturity. A credit impairment is recognized through a valuation allowance against the security with an offset through earnings; the allowance is limited to the amount that fair value, calculated as the present value of expected future cash flow discounted at the security’s effective interest rate, is less than the amortized cost basis. We separate the amount of the impairment related to credit losses, if any, and the amount due to all other factors. The credit loss component is recognized in earnings and recorded as an allowance for credit losses for AFS securities.

~~Held-to-Maturity Securities and the Allowance for Credit Losses on Held-to-Maturity Securities~~

Debt securities purchased with the positive intent and ability to hold to maturity are classified as held-to-maturity securities and are recorded at amortized cost, net of any allowance for credit losses.

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We measure ECL on held-to-maturity securities on a collective basis by major security type and standard credit rating. Our held-to-maturity securities portfolio, with the exception of our municipal bond portfolio, are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. With respect to these securities, we consider the risk of credit loss to be zero and, therefore, we do not record an ECL. Our municipal bond portfolio primarily consists of highly rated bonds and currently carry ratings no lower than Aa3. The estimate of ECL on our municipal bond portfolio considers historical credit loss information and severity of loss in the event of default and leverages external data adjusted for current conditions. A reasonable and supportable forecast period of one year is applied to our municipal bond portfolio, with immediate reversion to long-term average historical loss rates when remaining contractual lives of securities exceed one year. We do not estimate ECL on AIR from held-to-maturity securities as AIR is reversed or written off when the full collection of the AIR related to a security becomes doubtful. AIR from held-to-maturity securities totaled $39.4 million at September 30, 2020 and $45.2 million at December 31, 2019 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

Expected credit loss on municipal bonds that do not share common risk characteristics with our collective portfolio are individually measured based on net realizable value, or the difference between the discounted value of the expected future cash flows and the recorded amortized cost basis of the security.

Adoption of New Accounting Standards

~~Financial Instruments - Credit Losses~~

In ~~June 2016,~~December 2019, the FASB issued ~~a new~~ Accounting ~~Standard~~Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU ~~2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments)~~2019-12), which amends the incurred loss impairment methodology in current GAAP with a methodology that reflects a current expected credit loss measurement to estimate the allowance for credit losses over the contractual lifeis part of the ~~financial assets (including loans, unfunded credit commitments~~FASB’s initiative to reduce cost and ~~HTM securities)~~complexity related to accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the general principles of ASC 740, Income Taxes, and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. While the CECL model does not apply to available-for-sale debt securities, ASU 2016-13 does require entities to record an allowance for credit losses when recognizing credit losses for available-for-sale securities, rather than reduce the amortized cost of the securities by direct write-offs, which allows for reversal of credit impairmentssimplifies income tax accounting in ~~future periods based on improvements in credit.~~ several areas.We adopted the guidance on January 1, ~~2020, using~~2021, on a modified retrospective ~~approach. We recognized the cumulative effect of initially applying CECL as an adjustment to the opening balance of retained earnings, net of tax.~~basis. The ~~comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.~~

We completed a comprehensive implementation process that included loss forecasting model development, evaluation of technical accounting topics, updates to our allowance for credit loss accounting policies, reporting processes and related internal controls, overall operational readiness for our adoption of CECL as well as parallel runs for CECL alongside our previous allowance process. We provided quarterly updates to senior management and to the Audit and Credit Committees of the Board of Directors throughout the implementation process. For additional details regarding our allowance for credit losses methodology, see Note 7 — “Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Based on our loan, unfunded credit commitment, and HTM security portfolios composition at December 31, 2019, and the then current economic environment, the cumulative effect of the changes to our consolidated balance sheets at January 1, 2020, for the adoption of CECL were as follows:

(Dollars in thousands) Balance at December 31, 2019 Adjustments Due to Adoption of ASC 326 Balance at
January 1, 2020
Assets:
Allowance for credit losses: loans $ 304,924 $ 25,464 $ 330,388
Allowance for credit losses: held-to-maturity securities 0 174 174
Deferred tax assets 28,433 13,415 41,848
Other liabilities:
Allowance for credit losses: unfunded credit commitments 67,656 22,826 90,482
Stockholders' equity:
Retained earnings, net of tax 4,575,601 (35,049) 4,540,552

In light of the economic disruptions and operational challenges related to the Coronavirus Disease 2019 pandemic (“COVID-19”), in March 2020 the federal banking agencies provided transitional relief to banking organizations with respect to the impact of CECL on regulatory capital (the “2020 CECL Transition Rule”). Under the 2020 CECL Transition Rule, banking

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organizations that adopt CECL during the 2020 calendar year, such as SVB Financial and the Bank, may delay the estimated impact of CECL on regulatory capital for two years, followed by a three-year period to phase out the aggregate capital benefit provided during the initial two-year delay. The rule prescribes a methodology for estimating the impact of differences in credit loss allowances reflected under CECL versus under the incurred loss methodology during the five-year transition period. We have elected to use the five-year transition option under the 2020 CECL Transition Rule. Refer to the "Capital Resources" section under Part I, Item 2 of this report for additional details.

Additionally, under the prior guidance, our loan portfolio and credit quality disclosures were disaggregated based on client market segments. Upon adoption of CECL, our technology (software/internet and hardware) and life science/healthcare market segments are disclosed by disaggregated risk-based segments determined by portfolio segments that align with their respective underwriting methodology and the level at which credit risk is now monitored by management. The primary underwriting method for our technology and life science/healthcare portfolios are classified as Investor Dependent - Accelerator (Early-Stage) and Growth (Mid-Stage and Later-Stage) and Cash Flow (Sponsor Led Buyout and Other) and Balance Sheet Dependent, as noted above, and prior period amounts were reclassified for comparability. There are no other material changes to our current market segments.

~~Other Adopted Accounting Pronouncements~~

In August 2018, the FASB issued a new Accounting Standard Update (ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement). The ASU primarily modifies certain disclosures with respect to Level 3 fair value measurements. We adopted the guidance on January 1, 2020. The adoption did not have an impact on our consolidated financial position or results of operations and did not have a material impact on ~~the disclosures in~~ our ~~notes to our unaudited interim consolidated~~ financial ~~statements.~~position, results of operations, cash flows or disclosures.

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2. Stockholders' Equity and EPS

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, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) Income Statement Location 2020 2019 2020 2019
Reclassification adjustment for (gains) losses on available-for-sale securities included in net income Gains on investment securities, net $ 0 $ 0 $ (61,165) $ 3,905
Related tax expense (benefit) Income tax expense 0 0 16,953 (1,087)
Reclassification adjustment for (gains) losses on cash flow hedges included in net income Net interest income (16,004) 2,713 (33,924) 3,224
Related tax expense (benefit) Income tax expense 4,436 (755) 9,403 (897)
Total reclassification adjustment for (gains) losses included in net income, net of tax $ (11,568) $ 1,958 $ (68,733) $ 5,145


		Three months ended March 31,
(Dollars in thousands)	Income Statement Location	2021		2020
Reclassification adjustment for gains on available-for-sale securities included in net income	Gains on investment securities, net	$	0	$	(61,165)
Related tax expense	Income tax expense	0		16,953
Reclassification adjustment for gains on cash flow hedges included in net income	Net interest income	(15,657)		(2,089)
Related tax expense	Income tax expense	4,352		579
Total reclassification adjustment for gains included in net income, net of tax		$	(11,305)	$	(45,722)

The table below summarizes the activity relating to net gains and losses on our cash flow hedges included in accumulated other comprehensive income for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020. Refer to Note 1110 — “Derivative Financial Instruments” ~~of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report~~ for additional information regarding the termination of our cash flow hedges during the quarter ended March 31, 2020. Over the next 12 months, we expect that approximately ~~$63.5~~$62.5 million in accumulated other comprehensive income ("AOCI") at ~~September 30, 2020,~~March 31, 2021, related to unrealized gains will be reclassified out of AOCI and recognized in net income.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Balance, beginning of period, net of tax	Balance, beginning of period, net of tax	$	152,556	$	13,828	$	(2,130)	$	0	Balance, beginning of period, net of tax	$	129,273	$	(2,130)
Net increase in fair value, net of tax	Net increase in fair value, net of tax	0		7,077		167,639		20,536		Net increase in fair value, net of tax	0		167,639
Net realized (gain) loss reclassified to net income, net of tax		(11,568)		1,958		(24,521)		2,327
Net realized gain reclassified to net income, net of tax										Net realized gain reclassified to net income, net of tax	(11,305)		(1,510)
Balance, end of period, net of tax	Balance, end of period, net of tax	$	140,988	$	22,863	$	140,988	$	22,863	Balance, end of period, net of tax	$	117,968	$	163,999

~~EPS~~

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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 issuable for stock options and restricted stock unit awards outstanding under our 2006 Equity Incentive Plan and our ESPP. Potentially dilutive common shares are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive.

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The following is a reconciliation of basic EPS to diluted EPS for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars and shares in thousands, except per share amounts)	(Dollars and shares in thousands, except per share amounts)	2020		2019		2020		2019		(Dollars and shares in thousands, except per share amounts)	2021		2020
Numerator:	Numerator:									Numerator:
Net income available to common stockholders	Net income available to common stockholders	$	441,713	$	267,281	$	802,901	$	874,000	Net income available to common stockholders	$	532,220	$	132,253
Denominator:	Denominator:									Denominator:
Weighted average common shares outstanding—basic	Weighted average common shares outstanding—basic	51,773		51,545		51,640		52,025		Weighted average common shares outstanding—basic	52,180		51,565
Weighted average effect of dilutive securities:	Weighted average effect of dilutive securities:									Weighted average effect of dilutive securities:
Stock options and ESPP	Stock options and ESPP	141		203		147		238		Stock options and ESPP	294		217
Restricted stock units and awards	Restricted stock units and awards	232		110		163		168		Restricted stock units and awards	602		162
Weighted average common shares outstanding—diluted	Weighted average common shares outstanding—diluted	52,146		51,858		51,950		52,431		Weighted average common shares outstanding—diluted	53,076		51,944
Earnings per common share:	Earnings per common share:									Earnings per common share:
Basic	Basic	$	8.53	$	5.19	$	15.55	$	16.80	Basic	$	10.20	$	2.56
Diluted	Diluted	8.47		5.15		15.46		16.67		Diluted	10.03		2.55

The following table summarizes the weighted-average common shares excluded from the diluted EPS calculation due to the antidilutive effect for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,		Nine months ended September 30,			Three months ended March 31,
(Shares in thousands)	(Shares in thousands)	2020	2019	2020	2019	(Shares in thousands)	2021	2020
Stock options	Stock options	319	213	269	154	Stock options	0	206
Restricted stock units	Restricted stock units	55	432	83	294	Restricted stock units	18	119
Total	Total	374	645	352	448	Total	18	325

Common Stock ~~Repurchase Program~~

On ~~October 24, 2019, our Board of Directors authorized a stock repurchase program that enables us~~March 22, 2021, to ~~repurchase up to $350 million~~support the continued growth of our ~~outstanding~~balance sheet, we issued and sold 2,000,000 shares of common stock at a price of $500.00 per share. We received net proceeds of $972.1 million after deducting underwriting discounts and commissions.

On April 14, 2021, the Company issued and sold additional shares of common stock. For the three months ended September 30, 2020, we did not repurchase any shares of our outstanding common stock under the stock repurchase program as the program remained on pause during the quarter end period. For the nine months ended September 30, 2020, we had repurchased 244,223 shares of our outstanding common stockRefer to Note 19—“Subsequent Events” for ~~$60.0 million under the stock repurchase program. The program expired on October 29, 2020.~~additional information.

Preferred Stock

On December 9, 2019, the Company issued 5.25% Non-Cumulative Perpetual Series A Preferred Stock (''Series A Preferred Stock''). The public offering consists of 14,000,000 depositary shares, each representing ana 1/40th ownership interest in ~~350,000~~a shares of the Series A ~~Preferred Stock~~preferred stock with $0.001 par value and liquidation preference of $1,000 per share, or $25 per depositary share. ~~All preferred shares were issued in the form of depositary shares, with each depositary share representing a 1/40th ownership interest in a share of the preferred stock.~~ The Series A Preferred Stock ~~has no stated maturity and~~ is ~~not~~redeemable at the Company’s option, subject to ~~any sinking fund~~all applicable regulatory approvals, on or ~~other obligation~~after February 15, 2025.

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On February 2, 2021, the ~~Company.~~Company issued 4.10% Non-Cumulative Perpetual Series B Preferred Stock (''Series B Preferred Stock''). The public offering consists of 750,000 depositary shares, each representing a 1/100th ownership interest in shares of Series B Preferred Stock with $0.001 par value and liquidation preferences of $100,000 per share, or $1,000 per depositary share. Dividends, ~~are~~if approved and declared by the Board of Directors, ~~and, if declared,~~ are payable quarterly, in arrears, at a rate per annum equal to ~~5.25 percent. The Series A Preferred Stock is redeemable at~~(i) 4.10 percent from the ~~Company’s option, in whole or in part, on or after~~original issue date to, but excluding, February 15, ~~2025. Prior to~~2031 and (ii) for the February 15, ~~2025,~~2031 dividend date and during each subsequent ten year period, the ~~Series A Preferred Stock is redeemable at~~ten-year treasury rate (calculated three business days prior to each reset date as the ~~Company’s option, in whole and not in part, following any change in laws or regulations that would not allow the Company to treat the full liquidation value~~five day average of the ~~Series A Preferred Stock as Tier 1 capital~~yields on actively traded U.S. treasury securities adjusted to constant maturity, for ~~purposes of the capital adequacy guidelines of the Board of Governors of the Federal Reserve System ("the Federal Reserve"). The redemption amount is computed at the per share liquidation preference~~ten-year maturities) plus ~~any declared but unpaid dividends. Redemptions are subject to certain regulatory provisions, including approval of the Federal Reserve.~~3.064 percent.

As of ~~September 30, 2020,~~March 31, 2021, there were 350,000 shares issued and outstanding of Series A Preferred ~~Shares,~~Stock and 7,500 shares issued and outstanding of Series B Preferred Stock, which had a carrying value of $340.1 million and $739.2 million, respectively, and liquidation ~~preference~~preferences of $350.0 ~~million.~~

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The following table summarizes our preferred stock at ~~September 30, 2020:~~March 31, 2021:


Series	Series	Description	Amount outstanding (in millions)		Carrying value (in millions)		Shares issued and outstanding	Par Value		Ownership interest per depository share	Liquidation preference per depository share		2020 dividends paid per depository share		Series	Description	Amount outstanding (in millions)		Carrying value (in millions)		Shares issued and outstanding	Par Value		Ownership interest per depositary share	Liquidation preference per depositary share		2021 dividends paid per depositary share
Series A	Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340.1	350,000	$	0.001	1/40th	$	25	$	0.90	Series A	5.250% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	$	350	$	340.1	350,000	$	0.001	1/40th	$	25	$	0.33
Series B															Series B	4.100% Fixed-Rate Non-Cumulative Perpetual Preferred Stock	750		739.2		7,500	0.001		1/100th	1,000		0

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~~Consolidated Statement of Changes in Equity~~

~~The following table summarizes the changes in our consolidated equity for the three months ended September 30, 2020 and 2019:~~

Preferred Stock Common Stock Additional
Paid-in Capital Retained Earnings Accumulated
Other
Comprehensive Income Total SVBFG
Stockholders’ Equity Noncontrolling Interests Total Equity
(Dollars in thousands) Shares Amount
Balance at June 30, 2019 $ 0 51,561,719 $ 52 $ 1,421,565 $ 4,051,194 $ 81,232 $ 5,554,043 $ 152,132 $ 5,706,175
Common stock issued under employee benefit plans, net of restricted stock cancellations — 19,674 — 1,383 — — 1,383 — 1,383
Net income — — — — 267,281 — 267,281 14,437 281,718
Capital calls and distributions, net — — — — — — — (8,780) (8,780)
Net change in unrealized gains and losses on AFS securities, net of tax — — — — — 50,638 50,638 — 50,638
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax — — — — — (270) (270) — (270)
Foreign currency translation adjustments, net of tax — — — — — (4,482) (4,482) — (4,482)
Net change in unrealized gains and losses on cash flow hedges, net of tax — — 9,035 9,035 9,035
Share-based compensation, net — — — 18,782 — — 18,782 — 18,782
Common stock repurchases — (25,562) — — (5,730) — (5,730) — (5,730)
Balance at September 30, 2019 $ 0 51,555,831 $ 52 $ 1,441,730 $ 4,312,745 $ 136,153 $ 5,890,680 $ 157,789 $ 6,048,469
Balance at June 30, 2020 $ 340,138 51,740,714 $ 52 $ 1,522,728 $ 4,841,720 $ 614,735 $ 7,319,373 $ 148,940 $ 7,468,313
Common stock issued under employee benefit plans, net of restricted stock cancellations — 47,258 — 4,797 — — 4,797 — 4,797
Net income — — — — 446,307 — 446,307 27,748 474,055
Capital calls and distributions, net — — — — — — — (2,243) (2,243)
Net change in unrealized gains and losses on AFS securities, net of tax — — — — — 10,018 10,018 — 10,018
Amortization of unrealized holding gains on securities transferred from AFS to HTM, net of tax — — — — — (266) (266) — (266)
Foreign currency translation adjustments, net of tax — — — — — 7,475 7,475 — 7,475
Net change in unrealized gains and losses on cash flow hedges, net of tax — — — — — (11,568) (11,568) — (11,568)
Share-based compensation, net — — — 21,408 — — 21,408 — 21,408
Preferred stock dividends — — — — (4,594) — (4,594) — (4,594)
Other, net — — — (15) — — (15) — (15)
Balance at September 30, 2020 $ 340,138 51,787,972 $ 52 $ 1,548,918 $ 5,283,433 $ 620,394 $ 7,792,935 $ 174,445 $ 7,967,380

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3. Share-Based Compensation

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ 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)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Share-based compensation expense	Share-based compensation expense	$	21,408	$	18,782	$	60,733	$	50,550	Share-based compensation expense	$	26,691	$	19,171
Income tax benefit related to share-based compensation expense	Income tax benefit related to share-based compensation expense	(5,560)		(4,883)		(14,726)		(12,028)		Income tax benefit related to share-based compensation expense	(6,278)		(4,440)

Unrecognized Compensation Expense

As of ~~September 30, 2020,~~March 31, 2021, unrecognized share-based compensation expense was as follows:


(Dollars in thousands)	(Dollars in thousands)	Unrecognized Expense		Weighted Average Expected Recognition Period - in Years	(Dollars in thousands)	Unrecognized Expense		Weighted Average Expected Recognition Period - in Years
Stock options	Stock options	$	15,541	2.60	Stock options	$	12,059	2.26
Restricted stock units and awards	Restricted stock units and awards	125,321		2.68	Restricted stock units and awards	127,759		2.65
Total unrecognized share-based compensation expense	Total unrecognized share-based compensation expense	$	140,862		Total unrecognized share-based compensation expense	$	139,818

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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, 2020:~~March 31, 2021:

Options Weighted
Average
Exercise Price Weighted Average Remaining Contractual Life - in Years Aggregate
Intrinsic Value
of In-The-
Money
Options
Outstanding at December 31, 2019 625,407 $ 169.33
Granted 123,301 186.83
Exercised (130,330) 99.72
Forfeited (15,460) 231.75
Expired (1,030) 71.11
Outstanding at September 30, 2020 601,888 186.55 4.08 $ 38,405,994
Vested and expected to vest at September 30, 2020 578,024 185.26 4.00 $ 37,654,264
Exercisable at September 30, 2020 317,896 152.61 2.59 $ 30,524,026


	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life - in Years	Aggregate Intrinsic Value of In-The- Money Options
Outstanding at December 31, 2020	559,001	$	191.29

Exercised	(83,516)	136.14
Forfeited	(604)	254.35

Outstanding at March 31, 2021	474,881	200.91		4.17	$	139,021,519
Vested and expected to vest at March 31, 2021	457,920	200.35		4.12	134,311,416
Exercisable at March 31, 2021	193,079	166.23		2.58	63,219,304

The aggregate intrinsic value of outstanding options shown in the table above represents the pre-tax intrinsic value based on our closing stock price of ~~$240.62~~$493.66 as of ~~September 30, 2020.~~March 31, 2021. The total intrinsic value of options exercised during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 was ~~$5.6 million and $17.2~~$28.7 million, compared to ~~$1.6 million and $16.0~~$8.3 million for the comparable ~~2019 periods, respectively.~~2020 period.

The table below provides information for restricted stock units and awards under the 2006 Equity Incentive Plan for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:


		Shares	Weighted Average Grant Date Fair Value			Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2019		847,972	$	236.54
Nonvested at December 31, 2020					Nonvested at December 31, 2020	995,049	$	227.12
Granted	Granted	426,071	190.79		Granted	57,323	499.90
Vested	Vested	(247,370)	207.82		Vested	(73,716)	256.76
Forfeited	Forfeited	(49,272)	226.32		Forfeited	(17,579)	263.28
Nonvested at September 30, 2020		977,401	224.38
Nonvested at March 31, 2021					Nonvested at March 31, 2021	961,077	240.46

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4. Variable Interest Entities

Our involvement with VIEs includes our investments in venture capital and private equity funds, debt funds, private and public portfolio companies and qualified affordable housing projects.

The following table presents the carrying amounts and classification of significant variable interests in consolidated and unconsolidated VIEs as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

(Dollars in thousands) Consolidated VIEs Unconsolidated VIEs Maximum Exposure to Loss in Unconsolidated VIEs
September 30, 2020:
Assets:
Cash and cash equivalents $ 14,082 $ 0 $ —
Non-marketable and other equity securities (1) 318,356 771,329 771,329
Accrued interest receivable and other assets 853 0 —
Total assets $ 333,291 $ 771,329 $ 771,329
Liabilities:
Other liabilities (1) 1,500 332,031 —
Total liabilities $ 1,500 $ 332,031 $ —
December 31, 2019:
Assets:
Cash and cash equivalents $ 7,629 $ 0 $ —
Non-marketable and other equity securities (1) 270,057 689,360 689,360
Accrued interest receivable and other assets 1,117 0 —
Total assets $ 278,803 $ 689,360 $ 689,360
Liabilities:
Other liabilities (1) 2,854 302,031 —
Total liabilities $ 2,854 $ 302,031 $ —

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(Dollars in thousands)	Consolidated VIEs		Unconsolidated VIEs		Maximum Exposure to Loss in Unconsolidated VIEs
March 31, 2021:
Assets:
Cash and cash equivalents	$	11,392	$	0	$	—
Non-marketable and other equity securities (1)	450,537		867,187		867,187
Accrued interest receivable and other assets	13,094		0		—
Total assets	$	475,023	$	867,187	$	867,187
Liabilities:
Other liabilities (1)	11,041		372,516		—
Total liabilities	$	11,041	$	372,516	$	—
December 31, 2020:
Assets:
Cash and cash equivalents	$	14,859	$	0	$	—
Non-marketable and other equity securities (1)	422,049		858,617		858,617
Accrued interest receivable and other assets	937		0		—
Total assets	$	437,845	$	858,617	$	858,617
Liabilities:
Other liabilities (1)	1,410		370,208		—
Total liabilities	$	1,410	$	370,208	$	—

(1) Included in our unconsolidated non-marketable and other equity securities portfolio at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 are investments in qualified affordable housing projects of ~~$561.0~~$617.0 million and ~~$458.5~~$616.2 million, respectively, and related other liabilities consisting of unfunded commitments of ~~$332.0~~$372.5 million and ~~$302.0~~$370.2 million, respectively.

Non-marketable and other equity securities

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD Silicon Valley Bank Co., Ltd. (the Bank's joint venture bank in China (“SPD-SVB”)), debt funds, private and public portfolio companies and qualified affordable housing projects. Many of these are investments held by SVB Financial in third-party funds in which we do not have controlling or significant variable interests. These investments represent our unconsolidated VIEs in the table above. Our non-marketable and other equity securities portfolio also includes investments from SVB Capital. SVB Capital is the funds management business of SVB Financial Group, which focuses primarily on venture capital investments. The SVB Capital family of funds is comprised of direct venture funds that invest in companies and funds of funds that invest in other venture capital funds. We have a controlling and significant variable interest in 43 of these SVB Capital funds and consolidate these funds for financial reporting purposes.

All investments are generally nonredeemable, and distributions are expected to be received through the liquidation of the underlying investments throughout the life of the investment fund. Investments may only be sold or transferred subject to the notice and approval provisions of the underlying investment agreement. Subject to applicable regulatory requirements, including the Volcker Rule, we also make commitments to invest in venture capital and private equity funds. For additional details, see Note 1514 — “Off-Balance Sheet Arrangements, Guarantees and Other ~~Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)~~Commitments.” ~~under Part I, Item 1 of this report.~~

The Bank also has variable interests in low income housing tax credit funds, in connection with fulfilling its responsibilities under the ~~CRA,~~Community Reinvestment Act ("CRA"), that are designed to generate a return primarily through the realization of federal tax credits. These investments are typically limited partnerships in which the general partner, other than the Bank, holds the power over

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significant activities of the VIE; therefore, these investments are not consolidated. For additional information on our investments in qualified affordable housing projects, see Note 6 — “Investment ~~Securities" of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.~~Securities."

As of ~~September 30, 2020,~~March 31, 2021, our exposure to loss with respect to the consolidated VIEs is limited to our net assets of ~~$331.8~~$464.0 million and our exposure to loss for our unconsolidated VIEs is equal to our investment in these assets of ~~$771.3~~$867.2 million.

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5. Cash and Cash Equivalents

The following table details our cash and cash equivalents at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Cash and due from banks (1)	Cash and due from banks (1)	$	15,237,612	$	6,492,443	Cash and due from banks (1)	$	20,966,421	$	17,447,916
Securities purchased under agreements to resell (2)	Securities purchased under agreements to resell (2)	450,164		289,340		Securities purchased under agreements to resell (2)	288,438		226,847

Total cash and cash equivalents	Total cash and cash equivalents	$	15,687,776	$	6,781,783	Total cash and cash equivalents	$	21,254,859	$	17,674,763

(1)At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019, $11.9~~2020, $16.6 billionand ~~$3.7~~$13.7 billion, 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 institutionswere ~~$2.7~~$3.4 billionand ~~$2.1~~$3.0 billion, respectively.

(2)At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fairvalues of ~~$459.1~~$294.5 millionand ~~$295.3~~$232.2 million, respectively. ~~None~~NaN of these securities were sold or repledged as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

6. Investment Securities

Our investment securities portfolio consists of: (i) an available-for-sale securities portfolio and a held-to-maturity securities portfolio, both of which represent interest-earning investment securities, and (ii) a non-marketable and other equity securities portfolio, which primarily represents investments managed as part of our funds management business, investments in qualified affordable housing projects, as well as public equity securities held as a result of equity warrant assets exercised.

Available-for-Sale Securities

The major components of our available-for-sale investment securities portfolio at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 are as follows:


		September 30, 2020									March 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value		(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value
Available-for-sale securities, at fair value:	Available-for-sale securities, at fair value:									Available-for-sale securities, at fair value:
U.S. Treasury securities	U.S. Treasury securities	$	4,251,342	$	295,952	$	0	$	4,547,294	U.S. Treasury securities	$	4,244,175	$	195,444	$	(1,223)	$	4,438,396
U.S. agency debentures	U.S. agency debentures	150,000		2,526		0		152,526		U.S. agency debentures	230,375		1,155		(5,435)		226,095
Foreign government debt securities	Foreign government debt securities	23,452		0		(3)		23,449		Foreign government debt securities	23,454		0		(4)		23,450
Residential mortgage-backed securities:	Residential mortgage-backed securities:									Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	9,569,724		200,691		(102)		9,770,313		Agency-issued mortgage-backed securities	12,663,089		85,210		(233,388)		12,514,911
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	7,277,652		45,809		(7,488)		7,315,973		Agency-issued collateralized mortgage obligations—fixed rate	7,471,566		19,567		(234,507)		7,256,626

Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	3,965,370		130,384		(985)		4,094,769		Agency-issued commercial mortgage-backed securities	1,526,502		24,283		(23,792)		1,526,993

Total available-for-sale securities	Total available-for-sale securities	$	25,237,540	$	675,362	$	(8,578)	$	25,904,324	Total available-for-sale securities	$	26,159,161	$	325,659	$	(498,349)	$	25,986,471

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		December 31, 2019									December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value		(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Carrying Value
Available-for-sale securities, at fair value:	Available-for-sale securities, at fair value:									Available-for-sale securities, at fair value:
U.S. Treasury securities	U.S. Treasury securities	$	6,815,874	$	82,267	$	(4,131)	$	6,894,010	U.S. Treasury securities	$	4,197,858	$	271,977	$	(107)	$	4,469,728
U.S. agency debentures	U.S. agency debentures	100,000		0		(453)		99,547		U.S. agency debentures	233,727		4,165		(585)		237,307
Foreign government debt securities	Foreign government debt securities	9,037		1		0		9,038		Foreign government debt securities	24,491		1		0		24,492
Residential mortgage-backed securities:	Residential mortgage-backed securities:									Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	4,109,372		39,438		(19)		4,148,791		Agency-issued mortgage-backed securities	13,271,482		232,850		(651)		13,503,681
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	1,520,414		17,929		0		1,538,343		Agency-issued collateralized mortgage obligations—fixed rate	8,076,832		40,010		(10,278)		8,106,564

Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	1,339,651		1,078		(15,539)		1,325,190		Agency-issued commercial mortgage-backed securities	4,440,506		133,527		(3,367)		4,570,666

Total available-for-sale securities	Total available-for-sale securities	$	13,894,348	$	140,713	$	(20,142)	$	14,014,919	Total available-for-sale securities	$	30,244,896	$	682,530	$	(14,988)	$	30,912,438

The following table summarizes sale activity of available-for-sale securities during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ as recorded in the line item “Gains on investment securities, net," a component of noninterest income:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Sales proceeds $ 0 $ 0 $ 2,654,212 $ 2,189,087
Net realized gains and losses:
Gross realized gains 0 0 61,165 1,250
Gross realized losses 0 0 0 (5,155)
Net realized gains (losses) $ 0 $ 0 $ 61,165 $ (3,905)

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	Three months ended March 31,
(Dollars in thousands)	2021		2020
Sales proceeds	$	0	$	2,654,212
Net realized gains and losses:
Gross realized gains	0		61,165
Gross realized losses	0		0
Net realized gains	$	0	$	61,165

The following tables summarize our available-for-sale securities in an unrealized loss position for which an allowance for credit losses has not been recorded and summarized into categories of less than 12 months, or 12 months or longer, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

September 30, 2020
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
Available-for-sale securities:
Foreign government debt securities $ 23,449 $ (3) $ 0 $ 0 $ 23,449 $ (3)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities 179,050 (102) 0 0 179,050 (102)
Agency-issued collateralized mortgage obligations—fixed rate 1,772,593 (7,488) 0 0 1,772,593 (7,488)
Agency-issued commercial mortgage-backed securities 518,223 (985) 0 0 518,223 (985)
Total available-for-sale securities (1) $ 2,493,315 $ (8,578) $ 0 $ 0 $ 2,493,315 $ (8,578)


	March 31, 2021
	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
Available-for-sale securities:
U.S. Treasury securities	$	301,607	$	(1,223)	$	0	$	0	$	301,607	$	(1,223)
U.S. agency debentures	128,228		(5,435)		0		0		128,228		(5,435)
Foreign government debt securities	23,450		(4)		0		0		23,450		(4)
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	9,608,598		(233,388)		0		0		9,608,598		(233,388)
Agency-issued collateralized mortgage obligations—fixed rate	5,248,844		(234,507)		0		0		5,248,844		(234,507)

Agency-issued commercial mortgage-backed securities	751,263		(23,792)		0		0		751,263		(23,792)
Total available-for-sale securities (1)	$	16,061,990	$	(498,349)	$	0	$	0	$	16,061,990	$	(498,349)

(1)As of ~~September 30, 2020,~~March 31, 2021, we identified a total of 57400 investments that were in unrealized loss positions with 0 ~~investment~~investments in an unrealized loss position for a period of time greater than 12 months. Based on our analysis of the securities in an unrealized loss position as of ~~September 30, 2020,~~March 31, 2021, the decline in value is unrelated to credit loss and is related to changes in market interest rates since purchase and therefore changes in value for securities are included in other comprehensive income. Market valuations and credit loss analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis. As of ~~September 30, 2020,~~March 31, 2021, we do not intend to sell any of our securities in an unrealized loss position prior to recovery of our amortized 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 amortized cost basis. None of the investments in our available-for-sale securities portfolio were past due as of ~~September 30, 2020.~~March 31, 2021.

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		December 31, 2019													December 31, 2020
		Less than 12 months				12 months or longer (1)				Total					Less than 12 months				12 months or longer (1)				Total
(Dollars in thousands)	(Dollars in thousands)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		(Dollars in thousands)	Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses		Fair Value of Investments		Unrealized Losses
Available-for-sale securities:	Available-for-sale securities:													Available-for-sale securities:
U.S. Treasury securities	U.S. Treasury securities	$	971,572	$	(3,996)	$	449,850	$	(135)	$	1,421,422	$	(4,131)	U.S. Treasury securities	$	59,929	$	(107)	$	0	$	0	$	59,929	$	(107)
U.S. agency debentures	U.S. agency debentures	99,547		(453)		0		0		99,547		(453)		U.S. agency debentures	133,143		(585)		0		0		133,143		(585)

Residential mortgage-backed securities:	Residential mortgage-backed securities:													Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	4,014		(19)		0		0		4,014		(19)		Agency-issued mortgage-backed securities	903,767		(651)		0		0		903,767		(651)

Agency-issued collateralized mortgage obligations—fixed rate														Agency-issued collateralized mortgage obligations—fixed rate	2,199,207		(10,278)		0		0		2,199,207		(10,278)

Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	1,027,232		(15,539)		0		0		1,027,232		(15,539)		Agency-issued commercial mortgage-backed securities	989,389		(3,367)		0		0		989,389		(3,367)

Total available-for-sale securities (1)	Total available-for-sale securities (1)	$	2,102,365	$	(20,007)	$	449,850	$	(135)	$	2,552,215	$	(20,142)	Total available-for-sale securities (1)	$	4,285,435	$	(14,988)	$	0	$	0	$	4,285,435	$	(14,988)

(1)As of December 31, ~~2019,~~2020, we identified a total of 5893 investments that were in unrealized loss positions, of which 120 investments ~~totaling $0.4 billion with unrealized losses of $0.1 million have been~~are in an unrealized loss position for a period of time greater than 12 months. None of the investments in our available-for-sale securities portfolio were past due as of December 31, 2020.

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The following table summarizes the fixed income securities, carried at fair value, classified as available-for-sale as of ~~September 30, 2020~~March 31, 2021 by the remaining contractual principal maturities. For U.S. Treasury securities, U.S. agency debentures and foreign government debt securities, the expected maturity is the actual contractual maturity of the notes. 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 interest rate environments.


		September 30, 2020											March 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Total		One Year or Less		After One Year to Five Years		After Five Years to Ten Years		After Ten Years		(Dollars in thousands)	Total		One Year or Less		After One Year to Five Years		After Five Years to Ten Years		After Ten Years
U.S. Treasury securities	U.S. Treasury securities	$	4,547,294	$	60,221	$	2,989,181	$	1,497,892	$	0	U.S. Treasury securities	$	4,438,396	$	40,481	$	3,844,128	$	553,787	$	0
U.S. agency debentures	U.S. agency debentures	152,526		0		0		152,526		0		U.S. agency debentures	226,095		0		0		226,095		0
Foreign government debt securities	Foreign government debt securities	23,449		23,449		0		0		0		Foreign government debt securities	23,450		23,450		0		0		0
Residential mortgage-backed securities:	Residential mortgage-backed securities:											Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	9,770,313		0		0		0		9,770,313		Agency-issued mortgage-backed securities	12,514,911		0		0		0		12,514,911
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	7,315,973		0		0		0		7,315,973		Agency-issued collateralized mortgage obligations—fixed rate	7,256,626		0		0		0		7,256,626

Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	4,094,769		0		0		1,431,547		2,663,222		Agency-issued commercial mortgage-backed securities	1,526,993		0		0		1,526,993		0
Total	Total	$	25,904,324	$	83,670	$	2,989,181	$	3,081,965	$	19,749,508	Total	$	25,986,471	$	63,931	$	3,844,128	$	2,306,875	$	19,771,537

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Held-to-Maturity Securities

During the first quarter of 2021, we re-designated certain securities from the classification of “available-for-sale” to “held-to-maturity." The securities re-designated consisted of agency-issued commercial mortgage-backed securities with a total carrying value of $2.9 billion at March 31, 2021. At the time of re-designation the securities included $8.7 million of pretax unrealized gains 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 an allowance for credit losses, are not reported on the financial statements.

The components of our held-to-maturity investment securities portfolio at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 are as follows:


		September 30, 2020											March 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Allowance for Credit Losses (2)		(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-maturity securities, at cost:	Held-to-maturity securities, at cost:											Held-to-maturity securities, at cost:
U.S. agency debentures (1)	U.S. agency debentures (1)	$	402,346	$	19,496	$	0	$	421,842	$	0	U.S. agency debentures (1)	$	404,571	$	11,618	$	0	$	416,189	$	0
Residential mortgage-backed securities:	Residential mortgage-backed securities:											Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	5,363,541		266,455		(62)		5,629,934		0		Agency-issued mortgage-backed securities	23,525,681		184,691		(296,061)		23,414,311		0
Agency-issued collateralized mortgage obligations —fixed rate	Agency-issued collateralized mortgage obligations —fixed rate	1,909,965		26,601		(437)		1,936,129		0		Agency-issued collateralized mortgage obligations —fixed rate	2,425,024		23,807		(5,593)		2,443,238		0
Agency-issued collateralized mortgage obligations—variable rate	Agency-issued collateralized mortgage obligations—variable rate	147,714		362		0		148,076		0		Agency-issued collateralized mortgage obligations—variable rate	128,370		667		0		129,037		0
Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	2,229,811		154,061		0		2,383,872		0		Agency-issued commercial mortgage-backed securities	10,075,165		81,135		(85,801)		10,070,499		0
Municipal bonds and notes	Municipal bonds and notes	2,929,137		171,591		(8,118)		3,092,610		291		Municipal bonds and notes	4,555,237		150,919		(43,935)		4,662,221		531
Corporate bonds												Corporate bonds	51,684		0		(444)		51,240		581
Total held-to-maturity securities	Total held-to-maturity securities	$	12,982,514	$	638,566	$	(8,617)	$	13,612,463	$	291	Total held-to-maturity securities	$	41,165,732	$	452,837	$	(431,834)	$	41,186,735	$	1,112

(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.

~~(2) Refer to Note 1 - "Basis~~

Table of ~~Presentation" of the "Notes to Interim Consolidated Financial Statements (unaudited)" under Part i, Item 1 of this report for more information on our credit loss methodology.~~Contents

December 31, 2019
(Dollars in thousands) Amortized
Cost Unrealized
Gains Unrealized
Losses Fair Value
Held-to-maturity securities, at amortized cost:
U.S. agency debentures (1) $ 518,728 $ 6,640 $ (668) $ 524,700
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities 6,992,009 142,209 (2,066) 7,132,152
Agency-issued collateralized mortgage obligations—fixed rate 1,608,032 592 (8,502) 1,600,122
Agency-issued collateralized mortgage obligations—variable rate 178,611 94 (259) 178,446
Agency-issued commercial mortgage-backed securities 2,759,615 56,914 (4,508) 2,812,021
Municipal bonds and notes 1,785,951 83,314 (1,434) 1,867,831
Total held-to-maturity securities $ 13,842,946 $ 289,763 $ (17,437) $ 14,115,272


	December 31, 2020
(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-maturity securities, at amortized cost:
U.S. agency debentures (1)	$	402,265	$	18,961	$	0	$	421,226	$	0
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	7,739,763		240,121		(2,211)		7,977,673		0
Agency-issued collateralized mortgage obligations—fixed rate	1,735,451		23,227		(296)		1,758,382		0
Agency-issued collateralized mortgage obligations—variable rate	136,913		317		0		137,230		0
Agency-issued commercial mortgage-backed securities	2,942,959		123,846		0		3,066,805		0
Municipal bonds and notes	3,635,194		220,866		(505)		3,855,555		392
Total held-to-maturity securities	$	16,592,545	$	627,338	$	(3,012)	$	17,216,871	$	392

(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.

Allowance for Credit Losses for HTM Securities

The following table summarizes the activity relating to our allowance for credit losses for HTM securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020:


Three months ended September 30,		Beginning Balance June 30, 2020			Provision for Credit Losses			Ending Balance September 30, 2020
Three months ended March 31, 2021						Three months ended March 31, 2021				Beginning Balance December 31, 2020				Provision for Credit Losses				Ending Balance March 31, 2021
(Dollars in thousands)	(Dollars in thousands)			Beginning Balance June 30, 2020		Provision for Credit Losses						Ending Balance September 30, 2020				(Dollars in thousands)
Municipal bonds and notes	Municipal bonds and notes				Municipal bonds and notes			$	392					$	139					$	531
Corporate bonds										Corporate bonds			0				581					581
Total allowance for credit losses	Total allowance for credit losses	$	222				$	69			$		291		Total allowance for credit losses			$	392				$	720	$	1,112


Three months ended March 31, 2020	Beginning Balance December 31, 2019		Day One Impact of Adopting ASC 326		Provision for Credit Losses		Ending Balance March 31, 2020
(Dollars in thousands)
Municipal bonds and notes	$	0	$	174	$	56	$	230
Total allowance for credit losses	$	0	$	174	$	56	$	230

~~Table of Contents~~Accrued interest receivable ("AIR") from HTM securities totaled

Nine months ended September 30, Beginning Balance December 31, 2019 Day One Impact of adopting ASC 326 Provision for Credit Losses Ending Balance September 30, 2020
(Dollars in thousands)
Municipal bonds and notes $ 0 $ 174 $ 117 $ 291
Total allowance for credit losses $ 0 $ 174 $ 117 $ 291
$96.1 million at March 31, 2021 and $55.0 million at December 31, 2020 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

Credit Quality Indicators

On a quarterly basis, management monitors the credit quality for HTM securities through the use of standard credit ratings. The following table summarizes our amortized cost of HTM securities aggregated by credit quality indicator at ~~September 30,~~

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March 31, 2021 and December 31, 2020:


~~(Dollars in thousands)~~	~~September 30, 2020~~
~~Municipal bonds and notes:~~
~~Aaa~~	$	~~1,732,450~~
~~Aa1~~	~~935,970~~
~~Aa2~~	~~259,767~~
~~Aa3~~	~~950~~
~~Total~~	$	~~2,929,137~~


(Dollars in thousands)	March 31, 2021		December 31, 2020
Municipal bonds and notes:
Aaa	$	2,519,992	$	2,070,311
Aa1	1,329,903		1,144,500
Aa2	568,423		420,383
Aa3	124,724		0
A1	12,195		0
Total municipal bonds and notes	$	4,555,237	$	3,635,194
Corporate bonds:


Aa2	$	27,583	$	0
Aa3	24,101		0
Total corporate bonds	$	51,684	$	0

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The following table summarizes the remaining contractual principal maturities on fixed income investment securities classified as held-to-maturity as of ~~September 30, 2020.~~March 31, 2021. For U.S. agency debentures, 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 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 interest rate environments.


		September 30, 2020																					March 31, 2021
		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)	(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		(Dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. agency debentures	U.S. agency debentures	$	402,346	$	421,842	$	4,675	$	4,720	$	148,559	$	153,787	$	249,112	$	263,335	$	0	$	0	U.S. agency debentures	$	404,571	$	416,189	$	4,066	$	4,117	$	141,117	$	145,321	$	259,388	$	266,751	$	0	$	0
Residential mortgage-backed securities:	Residential mortgage-backed securities:																					Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	5,363,541		5,629,934		7,113		7,432		28,722		29,739		588,606		609,151		4,739,100		4,983,612		Agency-issued mortgage-backed securities	23,525,681		23,414,311		6,319		6,564		11,663		11,983		494,951		510,743		23,012,748		22,885,021
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	1,909,965		1,936,129		0		0		0		0		551,213		563,127		1,358,752		1,373,002		Agency-issued collateralized mortgage obligations—fixed rate	2,425,024		2,443,238		0		0		5,356		5,482		447,781		458,314		1,971,887		1,979,442
Agency-issued collateralized mortgage obligations—variable rate	Agency-issued collateralized mortgage obligations—variable rate	147,714		148,076		0		0		0		0		0		0		147,714		148,076		Agency-issued collateralized mortgage obligations—variable rate	128,370		129,037		0		0		0		0		0		0		128,370		129,037
Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	2,229,811		2,383,872		0		0		0		0		102,428		120,085		2,127,383		2,263,787		Agency-issued commercial mortgage-backed securities	10,075,165		10,070,499		0		0		0		0		536,203		542,183		9,538,962		9,528,316
Municipal bonds and notes	Municipal bonds and notes	2,929,137		3,092,610		44,340		44,839		134,029		140,191		540,308		587,096		2,210,460		2,320,484		Municipal bonds and notes	4,555,237		4,662,221		48,536		49,209		130,482		136,075		756,078		795,055		3,620,141		3,681,882
Corporate bonds																						Corporate bonds	51,684		51,240		0		0		0		0		51,684		51,240		0		0
Total	Total	$	12,982,514	$	13,612,463	$	56,128	$	56,991	$	311,310	$	323,717	$	2,031,667	$	2,142,794	$	10,583,409	$	11,088,961	Total	$	41,165,732	$	41,186,735	$	58,921	$	59,890	$	288,618	$	298,861	$	2,546,085	$	2,624,286	$	38,272,108	$	38,203,698

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Non-marketable and Other Equity Securities

The major components of our non-marketable and other equity securities portfolio at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 are as follows:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Non-marketable and other equity securities:	Non-marketable and other equity securities:					Non-marketable and other equity securities:
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):					Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments (1)	Consolidated venture capital and private equity fund investments (1)	$	74,293	$	87,180	Consolidated venture capital and private equity fund investments (1)	$	96,016	$	88,937
Unconsolidated venture capital and private equity fund investments (2)	Unconsolidated venture capital and private equity fund investments (2)	152,367		178,217		Unconsolidated venture capital and private equity fund investments (2)	178,407		184,886
Other investments without a readily determinable fair value (3)	Other investments without a readily determinable fair value (3)	56,008		55,255		Other investments without a readily determinable fair value (3)	200,367		60,975
Other equity securities in public companies (fair value accounting) (4)	Other equity securities in public companies (fair value accounting) (4)	229,297		59,200		Other equity securities in public companies (fair value accounting) (4)	160,810		280,804
Non-marketable securities (equity method accounting) (5):	Non-marketable securities (equity method accounting) (5):					Non-marketable securities (equity method accounting) (5):
Venture capital and private equity fund investments	Venture capital and private equity fund investments	274,721		215,367		Venture capital and private equity fund investments	394,349		362,192
Debt funds	Debt funds	6,918		7,271		Debt funds	5,813		5,444
Other investments	Other investments	192,776		152,863		Other investments	205,002		202,809
Investments in qualified affordable housing projects, net (6)	Investments in qualified affordable housing projects, net (6)	560,983		458,476		Investments in qualified affordable housing projects, net (6)	616,997		616,188
Total non-marketable and other equity securities	Total non-marketable and other equity securities	$	1,547,363	$	1,213,829	Total non-marketable and other equity securities	$	1,857,761	$	1,802,235

(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, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (fair value accounting):


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %		(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %
Strategic Investors Fund, LP	Strategic Investors Fund, LP	$	4,646	12.6	%	$	5,729	12.6	%	Strategic Investors Fund, LP	$	5,165	12.6	%	$	4,850	12.6	%
Capital Preferred Return Fund, LP	Capital Preferred Return Fund, LP	39,246		20.0		45,341		20.0		Capital Preferred Return Fund, LP	48,572		20.0		49,574		20.0
Growth Partners, LP	Growth Partners, LP	30,267		33.0		35,976		33.0		Growth Partners, LP	42,279		33.0		34,513		33.0
CP I, LP		134		10.7		134		10.7
Total consolidated venture capital and private equity fund investments	Total consolidated venture capital and private equity fund investments	$	74,293			$	87,180			Total consolidated venture capital and private equity fund investments	$	96,016			$	88,937

(2)The carrying value represents investments in ~~179~~161 and ~~205~~162 funds (primarily venture capital funds) at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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. We carry our unconsolidated venture capital and private equity fund investments at fair value based on the fund investments' net asset values per share as obtained from the general partners of the investments. For each fund investment, 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 31thst for our ~~September 30~~March 31thst consolidated financial statements, adjusted for any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

(3)These investments include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted.

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The following table shows the changes to the carrying amount of other investments without a readily determinable fair value for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:


(Dollars in thousands)	(Dollars in thousands)	Nine months ended September 30, 2020		Cumulative Adjustments		(Dollars in thousands)	Three months ended March 31, 2021		Cumulative Adjustments
Measurement alternative:	Measurement alternative:					Measurement alternative:
Carrying value at September 30, 2020		$	56,008
Carrying value at March 31, 2021						Carrying value at March 31, 2021	$	200,367
Carrying value adjustments:	Carrying value adjustments:					Carrying value adjustments:
Impairment	Impairment	$	(487)	$	(947)	Impairment	$	0	$	(947)
Upward changes for observable prices	Upward changes for observable prices	1,438		2,236		Upward changes for observable prices	13,762		17,121
Downward changes for observable prices	Downward changes for observable prices	(6,210)		(8,918)		Downward changes for observable prices	(456)		(4,327)

(4)Investments classified as other equity securities (fair value accounting) represent shares held in public companies as a result of exercising public equity warrant assets and direct equity investments in public companies held by our consolidated funds. Changes in equity securities measured at fair value are recognized through net income. ~~This amount includes total unrealized gains of $108.4 million in BigCommerce Holdings, Inc. ("BigCommerce") which is currently subject to a lock-up agreement.~~

(5)The following table shows the carrying value and our ownership percentage of each investment at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (equity method accounting):


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %		(Dollars in thousands)	Amount		Ownership %		Amount		Ownership %
Venture capital and private equity fund investments:	Venture capital and private equity fund investments:									Venture capital and private equity fund investments:
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	$	3,519	8.6	%	$	3,612	8.6	%	Strategic Investors Fund II, LP	$	4,624	8.6	%	$	3,705	8.6	%
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	14,984		5.9		15,668		5.9		Strategic Investors Fund III, LP	21,281		5.9		16,110		5.9
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	25,451		5.0		27,064		5.0		Strategic Investors Fund IV, LP	29,681		5.0		25,169		5.0
Strategic Investors Fund V funds	Strategic Investors Fund V funds	52,575		Various		46,830		Various		Strategic Investors Fund V funds	60,992		Various		67,052		Various
CP II, LP (i)	CP II, LP (i)	4,773		5.1		5,907		5.1		CP II, LP (i)	8,954		5.1		7,887		5.1
Other venture capital and private equity fund investments	Other venture capital and private equity fund investments	173,419		Various		116,286		Various		Other venture capital and private equity fund investments	268,817		Various		242,269		Various
Total venture capital and private equity fund investments	Total venture capital and private equity fund investments	$	274,721			$	215,367			Total venture capital and private equity fund investments	$	394,349			$	362,192
Debt funds:	Debt funds:									Debt funds:
Gold Hill Capital 2008, LP (ii)	Gold Hill Capital 2008, LP (ii)	$	5,317	15.5	%	$	5,525	15.5	%	Gold Hill Capital 2008, LP (ii)	$	4,380	15.5	%	$	3,941	15.5	%
Other debt funds	Other debt funds	1,601		Various		1,746		Various		Other debt funds	1,433		Various		1,503		Various
Total debt funds	Total debt funds	$	6,918			$	7,271			Total debt funds	$	5,813			$	5,444
Other investments:	Other investments:									Other investments:
SPD Silicon Valley Bank Co., Ltd.	SPD Silicon Valley Bank Co., Ltd.	$	107,969	50.0	%	$	74,190	50.0	%	SPD Silicon Valley Bank Co., Ltd.	$	111,838	50.0	%	$	115,232	50.0	%
Other investments	Other investments	84,807		Various		78,673		Various		Other investments	93,164		Various		87,577		Various
Total other investments	Total other investments	$	192,776			$	152,863			Total other investments	$	205,002			$	202,809

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

(ii)Our ownership includes 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.

(6)The following table presents the balances of our investments in qualified affordable housing projects and related unfunded commitments included as a component of “Other liabilities” on our consolidated balance sheets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Investments in qualified affordable housing projects, net	Investments in qualified affordable housing projects, net	$	560,983	$	458,476	Investments in qualified affordable housing projects, net	$	616,997	$	616,188
Other liabilities	Other liabilities	332,031		302,031		Other liabilities	372,516		370,208

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The following table presents other information relating to our investments in qualified affordable housing projects for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Tax credits and other tax benefits recognized	Tax credits and other tax benefits recognized	$	15,290	$	8,705	$	46,772	$	28,950	Tax credits and other tax benefits recognized	$	28,184	$	11,759
Amortization expense included in provision for income taxes (i)	Amortization expense included in provision for income taxes (i)	10,222		6,042		32,081		20,436		Amortization expense included in provision for income taxes (i)	16,105		11,471

(i)All investments are amortized using the proportional amortization method and amortization expense is included in the provision for income taxes.

The following table presents the net gains and losses on non-marketable and other equity securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ as recorded in the line item “Gains on investment securities, net," a component of noninterest income:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Net gains (losses) on non-marketable and other equity securities:
Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments $ 8,778 $ 4,555 $ 13,168 $ 22,674
Unconsolidated venture capital and private equity fund investments 16,400 8,530 15,187 26,688
Other investments without a readily determinable fair value 217 (471) (3,619) 4,701
Other equity securities in public companies (fair value accounting) 112,615 (11,979) 118,099 106
Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments 51,334 29,049 69,681 54,189
Debt funds 15 187 (253) 1,529
Other investments 478 (22) (2,668) 593
Total net gains on non-marketable and other equity securities $ 189,837 $ 29,849 $ 209,595 $ 110,480
Less: realized net gains on sales of non-marketable and other equity securities 5,262 277 5,477 12,637
Net gains on non-marketable and other equity securities still held $ 184,575 $ 29,572 $ 204,118 $ 97,843


	Three months ended March 31,
(Dollars in thousands)	2021		2020
Net gains (losses) on non-marketable and other equity securities:
Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments	$	17,211	$	3,113
Unconsolidated venture capital and private equity fund investments	12,510		1,252
Other investments without a readily determinable fair value	13,769		(2,943)
Other equity securities in public companies (fair value accounting)	77,561		(7,504)
Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments	45,385		(8,046)
Debt funds	414		(362)
Other investments	228		(620)
Total net gains (losses) on non-marketable and other equity securities	$	167,078	$	(15,110)


Less: realized net gains (losses) on sales of non-marketable and other equity securities	69,775		(49)
Net gains (losses) on non-marketable and other equity securities still held	$	97,303	$	(15,061)

7. Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments

We serve a variety of commercial clients in the technology, life science/healthcare, private equity/venture capital and premium wine industries. Our technology clients generally tend to be in the industries of hardware (such as semiconductors, communications, data, storage and electronics), software/internet (such as infrastructure software, applications, software services, digital content and advertising technology) and energy and resource innovation (“ERI”). Our life science/healthcare clients primarily tend to be in the industries of biotechnology, medical devices, healthcare information technology and healthcare services. Loans to our technology, life science/healthcare and ERI clients are reported under the Investor Dependent, Cash Flow Dependent and Balance Sheet Dependent risk-based segments below. Loans made to private equity/venture capital firm clients typically enable them to fund investments prior to their receipt of funds from capital calls and are reported under the Global Fund Banking ~~(previously Private Equity/Venture Capital)~~ portfolio segment below. 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.

~~Table of Contents~~

We also provide community development loans made as part of our responsibilities under the CRA. These loans are included within “construction loans” below and are primarily secured by real estate. Additionally, beginning in April 2020, we accepted applications under the PPP administered by the ~~SBA~~U.S. Small Business Association ("SBA") under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and originated loans to qualified small businesses.

~~CECL Adoption~~

~~On January 1,~~ Disbursement of PPP funds under the CARES Act originally expired on August 8, 2020, ~~we adopted~~however, on December 27, 2020, the ~~new credit loss guidance, CECL,~~Economic Aid to Hard-Hit Small Businesses, Nonprofits, and ~~all related amendments. Our loan portfolio~~Venues Act (the "Economic Aid Act") was ~~pooled into 6 portfolio segments that share similar risk characteristics and represent the level at~~enacted, which ~~we developed our systematic methodology~~allowed borrowers to ~~determine our allowance~~apply for credit losses. Further, our portfolio segments were disaggregated and grouped into 10 classes of financing receivable that represent the level at which we monitor and assess credit risk, which we referPPP loans up to March 31, 2021, as "risk-based segments". As such, our funded loans and credit quality disclosures below are presented at the risk-based segment level of disaggregation. As of September 30, 2020, we have 6 portfolio segments and 11 risk-based segments reflectivewell as allowing for certain PPP borrowers to apply for second draw loans. The disbursement phase of the ~~funding~~PPP was further extended to May 31, 2021 pursuant to the PPP Extension Act of SBA loans under the PPP. The comparative information below has been reclassified to conform to current period risk-based segment presentations. However, the financial results continue to be reported under the accounting standards in effect for those periods. Certain prior period credit quality disclosures related to impaired loans and our individually and collectively evaluated loan portfolio have been superseded with the current guidance and have not been included below, please refer to Note 10 - “Loans, Allowance for Loan Losses and Allowance for Unfunded Credit Commitments" under Part II, Item 82021.

Table of ~~our 2019 Form 10-K for additional prior period information.~~Contents

Refer to Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional information regarding the adoption of CECL.

The composition of loans at amortized cost basis broken out by risk-based segment at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is presented in the following table:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Global fund banking	Global fund banking	$	19,584,518	$	17,696,794	Global fund banking	$	27,306,926	$	25,543,198
Investor dependent:	Investor dependent:					Investor dependent:
Early stage	Early stage	1,470,941		1,624,221		Early stage	1,523,208		1,485,866
Mid stage	Mid stage	1,626,794		1,047,398		Mid stage	1,588,185		1,564,870
Later stage	Later stage	2,013,934		1,663,576		Later stage	2,055,676		1,921,082
Total investor dependent	Total investor dependent	5,111,669		4,335,195		Total investor dependent	5,167,069		4,971,818
Cash flow dependent:	Cash flow dependent:					Cash flow dependent:
Sponsor led buyout	Sponsor led buyout	2,062,243		2,185,497		Sponsor led buyout	1,984,567		1,989,173
Other	Other	2,600,157		2,238,741		Other	2,959,609		2,945,360
Total cash flow dependent	Total cash flow dependent	4,662,400		4,424,238		Total cash flow dependent	4,944,176		4,934,533
Private bank (1) (5)		4,424,899		3,492,269
Private bank (4)						Private bank (4)	5,063,827		4,901,056
Balance sheet dependent	Balance sheet dependent	1,698,220		1,286,153		Balance sheet dependent	2,501,524		2,191,023
Premium wine (1) (5)		1,081,963		1,062,264
Other (1) (5)		48,206		867,723
Premium wine (4)						Premium wine (4)	1,040,223		1,052,643
Other (4)						Other (4)	45,688		27,687
SBA loans	SBA loans	1,802,016		0		SBA loans	1,605,733		1,559,530
Total loans (2) (3) (4)		$	38,413,891	$	33,164,636
Total loans (1) (2) (3)						Total loans (1) (2) (3)	$	47,675,166	$	45,181,488
Allowance for credit losses	Allowance for credit losses	(512,958)		(304,924)		Allowance for credit losses	(391,751)		(447,765)
Net loans	Net loans	$	37,900,933	$	32,859,712	Net loans	$	47,283,415	$	44,733,723

(1) As of September 30, 2020, as a result of enhanced portfolio characteristic definitions for our risk-based segments, loans in the amount of $411.2 million and $50.3 million that would have been reported in Other under historical definitions, are now being reported in our Private Bank and Premium Wine risk-based segments, respectively.

~~(2)~~ Total loans at amortized cost is net of unearned income of~~$222~~ $248 million and ~~$163~~$226 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

~~(3)~~(2) Included within our total loan portfolio are credit card loans of~~$329~~ $461 million and ~~$395~~$400 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

~~(4)~~(3) Included within our total loan portfolio are construction loans of $108 million and $118 million ~~and $183 million~~ at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

~~(5)~~(4) Of our total loans, the table below includes those secured by real estate at amortized cost at ~~September 30, 2020~~March 31, 2021 and

~~Table of Contents~~

December 31, ~~2019~~2020 and were comprised of the following:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Real estate secured loans:	Real estate secured loans:					Real estate secured loans:
Private bank:	Private bank:					Private bank:
Loans for personal residence	Loans for personal residence	$	3,179,148	$	2,829,880	Loans for personal residence	$	3,538,077	$	3,392,237
Loans to eligible employees	Loans to eligible employees	449,551		401,396		Loans to eligible employees	458,736		481,098
Home equity lines of credit	Home equity lines of credit	50,929		55,461		Home equity lines of credit	45,033		42,449
Other	Other	137,320		38,880		Other	145,995		142,895
Total private bank loans secured by real estate	Total private bank loans secured by real estate	$	3,816,948	$	3,325,617	Total private bank loans secured by real estate	$	4,187,841	$	4,058,679
Premium wine	Premium wine	831,182		820,730		Premium wine	824,463		824,008
Other	Other	60,501		0		Other	50,584		56,882
Total real estate secured loans	Total real estate secured loans	$	4,708,631	$	4,146,347	Total real estate secured loans	$	5,062,888	$	4,939,569

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;

Table of Contents

these translate to an internal rating of “Criticized.” All of our nonaccrual loans are risk-rated 8 or 9 and are classified ~~under~~with the ~~nonperforming category.~~internal rating of "Nonperforming." Loans rated 10 are charged-off and are not included as part of our loan portfolio balance. We review our credit quality indicators on a quarterly basis for performance and appropriateness of risk ratings as part of our evaluation process for our allowance for credit losses for loans.

~~Table of Contents~~

The following table summarizes the credit quality indicators, broken out by risk-based segment, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

(Dollars in thousands) Pass Criticized Nonperforming (Nonaccrual) Total
September 30, 2020:
Global fund banking $ 19,576,723 $ 7,782 $ 13 $ 19,584,518
Investor dependent:
Early stage 1,296,789 154,420 19,732 1,470,941
Mid stage 1,449,525 165,642 11,627 1,626,794
Later stage 1,795,229 180,130 38,575 2,013,934
Total investor dependent 4,541,543 500,192 69,934 5,111,669
Cash flow dependent:
Sponsor led buyout 1,827,943 212,708 21,592 2,062,243
Other 2,314,453 279,419 6,285 2,600,157
Total cash flow dependent 4,142,396 492,127 27,877 4,662,400
Private bank 4,395,531 23,936 5,432 4,424,899
Balance sheet dependent 1,565,597 131,947 676 1,698,220
Premium wine 941,511 138,777 1,675 1,081,963
Other 48,041 61 104 48,206
SBA loans 1,663,383 138,633 0 1,802,016
Total loans (1) $ 36,874,725 $ 1,433,455 $ 105,711 $ 38,413,891
December 31, 2019:
Global fund banking $ 17,708,550 $ 4,247 $ 0 $ 17,712,797
Investor dependent
Early stage 1,436,022 206,310 11,093 1,653,425
Mid stage 924,002 125,451 17,330 1,066,783
Later stage 1,490,561 201,819 6,296 1,698,676
Total investor dependent 3,850,585 533,580 34,719 4,418,884
Cash flow dependent
Sponsor led buyout 2,039,847 118,588 44,585 2,203,020
Other 2,141,766 93,400 17,681 2,252,847
Total cash flow dependent 4,181,613 211,988 62,266 4,455,867
Private bank 3,472,138 11,601 5,480 3,489,219
Balance sheet dependent 1,231,961 65,343 0 1,297,304
Premium wine 1,026,973 36,335 204 1,063,512
Other 890,059 62 0 890,121
Total loans (1) $ 32,361,879 $ 863,156 $ 102,669 $ 33,327,704

~~(1)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~


(Dollars in thousands)	Pass		Criticized		Nonperforming (Nonaccrual)		Total
March 31, 2021:
Global fund banking	$	27,292,491	$	14,417	$	18	$	27,306,926
Investor dependent:
Early stage	1,303,581		211,861		7,766		1,523,208
Mid stage	1,492,157		96,028		0		1,588,185
Later stage	1,922,215		106,058		27,403		2,055,676
Total investor dependent	4,717,953		413,947		35,169		5,167,069
Cash flow dependent:
Sponsor led buyout	1,844,415		100,304		39,848		1,984,567
Other	2,680,114		273,867		5,628		2,959,609
Total cash flow dependent	4,524,529		374,171		45,476		4,944,176
Private bank	5,024,735		30,647		8,445		5,063,827
Balance sheet dependent	2,373,152		128,372		0		2,501,524
Premium wine	903,583		135,501		1,139		1,040,223
Other	45,653		35		0		45,688
SBA loans	1,466,605		139,128		0		1,605,733
Total loans	$	46,348,701	$	1,236,218	$	90,247	$	47,675,166
December 31, 2020:
Global fund banking	$	25,537,354	$	5,833	$	11	$	25,543,198
Investor dependent
Early stage	1,288,897		178,629		18,340		1,485,866
Mid stage	1,420,788		140,026		4,056		1,564,870
Later stage	1,744,662		147,763		28,657		1,921,082
Total investor dependent	4,454,347		466,418		51,053		4,971,818
Cash flow dependent
Sponsor led buyout	1,795,972		153,205		39,996		1,989,173
Other	2,677,371		261,985		6,004		2,945,360
Total cash flow dependent	4,473,343		415,190		46,000		4,934,533
Private bank	4,862,176		32,728		6,152		4,901,056
Balance sheet dependent	2,104,645		86,378		0		2,191,023
Premium wine	910,397		141,248		998		1,052,643
Other	27,594		63		30		27,687
SBA loans	1,455,990		103,540		0		1,559,530
Total loans	$	43,825,846	$	1,251,398	$	104,244	$	45,181,488

3325

Table of Contents

The following ~~table summarizes~~tables summarize the credit quality indicators, broken out by risk-based segment and vintage year, as of ~~September 30,~~March 31, 2021 and December 31, 2020:


		Term Loans by Origination Year																			Term Loans by Origination Year
(Dollars in thousands)		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
March 31, 2021 (Dollars in thousands)																				March 31, 2021 (Dollars in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Unallocated (1)		Total
Global fund banking:	Global fund banking:																			Global fund banking:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	271,164	$	156,714	$	70,084	$	36,907	$	2,552	$	11,588	$	19,022,934	$	4,780	$	19,576,723	Pass	$	267,498	$	263,243	$	44,632	$	59,520	$	21,416	$	7,773	$	26,627,712	$	697	$	0	$	27,292,491
Criticized	Criticized	8		0		0		0		0		0		994		6,780		7,782		Criticized	3		0		0		0		0		0		10,347		4,067		0		14,417
Nonperforming	Nonperforming	0		8		0		0		0		0		5		0		13		Nonperforming	0		0		8		0		0		0		10		0		0		18
Total global fund banking	Total global fund banking	$	271,172	$	156,722	$	70,084	$	36,907	$	2,552	$	11,588	$	19,023,933	$	11,560	$	19,584,518	Total global fund banking	$	267,501	$	263,243	$	44,640	$	59,520	$	21,416	$	7,773	$	26,638,069	$	4,764	$	0	$	27,306,926
Investor dependent:	Investor dependent:																			Investor dependent:
Early stage:	Early stage:																			Early stage:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	589,224	$	452,550	$	140,448	$	37,911	$	2,430	$	390	$	73,199	$	637	$	1,296,789	Pass	$	197,867	$	584,281	$	296,776	$	95,495	$	16,114	$	1,122	$	111,366	$	560	$	0	$	1,303,581
Criticized	Criticized	20,744		68,381		36,841		10,878		2,530		363		13,750		933		154,420		Criticized	5,120		82,312		68,639		23,896		6,174		1,792		23,928		0		0		211,861
Nonperforming	Nonperforming	2,466		8,870		6,956		463		0		4		973		0		19,732		Nonperforming	211		454		3,037		3,124		0		0		940		0		0		7,766
Total early stage	Total early stage	$	612,434	$	529,801	$	184,245	$	49,252	$	4,960	$	757	$	87,922	$	1,570	$	1,470,941	Total early stage	$	203,198	$	667,047	$	368,452	$	122,515	$	22,288	$	2,914	$	136,234	$	560	$	0	$	1,523,208
Mid stage:	Mid stage:																			Mid stage:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	726,708	$	344,458	$	209,372	$	39,603	$	7,510	$	2,725	$	116,655	$	2,494	$	1,449,525	Pass	$	253,799	$	708,740	$	253,486	$	129,298	$	19,909	$	2,754	$	121,676	$	2,495	$	0	$	1,492,157
Criticized	Criticized	59,623		43,386		32,668		12,725		1,966		0		15,274		0		165,642		Criticized	4,510		43,314		18,015		10,773		3,745		4,998		10,673		0		0		96,028
Nonperforming	Nonperforming	2		2,558		5,405		3,519		0		0		143		0		11,627		Nonperforming	0		0		0		0		0		0		0		0		0		0
Total mid stage	Total mid stage	$	786,333	$	390,402	$	247,445	$	55,847	$	9,476	$	2,725	$	132,072	$	2,494	$	1,626,794	Total mid stage	$	258,309	$	752,054	$	271,501	$	140,071	$	23,654	$	7,752	$	132,349	$	2,495	$	0	$	1,588,185
Later stage:	Later stage:																			Later stage:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	790,085	$	473,800	$	178,768	$	60,009	$	562	$	9,110	$	277,911	$	4,984	$	1,795,229	Pass	$	262,703	$	942,741	$	338,516	$	165,935	$	14,016	$	5,593	$	187,725	$	4,986	$	0	$	1,922,215
Criticized	Criticized	17,108		72,028		30,280		2,666		0		8,708		49,340		0		180,130		Criticized	0		35,439		27,753		8,571		0		892		33,403		0		0		106,058
Nonperforming	Nonperforming	17,506		1,886		12,434		0		0		0		6,749		0		38,575		Nonperforming	0		15,997		1,676		3,280		0		0		6,450		0		0		27,403
Total later stage	Total later stage	$	824,699	$	547,714	$	221,482	$	62,675	$	562	$	17,818	$	334,000	$	4,984	$	2,013,934	Total later stage	$	262,703	$	994,177	$	367,945	$	177,786	$	14,016	$	6,485	$	227,578	$	4,986	$	0	$	2,055,676
Total investor dependent	Total investor dependent	$	2,223,466	$	1,467,917	$	653,172	$	167,774	$	14,998	$	21,300	$	553,994	$	9,048	$	5,111,669	Total investor dependent	$	724,210	$	2,413,278	$	1,007,898	$	440,372	$	59,958	$	17,151	$	496,161	$	8,041	$	0	$	5,167,069
Cash flow dependent:	Cash flow dependent:																			Cash flow dependent:
Sponsor led buyout:	Sponsor led buyout:																			Sponsor led buyout:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	534,579	$	601,938	$	326,172	$	226,326	$	50,267	$	0	$	88,661	$	0	$	1,827,943	Pass	$	310,562	$	643,432	$	406,962	$	242,303	$	147,618	$	36,269	$	57,269	$	0	$	0	$	1,844,415
Criticized	Criticized	43,221		70,050		53,043		21,400		12,238		0		12,756		0		212,708		Criticized	0		551		30,534		39,028		10,515		13,129		6,547		0		0		100,304
Nonperforming	Nonperforming	33		11,907		0		7,200		0		0		2,452		0		21,592		Nonperforming	0		32		11,838		15,998		7,158		0		4,822		0		0		39,848
Total sponsor led buyout	Total sponsor led buyout	$	577,833	$	683,895	$	379,215	$	254,926	$	62,505	$	0	$	103,869	$	0	$	2,062,243	Total sponsor led buyout	$	310,562	$	644,015	$	449,334	$	297,329	$	165,291	$	49,398	$	68,638	$	0	$	0	$	1,984,567
Other	Other																			Other
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	465,243	$	574,231	$	189,501	$	116,918	$	39,627	$	346	$	928,587	$	0	$	2,314,453	Pass	$	454,225	$	791,748	$	343,877	$	158,992	$	111,051	$	1,946	$	818,275	$	0	$	0	$	2,680,114
Criticized		9,589		55,118		74,916		956		416		0		138,424		0		279,419
Nonperforming		0		0		3,845		0		0		0		2,440		0		6,285
Total other		$	474,832	$	629,349	$	268,262	$	117,874	$	40,043	$	346	$	1,069,451	$	0	$	2,600,157
Total cash flow dependent		$	1,052,665	$	1,313,244	$	647,477	$	372,800	$	102,548	$	346	$	1,173,320	$	0	$	4,662,400
Private bank:
Risk rating:
Pass		$	1,191,024	$	1,212,000	$	420,440	$	397,847	$	342,594	$	463,198	$	368,107	$	321	$	4,395,531
Criticized		1,456		5,549		3,040		1,201		5,101		6,802		787		0		23,936
Nonperforming		0		520		2,475		0		0		1,702		735		0		5,432
Total private bank		$	1,192,480	$	1,218,069	$	425,955	$	399,048	$	347,695	$	471,702	$	369,629	$	321	$	4,424,899
Balance sheet dependent:
Risk rating:

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Table of Contents


Criticized																				Criticized	1		16,065		60,474		67,074		3,957		0		126,296		0		0		273,867
Nonperforming																				Nonperforming	0		0		0		4,418		0		0		1,210		0		0		5,628
Total other																				Total other	$	454,226	$	807,813	$	404,351	$	230,484	$	115,008	$	1,946	$	945,781	$	0	$	0	$	2,959,609
Total cash flow dependent																				Total cash flow dependent	$	764,788	$	1,451,828	$	853,685	$	527,813	$	280,299	$	51,344	$	1,014,419	$	0	$	0	$	4,944,176
Private bank:																				Private bank:
Risk rating:																				Risk rating:
Pass																				Pass	$	412,282	$	1,821,765	$	1,064,886	$	364,246	$	319,602	$	646,021	$	395,302	$	631	$	0	$	5,024,735
Criticized																				Criticized	0		3,179		8,398		3,513		3,211		9,442		2,904		0		0		30,647
Nonperforming																				Nonperforming	0		0		0		6,079		0		1,657		709		0		0		8,445
Total private bank																				Total private bank	$	412,282	$	1,824,944	$	1,073,284	$	373,838	$	322,813	$	657,120	$	398,915	$	631	$	0	$	5,063,827
Balance sheet dependent:																				Balance sheet dependent:
Risk rating:																				Risk rating:
Pass	Pass	$	374,768	$	202,185	$	237,529	$	31,838	$	0	$	0	$	717,771	$	1,506	$	1,565,597	Pass	$	263,600	$	832,914	$	155,424	$	181,241	$	33,922	$	0	$	904,547	$	1,504	$	0	$	2,373,152
Criticized	Criticized	60,238		8,877		5,559		610		0		0		56,663		0		131,947		Criticized	69		58,519		42,391		0		0		0		27,393		0		0		128,372
Nonperforming	Nonperforming	0		0		0		0		0		675		1		0		676		Nonperforming	0		0		0		0		0		0		0		0		0		0
Total balance sheet dependent	Total balance sheet dependent	$	435,006	$	211,062	$	243,088	$	32,448	$	0	$	675	$	774,435	$	1,506	$	1,698,220	Total balance sheet dependent	$	263,669	$	891,433	$	197,815	$	181,241	$	33,922	$	0	$	931,940	$	1,504	$	0	$	2,501,524
Premium wine:	Premium wine:																			Premium wine:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	154,624	$	181,416	$	70,297	$	84,221	$	102,297	$	156,397	$	154,685	$	37,574	$	941,511	Pass	$	20,393	$	129,671	$	193,793	$	87,586	$	77,877	$	225,080	$	133,185	$	35,998	$	0	$	903,583
Criticized	Criticized	14,001		26,446		35,898		338		13,674		8,210		40,210		0		138,777		Criticized	1,634		13,288		22,856		16,069		10,207		47,518		23,929		0		0		135,501
Nonperforming	Nonperforming	0		0		0		0		1,662		0		13		0		1,675		Nonperforming	0		42		0		0		0		998		99		0		0		1,139
Total Premium wine	Total Premium wine	$	168,625	$	207,862	$	106,195	$	84,559	$	117,633	$	164,607	$	194,908	$	37,574	$	1,081,963	Total Premium wine	$	22,027	$	143,001	$	216,649	$	103,655	$	88,084	$	273,596	$	157,213	$	35,998	$	0	$	1,040,223
Other:	Other:																			Other:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	1,474	$	23,286	$	13,092	$	1,900	$	0	$	80	$	8,209	$	0	$	48,041	Pass	$	21	$	10,792	$	19,179	$	16,642	$	1,478	$	1	$	13,031	$	0	$	(15,491)	$	45,653
Criticized	Criticized	22		0		0		0		0		0		39		0		61		Criticized	0		0		0		0		0		0		35		0		0		35
Nonperforming	Nonperforming	0		104		0		0		0		0		0		0		104		Nonperforming	0		0		0		0		0		0		0		0		0		0
Total other	Total other	$	1,496	$	23,390	$	13,092	$	1,900	$	0	$	80	$	8,248	$	0	$	48,206	Total other	$	21	$	10,792	$	19,179	$	16,642	$	1,478	$	1	$	13,066	$	0	$	(15,491)	$	45,688
SBA loans:	SBA loans:																			SBA loans:
Risk rating:	Risk rating:																			Risk rating:
Pass	Pass	$	1,663,383	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,663,383	Pass	$	385,899	$	1,080,706	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,466,605
Criticized	Criticized	138,633		0		0		0		0		0		0		0		138,633		Criticized	49,353		89,775		0		0		0		0		0		0		0		139,128
Nonperforming	Nonperforming	0		0		0		0		0		0		0		0		0		Nonperforming	0		0		0		0		0		0		0		0		0		0
Total SBA loans	Total SBA loans	$	1,802,016	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,802,016	Total SBA loans	$	435,252	$	1,170,481	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,605,733
Total loans	Total loans	$	7,146,926	$	4,598,266	$	2,159,063	$	1,095,436	$	585,426	$	670,298	$	22,098,467	$	60,009	$	38,413,891	Total loans	$	2,889,750	$	8,169,000	$	3,413,150	$	1,703,081	$	807,970	$	1,006,985	$	29,649,783	$	50,938	$	(15,491)	$	47,675,166

(1) These amounts consist of fees and clearing items that have not yet been allocated at the loan level.

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	Term Loans by Origination Year
December 31, 2020 (Dollars in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Global fund banking:
Risk rating:
Pass	$	439,494	$	48,297	$	68,491	$	22,878	$	2,389	$	5,999	$	24,947,428	$	2,378	$	25,537,354
Criticized	0		0		0		0		0		0		410		5,423		5,833
Nonperforming	3		8		0		0		0		0		0		0		11
Total global fund banking	$	439,497	$	48,305	$	68,491	$	22,878	$	2,389	$	5,999	$	24,947,838	$	7,801	$	25,543,198
Investor dependent:
Early stage:
Risk rating:
Pass	$	667,006	$	370,189	$	120,920	$	32,163	$	1,234	$	405	$	96,363	$	617	$	1,288,897
Criticized	46,889		72,495		26,170		10,204		3,557		334		18,980		0		178,629
Nonperforming	2,438		9,354		5,368		441		0		0		739		0		18,340
Total early stage	$	716,333	$	452,038	$	152,458	$	42,808	$	4,791	$	739	$	116,082	$	617	$	1,485,866
Mid stage:
Risk rating:
Pass	$	840,431	$	301,905	$	145,588	$	22,834	$	5,086	$	1,026	$	101,423	$	2,495	$	1,420,788
Criticized	43,288		48,294		26,023		8,242		0		4,998		9,181		0		140,026
Nonperforming	10		614		218		2,539		0		675		0		0		4,056
Total mid stage	$	883,729	$	350,813	$	171,829	$	33,615	$	5,086	$	6,699	$	110,604	$	2,495	$	1,564,870
Later stage:
Risk rating:
Pass	$	905,468	$	393,584	$	170,128	$	37,967	$	11	$	8,087	$	224,432	$	4,985	$	1,744,662
Criticized	22,286		55,254		30,252		1,142		0		1,547		37,282		0		147,763
Nonperforming	16,691		1,797		3,522		0		0		0		6,647		0		28,657
Total later stage	$	944,445	$	450,635	$	203,902	$	39,109	$	11	$	9,634	$	268,361	$	4,985	$	1,921,082
Total investor dependent	$	2,544,507	$	1,253,486	$	528,189	$	115,532	$	9,888	$	17,072	$	495,047	$	8,097	$	4,971,818
Cash flow dependent:
Sponsor led buyout:
Risk rating:
Pass	$	791,480	$	451,561	$	273,719	$	166,820	$	36,900	$	0	$	75,492	$	0	$	1,795,972
Criticized	500		70,324		39,020		21,607		13,003		0		8,751		0		153,205
Nonperforming	33		11,869		16,068		7,177		0		0		4,849		0		39,996
Total sponsor led buyout	$	792,013	$	533,754	$	328,807	$	195,604	$	49,903	$	0	$	89,092	$	0	$	1,989,173
Other
Risk rating:
Pass	$	879,542	$	513,242	$	179,169	$	133,235	$	38,808	$	101	$	933,274	$	0	$	2,677,371
Criticized	19,246		67,854		33,779		4,477		0		0		136,629		0		261,985

Table of Contents


Nonperforming	0		0		4,552		0		0		0		1,452		0		6,004
Total other	$	898,788	$	581,096	$	217,500	$	137,712	$	38,808	$	101	$	1,071,355	$	0	$	2,945,360
Total cash flow dependent	$	1,690,801	$	1,114,850	$	546,307	$	333,316	$	88,711	$	101	$	1,160,447	$	0	$	4,934,533
Private bank:
Risk rating:
Pass	$	1,878,184	$	1,152,903	$	394,351	$	352,857	$	294,870	$	405,909	$	382,442	$	660	$	4,862,176
Criticized	3,480		9,985		4,486		1,202		5,101		7,725		749		0		32,728
Nonperforming	0		563		3,197		0		0		1,679		713		0		6,152
Total private bank	$	1,881,664	$	1,163,451	$	402,034	$	354,059	$	299,971	$	415,313	$	383,904	$	660	$	4,901,056
Balance sheet dependent:
Risk rating:
Pass	$	837,613	$	190,140	$	198,532	$	19,213	$	0	$	0	$	857,642	$	1,505	$	2,104,645
Criticized	55,887		3,733		171		0		0		0		26,587		0		86,378
Nonperforming	0		0		0		0		0		0		0		0		0
Total balance sheet dependent	$	893,500	$	193,873	$	198,703	$	19,213	$	0	$	0	$	884,229	$	1,505	$	2,191,023
Premium wine:
Risk rating:
Pass	$	126,476	$	193,744	$	70,783	$	79,088	$	114,812	$	153,841	$	135,461	$	36,192	$	910,397
Criticized	17,882		24,286		35,737		10,300		13,559		5,766		33,718		0		141,248
Nonperforming	0		0		0		0		998		0		0		0		998
Total Premium wine	$	144,358	$	218,030	$	106,520	$	89,388	$	129,369	$	159,607	$	169,179	$	36,192	$	1,052,643
Other:
Risk rating:
Pass	$	0	$	16,251	$	10,910	$	0	$	0	$	433	$	0	$	0	$	27,594
Criticized	3		0		0		0		0		0		60		0		63
Nonperforming	0		30		0		0		0		0		0		0		30
Total other	$	3	$	16,281	$	10,910	$	0	$	0	$	433	$	60	$	0	$	27,687
SBA loans:
Risk rating:
Pass	$	1,455,990	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,455,990
Criticized	103,540		0		0		0		0		0		0		0		103,540
Nonperforming	0		0		0		0		0		0		0		0		0
Total SBA loans	$	1,559,530	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1,559,530
Total loans	$	9,153,860	$	4,008,276	$	1,861,154	$	934,386	$	530,328	$	598,525	$	28,040,704	$	54,255	$	45,181,488

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Allowance for Credit Losses: Loans

In the ~~third~~first quarter of ~~2020,~~2021, the ACL for loans decreased ~~$76.9~~$56.0 million driven primarily ~~driven~~ by an improved economic forecast in Moody’s Analytics ~~September 2020~~March 2021 forecast utilized in our quantitative model, as compared to the forecast utilized in ~~June~~December 2020. Those assumptions included an improvement in the unemployment rate as a result of businesses re-opening and the effect of government aid programs. The gross domestic product ~~contraction rate~~growth forecast also improved in the ~~September 2020~~March 2021 forecast.

The economic forecast in Moody's Analytics March 2021 forecast was utilized in our quantitative model for the ACL as of March 31, 2021. We determined the ~~above~~ forecast to be a reasonable view of the outlook for the economy given the available information at current quarter end. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics ~~September 2020~~March 2021 forecast, we addressed the risk through management's qualitative adjustments to our ACL.

We do not estimate expected credit losses ("ECL") on accrued interest receivable ("AIR") on loans, as AIR is reversed or written off when the full collection of the AIR related to a loan becomes doubtful. AIR on loans totaled $138.4 million atMarch 31, 2020 and $126.4 million at December 31, 2020 and is reported in "Accrued interest receivable and other assets" in our unaudited interim consolidated balance sheets.

The following tables summarize the activity relating to our allowance for credit losses for loans for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ broken out by ~~risk-based~~portfolio segment:

Three months ended September 30, 2020 Beginning Balance June 30, 2020 Charge-offs Recoveries (Reduction) Provision for Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2020
(Dollars in thousands)
Global fund banking $ 53,723 $ 0 $ 0 $ (14,734) $ 0 $ 38,989
Investor dependent:
Early stage 148,270 (14,950) 2,511 (33,171) (101) 102,559
Mid stage 56,393 (7,162) 697 12,578 (88) 62,418
Later stage 87,604 (6,205) 600 15,792 (80) 97,711
Total investor dependent 292,267 (28,317) 3,808 (4,801) (269) 262,688
Cash flow dependent:
Sponsor led buyout 54,853 (130) 0 (3,062) 0 51,661
Other 43,100 0 0 (2,779) 0 40,321
Total cash flow dependent 97,953 (130) 0 (5,841) 0 91,982
Private bank 91,345 0 15 (14,881) 0 76,479
Balance sheet dependent 24,728 0 0 4,341 0 29,069
Premium wine 12,319 0 0 (1,914) 0 10,405
Other 13,635 (2) 531 (14,898) 1,600 866
SBA loans 3,858 0 0 (1,378) 0 2,480
Total allowance for credit losses $ 589,828 $ (28,449) $ 4,354 $ (54,106) $ 1,331 $ 512,958


Three months ended March 31, 2021	Beginning Balance December 31, 2020		Charge-offs		Recoveries		Provision (Reduction) for Credit Losses		Foreign Currency Translation Adjustments		Ending Balance March 31, 2021
(Dollars in thousands)
Global fund banking	$	45,584	$	(79,912)	$	0	$	94,329	$	0	$	60,001
Investor dependent:
Early stage	86,674		(14,123)		838		(11,121)		(21)		62,247
Growth stage	126,683		(120)		3,693		(25,546)		(24)		104,686

Total investor dependent	213,357		(14,243)		4,531		(36,667)		(45)		166,933
Cash flow and balance sheet dependent	124,249		0		0		(12,758)		2		111,493
Private bank	53,629		0		2		(8,567)		0		45,064
Premium wine and other	9,036		(850)		320		(401)		155		8,260
SBA loans	1,910		0		0		(1,910)		0		0
Total allowance for credit losses	$	447,765	$	(95,005)	$	4,853	$	34,026	$	112	$	391,751

~~Table of Contents~~

Three months ended September 30, 2019 Beginning Balance June 30, 2019 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking $ 101,253 $ 0 $ 1,200 $ 1,485 $ (22) $ 103,916
Investor dependent:
Early stage 30,969 (7,524) 1,760 5,783 (85) 30,903
Mid stage 28,264 (16,581) 385 5,778 (85) 17,761
Later stage 37,940 (11,449) 276 17,513 (259) 44,021
Total investor dependent 97,173 (35,554) 2,421 29,074 (429) 92,685
Cash flow dependent:
Sponsor led buyout 32,131 0 0 9,663 (143) 41,651
Other 24,551 0 250 (3,199) 47 21,649
Total cash flow dependent 56,682 0 250 6,464 (96) 63,300
Private Bank 20,397 0 15 1,307 (19) 21,700
Balance sheet dependent 17,256 0 0 (2,496) 37 14,797
Premium wine 4,227 0 0 27 0 4,254
Other 4,900 (1,266) 2 124 (2) 3,758
Total allowance for credit losses $ 301,888 $ (36,820) $ 3,888 $ 35,985 $ (531) $ 304,410

Nine months ended September 30, 2020 Beginning Balance December 31, 2019 Impact of adopting ASC 326 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2020
(Dollars in thousands)
Global fund banking $ 107,285 $ (69,888) $ 0 $ 0 $ 1,772 $ (180) $ 38,989
Investor dependent:
Early stage 26,245 39,911 (26,897) 6,474 57,494 (668) 102,559
Mid stage 15,936 6,963 (20,147) 5,303 54,584 (221) 62,418
Later stage 40,189 24,750 (20,189) 600 52,880 (519) 97,711
Total investor dependent 82,370 71,624 (67,233) 12,377 164,958 (1,408) 262,688
Cash flow dependent:
Sponsor led buyout 42,939 3,151 (2,754) 2,845 5,613 (133) 51,661
Other 25,159 (3,056) (3,385) 1 21,727 (125) 40,321
Total cash flow dependent 68,098 95 (6,139) 2,846 27,340 (258) 91,982
Private bank 21,551 12,615 (1,616) 15 44,194 (280) 76,479
Balance sheet dependent 12,722 (1,364) (4,900) 0 22,685 (74) 29,069
Premium wine 5,296 3,650 (192) 0 1,691 (40) 10,405
Other 7,602 8,732 (320) 944 (18,426) 2,334 866
SBA loans 0 0 0 0 2,480 0 2,480
Total allowance for credit losses $ 304,924 $ 25,464 $ (80,400) $ 16,182 $ 246,694 $ 94 $ 512,958

~~Table of Contents~~

Nine months ended September 30, 2019 Beginning Balance December 31, 2018 Charge-offs Recoveries Provision for (Reduction) Credit Losses Foreign Currency Translation Adjustments Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking $ 93,781 $ (2,047) $ 1,200 $ 11,304 $ (322) $ 103,916
Investor dependent:
Early stage 25,885 (16,819) 5,685 16,547 (395) 30,903
Mid stage 20,999 (36,492) 1,288 31,443 523 17,761
Later stage 25,217 (11,449) 2,053 28,616 (416) 44,021
Total investor dependent 72,101 (64,760) 9,026 76,606 (288) 92,685
Cash flow dependent:
Sponsor led buyout 44,274 (2,402) 0 (253) 32 41,651
Other 21,754 (716) 4,647 (4,083) 47 21,649
Total cash flow dependent 66,028 (3,118) 4,647 (4,336) 79 63,300
Private Bank 20,583 (1,019) 240 1,999 (103) 21,700
Balance sheet dependent 21,707 0 0 (7,135) 225 14,797
Premium wine 3,646 0 0 611 (3) 4,254
Other 3,057 (1,311) 20 1,905 87 3,758
Total allowance for credit losses $ 280,903 $ (72,255) $ 15,133 $ 80,954 $ (325) $ 304,410


Three months ended March 31, 2020	Beginning Balance December 31, 2019		Impact of adopting ASC 326		Charge-offs		Recoveries		Provision (Reduction) for Credit Losses		Foreign Currency Translation Adjustments		Ending Balance March 31, 2020
(Dollars in thousands)
Global fund banking	$	107,285	$	(69,888)	$	0	$	0	$	19,557	$	(180)	$	56,774
Investor dependent:
Early stage	26,245		39,911		(10,183)		1,573		70,214		(571)		127,189
Growth stage	56,125		31,713		(23,316)		3,337		81,183		(530)		148,512
Total investor dependent	82,370		71,624		(33,499)		4,910		151,397		(1,101)		275,701
Cash flow and balance sheet dependent	80,820		(1,269)		(2,624)		2,845		25,301		(331)		104,742
Private bank	21,551		12,615		(581)		0		54,490		(280)		87,795
Premium wine and other	12,898		12,382		(192)		0		(1,844)		707		23,951

Total allowance for credit losses	$	304,924	$	25,464	$	(36,896)	$	7,755	$	248,901	$	(1,185)	$	548,963

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The following table summarizes the aging of our loans broken out by risk-based segment as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

(Dollars in thousands) 30 - 59
  Days Past
Due 60 - 89
  Days Past
Due Equal to or Greater
Than 90
  Days Past
Due   Total Past
Due Current   Total   Loans Past Due
90 Days or
More Still
Accruing
Interest
September 30, 2020:
Global fund banking $ 6,285 $ 0 $ 14 $ 6,299 $ 19,578,219 $ 19,584,518 $ 0
Investor dependent:
Early stage 605 323 367 1,295 1,469,646 1,470,941 0
Mid stage 250 145 211 606 1,626,188 1,626,794 0
Later stage 51 0 0 51 2,013,883 2,013,934 0
Total investor dependent 906 468 578 1,952 5,109,717 5,111,669 0
Cash flow dependent:
Sponsor led buyout 0 0 0 0 2,062,243 2,062,243 0
Other 742 3 0 745 2,599,412 2,600,157 0
Total cash flow dependent 742 3 0 745 4,661,655 4,662,400 0
Private bank 4 4 0 8 4,424,891 4,424,899 0
Balance sheet dependent 2,851 7 0 2,858 1,695,362 1,698,220 0
Premium wine 3,117 4,355 0 7,472 1,074,491 1,081,963 0
Other 23 0 155 178 48,028 48,206 0
SBA loans 0 0 0 0 1,802,016 1,802,016 0
Total loans (1) $ 13,928 $ 4,837 $ 747 $ 19,512 $ 38,394,379 $ 38,413,891 $ 0
December 31, 2019:
Global fund banking $ 97,739 $ 383 $ 3,150 $ 101,272 $ 17,611,525 $ 17,712,797 $ 3,150
Investor dependent:
Early stage 1,307 22,062 723 24,092 1,629,333 1,653,425 0
Mid stage 10,025 6,999 0 17,024 1,049,759 1,066,783 0
Later stage 8,113 500 10,569 19,182 1,679,494 1,698,676 0
Total investor dependent 19,445 29,561 11,292 60,298 4,358,586 4,418,884 0
Cash flow dependent
Sponsor led buyout 0 0 0 0 2,203,020 2,203,020 0
Other 2,426 3,061 2 5,489 2,247,358 2,252,847 0
Total cash flow dependent 2,426 3,061 2 5,489 4,450,378 4,455,867 0
Private bank 6,582 2,049 1,544 10,175 3,479,044 3,489,219 365
Balance sheet dependent 2,731 0 0 2,731 1,294,573 1,297,304 0
Premium wine 8,435 3,170 0 11,605 1,051,907 1,063,512 0
Other 17 0 0 17 890,104 890,121 0
Total loans (1) $ 137,375 $ 38,224 $ 15,988 $ 191,587 $ 33,136,117 $ 33,327,704 $ 3,515

~~(1)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~


(Dollars in thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Equal to or Greater Than 90 Days Past Due		Total Past Due		Current		Total		Loans Past Due 90 Days or More Still Accruing Interest
March 31, 2021:
Global fund banking	$	10,002	$	3	$	4,106	$	14,111	$	27,292,815	$	27,306,926	$	4,088
Investor dependent:
Early stage	6,270		643		500		7,413		1,515,795		1,523,208		9
Mid stage	8,127		155		0		8,282		1,579,903		1,588,185		0
Later stage	3,272		0		0		3,272		2,052,404		2,055,676		0
Total investor dependent	17,669		798		500		18,967		5,148,102		5,167,069		9
Cash flow dependent:
Sponsor led buyout	0		0		0		0		1,984,567		1,984,567		0
Other	3,839		69		485		4,393		2,955,216		2,959,609		0
Total cash flow dependent	3,839		69		485		4,393		4,939,783		4,944,176		0
Private bank	0		1,973		0		1,973		5,061,854		5,063,827		0
Balance sheet dependent	6,962		62		0		7,024		2,494,500		2,501,524		0
Premium wine	0		0		998		998		1,039,225		1,040,223		0
Other	1		0		0		1		45,687		45,688		0
SBA loans	117		174		394		685		1,605,048		1,605,733		394
Total loans	$	38,590	$	3,079	$	6,483	$	48,152	$	47,627,014	$	47,675,166	$	4,491
December 31, 2020:
Global fund banking	$	27,606	$	8	$	11	$	27,625	$	25,515,573	$	25,543,198	$	0
Investor dependent:
Early stage	6,320		1,840		202		8,362		1,477,504		1,485,866		0
Mid stage	5,984		238		907		7,129		1,557,741		1,564,870		0
Later stage	5,363		0		0		5,363		1,915,719		1,921,082		0
Total investor dependent	17,667		2,078		1,109		20,854		4,950,964		4,971,818		0
Cash flow dependent
Sponsor led buyout	34		0		0		34		1,989,139		1,989,173		0
Other	6,510		58		0		6,568		2,938,792		2,945,360		0
Total cash flow dependent	6,544		58		0		6,602		4,927,931		4,934,533		0
Private bank	4,292		3,990		0		8,282		4,892,774		4,901,056		0
Balance sheet dependent	987		1,089		0		2,076		2,188,947		2,191,023		0
Premium wine	3,168		0		998		4,166		1,048,477		1,052,643		0
Other	3		28		82		113		27,574		27,687		0
SBA loans	0		0		0		0		1,559,530		1,559,530		0
Total loans	$	60,267	$	7,251	$	2,200	$	69,718	$	45,111,770	$	45,181,488	$	0

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Nonaccrual Loans

~~The following tables summarize our nonaccrual loan activity by risk-based segment for the three and nine months ended September 30, 2020 and 2019:~~

Three months ended September 30, 2020 Beginning Balance June 30, 2020 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2020
(Dollars in thousands)
Global fund banking $ 9 $ 6 $ (2) $ 0 $ 13
Investor dependent:
Early stage 24,422 6,269 (2,790) (8,169) 19,732
Mid stage 8,119 10,290 (292) (6,490) 11,627
Later stage 10,498 36,779 (3,500) (5,202) 38,575
Total investor dependent 43,039 53,338 (6,582) (19,861) 69,934
Cash flow dependent:
Sponsor led buyout 21,658 172 (238) 0 21,592
Other 5,317 12,356 (11,388) 0 6,285
Total cash flow dependent 26,975 12,528 (11,626) 0 27,877
Private bank 6,517 3,348 (4,433) 0 5,432
Balance sheet dependent 11,842 675 (11,841) 0 676
Premium wine 1,681 0 (6) 0 1,675
Other 61 105 (62) 0 104
SBA loans 4,202 0 (4,202) 0 0
Total nonaccrual loans $ 94,326 $ 70,000 $ (38,754) $ (19,861) $ 105,711

Three months ended September 30, 2019 Beginning Balance June 30, 2019 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking $ 0 $ 0 $ 0 $ 0 $ 0
Investor dependent:
Early stage 10,290 12,409 (2,172) (1,569) 18,958
Mid stage 28,699 6 (8,151) (15,323) 5,231
Later stage 38,346 2,216 (6,462) (6,837) 27,263
Total investor dependent 77,335 14,631 (16,785) (23,729) 51,452
Cash flow dependent:
Sponsor led buyout 8,365 37,294 (640) 0 45,019
Other 79 13 0 0 92
Total cash flow dependent 8,444 37,307 (640) 0 45,111
Private bank 5,644 1,531 (86) 0 7,089
Balance sheet dependent 4,974 0 (4,974) 0 0
Premium wine 244 174 (25) 0 393
Other 0 0 0 0 0
Total nonaccrual loans (1) $ 96,641 $ 53,643 $ (22,510) $ (23,729) $ 104,045

~~Table of Contents~~

Nine months ended September 30, 2020 Beginning Balance December 31, 2019 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2020
(Dollars in thousands)
Global fund banking $ 0 $ 15 $ (2) $ 0 $ 13
Investor dependent:
Early stage 11,093 28,218 (8,695) (10,884) 19,732
Mid stage 17,330 22,875 (1,079) (27,499) 11,627
Later stage 6,296 48,962 (8,276) (8,407) 38,575
Total investor dependent 34,719 100,055 (18,050) (46,790) 69,934
Cash flow dependent:
Sponsor led buyout 44,585 21,830 (42,199) (2,624) 21,592
Other 17,681 20,936 (32,314) (18) 6,285
Total cash flow dependent 62,266 42,766 (74,513) (2,642) 27,877
Private bank 5,480 5,982 (5,449) (581) 5,432
Balance sheet dependent 0 17,417 (16,741) 0 676
Premium wine 204 1,686 (23) (192) 1,675
Other 0 339 (235) 0 104
SBA loans 0 4,202 (4,202) 0 0
Total nonaccrual loans (1) $ 102,669 $ 172,462 $ (119,215) $ (50,205) $ 105,711

Nine months ended September 30, 2019 Beginning Balance December 31, 2018 Additions Paydowns and Other Reductions Charge-offs Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking $ 3,700 $ 2,247 $ (3,900) $ (2,047) $ 0
Investor dependent:
Early stage 7,616 25,221 (10,615) (3,264) 18,958
Mid stage 4,751 42,497 (9,541) (32,476) 5,231
Later stage 11,385 32,786 (10,071) (6,837) 27,263
Total investor dependent 23,752 100,504 (30,227) (42,577) 51,452
Cash flow dependent:
Sponsor led buyout 39,534 37,294 (29,407) (2,402) 45,019
Other 17,156 92 (16,690) (466) 92
Total cash flow dependent 56,690 37,386 (46,097) (2,868) 45,111
Private bank 3,919 3,411 (174) (67) 7,089
Balance sheet dependent 5,004 238 (5,242) 0 0
Premium wine 285 174 (66) 0 393
Other 792 0 (792) 0 0
Total nonaccrual loans (1) $ 94,142 $ 143,960 $ (86,498) $ (47,559) $ 104,045

~~(1)~~For the three and nine months ended September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.

~~Table of Contents~~

The following table summarizes our nonaccrual loans with no allowance for credit loss at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

September 30, 2020 December 31, 2019
(Dollars in thousands) Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss Nonaccrual Loans Nonaccrual Loans with no Allowance for Credit Loss
Global fund banking $ 13 $ 8 $ 0 $ 0
Investor dependent:
Early stage 19,732 10 11,093 460
Mid stage 11,627 0 17,330 274
Later stage 38,575 0 6,296 0
Total investor dependent 69,934 10 34,719 734
Cash flow dependent:
Sponsor led buyout 21,592 0 44,585 0
Other 6,285 705 17,681 2,782
Total cash flow dependent 27,877 705 62,266 2,782
Private bank 5,432 4,912 5,480 3,714
Balance sheet dependent 676 0 0 0
Premium wine 1,675 998 204 0
Other 104 104 0 0
SBA loans 0 0 0 0
Total nonaccrual loans (1) $ 105,711 $ 6,737 $ 102,669 $ 7,230

~~(1)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~


	March 31, 2021				December 31, 2020
(Dollars in thousands)	Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss		Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Loss
Global fund banking	$	18	$	8	$	11	$	11
Investor dependent:
Early stage	7,766		376		18,340		3
Mid stage	0		0		4,056		3,159
Later stage	27,403		6,437		28,657		118
Total investor dependent	35,169		6,813		51,053		3,280
Cash flow dependent:
Sponsor led buyout	39,848		0		39,996		0
Other	5,628		572		6,004		1,138
Total cash flow dependent	45,476		572		46,000		1,138
Private bank	8,445		2,365		6,152		2,393
Balance sheet dependent	0		0		0		0
Premium wine	1,139		997		998		998
Other	0		0		30		30
SBA loans	0		0		0		0
Total nonaccrual loans	$	90,247	$	10,755	$	104,244	$	7,850

Troubled Debt Restructurings

As of ~~September 30, 2020,~~March 31, 2021, we had 1615 TDRs with a total carrying value of ~~$50.5~~$72.8 million where concessions have been granted to borrowers experiencing financial difficulties, in an attempt to maximize collection. There were 0 unfunded commitments available for funding to the clients associated with these TDRs as of ~~September 30, 2020.~~March 31, 2021.

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The following table summarizes our loans modified in TDRs, broken out by risk-based segment, at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

(Dollars in thousands) September 30, 2020 December 31, 2019
Loans modified in TDRs:
Global fund banking $ 0 $ 0
Investor dependent:
Early stage 7,771 9,471
Mid stage 3,781 5,189
Later stage 3,297 23,318
Total investor dependent 14,849 37,978
Cash flow dependent:
Sponsor led buyout 30,799 55,443
Other 855 0
Total cash flow dependent 31,654 55,443
Private bank 0 2,104
Balance sheet dependent 675 0
Premium wine 3,341 13,457
Other 0 0
SBA loans 0 0
Total loans modified in TDRs (1) $ 50,519 $ 108,982

~~(1)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~


(Dollars in thousands)	March 31, 2021		December 31, 2020
Loans modified in TDRs:
Global fund banking	$	0	$	0
Investor dependent:
Early stage	2,322		6,705
Mid stage	0		4,050
Later stage	20,953		24,896
Total investor dependent	23,275		35,651
Cash flow dependent:
Sponsor led buyout	39,897		21,529
Other	4,903		1,237
Total cash flow dependent	44,800		22,766
Private bank	2,079		0
Balance sheet dependent	0		0
Premium wine	2,631		2,661
Other	0		0
SBA loans	0		0
Total loans modified in TDRs	$	72,785	$	61,078

The following table summarizes the recorded investment in loans modified in TDRs, broken out by risk-based segment, for modifications made during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Loans modified in TDRs during the period:	Loans modified in TDRs during the period:									Loans modified in TDRs during the period:
Global fund banking	Global fund banking	$	0	$	0	$	0	$	0	Global fund banking	$	0	$	0
Investor dependent:	Investor dependent:									Investor dependent:
Early stage	Early stage	4,043		2,205		4,193		2,205		Early stage	0		0
Mid stage	Mid stage	0		0		209		3,480		Mid stage	0		5,955
Later stage	Later stage	0		6,361		3,297		17,324		Later stage	0		2,769
Total investor dependent	Total investor dependent	4,043		8,566		7,699		23,009		Total investor dependent	0		8,724
Cash flow dependent:	Cash flow dependent:									Cash flow dependent:
Sponsor led buyout	Sponsor led buyout	21,611		0		21,611		48,604		Sponsor led buyout	18,439		0
Other	Other	0		0		855		0		Other	3,734		0
Total cash flow dependent	Total cash flow dependent	21,611		0		22,466		48,604		Total cash flow dependent	22,173		0
Private bank	Private bank	0		0		0		1,826		Private bank	2,079		0
Balance sheet dependent	Balance sheet dependent	675		0		675		0		Balance sheet dependent	0		0
Premium wine	Premium wine	0		0		998		0		Premium wine	0		0
Other	Other	0		0		0		0		Other	0		0
SBA loans	SBA loans	0		0		0		0		SBA loans	0		0
Total loans modified in TDRs during the period (1) (2)		$	26,329	$	8,566	$	31,838	$	73,439
Total loans modified in TDRs during the period (1)										Total loans modified in TDRs during the period (1)	$	24,252	$	8,724

~~Table of Contents~~

(1)For the three and nine months ended September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.

~~(2)~~There were ~~$13.6~~$1.8 million and ~~$31.1~~$12.5 million of partial charge-offs for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~respectively, and $3.7 million and $9.2 million of partial charge-offs for the three and nine months ended September 30, 2019.~~respectively.

During the three months ended ~~September 30,~~March 31, 2021 and 2020, new TDRs of $25.6 million were modified through payment deferrals granted to our clients and $0.7 million were modified through forgiveness of principal. During the nine months ended September 30, 2020, new TDRs of $30.9 million were modified through payment deferrals granted to our clients and $0.9 million were modified through forgiveness of principal. During the three and nine months ended September 30, 2019, ~~$6.4~~$22.2 million and ~~$69.4~~$8.3 million, respectively, were modified through payment deferrals granted to our clients. During the three ~~and nine~~ months ended ~~September 30, 2019, $2.2~~March 31, 2021 and 2020, $2.1 million and ~~$4.0~~$0.4 million, respectively, were modified through ~~partial~~ forgiveness of principal.

Table of Contents

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, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
TDRs modified within the previous 12 months that defaulted during the period:
Global fund banking $ 0 $ 0 $ 0 $ 0
Investor dependent:
Early stage 0 0 0 0
Mid stage 0 0 0 0
Later stage 0 10,963 0 10,963
Total investor dependent 0 10,963 0 10,963
Cash flow dependent:
Sponsor led buyout 0 37,294 0 37,294
Other 0 0 0 0
Total cash flow dependent 0 37,294 0 37,294
Private bank 0 0 0 0
Balance sheet dependent 0 0 0 0
Premium wine 998 0 998 0
Other 0 0 0 0
SBA loans 0 0 0 0
Total TDRs modified within the previous 12 months that defaulted in the period (1) $ 998 $ 48,257 $ 998 $ 48,257


	Three months ended March 31,
(Dollars in thousands)	2021		2020
TDRs modified within the previous 12 months that defaulted during the period:
Global fund banking	$	0	$	0
Investor dependent:
Early stage	0		0
Mid stage	0		0
Later stage	0		0
Total investor dependent	0		0
Cash flow dependent:
Sponsor led buyout	0		0
Other	3,734		0
Total cash flow dependent	3,734		0
Private bank	0		0
Balance sheet dependent	0		0
Premium wine	0		8,247
Other	0		0
SBA loans	0		0
Total TDRs modified within the previous 12 months that defaulted in the period	$	3,734	$	8,247

Charge-offs and defaults on previously restructured loans are evaluated to determine the impact to the allowance for credit losses for loans, if any. The evaluation of these defaults may impact the assumptions used in calculating the reserve on other TDRs and nonaccrual 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 for TDRs was necessary to determine the allowance for credit losses for loans as of ~~September 30, 2020.~~March 31, 2021.

Allowance for Credit Losses: Unfunded Credit Commitments

We maintain a separate allowance for credit losses for unfunded credit commitments that is determined using a methodology that is inherently similar to the methodology used for calculating the allowance for credit losses for loans. At ~~September 30, 2020,~~March 31, 2021, our ACL estimates utilized the improved Moody's economic forecasts from ~~September 2020~~March 2021 as mentioned above.

~~Table of Contents~~

The following table summarizes the activity relating to our allowance for credit losses for unfunded credit commitments for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Allowance for credit losses: unfunded credit commitments, beginning balance	Allowance for credit losses: unfunded credit commitments, beginning balance	$	99,294	$	62,664	$	67,656	$	55,183	Allowance for credit losses: unfunded credit commitments, beginning balance	$	120,796	$	67,656
Impact of adopting ASC 326	Impact of adopting ASC 326	0		0		22,826		0		Impact of adopting ASC 326	0		22,826
Provision for credit losses		2,019		551		11,132		8,079
Reduction of credit losses										Reduction of credit losses	(16,067)		(5,477)
Foreign currency translation adjustments	Foreign currency translation adjustments	202		(107)		(99)		(154)		Foreign currency translation adjustments	21		(315)
Allowance for credit losses: unfunded credit commitments, ending balance (1)	Allowance for credit losses: unfunded credit commitments, ending balance (1)	$	101,515	$	63,108	$	101,515	$	63,108	Allowance for credit losses: unfunded credit commitments, ending balance (1)	$	104,750	$	84,690

(1)The “allowance for credit losses: unfunded credit commitments” is included as a component of “other liabilities” on our unaudited interim consolidated balance sheets. See Note 1514 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” ~~of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1~~ of this report for additional disclosures related to our commitments to extend credit.

~~8. Leases~~

We have operating leases for our corporate offices and certain equipment utilized at those properties. We are obligated under a number of noncancelable operating leases for premises and equipment that expire at various dates, through 2030, and in most instances, include options to renew or extend at market rates and terms. Such leases may provide for periodic adjustments of rent during the term of the lease based on changes in various economic indicators.

At the inception of the lease, the lease is evaluated to determine whether the lease will be accounted for as an operating or a finance lease. There were no significant assumptions or judgments required upon applying the new lease standard. Operating lease right-of-use assets and operating lease liabilities are included in our consolidated balance sheets. We have no leases that meet the definition of a finance lease under ASC 842 and our lessor accounting treatment for subleases is not material.

~~Total recorded balances for the lease assets and liabilities are as follows:~~

(Dollars in thousands) September 30, 2020 December 31, 2019
Assets:
Right-of-use assets - operating leases $ 220,493 $ 197,365
Liabilities:
Lease liabilities - operating leases 246,652 218,847

~~Table of Contents~~

~~The components of our lease cost and supplemental cash flow information related to leases for the three and nine months ended September 30, 2020 and 2019 were as follows:~~

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Operating lease cost $ 11,998 $ 10,120 $ 35,040 $ 29,099
Short-term lease cost 333 370 1,092 1,214
Variable lease cost 830 903 2,548 2,683
Less: sublease income (346) (1,140) (1,633) (3,363)
Total lease cost, net $ 12,815 $ 10,253 $ 37,047 $ 29,633
Supplemental cash flows information:
Cash paid for amounts included in the measurement of lease liabilities:
Cash paid for operating leases $ 12,273 $ 11,514 $ 36,753 $ 32,752
Noncash items during the period:
Lease obligations in exchange for obtaining Right-of-use assets:
Operating leases $ 14,741 $ 7,770 $ 55,316 $ 7,770

~~The table below presents additional information related to the Company's leases as of September 30, 2020 and December 31, 2019:~~

September 30, 2020 December 31, 2019
Weighted-average remaining term (in years) - operating leases 6.13 6.29
Weighted-average discount rate - operating leases (1) 2.54 % 2.92 %

~~(1)~~The incremental borrowing rate used to calculate the lease liability was determined based on the facts and circumstances of the economic environment and the Company’s credit standing as of the effective date of ASC 842. Additionally, the total lease term and total lease payments were also considered in determining the rate. Based on these considerations the Company identified credit terms available under its existing credit lines which represent a collateralized borrowing rate that has varying credit terms that could be matched to total lease terms and total lease payments in ultimately determining the implied borrowing rate in each lease contract.

~~The following table presents our undiscounted future cash payments for our operating lease liabilities as of September 30, 2020:~~

Years ended December 31,
(Dollars in thousands) Operating Leases
2020 (excluding the nine months ended September 30, 2020) $ 12,782
2021 50,271
2022 45,430
2023 44,337
2024 38,437
2025 and thereafter 75,799
Total future lease payments (1) $ 267,056
Less: imputed interest (20,404)
Total lease liabilities $ 246,652

~~(1)~~As of September 30, 2020, we have additional leases that have not yet commenced. We estimate that we will record additional lease liabilities of $2.8 million upon commencement. These leases will commence in 2020 with lease terms of two years to ten years.

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9.8. Goodwill and Other Intangible Assets

Goodwill

Goodwill at both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was ~~$137.8~~$142.7 million, which was a result of revenue generating synergies expected from our acquisition of SVB Leerink in ~~2019. All reported goodwill amounts have been allocated to the SVB Leerink reporting segment and are expected to be deductible for tax purposes. Refer to Note 14 — “Segment Reporting”~~2019 as well as our acquisition of ~~the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional information.~~WestRiver Group's debt fund business in December 2020.

Other Intangible Assets

The components of net other intangible assets ~~related to the acquisition of SVB Leerink~~ were as follows:


		September 30, 2020						December 31, 2019							March 31, 2021						December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount		(Dollars in thousands)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount
Other intangible assets:	Other intangible assets:													Other intangible assets:
Customer relationships	Customer relationships	$	42,000	$	6,682	$	35,318	$	42,000	$	3,818	$	38,182	Customer relationships	$	42,000	$	8,591	$	33,409	$	42,000	$	7,636	$	34,364
Other	Other	18,900		8,838		10,062		18,900		7,665		11,235		Other	36,300		10,384		25,916		36,300		9,229		27,071
Total other intangible assets	Total other intangible assets	$	60,900	$	15,520	$	45,380	$	60,900	$	11,483	$	49,417	Total other intangible assets	$	78,300	$	18,975	$	59,325	$	78,300	$	16,865	$	61,435

For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we recorded amortization expense of ~~$4.0~~$2.1 million. Assuming no future impairments of other intangible assets or additional acquisitions or dispositions, the following table presents the Company's future expected amortization expense for other intangible assets that will continue to be amortized as of ~~September 30, 2020:~~March 31, 2021:


Years ended December 31, (Dollars in thousands)	Years ended December 31, (Dollars in thousands)	Other Intangible Assets		Years ended December 31, (Dollars in thousands)	Other Intangible Assets
2020 (excluding the nine months ended September 30, 2020)		$	1,345
2021		4,732
2021 (excluding the three months ended March 31, 2021)				2021 (excluding the three months ended March 31, 2021)	$	6,107
2022	2022	4,732		2022	8,141
2023	2023	4,732		2023	8,141
2024	2024	4,732		2024	8,141
2025 and thereafter		25,107
2025				2025	6,900
2026 and thereafter				2026 and thereafter	21,895
Total future amortization expense	Total future amortization expense	$	45,380	Total future amortization expense	$	59,325

~~10.~~9. Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


					Carrying Value								Carrying Value
(Dollars in thousands)	(Dollars in thousands)	Maturity	Principal value at September 30, 2020		September 30, 2020		December 31, 2019		(Dollars in thousands)	Maturity	Principal value at March 31, 2021		March 31, 2021		December 31, 2020
Short-term borrowings:	Short-term borrowings:								Short-term borrowings:

Other short-term borrowings	Other short-term borrowings	(1)	$	19,068	$	19,068	17,430		Other short-term borrowings	(1)	$	38,434	$	38,434	$	20,553
Total short-term borrowings	Total short-term borrowings				$	19,068	$	17,430	Total short-term borrowings				$	38,434	$	20,553
Long-term debt:	Long-term debt:								Long-term debt:
3.50% Senior Notes	3.50% Senior Notes	January 29, 2025	$	350,000	$	348,257	$	347,987	3.50% Senior Notes	January 29, 2025	$	350,000	$	348,441	$	348,348
3.125% Senior Notes	3.125% Senior Notes	June 5, 2030	500,000		495,173		0		3.125% Senior Notes	June 5, 2030	500,000		495,387		495,280
1.800% Senior Notes									1.800% Senior Notes	February 2, 2031	500,000		494,355		0
Total long-term debt	Total long-term debt				$	843,430	$	347,987	Total long-term debt				$	1,338,183	$	843,628

(1)Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.

~~Table of Contents~~

Interest expense related to short-term borrowings and long-term debt was ~~$7.2~~$8.7 million and ~~$17.9~~$5.9 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and compared to comparable 2020 ~~and $8.1 million and $27.6 million for the three and nine months ended September 30, 2019.~~period. The weighted average interest rate associated with our short-term borrowings was ~~0.08~~0.06 percent as of ~~September 30, 2020~~March 31, 2021 and ~~1.55~~0.80 percent as of as of December 31, ~~2019.~~2020.

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Short-term Borrowings

We have certain facilities in place to enable us to access short-term borrowings on a secured and unsecured basis. Our secured facilities include collateral pledged to the FHLB of San Francisco and the discount window at the FRB (using both fixed income securities and loans as collateral). Our unsecured facility consists of our uncommitted federal funds lines. As of ~~September 30, 2020,~~March 31, 2021, collateral pledged to the FHLB of San Francisco was comprised primarily of fixed income investment securities and loans and had a carrying value of ~~$6.6~~$6.9 billion, of which ~~$5.5~~$5.8 billion was available to support additional borrowings. As of ~~September 30, 2020,~~March 31, 2021, collateral pledged to the discount window at the FRB was comprised of fixed income investment securities and had a carrying value of $0.9 billion, all of which was unused and available to support additional borrowings. Our total unused and available borrowing capacity for our uncommitted federal funds lines totaled $1.9 billion at ~~September 30, 2020.~~March 31, 2021. Our total unused and available borrowing capacity under our master repurchase agreements with various financial institutions totaled ~~$3.3~~$4.0 billion at ~~September 30, 2020.~~March 31, 2021.

3.50% Senior Notes

In January 2015, SVB Financial issued $350 million of 3.50% Senior Notes due in January 2025. We received net proceeds 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, 2021 was $348.4 million, which is reflective of $1.5 million of debt issuance costs and a $0.1 million discount.

3.125% Senior Notes

On June 5, 2020, the Company issued $500 million of 3.125% Senior Notes due in June 2030 ("3.125% Senior Notes"). The 3.125% Senior Notes may be redeemed by us, at our option, at any time prior to March 5, 2030, at a redemption price equal to the full aggregate principal amount plus a “make-whole” premium payment. We received net proceeds from this offering of approximately $495.4 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.125% Senior Notes at ~~September 30, 2020~~March 31, 2021 was ~~$495.2~~$495.4 million, which is reflective of ~~$4.4~~$4.3 million of debt issuance costs and a ~~$0.4~~$0.3 million discount.

1.800% Senior Notes

~~11.~~On February 2, 2021 the Company issued $500 million of 1.800% Senior Notes due February 2031 ("1.800% Senior Notes"), with interest payments starting August 2, 2021, and payable every February 2nd and August 2nd. The notes will be senior unsecured obligations of SVB Financial Group and will rank equally with all of our other unsecured and unsubordinated indebtedness. We received net proceeds from this offering of approximately $494.3 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 1.800% Senior Notes at March 31, 2021 was $494.4 million, which is reflective of $4.0 million of debt issuance costs and a $1.6 million discount.

10. Derivative Financial Instruments

We primarily use derivative financial instruments to manage interest rate risk and currency exchange rate risk and to assist customers with their risk management objectives, which may include currency exchange rate risks and interest rate risks. 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.

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 on our interest rate sensitive assets, we have entered into interest rate swap contracts to hedge against future changes in interest rates. We designate these interest rate swap contracts as fair value and cash flow hedges.

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Fair Value Hedges

To manage interest rate risk on our available-for-sale securities portfolio, we enter into pay-fixed, receive-floating interest rate swap contracts to hedge against exposure to changes in the fair value of the securities resulting from changes in interest rates. We designate these interest rate swap contracts as fair value hedges that qualify for hedge accounting under ASC 815, Derivatives and Hedging ("ASC 815") and have elected to account for them using the last-of-layer method as outlined in ASC 815. We record the fair value hedges in other assets and other liabilities. For qualifying fair value hedges, both the changes in the fair value of the derivative and the portion of the fair value adjustments associated with the last-of-layer attributable to the hedged risk will be recognized into earnings as they occur. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item in the line item "investment securities" as part of interest income, a component of consolidated net income.

We assess hedge effectiveness under ASC 815 on a quarterly basis to ensure all hedges remain highly effective and hedge accounting under ASC 815 can be applied. In conjunction with the assessment of effectiveness, we assess the hedged item to ensure it is expected to be outstanding at the hedged item’s assumed maturity date and the last-of-layer method of accounting under ASC 815 can be applied. If the hedging relationship no longer exists or no longer qualifies as a hedge per ASC 815, any remaining fair value basis adjustments are allocated to the individual assets in the portfolio and amortized into earnings over a period consistent with the amortization of other discounts and premiums associated with the respective assets.

The following table summarizes the amortized cost basis of hedged assets that are designated and qualify as fair value hedges and the cumulative amount of fair value hedging adjustments included in the carrying value that have been recorded on our consolidated balance sheets as of March 31, 2021:


	March 31, 2021
(Dollars in thousands)	Amortized Cost Basis of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets
Available-for-sale securities (1)	$	21,312,139	$	(16,975)

(1)These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At March 31, 2021, the amortized cost basis of the closed portfolios used in these hedging relationships was $21.3 billion, the amounts of the designated hedged items was $10.0 billion and the cumulative basis adjustments associated with these hedging relationships was $17.0 million.

Cash Flow Hedges

To manage interest rate risk on our variable-interest rate loan portfolio, we enter into interest rate swap contracts to hedge against future changes in interest rates by using hedging instruments to lock in future cash inflows that would otherwise be impacted by movements in the market interest rates. We designate these interest rate swap contracts as cash flow hedges that qualify for hedge accounting under ASC 815~~Derivatives and Hedging~~ ("~~ASC 815~~"), and record them in other assets and other liabilities. For qualifying cash flow hedges, changes in the fair value of the derivative are recorded in accumulated other comprehensive income and recognized in earnings as the hedged item affects earnings. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item in the line item "Loans" as part of interest income, a component of consolidated net income.

We assess hedge effectiveness under ASC 815 on a quarterly basis to ensure all hedges remain highly effective ~~to ensure~~and hedge accounting under ASC 815 can be applied. If the hedging relationship no longer exists or no longer qualifies as a hedge per ASC 815, any amounts remaining as gain or loss in accumulated other comprehensive income are reclassified into earnings in the line item "Loans" as part of interest income, a component of consolidated net income. As of March 31, 2020, all derivatives previously classified as hedges with notional balances totaling $5.0 billion and a net asset fair value of $227.5 million were terminated. As of ~~September 30, 2020,~~March 31, 2021, the total unrealized gains on terminated cash flow hedges remaining in AOCI ~~is $195.0~~was $163.4 million, ~~$141.0~~$118.0 million net of tax. The unrealized gains will be reclassified into interest income as the underlying forecasted transactions impact earnings through the original maturity of the hedged forecasted transactions. The total remaining term over which the unrealized gains will be reclassified into earnings is approximately ~~five~~four years.

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. We do not designate any foreign exchange forward contracts as derivative instruments that qualify for hedge accounting. Gains or losses from changes in

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currency rates on foreign currency denominated instruments are recorded in the line item “other” as part of noninterest

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income, a component of consolidated net 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 in the line item “other” as part of noninterest income, a component of consolidated net income.

Other Derivative Instruments

Also included in our derivative instruments are equity warrant assets and client forward and option contracts, and client interest rate contracts. For further description of these other derivative instruments, refer to Note 2 — “Summary of Significant Accounting Policies" under Part II, Item 8 of our ~~2019~~2020 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.

The total notional or contractual amounts and fair value of our derivative financial instruments at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows:


		September 30, 2020								December 31, 2019										March 31, 2021								December 31, 2020
		Notional or Contractual Amount			Fair Value					Notional or Contractual Amount			Fair Value							Notional or Contractual Amount			Fair Value					Notional or Contractual Amount			Fair Value
(Dollars in thousands)	(Dollars in thousands)			Derivative Assets (1)			Derivative Liabilities (1)					Derivative Assets (1)			Derivative Liabilities (1)	(Dollars in thousands)						Derivative Assets (1)			Derivative Liabilities (1)					Derivative Assets (1)			Derivative Liabilities (1)
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:																		Derivatives designated as hedging instruments:
Interest rate risks:	Interest rate risks:																	Interest rate risks:
Interest rate swaps(2)	Interest rate swaps(2)	$	0		$	0		$	—	$	1,915,000		$	22,676		$	—	Interest rate swaps(2)		$	10,000,000		$	0		$	—	$	0		$	0		$	—
Interest rate swaps	Interest rate swaps	0			—			0		3,085,000			—			25,623		Interest rate swaps		0			—			0		0			—			0
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:																	Derivatives not designated as hedging instruments:
Currency exchange risks:	Currency exchange risks:																	Currency exchange risks:
Foreign exchange forwards	Foreign exchange forwards	462,765			4,083			—		—			—			—		Foreign exchange forwards		687,576			19,109			—		68,381			306			—
Foreign exchange forwards	Foreign exchange forwards	59,992			—			278		300,250			—			2,154		Foreign exchange forwards		97,950			—			2,626		566,988			—			20,566
Other derivative instruments:	Other derivative instruments:																	Other derivative instruments:
Equity warrant assets	Equity warrant assets	256,774			202,184			—		225,893			165,473			—		Equity warrant assets		299,101			244,334			—		253,153			203,438			—
Client foreign exchange forwards	Client foreign exchange forwards	6,955,487			138,522			—		4,661,517			114,546			—		Client foreign exchange forwards		9,015,147			220,034			—		8,025,973			214,969			—
Client foreign exchange forwards	Client foreign exchange forwards	5,754,213			—			108,959		4,326,059			—			94,745		Client foreign exchange forwards		8,675,502			—			198,866		7,490,723			—			188,565
Client foreign currency options	Client foreign currency options	111,107			2,986			—		154,985			1,308			—		Client foreign currency options		63,503			1,040			—		97,529			1,702			—
Client foreign currency options	Client foreign currency options	111,107			—			2,986		154,985			—			1,308		Client foreign currency options		63,503			—			1,040		97,522			—			1,702
Client interest rate derivatives(2)	Client interest rate derivatives(2)	916,573			79,270			—		1,275,190			28,811			—		Client interest rate derivatives(2)		1,212,842			65,123			—		1,082,265			67,854			—
Client interest rate derivatives (2)	Client interest rate derivatives (2)	1,048,715			—			25,558		1,372,914			—			14,154		Client interest rate derivatives (2)		1,381,626			—			68,954		1,250,975			—			26,646
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments				427,045			137,781					310,138			112,361		Total derivatives not designated as hedging instruments					549,640			271,486					488,269			237,479
Total derivatives	Total derivatives				$	427,045		$	137,781				$	332,814		$	137,984	Total derivatives					$	549,640		$	271,486				$	488,269		$	237,479

(1)Derivative assets and liabilities are included in "accrued interest receivable and other assets" and "other liabilities", respectively, on our consolidated balance sheets.

(2)The amount reported reflects reductions of approximately ~~$59.2~~$22.7 million of derivative assets and ~~$17.4~~$45.4 million of derivative liabilities at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, reflecting variation margin treated as settlement of the related derivative fair values for legal and accounting purposes as required by central clearing houses.

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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,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


			Three months ended September 30,				Nine months ended September 30,						Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	Statement of income location	2020		2019		2020		2019		(Dollars in thousands)	Statement of income location	2021		2020
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:										Derivatives designated as hedging instruments:
Interest rate risks:	Interest rate risks:										Interest rate risks:
Amounts reclassified from accumulated other comprehensive income into income	Amounts reclassified from accumulated other comprehensive income into income	Interest income - loans	$	16,004	$	(2,713)	$	33,924	$	(3,224)	Amounts reclassified from accumulated other comprehensive income into income	Interest income - loans	$	15,657	$	2,089
Change in fair value of interest rate swaps hedging investment securities											Change in fair value of interest rate swaps hedging investment securities	Interest income - investment securities taxable	18,494		0
Change in fair value of hedged investment securities											Change in fair value of hedged investment securities	Interest income - investment securities taxable	(16,975)		0
Net gains associated with interest rate risk derivatives											Net gains associated with interest rate risk derivatives		$	17,176	$	2,089
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:										Derivatives not designated as hedging instruments:
Currency exchange risks:	Currency exchange risks:										Currency exchange risks:
Gains (losses) on revaluations of internal foreign currency instruments, net		Other noninterest income	$	17,085	$	(8,724)	$	20,138	$	(5,183)
(Losses) gains on internal foreign exchange forward contracts, net		Other noninterest income	(19,344)		8,660		(20,010)		4,917
Losses on revaluations of internal foreign currency instruments, net											Losses on revaluations of internal foreign currency instruments, net	Other noninterest income	$	(28,129)	$	(8,375)
Gains on internal foreign exchange forward contracts, net											Gains on internal foreign exchange forward contracts, net	Other noninterest income	26,853		8,668
Net (losses) gains associated with internal currency risk	Net (losses) gains associated with internal currency risk		$	(2,259)	$	(64)	$	128	$	(266)	Net (losses) gains associated with internal currency risk		$	(1,276)	$	293
Other derivative instruments:	Other derivative instruments:										Other derivative instruments:
Gains (losses) on revaluations of client foreign currency instruments, net		Other noninterest income	$	71	$	(2,181)	$	(3,302)	$	(14,793)
Losses on revaluations of client foreign currency instruments, net											Losses on revaluations of client foreign currency instruments, net	Other noninterest income	$	(2,427)	$	(8,284)
Gains on client foreign exchange forward contracts, net	Gains on client foreign exchange forward contracts, net	Other noninterest income	1,641		2,167		2,582		15,232		Gains on client foreign exchange forward contracts, net	Other noninterest income	2,751		7,747
Net gains (losses) associated with client currency risk	Net gains (losses) associated with client currency risk		$	1,712	$	(14)	$	(720)	$	439	Net gains (losses) associated with client currency risk		$	324	$	(537)
Net gains on equity warrant assets	Net gains on equity warrant assets	Gains on equity warrant assets, net	$	53,766	$	37,561	$	93,667	$	107,213	Net gains on equity warrant assets	Gains on equity warrant assets, net	$	221,685	$	13,395
Net gains (losses) on other derivatives	Net gains (losses) on other derivatives	Other noninterest income	$	31,151	$	(1,123)	$	26,533	$	(2,619)	Net gains (losses) on other derivatives	Other noninterest income	$	4,521	$	(4,345)

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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, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		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		Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount			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			Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount
(Dollars in thousands)	(Dollars in thousands)					Financial Instruments			Cash Collateral Received (1)		(Dollars in thousands)							Financial Instruments					Cash Collateral Received (1)
September 30, 2020
March 31, 2021															March 31, 2021
Derivative assets:	Derivative assets:														Derivative assets:
Interest rate swaps		$	0	$	0		$	0	$	0	$	0	$	0

Foreign exchange forwards	Foreign exchange forwards	142,605		0			142,605		(56,584)		(19,049)		66,972		Foreign exchange forwards	$	239,143		$	0	$	239,143		$	(77,667)	$	(38,286)	$	123,190
Foreign currency options	Foreign currency options	2,986		0			2,986		(2,323)		(19)		644		Foreign currency options	1,040			0		1,040			(413)		(148)		479
Client interest rate derivatives	Client interest rate derivatives	79,270		0			79,270		(79,270)		0		0		Client interest rate derivatives	65,123			0		65,123			(65,123)		0		0
Total derivative assets	Total derivative assets	224,861		0			224,861		(138,177)		(19,068)		67,616		Total derivative assets	305,306			0		305,306			(143,203)		(38,434)		123,669
Reverse repurchase, securities borrowing, and similar arrangements	Reverse repurchase, securities borrowing, and similar arrangements	450,164		0			450,164		(450,164)		0		0		Reverse repurchase, securities borrowing, and similar arrangements	288,438			0		288,438			(288,438)		0		0
Total	Total	$	675,025	$	0		$	675,025	$	(588,341)	$	(19,068)	$	67,616	Total	$	593,744		$	0	$	593,744		$	(431,641)	$	(38,434)	$	123,669
December 31, 2019
December 31, 2020															December 31, 2020
Derivative assets:	Derivative assets:														Derivative assets:
Interest rate swaps		$	22,676	$	0		$	22,676	$	(22,598)	$	0	$	78

Foreign exchange forwards	Foreign exchange forwards	114,546		0			114,546		(36,855)		(17,095)		60,596		Foreign exchange forwards	$	215,275		$	0	$	215,275		$	(75,983)	$	(20,550)	$	118,742
Foreign currency options	Foreign currency options	1,308		0			1,308		(848)		(335)		125		Foreign currency options	1,702			0		1,702			(1,045)		(3)		654
Client interest rate derivatives	Client interest rate derivatives	28,811		0			28,811		(28,811)		0		0		Client interest rate derivatives	67,854			0		67,854			(67,854)		0		0
Total derivative assets	Total derivative assets	167,341		0			167,341		(89,112)		(17,430)		60,799		Total derivative assets	284,831			0		284,831			(144,882)		(20,553)		119,396
Reverse repurchase, securities borrowing, and similar arrangements	Reverse repurchase, securities borrowing, and similar arrangements	289,340		0			289,340		(289,340)		0		0		Reverse repurchase, securities borrowing, and similar arrangements	226,847			0		226,847			(226,847)		0		0
Total	Total	$	456,681	$	0		$	456,681	$	(378,452)	$	(17,430)	$	60,799	Total	$	511,678		$	0	$	511,678		$	(371,729)	$	(20,553)	$	119,396

(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.

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The following table summarizes our liabilities subject to enforceable master netting arrangements as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		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		Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				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			Gross Amounts Not Offset in the Statement of Financial Position but Subject to Master Netting Arrangements				Net Amount
(Dollars in thousands)	(Dollars in thousands)					Financial Instruments			Cash Collateral Pledged (1)		(Dollars in thousands)							Financial Instruments					Cash Collateral Pledged (1)
September 30, 2020
March 31, 2021															March 31, 2021
Derivative liabilities:	Derivative liabilities:														Derivative liabilities:
Interest rate swaps		$	0	$	0		$	0	$	0	$	0	$	0

Foreign exchange forwards	Foreign exchange forwards	109,237		0			109,237		(49,862)		(12,918)		46,457		Foreign exchange forwards	$	201,492		$	0	$	201,492		$	(61,303)	$	(58,582)	$	81,607
Foreign currency options	Foreign currency options	2,986		0			2,986		(644)		0		2,342		Foreign currency options	1,040			0		1,040			(491)		0		549
Client interest rate derivatives	Client interest rate derivatives	25,558		0			25,558		0		(24,898)		660		Client interest rate derivatives	68,954			0		68,954			(53,003)		(15,570)		381
Total derivative liabilities	Total derivative liabilities	137,781		0			137,781		(50,506)		(37,816)		49,459		Total derivative liabilities	271,486			0		271,486			(114,797)		(74,152)		82,537
Repurchase, securities lending, and similar arrangements	Repurchase, securities lending, and similar arrangements	0		0			0		0		0		0		Repurchase, securities lending, and similar arrangements	0			0		0			0		0		0
Total	Total	$	137,781	$	0		$	137,781	$	(50,506)	$	(37,816)	$	49,459	Total	$	271,486		$	0	$	271,486		$	(114,797)	$	(74,152)	$	82,537
December 31, 2019
December 31, 2020															December 31, 2020
Derivative liabilities:	Derivative liabilities:														Derivative liabilities:
Interest rate swaps		$	25,623	$	0		$	25,623	$	(22,676)	$	(2,947)	$	0

Foreign exchange forwards	Foreign exchange forwards	96,899		0			96,899		(33,314)		(22,030)		41,555		Foreign exchange forwards	$	209,131		$	0	$	209,131		$	(84,547)	$	(45,367)	$	79,217
Foreign currency options	Foreign currency options	1,308		0			1,308		(531)		0		777		Foreign currency options	1,702			0		1,702			(645)		(8)		1,049
Client interest rate derivatives	Client interest rate derivatives	14,154		0			14,154		0		(13,936)		218		Client interest rate derivatives	26,646			0		26,646			0		(26,100)		546
Total derivative liabilities	Total derivative liabilities	137,984		0			137,984		(56,521)		(38,913)		42,550		Total derivative liabilities	237,479			0		237,479			(85,192)		(71,475)		80,812
Repurchase, securities lending, and similar arrangements	Repurchase, securities lending, and similar arrangements	0		0			0		0		0		0		Repurchase, securities lending, and similar arrangements	0			0		0			0		0		0
Total	Total	$	137,984	$	0		$	137,984	$	(56,521)	$	(38,913)	$	42,550	Total	$	237,479		$	0	$	237,479		$	(85,192)	$	(71,475)	$	80,812

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(1)Cash collateral pledged to our counterparties in relation to market value exposures of derivative contracts in a liability position and repurchase agreements are recorded as a component of “cash and cash equivalents" on our consolidated balance sheets.

~~12.~~11. Noninterest Income

All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income. Included below is a summary of noninterest income for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Noninterest income:
Gains on investment securities, net $ 189,837 $ 29,849 $ 270,760 $ 106,575
Gains on equity warrant assets, net 53,766 37,561 93,667 107,213
Client investment fees 31,914 46,679 107,192 136,905
Foreign exchange fees 43,881 40,309 127,642 116,863
Credit card fees 22,756 30,158 72,348 86,431
Deposit service charges 22,015 22,482 67,115 65,496
Lending related fees 13,562 11,707 37,851 36,857
Letters of credit and standby letters of credit fees 12,192 10,842 35,155 31,205
Investment banking revenue 92,181 38,516 280,551 137,005
Commissions 16,257 12,275 49,197 40,812
Other 49,222 13,631 76,887 42,773
Total noninterest income $ 547,583 $ 294,009 $ 1,218,365 $ 908,135

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	Three months ended March 31,
(Dollars in thousands)	2021		2020
Noninterest income:
Gains on investment securities, net	$	167,078	$	46,055
Gains on equity warrant assets, net	221,685		13,395
Client investment fees	20,065		43,393
Foreign exchange fees	57,393		47,505
Credit card fees	27,567		28,304
Deposit service charges	25,151		24,589
Lending related fees	15,657		13,125
Letters of credit and standby letters of credit fees	13,051		11,542
Investment banking revenue	142,302		46,867
Commissions	24,439		16,022
Other	29,792		11,137
Total noninterest income	$	744,180	$	301,934

Gains on investment securities, net

Net gains on investment securities include both gains and losses from our non-marketable and other equity securities, which include public equity securities held as a result of exercised equity warrant assets, gains and losses from sales of our AFS debt securities portfolio, when applicable, and carried interest.

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, our China ~~Joint Venture,~~joint venture (SPD-SVB), debt funds, private and public portfolio companies, which include public equity securities held as a result of exercised equity warrant assets and qualified affordable housing projects. We experience variability in the performance of our non-marketable and other equity securities from period to period, 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, changes in liquidity events and general economic and market conditions. Unrealized gains from non-marketable and other equity securities for any single period are typically driven by valuation changes.

The extent to which any unrealized gains or losses 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 (e.g., lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities, and the timing of such actual sales or distributions, which, to the extent such securities are managed by our managed funds, are subject to our funds' separate discretionary sales/distributions and governance processes.

Carried interest is comprised of preferential allocations of profits recognizable when the return on assets of our individual managed fund of funds and direct venture funds exceeds certain performance targets and is payable to us, as the general partners of the managed funds. The carried interest we earn is often shared with employees, who are also members of the general partner entities. We record carried interest on a quarterly basis by measuring fund performance to date versus the performance target. For our unconsolidated managed funds, carried interest is recorded as gains on investment securities, net. For our consolidated managed funds, it is recorded as a component of net income attributable to noncontrolling interests. Carried interest allocated to others is recorded as a component of net income attributable to noncontrolling interests. Any carried interest paid to us (or our employees) may be subject to reversal to the extent fund performance declines to a level where inception to date carried interest is lower than actual payments made by the funds. The limited partnership agreements for our funds provide that carried interest is generally not paid to the general partners until the funds have provided a full return of contributed capital to the limited partners. Accrued, but unpaid carried interest may be subject to reversal to the extent that the fund performance declines to a level where inception-to-date carried interest is less than

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prior amounts recognized. Carried interest income is accounted for under an ownership model based on ASC 323 — Equity Method of Accounting and ASC 810 — Consolidation.

Our ~~available-for-sale~~AFS securities portfolio is a fixed income investment portfolio that is managed with the objective of earning an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/liability management objectives. Though infrequent, sales of debt securities in our AFS securities portfolio may result in net gains or losses and are conducted pursuant to the guidelines of our investment policy related to the management of our liquidity position and interest rate risk.

Gains on investment securities are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our investment-related activities. A summary of gains and losses on investment securities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Gains on non-marketable and other equity securities, net $ 189,837 $ 29,849 $ 209,595 $ 110,480
Gains (losses) on sales of available-for-sale securities, net — 0 61,165 (3,905)
Total gains on investment securities, net $ 189,837 $ 29,849 $ 270,760 $ 106,575

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	Three months ended March 31,
(Dollars in thousands)	2021		2020
Gains (losses) on non-marketable and other equity securities, net	$	167,078	$	(15,110)
Gains on sales of available-for-sale securities, net	0		61,165
Total gains on investment securities, net	$	167,078	$	46,055

Gains on equity warrant assets, net

Gains on equity warrant assets are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities. A summary of net gains on equity warrant assets for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Equity warrant assets:	Equity warrant assets:									Equity warrant assets:
Gains on exercises, net	Gains on exercises, net	$	23,940	$	30,047	$	59,370	$	90,357	Gains on exercises, net	$	159,637	$	19,193
Terminations	Terminations	(361)		(481)		(1,332)		(2,931)		Terminations	(249)		(326)
Changes in fair value, net	Changes in fair value, net	30,187		7,995		35,629		19,787		Changes in fair value, net	62,297		(5,472)
Total net gains on equity warrant assets	Total net gains on equity warrant assets	$	53,766	$	37,561	$	93,667	$	107,213	Total net gains on equity warrant assets	$	221,685	$	13,395

Client investment fees

Client investment fees include fees earned from discretionary investment management services for substantially all clients, managing clients’ portfolios based on their investment policies, strategies and objectives and investment advisory fees. Revenue is recognized on a monthly basis upon completion of our performance obligation and consideration is typically received in the subsequent month. Included in our sweep money market fees are Rule 12(b)-1 fees, revenue sharing and customer transactional-based fees. Rule 12(b)-1 fees and revenue sharing are recognized as earned based on client funds that are invested in the period, typically monthly. Transactional based fees are earned and recognized on fixed income securities when the transaction is executed on the clients' behalf. Amounts paid to third-party service providers are predominantly expensed, such that client investment fees are recorded gross of payments made to third parties. A summary of client investment fees by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Client investment fees by type:	Client investment fees by type:									Client investment fees by type:
Sweep money market fees	Sweep money market fees	$	18,155	$	26,202	$	60,617	$	79,698	Sweep money market fees	$	10,461	$	23,049
Asset management fees (1)	Asset management fees (1)	12,172		7,256		32,905		20,883		Asset management fees (1)	9,020		9,137
Repurchase agreement fees	Repurchase agreement fees	1,587		13,221		13,670		36,324		Repurchase agreement fees	584		11,207
Total client investment fees (2)	Total client investment fees (2)	$	31,914	$	46,679	$	107,192	$	136,905	Total client investment fees (2)	$	20,065	$	43,393

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(1)Represents fees earned from investments in third-party money market mutual funds and fixed-income securities managed by SVB Asset Management.

(2)Represents fees earned on client investment funds that are maintained at third-party financial institutions and are not recorded on our balance sheet.

Foreign exchange fees

Foreign exchange fees represent the income differential between purchases and sales of foreign currency on behalf of our clients, primarily from spot contracts. Foreign exchange spot contract fees are recognized upon the completion of the single performance obligation, the execution of a spot trade in exchange for a fee. In line with customary business practice, the legal right transfers to the client upon execution of a foreign exchange contract on the trade date, and as such, we currently recognize our fees based on the trade date and the transactions are typically settled within two business days.

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Forward contract and option premium fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities. A summary of foreign exchange fee income by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Foreign exchange fees by instrument type:	Foreign exchange fees by instrument type:									Foreign exchange fees by instrument type:
Spot contract commissions	Spot contract commissions	$	38,794	$	36,836	$	112,821	$	106,561	Spot contract commissions	$	54,929	$	40,934
Forward contract commissions	Forward contract commissions	4,613		3,371		14,004		10,144		Forward contract commissions	2,348		6,339
Option premium fees	Option premium fees	474		102		817		158		Option premium fees	116		232
Total foreign exchange fees	Total foreign exchange fees	$	43,881	$	40,309	$	127,642	$	116,863	Total foreign exchange fees	$	57,393	$	47,505

Credit card fees

Credit card fees include interchange income from credit and debit cards and fees earned from processing transactions for merchants. Interchange income is earned after satisfying our performance obligation of providing nightly settlement services to a payment network. Costs related to rewards programs are recorded when the rewards are earned by the customer and presented as a reduction to interchange fee income. Rewards programs continue to be accounted for under ASC 310 - Receivables. Our performance obligations for merchant service fees are to transmit data and funds between the merchant and the payment network. Credit card interchange and merchant service fees are earned daily upon completion of transaction settlement services.

Annual card service fees are recognized on a straight-line basis over a 12-month period and continue to be accounted for under ASC 310 - Receivables.

A summary of credit card fees by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Credit card fees by instrument type:	Credit card fees by instrument type:									Credit card fees by instrument type:
Card interchange fees, net	Card interchange fees, net	$	18,168	$	24,560	$	55,257	$	68,808	Card interchange fees, net	$	22,848	$	21,775
Merchant service fees	Merchant service fees	3,670		3,943		13,727		12,763		Merchant service fees	3,772		5,027
Card service fees	Card service fees	918		1,655		3,364		4,860		Card service fees	947		1,502
Total credit card fees	Total credit card fees	$	22,756	$	30,158	$	72,348	$	86,431	Total credit card fees	$	27,567	$	28,304

Deposit service charges

Deposit service charges include fees earned from performing cash management activities and other deposit account services. Deposit services include, but are not limited to, the following: receivables services, which include merchant services, remote capture, lockbox, electronic deposit capture, and fraud control services. Payment and cash management products and services include wire transfer and automated clearing house payment services to enable clients to transfer funds more quickly, as well as business bill pay, business credit and debit cards, account analysis, and disbursement services. Deposit service charges are recognized over the period in which the related performance obligation is provided, generally on a monthly basis, and are presented in the "Disaggregation of revenue from contracts with customers" table below.

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Lending related fees

Unused commitment fees, minimum finance fees and unused line fees are recognized as earned on a monthly basis. Fees that qualify for syndication treatment are recognized at the completion of the syndicated loan deal for which the fees were received. Lending related fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our lending-related activities. A summary of lending related fees by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Lending related fees by instrument type:	Lending related fees by instrument type:									Lending related fees by instrument type:
Unused commitment fees	Unused commitment fees	$	9,872	$	8,339	$	26,602	$	25,060	Unused commitment fees	$	12,256	$	8,406
Other	Other	3,690		3,368		11,249		11,797		Other	3,401		4,719
Total lending related fees	Total lending related fees	$	13,562	$	11,707	$	37,851	$	36,857	Total lending related fees	$	15,657	$	13,125

Letters of credit and standby letters of credit fees

Commercial and standby letters of credit represent conditional commitments issued by us on behalf of a client to guarantee the performance of the client to a third party when certain specified future events have occurred. Fees generated from letters of credit and standby letters of credit are deferred as a component of other liabilities and recognized in noninterest income over the commitment period using the straight-line method, based on the likelihood that the commitment being drawn down will be remote. Letters of credit and standby letters of credit fees are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our lending related activities.

Investment banking revenue

~~The Company earns~~We earn investment banking revenue from clients for providing services related to securities underwriting, private placements and advisory services on strategic matters such as mergers and acquisitions. Underwriting fees are attributable to public and private offerings of equity and debt securities and are recognized at the point in time when the offering has been deemed to be completed by the lead manager of the underwriting group. Once the offering is completed, the performance obligation has been ~~satisfied and the Company recognizes~~satisfied; we recognize the applicable management fee as well as the underwriting fee, net of consideration payable to customers. ~~The Company recognizes private~~Private placement fees are recognized at the point in time when the private placement is completed, which is generally when the client accepts capital from the fund raise. Advisory fees from mergers and acquisitions engagements are generally recognized at the point in time when the related transaction is completed. Expenses are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at a point in time. All other deal-related expenses are expensed as incurred. ~~The Company has~~We have determined that ~~it acts~~we act as principal in the majority of these transactions and therefore ~~presents~~present expenses gross within other operating expenses.

A summary of investment banking revenue by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Investment banking revenue:	Investment banking revenue:									Investment banking revenue:
Underwriting fees	Underwriting fees	$	85,009	$	31,016	$	247,384	$	109,371	Underwriting fees	$	125,076	$	31,290
Advisory fees	Advisory fees	1,761		5,200		26,170		22,789		Advisory fees	4,450		15,487
Private placements and other	Private placements and other	5,411		2,300		6,997		4,845		Private placements and other	12,776		90
Total investment banking revenue	Total investment banking revenue	$	92,181	$	38,516	$	280,551	$	137,005	Total investment banking revenue	$	142,302	$	46,867

Commissions

Commissions include commissions received from customers for the execution of agency-based brokerage transactions in listed and over-the-counter equities. The execution of each trade order represents a distinct performance obligation and the transaction price is fixed at the point in time or trade order execution. Trade execution is satisfied at the point in time that the customer has control of the asset and as such, fees are recorded on a trade date basis. Commissions are presented in the "Disaggregation of revenue from contracts with customers" table below.

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Other

Other noninterest income primarily includes income from fund management fees, gains from conversion of convertible debt options and service revenue. Fund management fees are comprised of fees charged directly to our managed funds of funds and direct venture funds. Fund management fees are based upon the contractual terms of the limited partnership agreements and are generally recognized as earned over the specified contract period, which is generally equal to the life of the individual fund. Fund management fees are calculated as a percentage of committed capital and collected in advance and are received quarterly. Fund management fees for certain of our limited partnership agreements are calculated as a percentage of distributions made by the funds and revenue is recorded only at the time of a distribution event. As distribution events are not predetermined for these certain funds, management fees are considered variable and constrained under ASC 606.

Gains from conversion of convertible debt options represent unrealized valuation gains on loan conversion derivative assets, and realized gains from the conversion of debt instruments, convertible into a third party’s common stock upon a triggering event such as an IPO. Gains from conversion of convertible debt options are recognized outside of the scope of ASC 606 as it explicitly excludes noninterest income earned from our derivative-related activities.

Other service revenue primarily consists of dividend income on FHLB/FRB stock, correspondent bank rebate income, incentive fees related to carried interest and other fee income. We recognize revenue when our performance obligations are met and record revenues on a daily/monthly, quarterly, semi-annual or annual basis. For event driven revenue sources, we recognize revenue when: (i) persuasive evidence of an arrangement exists, (ii) we have performed the service, provided we have no other remaining obligations to the customer, (iii) the fee is fixed or determinable and (iv) collectability is probable.

A summary of other noninterest income by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Other noninterest income by instrument type:	Other noninterest income by instrument type:									Other noninterest income by instrument type:
Fund management fees	Fund management fees	$	9,669	$	8,493	$	26,422	$	24,292	Fund management fees	$	14,559	$	7,908
Net (losses) gains on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)		(547)		(78)		(592)		173
Gains from conversion of convertible debt options		30,018		0		30,018		0
Net losses on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)										Net losses on revaluation of foreign currency instruments, net of foreign exchange forward contracts (1)	(952)		(244)
Other service revenue	Other service revenue	10,082		5,216		21,039		18,308		Other service revenue	16,185		3,473
Total other noninterest income	Total other noninterest income	$	49,222	$	13,631	$	76,887	$	42,773	Total other noninterest income	$	29,792	$	11,137

(1)Represents the net revaluation of client and internal foreign currency denominated financial instruments. We enter into foreign exchange forward contracts to economically reduce our foreign exchange exposure related to client and internal foreign currency denominated financial instruments.

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Disaggregation of revenue from contracts with customers

The following tables present our revenues from contracts with customers disaggregated by revenue source and segment for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


Three months ended September 30, 2020 (Dollars in thousands)		Global Commercial Bank (2)		SVB Private Bank		SVB Capital (2)		SVB Leerink (2)		Other Items		Total
Three months ended March 31, 2021 (Dollars in thousands)														Three months ended March 31, 2021 (Dollars in thousands)	Global Commercial Bank (2)		SVB Private Bank		SVB Capital (2)		SVB Leerink (2)		Other Items		Total
Revenue from contracts with customers:	Revenue from contracts with customers:													Revenue from contracts with customers:
Client investment fees	Client investment fees	$	31,132	$	782	$	0	$	0	$	0	$	31,914	Client investment fees	$	19,253	$	812	$	0	$	0	$	0	$	20,065
Spot contract commissions	Spot contract commissions	38,546		108		0		0		140		38,794		Spot contract commissions	54,603		158		0		0		168		54,929
Card interchange fees, gross	Card interchange fees, gross	29,255		5		0		0		287		29,547		Card interchange fees, gross	41,293		4		0		0		267		41,564
Merchant service fees	Merchant service fees	3,670		0		0		0		0		3,670		Merchant service fees	3,772		0		0		0		0		3,772
Deposit service charges	Deposit service charges	21,914		20		0		0		81		22,015		Deposit service charges	24,550		19		0		0		582		25,151
Investment banking revenue	Investment banking revenue	0		0		0		92,181		0		92,181		Investment banking revenue	0		0		0		142,302		0		142,302
Commissions	Commissions	0		0		0		16,257		0		16,257		Commissions	0		0		0		24,439		0		24,439
Fund management fees	Fund management fees	0		0		8,239		1,430		0		9,669		Fund management fees	0		0		13,119		1,440		0		14,559
Performance fees	Performance fees	0		0		1,613		0		0		1,613		Performance fees	0		0		69		0		0		69
Correspondent bank rebates	Correspondent bank rebates	1,377		0		0		0		0		1,377		Correspondent bank rebates	1,289		0		0		0		0		1,289
Total revenue from contracts with customers	Total revenue from contracts with customers	$	125,894	$	915	$	9,852	$	109,868	$	508	$	247,037	Total revenue from contracts with customers	$	144,760	$	993	$	13,188	$	168,181	$	1,017	$	328,139

Revenues outside the scope of ASC 606 (1)	Revenues outside the scope of ASC 606 (1)	21,700		1		50,528		3,783		224,534		300,546		Revenues outside the scope of ASC 606 (1)	13,911		5		55,406		2,786		343,933		416,041
Total noninterest income	Total noninterest income	$	147,594	$	916	$	60,380	$	113,651	$	225,042	$	547,583	Total noninterest income	$	158,671	$	998	$	68,594	$	170,967	$	344,950	$	744,180

(1)Amounts are accounted for under separate guidance than ASC 606.

(2)Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."

Three months ended September 30, 2019
(Dollars in thousands) Global
Commercial
Bank (2) SVB Private
Bank SVB Capital (2)   SVB
Leerink (2) Other Items Total
Revenue from contracts with customers:
Client investment fees $ 46,171 $ 508 $ 0 $ 0 $ 0 $ 46,679
Spot contract commissions 36,644 89 0 0 103 36,836
Card interchange fees, gross 34,867 0 0 0 181 35,048
Merchant service fees 3,943 0 0 0 0 3,943
Deposit service charges 22,263 36 0 0 183 22,482
Investment banking revenue 0 0 0 38,516 0 38,516
Commissions 0 0 0 12,275 0 12,275
Fund management fees 0 0 7,063 1,430 0 8,493
Correspondent bank rebates 1,633 0 0 0 0 1,633
Total revenue from contracts with customers $ 145,521 $ 633 $ 7,063 $ 52,221 $ 467 $ 205,905
Revenues outside the scope of ASC 606 (1) 15,508 1 27,892 726 43,977 88,104
Total noninterest income $ 161,029 $ 634 $ 34,955 $ 52,947 $ 44,444 $ 294,009

~~(1)Amounts are accounted for under separate guidance than ASC 606.~~

~~(2)Global Commercial Bank’s and SVB Capital’s components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."~~

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Nine months ended September 30, 2020 (Dollars in thousands)		Global Commercial Bank (2)		SVB Private Bank		SVB Capital (2)		SVB Leerink (2)		Other Items		Total
Three months ended March 31, 2020 (Dollars in thousands)														Three months ended March 31, 2020 (Dollars in thousands)	Global Commercial Bank (2)		SVB Private Bank		SVB Capital (2)		SVB Leerink (2)		Other Items		Total
Revenue from contracts with customers:	Revenue from contracts with customers:													Revenue from contracts with customers:
Client investment fees	Client investment fees	$	105,176	$	2,016	$	0	$	0	$	0	$	107,192	Client investment fees	$	42,736	$	657	$	0	$	0	$	0	$	43,393
Spot contract commissions	Spot contract commissions	112,086		367		0		0		368		112,821		Spot contract commissions	40,675		161		0		0		98		40,934
Card interchange fees, gross	Card interchange fees, gross	90,909		17		0		0		1,144		92,070		Card interchange fees, gross	35,724		7		0		0		566		36,297
Merchant service fees	Merchant service fees	13,727		0		0		0		0		13,727		Merchant service fees	5,027		0		0		0		0		5,027
Deposit service charges	Deposit service charges	66,612		60		0		0		443		67,115		Deposit service charges	24,238		27		0		0		324		24,589
Investment banking revenue	Investment banking revenue	0		0		0		280,551		0		280,551		Investment banking revenue	0		0		0		46,867		0		46,867
Commissions	Commissions	0		0		0		49,197		0		49,197		Commissions	0		0		0		16,022		0		16,022
Fund management fees	Fund management fees	0		0		22,132		4,290		0		26,422		Fund management fees	0		0		6,478		1,430		0		7,908
Performance fees		0		0		3,601		0		0		3,601
Correspondent bank rebates	Correspondent bank rebates	4,151		0		0		0		0		4,151		Correspondent bank rebates	1,403		0		0		0		0		1,403
Total revenue from contracts with customers	Total revenue from contracts with customers	$	392,661	$	2,460	$	25,733	$	334,038	$	1,955	$	756,847	Total revenue from contracts with customers	$	149,803	$	852	$	6,478	$	64,319	$	988	$	222,440

Revenues outside the scope of ASC 606 (1)	Revenues outside the scope of ASC 606 (1)	55,241		26		61,015		6,107		339,129		461,518		Revenues outside the scope of ASC 606 (1)	17,031		48		(1,560)		(1,642)		65,617		79,494
Total noninterest income	Total noninterest income	$	447,902	$	2,486	$	86,748	$	340,145	$	341,084	$	1,218,365	Total noninterest income	$	166,834	$	900	$	4,918	$	62,677	$	66,605	$	301,934

(1)Amounts are accounted for under separate guidance than ASC 606.

Nine months ended September 30, 2019
(Dollars in thousands) Global
Commercial
Bank (2) SVB Private
Bank SVB Capital (2)   SVB
Leerink (2) Other Items Total
Revenue from contracts with customers:
Client investment fees $ 135,551 $ 1,354 $ 0 $ 0 $ 0 $ 136,905
Spot contract commissions 105,877 376 0 0 308 106,561
Card interchange fees, gross 115,468 0 0 0 518 115,986
Merchant service fees 12,764 0 0 0 0 12,764
Deposit service charges 64,806 104 0 0 586 65,496
Investment banking revenue 0 0 0 137,005 0 137,005
Commissions 0 0 0 40,812 0 40,812
Fund management fees 0 0 20,050 4,242 0 24,292
Correspondent bank rebates 4,712 0 0 0 0 4,712
Total revenue from contracts with customers $ 439,178 $ 1,834 $ 20,050 $ 182,059 $ 1,412 $ 644,533
Revenues outside the scope of ASC 606 (1) 32,314 (5) 79,810 6,005 145,478 263,602
Total noninterest income $ 471,492 $ 1,829 $ 99,860 $ 188,064 $ 146,890 $ 908,135

~~(1)Amounts are accounted for under separate guidance than ASC 606.~~

~~(2)Global Commercial Bank’s, SVB Capital’s and SVB Leerink's components of noninterest income are shown net of noncontrolling interests. Noncontrolling interest is included within “Other Items."~~

The timing of revenue recognition may differ from the timing of cash settlements or invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, and unearned revenue when revenue is recognized subsequent to receipt of consideration. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ changes in our contract assets, contract liabilities and receivables were not material. Additionally, revenues recognized during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ that were included in the corresponding contract liability balance at the beginning of the periods were not material.

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~~13.~~12. Other Noninterest Expense

A summary of other noninterest expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Lending and other client related processing costs	Lending and other client related processing costs	$	7,194	$	7,502	$	23,155	$	21,442	Lending and other client related processing costs	$	7,516	$	9,158
Correspondent bank fees	Correspondent bank fees	3,581		3,657		11,400		10,970		Correspondent bank fees	4,301		3,986
Investment banking activities	Investment banking activities	2,835		1,864		13,633		9,918		Investment banking activities	6,730		3,030
Trade order execution costs	Trade order execution costs	2,806		2,615		8,165		7,959		Trade order execution costs	2,988		2,745
Data processing services	Data processing services	3,984		3,066		10,945		8,624		Data processing services	4,606		3,454
Telephone	Telephone	2,342		2,466		6,458		7,629		Telephone	1,872		2,227
Dues and publications	Dues and publications	1,159		1,055		3,199		3,439		Dues and publications	1,103		1,130
Postage and supplies	Postage and supplies	538		720		2,117		2,168		Postage and supplies	570		856
Other	Other	13,114		11,161		38,831		32,910		Other	15,770		14,117
Total other noninterest expense	Total other noninterest expense	$	37,553	$	34,106	$	117,903	$	105,059	Total other noninterest expense	$	45,456	$	40,703

~~14.~~13. Segment Reporting

We have 4 reportable segments for management reporting purposes: Global Commercial Bank, SVB Private Bank, SVB Capital and SVB Leerink. The results of our operating segments are based on our internal management reporting process.

Our Global Commercial Bank and SVB Private Bank 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, these 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 a funding credit is given for deposits raised, and a funding 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 credit 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 tax expense or the ~~provision~~provisions for unfunded credit commitments or held-to-maturity securities (included in provision for credit losses) 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.

For reporting purposes, SVB Financial Group has 4 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 key innovation markets. The Bank provides solutions to the financial needs of commercial clients through credit, treasury management, foreign exchange, trade finance, and other services. In addition, the Bank and its subsidiaries offer a variety of investment services and solutions to its clients that enable them to effectively manage their assets.

◦Our Global Fund Banking ~~(formerly Private Equity)~~ Division provides banking products and services primarily to our private equity and venture capital clients.

◦SVB Wine provides banking products and services to our premium wine industry clients, including vineyard development loans.

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

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•SVB Private Bank is the private banking division of the Bank, which provides a range of personal financial solutions for consumers. Our clients are primarily private equity/venture capital professionals and executive

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leaders of the innovation companies they support. We offer a customized suite of private banking services, including mortgages, home equity lines of credit, restricted and private stock loans, capital call lines of credit and other secured and unsecured lending products, as well as cash and wealth management services. In addition, we provide real estate secured loans to eligible employees through our Employee Home Ownership Program.

•SVB Capital is the funds management business of SVB Financial Group, which focuses primarily on venture capital investments. 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 that invest in other venture capital ~~funds.~~funds, investments in certain debt funds in which we are a strategic investor and WestRiver Group's debt fund business. SVB Capital generates income for the Company primarily from investment returns (including carried interest allocations) and management fees.

•SVB Leerink is an investment bank specializing in the equity and convertible capital markets, mergers and acquisitions, equity research and sales and trading for growth and innovation-minded healthcare and life science companies and operates as a wholly-owned subsidiary of SVB Financial. SVB Leerink provides investment banking services across all subsectors of healthcare including: biotechnology, pharmaceuticals, medical devices, diagnostic and life science tools, healthcare services and digital health. SVB Leerink focuses on two primary lines of business: (i) investment banking focused on providing companies with capital-raising services, financial advice on mergers and acquisitions, sales and trading services and equity research, and (ii) sponsorship of private investment funds.

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

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Our segment information for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


(Dollars in thousands)	(Dollars in thousands)	Global Commercial Bank (1)		SVB Private Bank		SVB Capital (1)		SVB Leerink (1)		Other Items (2)		Total		(Dollars in thousands)	Global Commercial Bank (1)		SVB Private Bank		SVB Capital (1)		SVB Leerink (1)		Other Items (2)		Total
Three months ended September 30, 2020
Net interest income (loss)		$	512,963	$	19,145	$	2	$	175	$	(4,545)	$	527,740
Reduction (provision for) credit losses		37,847		14,881		—		—		(710)		52,018
Three months ended March 31, 2021														Three months ended March 31, 2021
Net interest income														Net interest income	$	618,609	$	27,025	$	2	$	166	$	13,777	$	659,579
(Provision for) reduction of credit losses														(Provision for) reduction of credit losses	(44,503)		8,567		0		0		17,257		(18,679)
Noninterest income	Noninterest income	147,594		916		60,380		113,651		225,042		547,583		Noninterest income	158,671		998		68,594		170,967		344,950		744,180
Noninterest expense (3)	Noninterest expense (3)	(258,035)		(12,293)		(11,198)		(77,567)		(131,928)		(491,021)		Noninterest expense (3)	(277,763)		(12,958)		(15,233)		(136,352)		(193,695)		(636,001)
Income before income tax expense (4)	Income before income tax expense (4)	$	440,369	$	22,649	$	49,184	$	36,259	$	87,859	$	636,320	Income before income tax expense (4)	$	455,014	$	23,632	$	53,363	$	34,781	$	182,289	$	749,079
Total average loans, amortized cost	Total average loans, amortized cost	$	30,763,715	$	4,263,324	$	0	$	0	$	2,291,561	$	37,318,600	Total average loans, amortized cost	$	39,286,744	$	4,977,080	$	0	$	0	$	2,017,652	$	46,281,476
Total average assets (5) (6)	Total average assets (5) (6)	77,802,730		4,297,011		413,882		605,263		5,229,480		88,348,366		Total average assets (5) (6)	108,927,856		5,028,004		576,705		767,300		9,514,743		124,814,608
Total average deposits	Total average deposits	74,825,725		2,163,903		0		0		690,388		77,680,016		Total average deposits	106,267,572		3,292,673		0		0		1,048,169		110,608,414
Three months ended September 30, 2019
Three months ended March 31, 2020														Three months ended March 31, 2020
Net interest income	Net interest income	$	455,161	$	12,772	$	9	$	277	$	52,425	$	520,644	Net interest income	$	463,835	$	15,164	$	21	$	201	$	44,916	$	524,137
Provision for credit losses		(34,075)		(1,910)		0		0		(551)		(36,536)
(Provision for) reduction of credit losses														(Provision for) reduction of credit losses	(194,411)		(54,490)		0		0		5,421		(243,480)
Noninterest income	Noninterest income	161,029		634		34,955		52,947		44,444		294,009		Noninterest income	166,834		900		4,918		62,677		66,605		301,934
Noninterest expense (3)	Noninterest expense (3)	(213,786)		(11,638)		(8,129)		(55,200)		(102,571)		(391,324)		Noninterest expense (3)	(224,855)		(10,090)		(8,585)		(62,037)		(94,018)		(399,585)
Income (loss) before income tax expense (4)	Income (loss) before income tax expense (4)	$	368,329	$	(142)	$	26,835	$	(1,976)	$	(6,253)	$	386,793	Income (loss) before income tax expense (4)	$	211,403	$	(48,516)	$	(3,646)	$	841	$	22,924	$	183,006
Total average loans, amortized cost	Total average loans, amortized cost	$	25,839,647	$	3,400,889	$	0	$	0	$	581,890	$	29,822,426	Total average loans, amortized cost	$	29,137,484	$	3,857,478	$	0	$	0	$	665,766	$	33,660,728
Total average assets (5) (6) (8)		58,384,473		3,431,313		396,031		428,848		2,687,083		65,327,748
Total average deposits		55,250,154		1,497,303		0		0		487,512		57,234,969
Nine months ended September 30, 2020
Net interest income		$	1,461,768	$	52,952	$	28	$	373	$	49,683	$	1,564,804
Provision for credit losses		(200,020)		(44,194)		0		0		(13,729)		(257,943)
Noninterest income		447,902		2,486		86,748		340,145		341,084		1,218,365
Noninterest expense (3)		(724,233)		(32,547)		(28,040)		(248,254)		(337,168)		(1,370,242)
Income (loss) before income tax expense (4)		$	985,417	$	(21,303)	$	58,736	$	92,264	$	39,870	$	1,154,984
Total average loans, net of unearned income		$	30,126,870	$	4,053,018	$	0	$	0	$	1,656,039	$	35,835,927
Total average assets (5) (6)	Total average assets (5) (6)	69,212,733		4,087,786		430,391		514,836		5,514,904		79,760,650		Total average assets (5) (6)	61,813,129		3,892,400		447,201		483,648		5,770,790		72,407,168
Total average deposits	Total average deposits	66,408,359		2,069,196		0		0		688,509		69,166,064		Total average deposits	59,217,433		1,922,663		0		0		668,135		61,808,231
Nine months ended September 30, 2019
Net interest income		$	1,360,997	$	37,200	$	20	$	961	$	163,755	$	1,562,933
Provision for credit losses		(79,175)		(1,779)		0		0		(8,079)		(89,033)
Noninterest income		471,492		1,829		99,860		188,064		146,890		908,135
Noninterest expense (3)		(617,933)		(30,015)		(21,794)		(177,675)		(293,093)		(1,140,510)
Income before income tax expense (4)		$	1,135,381	$	7,235	$	78,086	$	11,350	$	9,473	$	1,241,525
Total average loans, net of unearned income		$	25,457,997	$	3,235,943	$	0	$	0	$	517,020	$	29,210,960
Total average assets (5) (6)		54,196,976		3,264,071		382,707		380,290		2,990,088		61,214,132
Total average deposits		51,352,644		1,461,170		0		0		517,530		53,331,344

(1)Global Commercial Bank’s, SVB Capital’s and SVB Leerink'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."

(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. Net interest income consists primarily of interest earned from our fixed income investment portfolio, net of FTP. Noninterest income consists primarily of gains or losses on equity warrant assets, gains or losses on the sale of AFS securities and gains or losses on equity securities from

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exercised warrant assets. Noninterest expense consists primarily of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses.

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(3)The Global Commercial Bank segment includes direct depreciation and amortization of ~~$6.4~~$6.8 million and ~~$5.1~~$5.5 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $17.7 million and $14.8 million for the nine months ended September 30, 2020 and 2019.~~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 average liabilities and total average stockholders' equity for each segment to reconcile the results to the consolidated financial statements prepared in conformity with GAAP.

(6)Included in the total average assets for SVB Leerink is goodwill of $137.8 million for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

~~15.~~14. Off-Balance Sheet Arrangements, Guarantees and Other Commitments

Commitments to Extend Credit

The following table summarizes information related to our commitments to extend credit at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		(Dollars in thousands)	March 31, 2021		December 31, 2020
Loan commitments available for funding: (1)	Loan commitments available for funding: (1)					Loan commitments available for funding: (1)	$	30,923,217	$	28,975,133
Fixed interest rate commitments		$	2,474,804	$	2,434,042
Variable interest rate commitments		24,796,923		19,309,317
Total loan commitments available for funding		27,271,727		21,743,359

Commercial and standby letters of credit (2)	Commercial and standby letters of credit (2)	3,058,069		2,778,561		Commercial and standby letters of credit (2)	3,063,410		3,007,118
Total unfunded credit commitments	Total unfunded credit commitments	$	30,329,796	$	24,521,920	Total unfunded credit commitments	$	33,986,627	$	31,982,251
Commitments unavailable for funding (3)		$	2,519,517	$	3,051,075

Allowance for unfunded credit commitments ~~(4)~~(3)	Allowance for unfunded credit commitments ~~(4)~~(3)	101,515		67,656		Allowance for unfunded credit commitments ~~(4)~~(3)	104,750		120,796

(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)~~Our allowance for credit losses 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, 2020.~~March 31, 2021. 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
Financial standby letters of credit $ 2,838,280 $ 90,452 $ 2,928,732 $ 2,928,732
Performance standby letters of credit 109,224 18,057 127,281 127,281
Commercial letters of credit 2,056 0 2,056 2,056
Total $ 2,949,560 $ 108,509 $ 3,058,069 $ 3,058,069

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(Dollars in thousands)	Expires in One Year or Less		Expires After One Year		Total Amount Outstanding		Maximum Amount of Future Payments
Financial standby letters of credit	$	2,833,713	$	79,552	$	2,913,265	$	2,913,265
Performance standby letters of credit	118,222		20,116		138,338		138,338
Commercial letters of credit	11,807		0		11,807		11,807
Total	$	2,963,742	$	99,668	$	3,063,410	$	3,063,410

Deferred fees related to financial and performance standby letters of credit were ~~$16.5~~$17.0 million at ~~September 30, 2020~~March 31, 2021 and ~~$17.2~~$16.9 million at December 31, ~~2019.~~2020. At ~~September 30, 2020,~~March 31, 2021, collateral in the form of cash of $1.7 billion was available to us to reimburse losses, if any, under financial and performance standby letters of credit.

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Commitments to Invest in Venture Capital and Private Equity Funds

We make commitments to invest in venture capital and private equity funds, which generally make investments in 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 call most of the capital commitments over 5 to 7 years, and in certain cases, the funds may not call 100% of committed capital. 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, 2020:~~March 31, 2021:


(Dollars in thousands)	(Dollars in thousands)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund (3)		(Dollars in thousands)	SVBFG Capital Commitments		SVBFG Unfunded Commitments		SVBFG Ownership of each Fund
CP I, LP		$	6,000	$	270	10.7	%
CP II, LP (1)	CP II, LP (1)	1,200		162		5.1		CP II, LP (1)	$	1,200	$	162	5.1	%
Capital Preferred Return Fund, LP	Capital Preferred Return Fund, LP	12,688		0		20.0		Capital Preferred Return Fund, LP	12,688		0		20.0
Growth Partners, LP	Growth Partners, LP	24,670		1,340		33.0		Growth Partners, LP	24,670		1,340		33.0
Strategic Investors Fund, LP	Strategic Investors Fund, LP	15,300		688		12.6		Strategic Investors Fund, LP	15,300		688		12.6
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	15,000		1,050		8.6		Strategic Investors Fund II, LP	15,000		1,050		8.6
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	15,000		1,275		5.9		Strategic Investors Fund III, LP	15,000		1,275		5.9
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	12,239		2,325		5.0		Strategic Investors Fund IV, LP	12,239		2,325		5.0
Strategic Investors Fund V funds	Strategic Investors Fund V funds	515		131		Various		Strategic Investors Fund V funds	515		131		Various
Other venture capital and private equity fund investments (equity method accounting)	Other venture capital and private equity fund investments (equity method accounting)	25,197		6,258		Various		Other venture capital and private equity fund investments (equity method accounting)	21,843		2,795		Various
Debt funds (equity method accounting)	Debt funds (equity method accounting)	58,733		240		Various		Debt funds (equity method accounting)	58,733		211		Various
Other fund investments (2)	Other fund investments (2)	278,339		5,614		Various		Other fund investments (2)	277,515		10,118		Various
Total	Total	$	464,881	$	19,353			Total	$	454,703	$	20,095

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

(2)Represents commitments to ~~185~~167 funds (primarily venture capital funds) where our ownership interest is generally less than 5 percent of the voting interests of each such fund.

~~(3)~~We are subject to the Volcker Rule, which restricts investments in “covered funds”. Under revised regulations that became effective on October 1, 2020, venture capital and credit funds that meet certain criteria will no longer be considered covered funds. We believe that, as a result of these changes, we will not be required to sell or otherwise conform certain of our fund investments. See the “Volcker Rule” section under Part I, Item 2 of this report for additional details.

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, 2020:~~March 31, 2021:


(Dollars in thousands)	Unfunded Commitments
Strategic Investors Fund, LP	$	~~376~~196
Capital Preferred Return Fund, LP	~~1,517~~1,519
Growth Partners, LP	~~2,513~~2,518
Total	$	~~4,406~~4,233

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~~16.~~15. Income Taxes

We are subject to income tax and non-income based taxes by the U.S. federal tax authorities as well as various state and foreign tax authorities. We have identified the U.S. federal and California state jurisdictions as major tax filings. ~~All~~Our U.S. federal tax returns remain open to full examination for 2017 and subsequent tax years. Our California ~~state~~ tax returns remain open to full examination for 2016 and subsequent tax years.

At ~~September 30, 2020,~~March 31, 2021, our unrecognized tax benefit was ~~$15.0~~$19.7 million, the recognition of which would reduce our income tax expense by ~~$11.8~~$15.6 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, 2020.~~March 31, 2021.

~~17.~~

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16. Fair Value of Financial Instruments

Fair Value Measurements

Our available-for-sale securities, derivative instruments and certain non-marketable and other equity 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 on 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, foreign government debt 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 independent pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent brokers. We perform a monthly analysis on the values received from third parties to ensure that the prices represent a reasonable estimate of the fair value. The procedures include, but are not limited to, initial and ongoing review of third-party pricing methodologies, review of pricing trends and monitoring of trading volumes. 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. We ensure prices received from independent brokers represent a reasonable estimate of the fair value through the use of observable market inputs including comparable trades, yield curve, spreads and, when available, market indices. As a result of this analysis, if the Company determines that there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. 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, issuance date, 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.

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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.

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.

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Interest rate derivative and interest rate swap assets and liabilities: Fair value measurements of interest rate derivatives and interest rate swaps are priced considering the coupon rate of the fixed leg of the contract and the variable coupon rate 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.

Other equity 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. Certain sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sale restrictions which typically range from three to six months.

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. The valuation techniques are consistent with the market approach, income approach and/or the cost approach used to measure fair value. Below is a summary of the valuation techniques used for each class of Level 3 assets:

Venture capital and private equity fund investments not measured at net asset value: 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.

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 percent for certain warrants that have certain sales restrictions or other features that indicate a discount to fair value is warranted. As sale restrictions are lifted, discounts are adjusted downward to zero 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 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 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

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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.

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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, 2020:~~March 31, 2021:

(Dollars in thousands) Level 1 Level 2 Level 3 Balance at September 30, 2020
Assets:
Available-for-sale securities:
U.S. Treasury securities $ 4,547,294 $ 0 $ 0 $ 4,547,294
U.S. agency debentures 0 152,526 0 152,526
Foreign government debt securities 23,449 0 0 23,449
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities 0 9,770,313 0 9,770,313
Agency-issued collateralized mortgage obligations—fixed rate
0 7,315,973 0 7,315,973
Agency-issued commercial mortgage-backed securities 0 4,094,769 0 4,094,769
Total available-for-sale securities 4,570,743 21,333,581 0 25,904,324
Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value — — — 226,526
Venture capital and private equity fund investments not measured at net asset value (1) 0 0 134 134
Other equity securities in public companies 26,205 203,092 0 229,297
Total non-marketable and other equity securities (fair value accounting) 26,205 203,092 134 455,957
Other assets:
Foreign exchange forward and option contracts 0 145,591 0 145,591
Equity warrant assets 0 9,501 192,683 202,184
Client interest rate derivatives 0 79,270 0 79,270
Total assets $ 4,596,948 $ 21,771,035 $ 192,817 $ 26,787,326
Liabilities:
Foreign exchange forward and option contracts $ 0 $ 112,223 $ 0 $ 112,223
Client interest rate derivatives 0 25,558 0 25,558
Total liabilities $ 0 $ 137,781 $ 0 $ 137,781

~~(1)Included in Level 3 assets is $120 thousand attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.~~


(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at March 31, 2021
Assets:
Available-for-sale securities:
U.S. Treasury securities	$	4,438,396	$	0	$	0	$	4,438,396
U.S. agency debentures	0		226,095		0		226,095
Foreign government debt securities	23,450		0		0		23,450
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	0		12,514,911		0		12,514,911
Agency-issued collateralized mortgage obligations—fixed rate	0		7,256,626		0		7,256,626

Agency-issued commercial mortgage-backed securities	0		1,526,993		0		1,526,993
Total available-for-sale securities	4,461,846		21,524,625		0		25,986,471
Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value	—		—		—		274,424

Other equity securities in public companies	38,253		122,557		0		160,810
Total non-marketable and other equity securities (fair value accounting)	38,253		122,557		0		435,234
Other assets:
Foreign exchange forward and option contracts	0		240,183		0		240,183
Equity warrant assets	0		10,952		233,382		244,334

Client interest rate derivatives	0		65,123		0		65,123
Total assets	$	4,500,099	$	21,963,440	$	233,382	$	26,971,345
Liabilities:
Foreign exchange forward and option contracts	$	0	$	202,532	$	0	$	202,532

Client interest rate derivatives	0		68,954		0		68,954
Total liabilities	$	0	$	271,486	$	0	$	271,486

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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, ~~2019:~~2020:

(Dollars in thousands) Level 1 Level 2 Level 3 Balance at December 31, 2019
Assets:
Available-for-sale securities:
U.S. Treasury securities $ 6,894,010 $ 0 $ 0 $ 6,894,010
U.S. agency debentures 0 99,547 0 99,547
Foreign government debt securities 9,038 0 0 9,038
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities 0 4,148,791 0 4,148,791
Agency-issued collateralized mortgage obligations—fixed rate 0 1,538,343 0 1,538,343
Agency-issued commercial mortgage-backed securities 0 1,325,190 0 1,325,190
Total available-for-sale securities 6,903,048 7,111,871 0 14,014,919
Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value — — — 265,263
Venture capital and private equity fund investments not measured at net asset value (1) 0 0 134 134
Other equity securities in public companies 17,290 41,910 0 59,200
Total non-marketable and other equity securities (fair value accounting) 17,290 41,910 134 324,597
Other assets:
Foreign exchange forward and option contracts 0 115,854 0 115,854
Equity warrant assets 0 4,435 161,038 165,473
Interest rate swaps 0 22,676 0 22,676
Client interest rate derivatives 0 28,811 0 28,811
Total assets $ 6,920,338 $ 7,325,557 $ 161,172 $ 14,672,330
Liabilities:
Foreign exchange forward and option contracts $ 0 $ 98,207 $ 0 $ 98,207
Interest rate swaps 0 25,623 0 25,623
Client interest rate derivatives 0 14,154 0 14,154
Total liabilities $ 0 $ 137,984 $ 0 $ 137,984

~~(1)Included in Level 3 assets is $120 thousand attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.~~


(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2020
Assets:
Available-for-sale securities:
U.S. Treasury securities	$	4,469,728	$	0	$	0	$	4,469,728
U.S. agency debentures	0		237,307		0		237,307
Foreign government debt securities	24,492		0		0		24,492
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	0		13,503,681		0		13,503,681
Agency-issued collateralized mortgage obligations—fixed rate	0		8,106,564		0		8,106,564

Agency-issued commercial mortgage-backed securities	0		4,570,666		0		4,570,666


Total available-for-sale securities	4,494,220		26,418,218		0		30,912,438
Non-marketable and other equity securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments measured at net asset value	—		—		—		273,823

Other equity securities in public companies	43,344		237,460		0		280,804
Total non-marketable and other equity securities (fair value accounting)	43,344		237,460		0		554,627
Other assets:

Foreign exchange forward and option contracts	0		216,977		0		216,977
Equity warrant assets	0		11,221		192,217		203,438

Client interest rate derivatives	0		67,854		0		67,854
Total assets	$	4,537,564	$	26,951,730	$	192,217	$	31,955,334
Liabilities:
Foreign exchange forward and option contracts	$	0	$	210,833	$	0	$	210,833

Client interest rate derivatives	0		26,646		0		26,646
Total liabilities	$	0	$	237,479	$	0	$	237,479

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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, 2020~~March 31, 2021 and ~~2019:~~2020:


(Dollars in thousands)	(Dollars in thousands)	Beginning Balance		Total Net Gains Included in Net Income		Purchases		Sales/Exits		Issuances		Distributions and Other Settlements		Transfers Out of Level 3		Ending Balance		(Dollars in thousands)	Beginning Balance		Total Net Gains Included in Net Income		Purchases		Sales/Exits		Issuances		Other (3)		Transfers Out of Level 3		Ending Balance
Three months ended September 30, 2020
Three months ended March 31, 2021																		Three months ended March 31, 2021
Other assets:																		Other assets:
Equity warrant assets (1)																		Equity warrant assets (1)	$	192,217	$	219,827	$	0	$	(181,413)	$	6,565	$	(39)	$	(3,775)	$	233,382
Total assets																		Total assets	$	192,217	$	219,827	$	0	$	(181,413)	$	6,565	$	(39)	$	(3,775)	$	233,382

Three months ended March 31, 2020																		Three months ended March 31, 2020
Non-marketable and other equity securities (fair value accounting):	Non-marketable and other equity securities (fair value accounting):																	Non-marketable and other equity securities (fair value accounting):
Venture capital and private equity fund investments not measured at net asset value (1)		$	134	$	0	$	0	$	0	$	0	$	0	$	0	$	134
Venture capital and private equity fund investments not measured at net asset value (2)																		Venture capital and private equity fund investments not measured at net asset value (2)	$	134	$	5	$	0	$	(5)	$	0	$	0	$	0	$	134
Other assets:	Other assets:																	Other assets:
Equity warrant assets (2)		165,225		52,537		0		(28,760)		4,605		0		(924)		192,683
Equity warrant assets (1)																		Equity warrant assets (1)	161,038		14,601		0		(30,034)		4,519		0		(266)		149,858
Total assets	Total assets	$	165,359	$	52,537	$	0	$	(28,760)	$	4,605	$	0	$	(924)	$	192,817	Total assets	$	161,172	$	14,606	$	0	$	(30,039)	$	4,519	$	0	$	(266)	$	149,992
Three months ended September 30, 2019
Non-marketable and other equity securities (fair value accounting):
Venture capital and private equity fund investments not measured at net asset value (1)		$	441	$	57	$	0	$	(364)	$	0	$	0	$	0	$	134
Other assets:
Equity warrant assets (2)		147,770		39,527		0		(45,270)		4,130		0		(1,116)		145,041
Total assets		$	148,211	$	39,584	$	0	$	(45,634)	$	4,130	$	0	$	(1,116)	$	145,175
Nine months ended September 30, 2020
Non-marketable and other equity securities (fair value accounting):
Venture capital and private equity fund investments not measured at net asset value (1)		$	134	$	5	$	0	$	(5)	$	0	$	0	$	0	$	134
Other assets:
Equity warrant assets (2)		161,038		91,224		0		(74,110)		15,894		0		(1,363)		192,683
Total assets		$	161,172	$	91,229	$	0	$	(74,115)	$	15,894	$	0	$	(1,363)	$	192,817
Nine months ended September 30, 2019
Non-marketable and other equity securities (fair value accounting):
Venture capital and private equity fund investments not measured at net asset value (1)		$	1,079	$	12	$	0	$	(960)	$	0	$	3	$	0	$	134
Other assets:
Equity warrant assets (2)		145,199		105,338		575		(113,143)		11,714		0		(4,642)		145,041
Total assets		$	146,278	$	105,350	$	575	$	(114,103)	$	11,714	$	3	$	(4,642)	$	145,175

(1)Realized and unrealized gains (losses) are recorded in the line item “Gains on ~~investment securities,~~equity warrant assets, net," a component of noninterest income.

(2)Realized and unrealized gains (losses) are recorded in the line item “Gains on ~~equity warrant assets,~~investment securities, net," a component of noninterest income.

(3)Foreign currency translation gains (losses) recorded in line item "Foreign currency translation gains (losses)", a component of other comprehensive income.

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The following table presents the amount of net unrealized gains and losses included in earnings ~~(which is inclusive of noncontrolling interest)~~ attributable to Level 3 assets still held at ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Non-marketable and other equity securities (fair value accounting):
Venture capital and private equity fund investments not measured at net asset value (1) $ 0 $ 57 $ 0 $ 12
Other assets:
Equity warrant assets (2) 26,360 (727) 33,469 21,041
Total unrealized gains (losses) , net $ 26,360 $ (670) $ 33,469 $ 21,053
Unrealized losses attributable to noncontrolling interests (1) $ 0 $ (158) $ 0 $ (199)


	Three months ended March 31,
(Dollars in thousands)	2021		2020


Other assets:
Equity warrant assets (1)	$	60,639	$	(4,145)
Total unrealized gains (losses), net	$	60,639	$	(4,145)

(1)~~Unrealized gains (losses) are recorded in the line item “Gains on investment securities, net,~~" ~~a component of noninterest income.~~

~~(2)~~Unrealized gains (losses) are recorded in the line item “Gains on equity warrant assets, net," a component of noninterest income.

The extent to which any unrealized gains or losses will become realized is subject to a variety of factors, including, among other things, the expiration of current sales restrictions to which these securities are subject, the actual sales of securities and the timing of such actual sales.

The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. 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)	(Dollars in thousands)	Fair value		Valuation Technique		Significant Unobservable Inputs		Input Range		Weighted Average		(Dollars in thousands)		Fair value				Valuation Technique						Significant Unobservable Inputs					Input Range					Weighted Average
September 30, 2020:
Venture capital and private equity fund investments (fair value accounting)		$	134	Private company equity pricing		(1)		(1)		(1)
March 31, 2021:												March 31, 2021:
Equity warrant assets (public portfolio)	Equity warrant assets (public portfolio)	1,166		Black-Scholes option pricing model		Volatility		45.1% - 56.8%		51.9	%	Equity warrant assets (public portfolio)		28				Black-Scholes option pricing model						Volatility					47.4%					47.4	%
					Risk-Free interest rate		0.3- 0.7		0.6							Risk-Free interest rate								0.9- 1.6					1.1
					Sales restrictions discount (2)		10.0 - 20.0		15.9							Sales restrictions discount (2)								10.0					10.0
Equity warrant assets (private portfolio)	Equity warrant assets (private portfolio)	191,517			Black-Scholes option pricing model		Volatility		23.9 - 56.8				43.6	Equity warrant assets (private portfolio)			233,354						Black-Scholes option pricing model					Volatility					25.0 - 58.0				45.7
						Risk-Free interest rate		0.01 - 0.69		0.2											Risk-Free interest rate							0.01 - 1.17					0.3
						Marketability discount (3)		22.1		22.1									Marketability discount (3)							21.7					21.7
						Remaining life assumption (4)		45.0		45.0									Remaining life assumption (4)							40.0					40.0
December 31, 2019:
Venture capital and private equity fund investments (fair value accounting)		$	134		Private company equity pricing		(1)		(1)			(1)
December 31, 2020:												December 31, 2020:
Equity warrant assets (public portfolio)	Equity warrant assets (public portfolio)	346		Black-Scholes option pricing model		Volatility		39.2% - 54.8%		50.7	%	Equity warrant assets (public portfolio)			1,036					Black-Scholes option pricing model							Volatility					46.0% - 56.8%				49.1		%
					Risk-Free interest rate		1.9		1.9							Risk-Free interest rate									0.3- 0.9					0.6
					Sales restrictions discount (2)		10.0 - 20.0		13.6							Sales restrictions discount (2)								10.0 - 20.0					10.2
Equity warrant assets (private portfolio)	Equity warrant assets (private portfolio)	160,692			Black-Scholes option pricing model		Volatility		23.6 - 54.8				38.2		Equity warrant assets (private portfolio)				191,181							Black-Scholes option pricing model					Volatility				24.4 - 56.8				43.2
						Risk-Free interest rate		0.5 - 1.9		1.6												Risk-Free interest rate						0.01 - 0.52					0.1
						Marketability discount (3)		17.5		17.5									Marketability discount (3)						20.63						20.6
						Remaining life assumption (4)		45.0		45.0									Remaining life assumption (4)						40.0						40.0

(1)In determining the fair value of our venture capital and private equity fund investment portfolio (not measured at net asset value), 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

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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. We use company provided valuation reports, if available, to support our valuation assumptions. 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 three to six 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 upon various 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 terminations and exercises. At ~~September 30, 2020,~~March 31, 2021, the weighted average contractual remaining term was ~~6.2~~6.6 years, compared to our estimated remaining life of ~~2.8~~2.6 years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.

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For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we did not have any transfers between Level 3 and Level 1. All transfers from Level 3 to Level 2 for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ were due to the transfer of equity warrant assets from our private portfolio to our public portfolio (see our Level 3 reconciliation above).

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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. 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, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


				Estimated Fair Value											Estimated Fair Value
(Dollars in thousands)	(Dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3		(Dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
September 30, 2020:
March 31, 2021:												March 31, 2021:
Financial assets:												Financial assets:
Cash and cash equivalents												Cash and cash equivalents	$	21,254,859	$	21,254,859	$	21,254,859	$	0	$	0
Held-to-maturity securities												Held-to-maturity securities	41,164,620		41,186,735		0		41,186,735		0
Non-marketable securities not measured at net asset value												Non-marketable securities not measured at net asset value	379,224		379,224		0		0		379,224
Non-marketable securities measured at net asset value												Non-marketable securities measured at net asset value	426,306		426,306		0		0		0
Net commercial loans												Net commercial loans	42,264,653		43,438,142		0		0		43,438,142
Net consumer loans												Net consumer loans	5,018,762		5,158,216		0		0		5,158,216
FHLB and Federal Reserve Bank stock												FHLB and Federal Reserve Bank stock	83,355		83,355		0		0		83,355
Financial liabilities:												Financial liabilities:

Short-term borrowings												Short-term borrowings	38,434		38,434		0		38,434		0
Non-maturity deposits (1)												Non-maturity deposits (1)	123,454,403		123,454,403		123,454,403		0		0
Time deposits												Time deposits	695,703		394,574		0		394,574		0
3.50% Senior Notes												3.50% Senior Notes	348,441		378,242		0		378,242		0
3.125% Senior Notes												3.125% Senior Notes	495,387		521,205		0		521,205		0
1.80% Senior Notes												1.80% Senior Notes	494,355		463,625		0		463,625		0
Off-balance sheet financial assets:												Off-balance sheet financial assets:
Commitments to extend credit												Commitments to extend credit	0		39,003		0		0		39,003
December 31, 2020:												December 31, 2020:
Financial assets:	Financial assets:											Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	15,687,776	$	15,687,776	$	15,687,776	$	0	$	0	Cash and cash equivalents	$	17,674,763	$	17,674,763	$	17,674,763	$	0	$	0
Held-to-maturity securities	Held-to-maturity securities	12,982,223		13,612,463		0		13,612,463		0		Held-to-maturity securities	16,592,153		17,216,871		0		17,216,871		0
Non-marketable securities not measured at net asset value	Non-marketable securities not measured at net asset value	228,564		228,564		0		0		228,564		Non-marketable securities not measured at net asset value	240,761		240,761		0		0		240,761
Non-marketable securities measured at net asset value	Non-marketable securities measured at net asset value	293,269		293,269		0		0		0		Non-marketable securities measured at net asset value	390,658		390,658		0		0		0
Net commercial loans	Net commercial loans	33,552,513		34,091,696		0		0		34,091,696		Net commercial loans	39,886,296		40,412,490		0		0		40,412,490
Net consumer loans	Net consumer loans	4,348,420		4,418,614		0		0		4,418,614		Net consumer loans	4,847,427		4,911,451		0		0		4,911,451
FHLB and Federal Reserve Bank stock	FHLB and Federal Reserve Bank stock	61,232		61,232		0		0		61,232		FHLB and Federal Reserve Bank stock	61,232		61,232		0		0		61,232
Financial liabilities:	Financial liabilities:											Financial liabilities:

Short-term borrowings	Short-term borrowings	19,068		19,068		0		19,068		0		Short-term borrowings	20,553		20,553		0		20,553		0
Non-maturity deposits (1)	Non-maturity deposits (1)	84,438,332		84,438,332		84,438,332		0		0		Non-maturity deposits (1)	101,293,346		101,293,346		101,293,346		0		0
Time deposits	Time deposits	334,687		273,785		0		273,785		0		Time deposits	688,461		501,853		0		501,853		0
3.50% Senior Notes	3.50% Senior Notes	348,257		378,606		0		378,606		0		3.50% Senior Notes	348,348		382,855		0		382,855		0
3.125% Senior Notes	3.125% Senior Notes	495,173		557,495		0		557,495		0		3.125% Senior Notes	495,280		563,840		0		563,840		0
Off-balance sheet financial assets:	Off-balance sheet financial assets:											Off-balance sheet financial assets:
Commitments to extend credit	Commitments to extend credit	0		34,126		0		0		34,126		Commitments to extend credit	0		36,672		0		0		36,672
December 31, 2019:
Financial assets:
Cash and cash equivalents		$	6,781,783	$	6,781,783	$	6,781,783	$	0	$	0
Held-to-maturity securities		13,842,946		14,115,272		0		14,115,272		0
Non-marketable securities not measured at net asset value		195,405		195,405		0		0		195,405
Non-marketable securities measured at net asset value		235,351		235,351		0		0		0
Net commercial loans		29,104,532		29,615,176		0		0		29,615,176
Net consumer loans		3,755,180		3,820,804		0		0		3,820,804
FHLB and Federal Reserve Bank stock		60,258		60,258		0		0		60,258
Financial liabilities:

Short-term borrowings		17,430		17,430		0		17,430		0
Non-maturity deposits (1)		61,569,714		61,569,714		61,569,714		0		0
Time deposits		188,093		187,980		0		187,980		0
3.50% Senior Notes		347,987		366,856		0		366,856		0

Off-balance sheet financial assets:
Commitments to extend credit		0		27,197		0		0		27,197

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

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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 IPO 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 31th stfor our ~~September 30~~March 31thst 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, 2020:~~March 31, 2021:


(Dollars in thousands)	(Dollars in thousands)	Carrying Amount		Fair Value		Unfunded Commitments		(Dollars in thousands)	Carrying Amount		Fair Value		Unfunded Commitments
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):							Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	Venture capital and private equity fund investments (1)	$	226,524	$	226,524	$	9,133	Venture capital and private equity fund investments (1)	$	274,424	$	274,424	$	19,030
Non-marketable securities (equity method accounting):	Non-marketable securities (equity method accounting):							Non-marketable securities (equity method accounting):
Venture capital and private equity fund investments (2)	Venture capital and private equity fund investments (2)	274,721		274,721		11,201		Venture capital and private equity fund investments (2)	394,349		394,349		13,303
Debt funds (2)	Debt funds (2)	6,918		6,918		240		Debt funds (2)	5,813		5,813		211
Other investments (2)	Other investments (2)	11,629		11,629		886		Other investments (2)	26,144		26,144		886
Total	Total	$	519,792	$	519,792	$	21,460	Total	$	700,730	$	700,730	$	33,430

(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 (consolidated VIEs) and investments in venture capital and private equity fund investments (unconsolidated VIEs). Collectively, these investments in venture capital and private equity funds are primarily in U.S. and global technology and life science/healthcare companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are ~~$55.0~~$70.8 million and ~~$3.2~~$3.0 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)Venture capital and private equity fund investments, debt funds, and other fund investments within non-marketable securities (equity method accounting) include funds that invest in or lend money to primarily U.S. and global technology and life science/healthcare companies. It is estimated that we will receive distributions from the funds over the next 5 to 8 years, depending on the age of the funds and any potential extensions of the terms of the funds.

~~18.~~17. Legal Matters

Certain lawsuits and claims arising in the ordinary course of business have been filed or are pending against us and/or our affiliates, and we may from time to time be involved in other legal or regulatory proceedings. In accordance with applicable accounting guidance, we establish accruals for all such matters, including 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 matters 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 aim to disclose information relating to such potential loss. We also aim to disclose information relating to any material potential loss that is probable but not reasonably estimable. In such cases, where reasonably practicable, we aim to

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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 any such matters, nor do we currently expect 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.

~~19.~~18. Related Parties

We have no material related party transactions requiring disclosure. In the ordinary course of business, the Bank may extend credit to related parties, including executive officers, directors, principal shareholders and their related interests. Additionally, we provide real estate secured loans to eligible employees through our EHOP. For additional details, see Note 1719 — “Employee Compensation and Benefit Plans" under Part II, Item 8 of our ~~2019~~2020 Form 10-K.

19. Subsequent Events

Common Stock

On April 14, 2021, we issued and sold an additional 300,000 shares of common stock under the full exercise of the underwriter's over-allotment option resulting in additional net proceeds of approximately $146.0 million after deducting discounts and commissions. With the addition of the full exercise of the underwriters’ over-allotment option, the total gross proceeds from the offering were $1.15 billion before underwriting discounts and commissions and offering expenses.

Pending Acquisition of Boston Private

On May 4, 2021, Boston Private Financial Holdings, Inc. (“Boston Private”) announced that based on proxies submitted to the independent inspector of election for the special meeting of shareholders held on May 4, 2021, preliminary voting results indicate that Boston Private shareholders have approved each of the proposals presented at the special meeting, including the company’s merger agreement with SVB Financial, pursuant to which Boston Private will merge with and into SVB Financial. The preliminary voting results are subject to certification by First Coast Results, Inc., the independent inspector of election. The merger is expected to close in mid-2021, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals.

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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 safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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:

•Financial projections, including with respect to our net interest income, net interest margin, noninterest income, earnings per share, noninterest expenses (including professional services, compliance, compensation and other costs), cash flows, balance sheet positions, capital expenditures, deposit growth, liquidity and capitalization, effective tax rate or other financial items;

•Descriptions of our strategic initiatives, plans or objectives for future operations, including pending sales or ~~acquisitions;~~acquisitions, such as the announced planned acquisition of Boston Private;

•Forecasts of private ~~equity/~~equity and venture capital funding, investment level and ~~investment levels;~~exit activity;

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

•Forecasts of expected levels of provisions for credit losses, net loan charge-offs, nonperforming loans, loan growth, loan mix, loan yields and client funds;

•The outlook on our clients' performance;

•The potential effects of the COVID-19 pandemic; and

•Descriptions of assumptions underlying or relating to any of the foregoing.

You can identify these and other forward-looking statements by the use of words such as “becoming,” “may,” “will,” “should,” "~~could,~~""~~would,~~"“could,” “would,” “predict,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “assume,” “seek,” “expect,” “plan,” “intend,” and 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~~our forward-looking statements are reasonable, we have based these expectations on our current beliefs as well as our assumptions, and such expectations may not prove to be ~~incorrect.~~correct. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside 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. Important factors that could cause our actual results and financial condition to differ from the expectations stated in the forward-looking statements include, among others:

•Market and economic conditions ~~including~~(including the ~~interest rate environment,~~general condition of the capital and equity markets, and IPO, secondary offering, SPAC fundraising, M&A and financing activity levels) and the associated impact on ~~us;~~

•~~The credit profile~~us (including effects on client demand for our commercial and ~~credit quality~~investment banking and other financial services, as well as on the valuations of our ~~loan portfolio and volatility of our levels of nonperforming assets and charge-offs;~~investments);

•The COVID-19 pandemic and its effects on the economic and business environments in which we ~~operate;~~operate, and its effects on our operations, including, as a result of, prolonged work-from-home arrangements;

•The impact of changes from the ~~upcoming~~Biden-Harris administration and the new U.S. ~~elections~~Congress on the economic environment, capital markets and regulatory landscape, including monetary, tax and other trade policies;

•Changes in the volume and credit quality of our loans as well as volatility of our levels of nonperforming assets and charge-offs;

•The impact of changes in interest rates or market levels or factors affecting or affected by them, especially on our loan and investment portfolios;

•The adequacy of our allowance for credit losses and the need to make provisions for credit losses for any period;

•The ~~borrowing needs of our clients;~~

•~~The~~ sufficiency of our capital and liquidity ~~positions;~~provisions;

•~~The~~Changes in the levels of our loans, deposits and client investment fund balances;

•~~The~~Changes in the performance or equity valuations 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~~funds or companies in which we have invested or hold derivative instruments or equity warrant ~~assets, venture capital and private equity funds and direct equity investments;~~assets;

•~~Our overall investment plans and strategies; the realization, timing, valuation and performance of~~Variations from our ~~equity or other investments;~~expectations as to factors impacting our cost structure;

•~~The levels~~Changes in our assessment of ~~public offerings, mergers and acquisitions and venture capital investment activity~~the creditworthiness or liquidity of our clients, ~~that may impact~~unanticipated effects of credit concentration risks which create or exacerbate deterioration of such creditworthiness or liquidity;

•Variations from our expectations as to factors impacting the ~~borrowing needs~~timing and level of ~~our clients;~~employee share-based transactions;

•The occurrence of fraudulent activity, including breaches of our information security or cyber security-related incidents;

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•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~~The expansion of our business internationally, and the impact of international market and economic events on us;

•The effectiveness of our risk management framework and quantitative models;

•The impact of governmental policy, legal requirements and regulations, including regulations promulgated by the Board of Governors of the Federal Reserve System (the "Federal Reserve"), and other regulatory requirements;

•~~The impact of lawsuits and claims, as well as legal or regulatory proceedings;~~

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•~~The impact of changes in accounting standards and tax laws;~~

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

•~~The effectiveness of our risk management framework and quantitative models;~~

•Our ability to maintain or increase our market share, including through successfully implementing our business strategy and undertaking new business initiatives, including through the integration of ~~SVB Leerink;~~Boston Private;

•An inability to complete the acquisition of Boston Private, or changes in the current anticipated timeframe, terms or manner of such acquisition;

•The occurrence of any event change or other circumstance that could give rise to the right of one or both parties to terminate the merger agreement between us and Boston Private;

•Greater than expected costs or other difficulties related to the integration of our business and that of Boston Private;

•Variations from our expectations as to the amount and timing of business opportunities, growth prospects and cost savings associated with completing the acquisition of Boston Private;

•The inability to retain existing Boston Private clients and employees following the closing of the Boston Private acquisition;

•Unfavorable resolution of legal proceedings or claims, as well as legal or regulatory proceedings or governmental actions;

•Variations from our expectations as to factors impacting our estimate of our full-year effective tax rate;

•Changes in applicable accounting standards and tax laws;

•Regulatory or legal changes and their impact on us; and

•Other factors as discussed in “Risk Factors” under Part I, Item 1A in our ~~2019~~2020 Form 10-K and under Part II, Item 1A of this report.

The operating and economic environment during the first quarter continued to be impacted by the COVID-19 pandemic and related government orders. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, potential variations of the virus, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.

Accordingly, you are cautioned not to place undue reliance on forward-looking statements. We urge investors to consider all of these factors, among others, carefully in evaluating the forward-looking statements contained in this 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 required by law.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited interim consolidated financial statements and accompanying notes as presented in Part I, Item 1 of this report and in conjunction with our ~~2019~~2020 Form 10-K.

~~Reclassifications~~

~~Certain prior period amounts primarily related to the adoption of ASU 2016-13, CECL, have been reclassified to conform to current period presentations.~~

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Management’s Overview of ~~Third~~First Quarter ~~2020~~2021 Performance

Our ~~third~~overall financial performance for the first quarter ~~2020 performance~~was the strongest quarter in our history, which reflected the resilience of our markets and our ability to execute effectively. We had an outstanding quarter driven by outstanding balance sheet growth, higher core fee income, strong investment banking revenue and outsized gains related to client IPO ~~activity~~ and ~~solid~~SPAC activity. Additionally, credit ~~from~~quality continued to be stable, despite an isolated charge-off related to a potential client fraud incident. Positive underlying credit trends and improved model economic scenarios ~~and strong performance in our Private Bank portfolio segment resulting~~resulted in a reduction of reserves. During the ~~third~~first quarter of ~~2020,~~2021, we continued to manage through the COVID-19 pandemic ~~utilizing~~and monitor its effects, and we continued to operate our business ~~continuity plans to maintain client service~~and support our clients, while most of our employees and partners ~~continue~~continued to largely work from home. ~~We continue~~Despite the continuing challenges of the pandemic and the low rate environment, we saw exceptional growth and healthy business activities, and a continued focus to ~~support and engage with clients virtually, including the hosting of remote events designed to facilitate~~invest in our response to the business needs of our clients within the innovation ecosystem. We also continued to successfully administer client support initiatives, such as those which allowed temporary payment deferrals and other relief provided through the PPP. We continue to provide employees extended benefits,strategic priorities, as well as ~~practical~~our infrastructure to enable our growth.

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Our core business continued to perform well as a result of our ongoing focus on innovation companies and their investors and continued efforts to secure client relationships. We saw continued success in working with private equity/venture capital firms and life science/healthcare clients as well as clients in our private banking division. Additionally, on January 4, 2021, we announced our acquisition of Boston Private, which we expect to close in mid-2021, subject to the satisfaction of customary closing conditions. We believe this acquisition will significantly accelerate and scale the growth of our private bank and wealth management strategy, advance our expertise, products and technology; and provide the opportunity to deepen our client relationships.

Moreover, we continued to actively manage our capital in light of our overall growth. We raised $1.0 billion in common stock, $750 million in preferred stock and $500 million in senior notes during the first quarter. These issuances position us to sustain our growth momentum and support for working from home. Additionally, we continue to commit financial support for local, regional and global activities focused on health security, food security and shelter, and small business owner relief during this unprecedented time.our capital objectives.

~~Recent Developments -~~Continuing COVID-19 Pandemic Environment

The ~~current~~ global ~~health crisis created by the~~ COVID-19 pandemic has resulted in unprecedented challenges and volatility in economic, market and business conditions. It has caused significant economic and financial disruptions that have adversely affected ~~and are likely to continue to adversely affect,~~or otherwise impacted our business, financial condition and results of operations. ~~We cannot predict at this time the scope and duration of the pandemic, as~~ COVID-19 has not yet been globally contained and the number of cases continues to ~~increase~~be high in many locations, including in the United States and other international locations in which we operate. ~~Moreover,~~In some locations, the ~~impact~~number of ~~COVID-19 on economic, market and business conditions is likely~~cases continues to ~~be exacerbated if uncontained for a prolonged period of time, and even if it is contained, there may be a seasonal or other resurgence~~increase. During the course of the continuing pandemic, ~~as we have seen domestically and internationally. While~~ there have been varying governmental and other responses to slow or control the spread of COVID-19 and to mitigate the adverse impact of COVID-19, such as stay at home orders, restrictions on business activities, health and safety guidelines, economic relief for individuals and businesses, and monetary policy measures, such responses have met varying degrees of success, and it remains uncertain whether these actions will be successful asin a sustained manner. We cannot predict at this time the scope and duration of the pandemic.

Despite the continuing challenges, in recent months however, there has been some improvement in the economic environment and resilience in the markets in which we operate. With the seemingly wider availability and distribution of vaccinations and the easing of some restrictions in the U.S. and other parts of the world, we have seen steps towards broader containment. Notwithstanding however, there still remains much uncertainty around containment of the pandemic, ~~continues.~~

~~The global~~which will depend on a variety of factors, including but not limited to, the availability, adoption and efficacy of vaccines; government and other actions to mitigate the spread of COVID-19 accelerated in March 2020 at which time it was declared a pandemic by the World Health Organization. Since then, we have been focused on our business and human response to the crisis --- managing and operating our business as seamlessly as possible, and supporting our clients, employees and communities as we weather the crisis together.

During this volatile time, we remain focused on our capital and liquidity. We are “well-capitalized,” remaining above all applicable regulatory capital requirements. We have a liquid and high-quality balance sheet, with approximately half of our assets as of September 30, 2020 held in cash and marketable securities, primarily agency-backed mortgage securities and U.S. Treasuries. We also have access to other funding sources, as necessary. Moreover, we temporarily paused our stock repurchase program,COVID-19; and the ~~program expired on October 29, 2020. In addition, we have also elected to use a phase-in transitional approach for the estimated impact~~extent and spread of ~~CECL on our regulatory capital, as permitted by the 2020 CECL Transition Rule.~~

~~The uncertainties~~variants of the ~~duration and severity of the effect of COVID-19 on~~virus. The economic, market and business conditions impacted by COVID-19 may be slow to recover or may worsen if the pandemic is uncontained for a prolonged period of time. Even if it is contained, there may be variants of the virus or other resurgence of the pandemic as we have ~~made it more difficult~~seen domestically and internationally. We continue to forecast our operating results and the macroeconomic conditions to which our business is subject. Some notable negative effects emerged late in the first quarter and continued through the third quarter, as discussed in this Management Discussion and Analysis section, but any longer-term effects or trends remain subject to significant uncertainty. Moreover, we arebe subject to heightened business, operational (including fraud), market, credit and other risks related to the COVID-19 pandemic environment, which may have an adverse effect on our business, financial condition and results of operations. (See “Risk Factors” under Part II, Item 1A of this report)

~~We continue~~Reference Rate Reform

Following the 2017 announcement by the U.K.’s Financial Conduct Authority that it would no longer compel participating banks to ~~serve our clients during this difficult time, while managing our credit risk. During~~submit rates for the ~~third quarter, we continued~~LIBOR after 2021, regulators, trade associations and financial industry working groups have identified recommended replacement rates for LIBOR, as well as other Interbank Offered Rates, and have published recommended conventions to ~~provide special debt relief assistance~~allow new and existing products to ~~support certain clients who~~incorporate fallbacks or that reference these Alternative Reference Rates. The continuation of all British Pound Sterling ("GBP"), Euro, Swiss Franc and Japanese Yen LIBOR settings and one-week and two-month U.S. dollar LIBOR settings on the current basis are ~~experiencing financial hardships related~~due to terminate at the end of December 2021, with the remaining U.S. dollar LIBOR settings (i.e., overnight, one month, three month, six month and 12 month) expected to terminate at the end of June 2023.

On October 23, 2020, the International Swaps and Derivatives Association, Inc. (“ISDA”) published a new supplement to the COVID-19 pandemic, including offering certain venture-backed companies, Private Bank, Wine and other clients the opportunity to temporarily defer their scheduled loan principal payments. We continue to engage with our clients to understand client needs, and we may implement additional assistance or other relief to support clients across various sectors and life stages. Additionally, we participated as a lender in the PPP under the CARES ActISDA 2006 definitions and the ~~U.K. Coronavirus Business Interruption Loan Scheme ("CBILS"~~related 2020 IBOR Fallbacks Protocol (the “Protocol”). These publications are intended to facilitate the incorporation of robust rate fallback provisions into both legacy and ~~Coronavirus Large Business Interruption Loan Scheme ("CLBILS"), and may participate in other government relief programs in~~new derivative contracts with effect from January 25, 2021. Silicon Valley Bank has agreed to adhere to the U.S. or internationally. These government programs are complex and our participation in any of these programs may lead to governmental, regulatory and other scrutiny, litigation, negative publicity and reputation damage for us and our customers who participate. For example, like many other participating banks in the United States, weProtocol. ISDA further announced that bilateral templates have been ~~named in various lawsuits regarding~~made available for use with counterparties who choose not to adhere to the ~~right~~Protocol.

We have implemented a process to ~~agent fees~~assess the population of loans and contracts that will be impacted by this reference rate reform with the expectation that all existing LIBOR-based contracts will be remediated by September 30, 2021. We stopped issuing new British Pound LIBOR-based loans during the first quarter of 2021. We will no longer offer U.S. dollar LIBOR-based loans by June 30, 2021. We are currently evaluating the use and when we might apply the allowable practical expedients under ~~the PPP. Overall, these relief~~ASU 2020-04, Reference rate Reform (Topic 848) as it relates to our investment securities and derivative portfolios.

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measures, whether our own programs or our participation in government programs, are new programs for us and we may not be successful in implementing or administering the programs as intended. Further, the extent to which these programs are successful in assisting our clients is uncertain. These relief programs are temporary in nature, such as the PPP, which as currently designed, provides one-time relief, and our loan payment deferral programs, which expire during the second half of the year (certain of our programs ended in the third quarter with the remaining ending by year end). Our clients may experience financial difficulties without the continued support from these programs. If these relief measures are not effective, or if they are effective for only a limited period and our clients experience delayed financial hardship, there may be an adverse effect on our revenue and results of operations, including increased provisions in our allowance for credit losses, higher rates of default and increased credit losses in future periods.

We are also prioritizing the safety and well-being of our employees. In March 2020, we activated our business continuity and pandemic plans globally, moving to a work-from-home plan, prohibiting all business travel, postponing or moving online all SVB-hosted events, and enabling remote access to our systems. We have implemented various programs to provide work, life and health-related support for our employees, ranging from expanded time-off, counseling and medical benefits for employees directly impacted by COVID-19, to providing reimbursements and practical support for working from home. In addition, we are also developing a plan for employees to eventually return to work in our offices, which will be subject to a variety of complex considerations. While much of our workforce continues to work from home through the crisis (currently expected until January 2021, subject to further extensions or other changes) and perhaps to some extent beyond the crisis, in the event that we allow an increase in remote working practices even after the pandemic subsides, we will need to continue to provide support to our employees to work effectively in a remote environment, taking into consideration needs relating to technology, physical working conditions, work/life balance, and continued team collaboration.

Moreover, consistent with our tradition of supporting and giving back to our communities, we have also committed $5.5 million to local, regional and global COVID-19 relief activities in various U.S. and international locations where we have offices. This includes corporate contributions to global, national and regional charities, direct community-based giving, and a 3:1 match for employees’ donations to relevant causes. We also announced our intention to donate PPP loan origination fees, net of costs incurred, received from the Small Business Administration for COVID-19 relief efforts. We expect to make a donation in the fourth quarter of 2020 in the estimated amount of $20 million, irrespective of when forgiveness amounts are actually received from the SBA.

Although the effects of the pandemic remain uncertain, for the fourth quarter of 2020, we currently expect growth in average on-balance sheet deposits and average loans and lower core fees. While credit metrics have been stable to date, we continue to monitor our portfolio vigilantly, in light of continued economic uncertainty, fading government stimulus and expiring deferral programs. Additionally, volatile equity markets, IPO and M&A activity may impact investment banking and market-sensitive revenues. Even after the pandemic subsides, it is possible that the U.S. and other major economies will continue to experience a prolonged recession, which we expect would materially and adversely affect our business, financial condition, liquidity, capital and results of operations.

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A summary of our performance for the three months ended ~~September 30, 2020~~March 31, 2021 (compared to the three months ended ~~September 30, 2019,~~March 31, 2020, where applicable) is as follows:


BALANCE SHEET						EARNINGS
Assets. $~~88.3~~124.8 billion in average total assets (up ~~35.2%~~72.4%). ~~$96.9~~$142.3 billion in period-end total assets (up ~~42.0%~~89.8%). Loans. ~~$37.3~~$46.3 billion in average total loan balances (up ~~25.1%~~37.5%). ~~$38.4~~$47.7 billion in period-end total loan balances (up ~~23.7%~~32.5%). Total Client Funds. (on-balance sheet deposits and off-balance sheet client investment funds). ~~$201.2~~$262.2 billion in average total client fund balances (up ~~34.1%~~58.5%). ~~$211.6~~$288.0 billion in period-end total client fund balances (up ~~35.6%~~70.6%). AFS/HTM Fixed Income Investments. $~~32.6~~53.5 billion in average fixed income investment securities (up ~~29.6%~~97.3%). ~~$38.9~~$67.2 billion in period-end fixed income investment securities (up ~~42.6%~~156.1%).						EPS. Earnings per diluted share of ~~$8.47~~$10.03 (up ~~64.5%~~293.3%). Net Income. Consolidated net income available to common stockholders of ~~$441.7~~$532.2 million (up ~~65.3%~~302.4%). - Net interest income of ~~$527.7~~$659.6 million (up ~~1.4%~~25.8%). -Net interest margin of ~~2.53%~~2.29% (down 8183 bps). -Noninterest income of ~~$547.6~~$744.2 million (up ~~86.3%~~146.5%), non-GAAP core fee ~~income+~~income+ of ~~$146.3~~$158.9 million (down ~~9.8%~~5.7%) and non-GAAP ~~core fee income plus investment banking~~SVB Leerink revenue ~~and commissions~~++ of ~~$254.8~~$166.7 million (up ~~19.6%~~165.1%). -Noninterest expense of ~~$491.0~~$636.0 million (up ~~25.5%~~59.2%). ROE. Return on average equity (annualized) (“ROE”) performance of ~~24.19%~~27.04%. Operating Efficiency Ratio. Operating efficiency ratio of ~~45.66%~~45.31% with a non-GAAP core operating efficiency ratio of ~~56.86%~~58.52%+++.

CAPITAL						CREDIT QUALITY
Capital++++. ~~Continued strong~~Active capital management, with all capital ratios considered “well-capitalized” under banking regulations. SVB Financial and Bank capital ratios, respectively, were: - CET 1 risk-based capital ratio of ~~12.31%~~12.18% and ~~10.75%~~12.93%. - Tier 1 risk-based capital ratio of ~~13.25%~~14.01% and ~~10.75%~~12.93%. - Total risk-based capital ratio of ~~14.19%~~14.62% and ~~11.75%~~13.56%. - Tier 1 leverage ratio of ~~8.26%~~8.01% and ~~6.45%~~7.20%.						Credit Quality. Improved model economic scenarios ~~and continued strong Private Bank performance~~ drive reserve ~~release.~~release offset by a charge-off for potentially fraudulent client activity. - Allowance for credit losses for loans of ~~1.34%~~0.82% as a percentage of period-end total loans. - Provision for loans was ~~a net benefit of 0.56%~~0.29% as a percentage of period-end total loans (annualized). - Net loan charge-offs of ~~0.26%~~0.79% as a percentage of average total loans (annualized).

+ Consists of fee income for deposit services, letters of credit and standby letters of credit, credit cards, client investments, foreign exchange and lending-related activities. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under “Results of Operations—Noninterest Income”)

++ Consists of ~~non-GAAP core fee income plus~~ investment banking revenue and commissions. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under “Results of Operations—Noninterest Income”).

+++ This ratio excludes certain financial line items where performance is typically subject to market or other conditions beyond our control and excludes SVB Leerink revenue and expenses. It is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink by total revenue after adjusting for noninterest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets, investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis. This is a non-GAAP financial measure. (See the non-GAAP reconciliation under "Results of Operations-Noninterest Expense").

++++ In March 2020, the federal banking agencies provided transitional relief to banking organizations with respect to the impact of CECL on regulatory capital. Under the 2020 CECL Transition Rule, banking organizations may delay the estimated impact of CECL on regulatory capital for two years, followed by a three-year period to phase out the aggregate capital benefit provided during the initial two-year delay. We have elected to use this five-year transition option. For additional details, see "Capital Resources" within "Consolidated Financial Condition" under Part 1, Item 2 of this report.

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A summary of our performance for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands, except per share data, employees and ratios) 2020 2019 % Change   2020 2019 % Change
Income Statement:
Diluted earnings per share $ 8.47 $ 5.15 64.5 % $ 15.46 $ 16.67 (7.3) %
Net income available to common stockholders 441,713 267,281 65.3    802,901 874,000 (8.1)
Net interest income 527,740 520,644 1.4    1,564,804 1,562,933 0.1
Net interest margin 2.53 % 3.34 % (81) bps 2.79 % 3.60 % (81) bps
(Reduction) provision for credit losses $ (52,018) $ 36,536 (242.4) % $ 257,943 $ 89,033 189.7 %
Noninterest income 547,583 294,009 86.2 1,218,365 908,135 34.2
Noninterest expense 491,021 391,324 25.5 1,370,242 1,140,510 20.1
Non-GAAP core fee income (1) 146,320 162,177 (9.8) 447,303 473,757 (5.6)
Non-GAAP core fee income, plus investment banking revenue and commissions (1) 254,758 212,968 19.6 777,051 651,574 19.3
Non-GAAP noninterest income, net of noncontrolling interests (1) 519,721 279,441 86.0    1,177,972 871,583 35.2
Non-GAAP noninterest expense, net of noncontrolling interests (2) 490,907 391,179 25.5    1,369,858 1,139,818 20.2
Balance Sheet:
Average available-for-sale securities $ 20,026,864 $ 10,600,449 88.9 % $ 15,475,686 $ 8,572,314 80.5 %
Average held-to-maturity securities 12,553,196 14,534,505 (13.6) 13,054,393 14,891,158 (12.3)
Average loans, amortized cost 37,318,600 29,822,426 25.1 35,835,927 29,210,960 22.7
Average noninterest-bearing demand deposits 51,543,903 39,146,184 31.7    46,341,335 38,498,971 20.4
Average interest-bearing deposits 26,136,113 18,088,785 44.5    22,824,729 14,832,373 53.9
Average total deposits 77,680,016 57,234,969 35.7    69,166,064 53,331,344 29.7
Earnings Ratios:
Return on average assets (annualized) (3) 1.99 % 1.62 % 22.8 % 1.34 % 1.91 % (29.8) %
Return on average SVBFG stockholders’ equity (annualized) (4) 24.19 18.27 32.4    15.56 21.16 (26.5)
Asset Quality Ratios:
Allowance for credit losses for loans as a % of total period-end loans (5) 1.34 % 0.97 % 37 bps 1.34 % 0.97 % 37 bps
Allowance for credit losses for performing loans as a % of total performing loans (5) 1.17 0.81 36    1.17 0.81 36
Gross loan charge-offs as a % of average total loans (annualized) (5) 0.30 0.49 (19)    0.30 0.33 (3)
Net loan charge-offs as a % of average total loans (annualized) (5) 0.26 0.44 (18)    0.24 0.26 (2)
Capital Ratios:
SVBFG CET 1 risk-based capital ratio 12.31 % 12.71 % (40) bps 12.31 % 12.71 % (40) bps
SVBFG tier 1 risk-based capital ratio 13.25 12.86 39 13.25 12.86 39
SVBFG total risk-based capital ratio 14.19 13.70 49 14.19 13.70 49
SVBFG tier 1 leverage ratio 8.26 8.64 (38)    8.26 8.64 (38)
SVBFG tangible common equity to tangible assets (6) 7.52 8.38 (86)    7.52 8.38 (86)
SVBFG tangible common equity to risk-weighted assets (6) 13.28 13.04 24    13.28 13.04 24
Bank CET 1 risk-based capital ratio 10.75 11.48 (73) 10.75 11.48 (73)
Bank tier 1 risk-based capital ratio 10.75 11.48 (73)    10.75 11.48 (73)
Bank total risk-based capital ratio 11.75 12.36 (61)    11.75 12.36 (61)
Bank tier 1 leverage ratio 6.45 7.48 (103)    6.45 7.48 (103)
Bank tangible common equity to tangible assets (6) 6.42 7.36 (94)    6.42 7.36 (94)
Bank tangible common equity to risk-weighted assets (6) 11.79 11.82 (3)    11.79 11.82 (3)
Other Ratios:
Operating efficiency ratio (7) 45.66 % 48.04 % (5.0) % 49.23 % 46.15 % 6.7 %
Non-GAAP core operating efficiency ratio (2) 56.86 48.05 18.3 53.41 46.09 15.9
Total costs of deposits (annualized) (8) 0.04 0.38 (89.5) 0.10 0.33 (69.7)
Book value per common share (9) $ 143.91 $ 114.26 25.9    $ 143.91 $ 114.26 25.9
Other Statistics:
Average full-time equivalent employees 4,216 3,413 23.5 % 3,914 3,309 18.3 %
Period-end full-time equivalent employees 4,336 3,460 25.3    4,336 3,460 25.3

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	Three months ended March 31,
(Dollars in thousands, except per share data, employees and ratios)	2021			2020			% Change
Income Statement:
Diluted earnings per share	$	10.03		$	2.55		293.3	%
Net income available to common stockholders	532,220			132,253			302.4
Net interest income	659,579			524,137			25.8
Net interest margin	2.29		%	3.12		%	(83)	bps
Provision for credit losses	$	18,679		$	243,480		(92.3)	%
Noninterest income	744,180			301,934			146.5
Noninterest expense	636,001			399,585			59.2
Non-GAAP core fee income (1)	158,884			168,458			(5.7)
Non-GAAP core fee income, plus SVB Leerink revenue (1)	325,625			231,347			40.8
Non-GAAP noninterest income, net of noncontrolling interests (1)	719,113			303,788			136.7
Non-GAAP noninterest expense, net of noncontrolling interests (2)	635,884			399,445			59.2
Balance Sheet:
Average available-for-sale securities	$	28,247,436		$	13,565,908		108.2	%
Average held-to-maturity securities	25,295,205			13,576,061			86.3
Average loans, amortized cost	46,281,476			33,660,728			37.5
Average noninterest-bearing demand deposits	73,233,194			41,335,984			77.2
Average interest-bearing deposits	37,375,220			20,472,247			82.6
Average total deposits	110,608,414			61,808,231			79.0
Earnings Ratios:
Return on average assets (annualized) (3)	1.73		%	0.73		%	137.0	%
Return on average SVBFG stockholders’ equity (annualized) (4)	27.04			8.17			231.0
Asset Quality Ratios:
Allowance for credit losses for loans as a % of total period-end loans	0.82		%	1.53		%	(71)	bps
Allowance for credit losses for performing loans as a % of total performing loans	0.74			1.43			(69)
Gross loan charge-offs as a % of average total loans (annualized)	0.83			0.44			39
Net loan charge-offs as a % of average total loans (annualized)	0.79			0.35			44
Capital Ratios:
SVBFG CET 1 risk-based capital ratio	12.18		%	12.35		%	(17)	bps
SVBFG tier 1 risk-based capital ratio	14.01			13.35			66
SVBFG total risk-based capital ratio	14.62			14.45			17
SVBFG tier 1 leverage ratio	8.01			9.00			(99)
SVBFG tangible common equity to tangible assets (5)	6.06			8.70			(264)
SVBFG tangible common equity to risk-weighted assets (5)	12.11			13.40			(129)
Bank CET 1 risk-based capital ratio	12.93			10.90			203
Bank tier 1 risk-based capital ratio	12.93			10.90			203
Bank total risk-based capital ratio	13.56			12.04			152
Bank tier 1 leverage ratio	7.20			7.21			(1)
Bank tangible common equity to tangible assets (5)	6.25			7.63			(138)
Bank tangible common equity to risk-weighted assets (5)	12.87			11.99			88
Other Ratios:
Operating efficiency ratio (6)	45.31		%	48.37		%	(6.3)	%
Non-GAAP core operating efficiency ratio (2)	58.52			47.71			22.7
Total costs of deposits (annualized) (7)	0.04			0.24			(83.3)
Book value per common share (8)	$	163.25		$	130.02		25.6
Tangible book value per common share (9)	159.50			126.41			26.2
Other Statistics:
Average full-time equivalent employees	4,601			3,672			25.3	%
Period-end full-time equivalent employees	4,656			3,710			25.5

(1)See “Results of Operations–Noninterest Income” for a description and reconciliation of non-GAAP core fee income and non-GAAP core fee income plus investment banking revenue and commissions.

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

(3)Ratio represents annualized consolidated net income available to common stockholders divided by quarterly average assets.

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

~~(5)For the three and nine months ended September 30, 2020, the ratios are calculated using the amortized cost basis for total loans as a result~~Table of ~~the adoption of CECL. Prior period ratios were calculated using total gross loans in accordance with previous methodology.~~Contents

~~(6)~~

(5)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)~~(6)The operating efficiency ratio is calculated by dividing total noninterest expense by total net interest income plus noninterest income.

~~(8)~~(7)Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.

~~(9)~~(8)Book value per common share is calculated by dividing total SVBFG common stockholders’ equity by total outstanding common shares at period-end.

(9)Tangible book value per common share is calculated by dividing tangible common equity by total outstanding common shares at period-end. Tangible common equity is a non-GAAP measure defined under the section “Capital Resources-Capital Ratios.”

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~~Our accounting policies are fundamental to understanding our financial condition and ~~analysis of~~ results of ~~operations and financial condition is based upon our unaudited interim consolidated financial statements, which~~operations. We have ~~been prepared in accordance with GAAP. The preparation of these financial statements in accordance with GAAP~~identified one policy as being critical because it requires ~~management~~us to make ~~estimates~~particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain, and ~~judgments~~because it is likely that ~~affect the~~materially different amounts would be reported ~~amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. Management evaluates~~under different conditions or using different assumptions. We evaluate our estimates and assumptions on an ongoing ~~basis. Management bases its~~basis and we base these 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.

~~Except as set forth below, there~~There have been no significant changes during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 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 ~~2019~~2020 Form 10-K.

We disclose our method and approach for the allowance for credit losses for loans, unfunded credit commitments and HTM securities critical accounting policy in Note 1 - “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements” under Part I, Item 1 of this report.

~~Allowance for Credit Losses~~

We consider this accounting policy to be critical as estimation of expected credit losses involves material management estimates and is susceptible to significant changes in the near-term. Determining the allowance for credit losses for loans, unfunded credit commitments and HTM securities requires us to make forecasts that are highly uncertain and require a high degree of judgment. A committee comprised of senior management evaluates the adequacy of the allowance for credit losses for loans, which includes review of loan portfolio segmentation, quantitative models, internal and external data inputs, economic forecasts, credit risk ratings and qualitative adjustments.

~~Expected Credit Losses Estimate for Loans~~

We derive an estimated ECL assumption from a non-discounted cash flow approach based on our portfolio segments discussed above. This approach incorporates a calculation of three predictive metrics: (1) probability of default ("PD"), (2) loss given default ("LGD") and (3) exposure at default ("EAD"), over the estimated life of the exposure. PD and LGD assumptions are developed based on quantitative models and inherent risk of credit loss, both of which involve significant judgment. Renewals and extensions within our control are not considered in the estimated contractual term of a loan. However, we include potential extensions if management has a reasonable expectation that we will execute a TDR with the borrower. The quantitative models are based on historical credit loss experience, adjusted for probability-weighted economic scenarios. These scenarios are used to support a reasonable and supportable forecast period of three-years for all portfolio segments. To the extent the remaining contractual lives of loans in the portfolio extend beyond this three-year period, we revert to historical averages using an autoregressive model of mean reversion that will continue to gradually trend towards the mean historical loss over the remaining contractual lives, adjusted for prepayments. The macroeconomic scenarios are reviewed on a quarterly basis.

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We also apply a qualitative factor adjustment to the results obtained through our quantitative ECL models to consider model imprecision, emerging risk assessments, trends and other subjective factors that may not be adequately represented in the quantitative ECL models. These adjustments reflect our assessment of the extent that current conditions and reasonable and supportable forecasts differ from conditions that existed during the period over which historical information was evaluated. These adjustments are aggregated to become our qualitative allocation.Based on our qualitative assessment and prediction or estimate of changing risks in the lending environment, the qualitative allocation may vary significantly from period to period. Refer to Note 1 - “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements” under Part I, Item I of this report for a summary of the factors we consider for its qualitative adjustments as part of our estimate of the changing risks in the lending environment.

We monitor our loan pools to ensure all assets therein continue to share similar risk characteristics with other financial assets inside the pool. Changes in credit risk, borrower circumstances, or the recognition of write-offs may indicate that a loan's risk profile has changed, and the asset should be removed from its current pool. For a loan that does not share risk characteristics with other loans, expected credit loss is measured based on the net realizable value, that is, the difference between the discounted value of the expected future cash flows and the amortized cost basis of the loan. When a loan is collateral-dependent and the repayment is expected to be provided substantially through the operation or sale of the collateral, the ECL is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of the collateral will be determined by the most recent appraisal, as adjusted to reflect a reasonable marketing period for the sale of the asset(s) and an estimate of reasonable selling expenses. Collateral-dependent loans will have independent appraisals completed and accepted at least annually.

~~Expected Credit Losses Estimate for Unfunded Credit Commitments~~

We maintain a separate allowance for credit losses for unfunded credit commitments which is included in other liabilities and the related ECL in our provision for credit losses. We estimate the amount of expected losses by using historical trends to calculate a probability of an unfunded credit commitment being funded and derive historical lifetime expected loss factors for each portfolio segment similar to our funded loan ECL. The collectively assessed ECL for unfunded credit commitments also includes the same qualitative allocations applied for our funded loan ECL. For unfunded credit commitments related to loans that do not share similar risk characteristics with other loans, where applicable, a separate estimate of ECL will be included in our total allowance for credit losses on unfunded credit commitments. Loan commitments that are determined to be unconditionally cancellable by the Bank do not require an allowance for credit losses.

~~Expected Credit Losses Estimate for Held-to-Maturity Investments~~

~~Recent Accounting Pronouncements~~

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which is part of the FASB’s initiative to reduce cost and complexity related to accounting for income taxes. The ASU eliminates certain exceptions to the general principles of ASC 740, Income Taxes, and simplifies income tax accounting in several areas. The amendments are effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2020, with early adoption permitted. The ASU allows entities to adopt this provision on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. We do not anticipate a material impact from this ASU on our financial position, results of operations, cash flows and disclosures.

In March 2020, the FASB issued a new Accounting Standard Update (ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting). This ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, entities can (1) elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination; (2) elect various optional expedients that

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would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met; and (3) make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. This guidance became effective on March 12, 2020 and an entity may elect to prospectively apply each category of exemption independently, either in the interim period that includes March 12, 2020, or in a subsequent period through December 31, 2022. We have implemented a process to assess the population of contracts that will be impacted by this ASU and to evaluate expedients we will use and when we might apply them. We are currently evaluating the impact this guidance will have on our financial position, results of operations, cash flows and disclosures.

Results of Operations

Net Interest Income and Margin (Fully Taxable Equivalent Basis)

Net interest income is defined as the difference between: (i) interest earned on loans, fixed income investments in our available-for-sale and held-to-maturity securities portfolios and short-term investment securities and (ii) interest paid on funding sources. Net interest margin is defined as annualized net interest income, on a fully taxable equivalent basis, 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 applicable federal statutory tax rate.

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 mix 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.

2020 Compared to 2019 2020 Compared to 2019
Three months ended September 30, increase (decrease) due to change in Nine months ended September 30, increase (decrease) due to change in
(Dollars in thousands) Volume Rate Total Volume Rate Total
Interest income:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities $ 1,306 $ (27,456) $ (26,150) $ 10,986 $ (62,690) $ (51,704)
Fixed income investment portfolio (taxable) 23,710 (16,849) 6,861 57,830 (16,149) 41,681
Fixed income investment portfolio (non-taxable) 5,452 (656) 4,796 13,220 (1,562) 11,658
Loans, amortized cost 73,886 (99,151) (25,265) 206,671 (292,478) (85,807)
Increase (decrease) in interest income, net 104,354 (144,112) (39,758) 288,707 (372,879) (84,172)
Interest expense:
Interest bearing checking and savings accounts 2,705 231 2,936 3,792 686 4,478
Money market deposits 935 (45,510) (44,575) 12,998 (84,069) (71,071)
Money market deposits in foreign offices 12 (3) 9 34 (6) 28
Time deposits 270 (401) (131) 755 (310) 445
Sweep deposits in foreign offices (14) (5,113) (5,127) 167 (12,900) (12,733)
Total increase (decrease) in deposits expense 3,908 (50,796) (46,888) 17,746 (96,599) (78,853)
Short-term borrowings — (115) (115) 2,147 (2,356) (209)
3.125% Senior Notes 4,012 — 4,012 5,171 — 5,171
3.50% Senior Notes 3 — 3 10 — 10
5.375% Senior Notes (4,873) — (4,873) (14,611) — (14,611)
Total decrease in borrowings expense (858) (115) (973) (7,283) (2,356) (9,639)
Increase (decrease) in interest expense, net 3,050 (50,911) (47,861) 10,463 (98,955) (88,492)
Increase (decrease) in net interest income $ 101,304 $ (93,201) $ 8,103 $ 278,244 $ (273,924) $ 4,320

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	2021 Compared to 2020
	Three months ended March 31, increase (decrease) due to change in
(Dollars in thousands)	Volume		Rate		Total
Interest income:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities	$	1,965	$	(16,324)	$	(14,359)
Fixed income investment portfolio (taxable)	110,092		(40,315)		69,777
Fixed income investment portfolio (non-taxable)	12,882		(2,663)		10,219
Loans, amortized cost	116,058		(68,205)		47,853
Increase (decrease) in interest income, net	240,997		(127,507)		113,490
Interest expense:
Interest bearing checking and savings accounts	736		22		758
Money market deposits	3,792		(28,061)		(24,269)
Money market deposits in foreign offices	91		17		108
Time deposits	471		(274)		197
Sweep deposits in foreign offices	(37)		(3,718)		(3,755)
Total increase (decrease) in deposits expense	5,053		(32,014)		(26,961)
Short-term borrowings	(166)		(2,548)		(2,714)
1.80% Senior Notes	1,559		—		1,559
3.125% Senior Notes	4,014		—		4,014
3.50% Senior Notes	4		—		4


Total increase (decrease) in borrowings expense	5,411		(2,548)		2,863
Increase (decrease) in interest expense, net	10,464		(34,562)		(24,098)
Increase (decrease) in net interest income	$	230,533	$	(92,945)	$	137,588

Net Interest Income (Fully Taxable Equivalent Basis)

~~Three months ended September 30, 2020 and 2019~~

Net interest income increased by ~~$8.1~~$137.6 million to ~~$531.7~~$665.1 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$523.6~~$527.5 million for the comparable ~~2019~~2020 period. Overall, our net interest income increased primarily from ~~an increase in interest earned on interest earning assets from average growth in~~ our fixed income investment securities ~~of $7.4 billion~~ and ~~loan~~loans due to increases in average balances ~~of $7.5 billion, driven by growth in our deposit balances of $20.4 billion. In addition, the increase was reflective of~~and decreases in interest paid on deposits due to market interest rate decreases. ~~These increases were~~The increase in net interest income was partially offset by lower yields on cash and cash equivalents, fixed income investment securities and ~~loan yields~~loans reflective of the ~~three 25~~aggregate 150 basis point Federal Funds rate ~~decreases in the latter half of 2019 as well as the aggregate 150 basis point~~ decrease in March 2020.

The main factors affecting interest income and interest expense for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to the comparable ~~2019~~2020 period are discussed below:

•Interest income for the three months ended ~~September 30, 2020 decreased~~March 31, 2021 increased by ~~$39.8~~$113.5 million due primarily to:

◦A $26.2 million decrease in interest income from our interest earning cash and short-term investment securities. The decrease was due primarily to the decrease in Federal Funds rates as discussed above.

◦A $25.3 million decrease in interest income on loans to $369.0 million for the three months ended September 30, 2020, compared to $394.2 million for the comparable 2019 period. The decrease was reflective of a decrease in the overall loan yields of 131 basis points to 3.93 percent from 5.24 percent partially offset by an increase in average loan balances of $7.5 billion.Gross loan yields, excluding loan interest recoveries and loan fees, decreased 131 basis points to 3.41 percent from 4.72 percent, reflective primarily of the impact of the decreases in Federal Funds rates as discussed above, partially offset by an increase reflective of the impact of the reclassification of unrealized gains on interest rate swap cash flow hedges that were terminated in the first quarter of 2020 and effective loan floors, partially offset by

◦An ~~$11.7~~$80.0 million increase in interest income from our fixed income investment securities due primarily to ~~the~~an increase of ~~$7.4~~$26.4 billion in average fixed income investment securities. The increase in interest income from growth of our average fixed income investment securities was partially offset by declines in yields earned on these investments reflective of the lower interest rate market ~~environment.~~environment, and

◦A $47.9 million increase in interest income on loans to $430.4 million for the three months ended March 31, 2021, compared to $382.6 million for the comparable 2020 period. The increase was reflective of an increase in average loan balances of $12.6 billion, partially offset by a decrease in the overall loan yields of 80 basis points to 3.77 percent from 4.57 percent. Gross loan yields, excluding loan interest recoveries and loan fees, decreased 86 basis points to 3.27 percent from 4.13 percent, driven by growth in our higher credit quality Global Fund Banking portfolio, partially offset by an increase in the reclassification of unrealized gains on interest rate swap cash flow hedges that were terminated in the latter half of the first quarter of 2020.

•Interest expense for the three months ended ~~September 30, 2020~~March 31, 2021 decreased by ~~$47.9~~$24.1 million due primarily to:

◦A ~~$46.9~~$27.0 million decrease in interest expense on deposits due primarily to a decrease in interest paid on our interest-bearing money market deposits due to the decreases in market rates, ~~and~~partially offset by

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◦A ~~$1.0~~$2.9 million ~~decrease~~increase in interest expense on borrowings due primarily to ~~the extinguishment of our 5.375% Senior Notes in December 2019, partially offset by~~ interest expense on our 3.125% Senior Notes issued in June ~~2020.~~

~~Nine months ended September 30,~~ 2020 and ~~2019~~

~~The main factors affecting interest income and interest expense for the nine months ended September 30, 2020, compared to the comparable 2019 period are discussed below:~~

•~~Interest income~~ ~~for the nine months ended September 30, 2020 decreased by $84.2 million due primarily to:~~

◦A $85.8 million decrease in interest income on loans to $1.1 billion for the nine months ended September 30, 2020, compared to $1.2 billion for the comparable 2019 period. The decrease was reflective of a decrease in the overall loan yields of 134 basis points to 4.16 percent from 5.50 percent partially offset by an increase in average loan balances of $6.6 billion. Gross loan yields, excluding loan interest recoveries and loan fees, decreased 129 basis points to 3.66 percent from 4.95 percent, reflective primarily of the impact of the decreases in Federal Funds rates as discussed above, partially offset by an increase reflective of the impact of the reclassification of unrealized gains on interest rate swap cash flow hedges that were terminated in the first quarter of 2020 and effective loan floors, and

◦~~A $51.7 million decrease in interest income from~~ our interest earning cash and short-term investment securities. The decrease was due primarily to the decrease in Federal Funds interest rates as discussed above, partially offset by growth in average balances of $5.3 billion.

~~These decreases were offset by the following:~~

~~Table of Contents~~

◦A $53.3 million increase in interest income from our fixed income investment securities. The increase was due primarily to the increase of $5.1 billion in average fixed income investment securities, partially offset by declines in yields earned on these investments reflective of the lower interest rate market environment.

•~~Interest expense~~ ~~for the nine months ended September 30, 2020 decreased by $88.5 million primarily due to:~~

◦A $78.9 million decrease in interest expense on deposits due primarily to a decrease in interest paid on our interest-bearing money market and on-balance sheet sweep deposits reflective of the decreases in market rates. These decreases were partially offset by interest income earned from $5.8 billion of growth in average balances for our interest-bearing money markets deposits.

◦~~A $9.6 million decrease in interest expense on borrowings due primarily to the extinguishment of our 5.375% Senior Notes, partially offset by interest expense for our 3.125%~~1.800% Senior Notes issued ~~towards the end of the second quarter of 2020.~~in February 2021.

Net Interest Margin (Fully Taxable Equivalent Basis)

~~Three months ended September 30, 2020 and 2019~~

•Our net interest margin decreased by 8183 basis points to ~~2.53~~2.29 percent for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~3.34~~3.12 percent for the comparable ~~2019~~2020 period. The lower margin for the three months ended ~~September 30, 2020~~March 31, 2021 was due primarily to a decrease in yields on loans reflective of the ~~Federal Funds rate decreases~~shift in the loan mix as discussed above, as well as ~~a shift in the mix of the~~higher growth in our interest-earning assets to lower-yielding short-term investment securities portfolio relative to the growth in our loan portfolio. The decrease in our net interest margin was partially offset by increases from our interest rate swap cash flow hedges which were terminated in the first quarter of 2020 and effective loan floors. Average loans represented 44.6 percent of average interest earnings assets for the three months ended September 30, 2020, compared to 48.0 percent for the comparable 2019 period.

~~Nine months ended September 30, 2020 and 2019~~

•Our net interest margin decreased by 81 basis points to 2.79 percent for the nine months ended September 30, 2020, compared to 3.60 percent for the comparable 2019 period. The lower margin for the nine months ended September 30, 2020 was reflective primarily of the decreases in the Federal Funds as discussed above, as well as a shift in the mix of the growth in our interest-earning assets to lower-yielding short-term investment securities portfolio relative to the growth in our loan portfolio ~~partially offset~~driven by ~~increases from~~significant growth in our ~~interest rate swap cash flow hedges which were terminated in the first quarter of 2020 and effective loan floors.~~average deposits. Average loans represented ~~47.5~~39.2 percent of ~~year-to-date~~ average interest earnings assets for the three months ended March 31, 2021, compared to ~~50.0~~49.4 percent for the comparable ~~2019~~2020 period.

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, preferred stock, 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, 2020~~March 31, 2021 and ~~2019:~~2020:

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Average Balances, Rates and Yields for the Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~


		Three months ended September 30,													Three months ended March 31,
		2020						2019							2021						2020
(Dollars in thousands)	(Dollars in thousands)	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate		(Dollars in thousands)	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:	Interest-earning assets:													Interest-earning assets:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	$	13,817,353	$	2,717	0.08	%	$	7,193,195	$	28,867	1.59	%	Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1)	$	18,174,315	$	3,265	0.07	%	$	7,308,705	$	17,624	0.97	%
Investment securities: (2)	Investment securities: (2)													Investment securities: (2)
Available-for-sale securities:	Available-for-sale securities:													Available-for-sale securities:
Taxable	Taxable	20,026,864		87,792		1.74		10,600,449		62,121		2.32		Taxable	28,247,436		124,512		1.79		13,565,908		77,024		2.28
Held-to-maturity securities:	Held-to-maturity securities:													Held-to-maturity securities:
Taxable	Taxable	10,286,332		68,725		2.66		12,922,438		87,535		2.69		Taxable	21,590,350		99,650		1.87		11,675,421		77,361		2.66
Non-taxable (3)	Non-taxable (3)	2,266,864		18,876		3.31		1,612,067		14,080		3.47		Non-taxable (3)	3,704,855		26,452		2.90		1,900,640		16,233		3.44
Total loans, amortized cost (4) (5)	Total loans, amortized cost (4) (5)	37,318,600		368,981		3.93		29,822,426		394,246		5.24		Total loans, amortized cost (4) (5)	46,281,476		430,422		3.77		33,660,728		382,569		4.57
Total interest-earning assets	Total interest-earning assets	83,716,013		547,091		2.60		62,150,575		586,849		3.74		Total interest-earning assets	117,998,432		684,301		2.35		68,111,402		570,811		3.37
Cash and due from banks	Cash and due from banks	1,162,156						590,391						Cash and due from banks	1,546,539						797,462
Allowance for credit losses for loans	Allowance for credit losses for loans	(610,212)						(308,609)						Allowance for credit losses for loans	(484,476)						(327,812)
Other assets (6)	Other assets (6)	4,080,409						2,895,391						Other assets (6)	5,754,113						3,826,116
Total assets	Total assets	$	88,348,366					$	65,327,748					Total assets	$	124,814,608					$	72,407,168
Funding sources:	Funding sources:													Funding sources:
Interest-bearing liabilities:	Interest-bearing liabilities:													Interest-bearing liabilities:
Interest bearing checking and savings accounts	Interest bearing checking and savings accounts	$	4,297,874	$	3,038	0.28	%	$	470,601	$	102	0.09	%	Interest bearing checking and savings accounts	$	3,661,903	$	866	0.10	%	$	546,428	$	108	0.08	%
Money market deposits	Money market deposits	19,829,441		4,594		0.09		15,805,507		49,169		1.23		Money market deposits	30,959,253		8,744		0.11		17,613,578		33,013		0.75
Money market deposits in foreign offices	Money market deposits in foreign offices	261,903		21		0.03		115,590		12		0.04		Money market deposits in foreign offices	873,090		132		0.06		266,045		24		0.04
Time deposits	Time deposits	380,560		459		0.48		157,218		590		1.49		Time deposits	657,534		626		0.39		163,343		429		1.06
Sweep deposits in foreign offices	Sweep deposits in foreign offices	1,366,335		106		0.03		1,539,869		5,233		1.35		Sweep deposits in foreign offices	1,223,440		69		0.02		1,882,853		3,824		0.82
Total interest-bearing deposits	Total interest-bearing deposits	26,136,113		8,218		0.13		18,088,785		55,106		1.21		Total interest-bearing deposits	37,375,220		10,437		0.11		20,472,247		37,398		0.73
Short-term borrowings	Short-term borrowings	15,335		4		0.10		22,045		119		2.14		Short-term borrowings	12,137		2		0.07		969,896		2,716		1.13
1.800% Senior Notes														1.800% Senior Notes	318,569		1,559		1.98		—		—		—
3.125% Senior Notes	3.125% Senior Notes	495,095		4,012		3.22		—		—		—		3.125% Senior Notes	495,317		4,014		3.29		—		—		—
3.50% Senior Notes	3.50% Senior Notes	348,197		3,153		3.60		347,841		3,150		3.59		3.50% Senior Notes	348,380		3,155		3.67		348,018		3,151		3.64
5.375% Senior Notes		—		—		—		349,216		4,873		5.54

Total interest-bearing liabilities	Total interest-bearing liabilities	26,994,740		15,387		0.23		18,807,887		63,248		1.33		Total interest-bearing liabilities	38,549,623		19,167		0.20		21,790,161		43,265		0.80
Portion of noninterest-bearing funding sources	Portion of noninterest-bearing funding sources	56,721,273						43,342,688						Portion of noninterest-bearing funding sources	79,448,809						46,321,241
Total funding sources	Total funding sources	83,716,013		15,387		0.07		62,150,575		63,248		0.40		Total funding sources	117,998,432		19,167		0.06		68,111,402		43,265		0.25
Noninterest-bearing funding sources:	Noninterest-bearing funding sources:													Noninterest-bearing funding sources:
Demand deposits	Demand deposits	51,543,903						39,146,184						Demand deposits	73,233,194						41,335,984
Other liabilities	Other liabilities	2,055,599						1,417,659						Other liabilities	4,020,492						2,277,031
Preferred stock	Preferred stock	340,138						—						Preferred stock	817,057						340,169
SVBFG common stockholders’ equity	SVBFG common stockholders’ equity	7,265,863						5,802,907						SVBFG common stockholders’ equity	7,983,451						6,512,946
Noncontrolling interests	Noncontrolling interests	148,123						153,111						Noncontrolling interests	210,791						150,877
Portion used to fund interest-earning assets	Portion used to fund interest-earning assets	(56,721,273)						(43,342,688)						Portion used to fund interest-earning assets	(79,448,809)						(46,321,241)
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	$	88,348,366					$	65,327,748					Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity	$	124,814,608					$	72,407,168
Net interest income and margin	Net interest income and margin			$	531,704	2.53	%			$	523,601	3.34	%	Net interest income and margin			$	665,134	2.29	%			$	527,546	3.12	%
Total deposits	Total deposits	$	77,680,016					$	57,234,969					Total deposits	$	110,608,414					$	61,808,231
Reconciliation to reported net interest income:	Reconciliation to reported net interest income:													Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis	Adjustments for taxable equivalent basis			(3,964)						(2,957)				Adjustments for taxable equivalent basis			(5,555)						(3,409)
Net interest income, as reported	Net interest income, as reported			$	527,740					$	520,644			Net interest income, as reported			$	659,579					$	524,137

(1)Includes average interest-earning deposits in other financial institutions of ~~$1.0~~$1.6 billion and ~~$1.1~~$0.9 billion for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. For the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ balances also include ~~$11.3~~$14.8 billion and ~~$5.1~~$5.5 billion, respectively, deposited at the FRB, earning interest at the Federal Funds target rate.

(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.

(3)Interest income on non-taxable investment securities is presented on a fully taxable equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.

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

(5)Interest income includes loan fees of ~~$49.5~~$57.7 million and ~~$39.4~~$36.7 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

(6)Average investment securities of ~~$2.1~~$3.4 billion and ~~$1.2~~$1.6 billion for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, were classified as other assets as they were noninterest-earning assets. These investments primarily consisted of non-marketable and other equity securities.

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~~Average Balances, Rates and Yields for the Nine Months Ended September 30, 2020 and 2019~~

Nine months ended September 30,
2020 2019
(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) $ 11,025,519 $ 22,743 0.28 % $ 5,696,501 $ 74,447 1.75 %
Investment securities: (2)
Available-for-sale securities:
Taxable 15,475,686 234,066 2.02 8,572,314 142,891 2.23
Held-to-maturity securities:
Taxable 10,947,145 218,383 2.66 13,305,424 267,877 2.69
Non-taxable (3) 2,107,248 53,418 3.39 1,585,734 41,760 3.52
Total loans, amortized cost (4) (5) 35,835,927 1,116,660 4.16 29,210,960 1,202,467 5.50
Total interest-earning assets 75,391,525 1,645,270 2.91 58,370,933 1,729,442 3.96
Cash and due from banks 952,118 553,523
Allowance for credit losses for loans (499,962) (303,154)
Other assets (6) 3,916,969 2,592,830
Total assets $ 79,760,650 $ 61,214,132
Funding sources:
Interest-bearing liabilities:
Interest bearing checking and savings accounts $ 2,347,019 $ 4,796 0.27 % $ 491,663 $ 318 0.09 %
Money market deposits 18,330,106 41,178 0.30 12,540,843 112,249 1.20
Money market deposits in foreign offices 272,940 71 0.03 142,053 43 0.04
Time deposits 244,099 1,235 0.68 94,934 790 1.11
Sweep deposits in foreign offices 1,630,565 4,030 0.33 1,562,880 16,763 1.43
Total interest-bearing deposits 22,824,729 51,310 0.30 14,832,373 130,163 1.17
Short-term borrowings 532,549 3,310 0.83 186,930 3,519 2.52
3.125% Senior Notes 213,234 5,171 3.24 — — —
3.50% Senior Notes 348,108 9,457 3.63 347,756 9,447 3.63
5.375% Senior Notes — — — 349,050 14,611 5.60
Total interest-bearing liabilities 23,918,620 69,248 0.39 15,716,109 157,740 1.34
Portion of noninterest-bearing funding sources 51,472,905 42,654,824
Total funding sources 75,391,525 69,248 0.12 58,370,933 157,740 0.36
Noninterest-bearing funding sources:
Demand deposits 46,341,335 38,498,971
Other liabilities 2,118,690 1,327,040
Preferred stock 340,148 —
SVBFG common stockholders’ equity 6,892,301 5,523,196
Noncontrolling interests 149,556 148,816
Portion used to fund interest-earning assets (51,472,905) (42,654,824)
Total liabilities, noncontrolling interest, and SVBFG stockholders’ equity $ 79,760,650 $ 61,214,132
Net interest income and margin $ 1,576,022 2.79 % $ 1,571,702 3.60 %
Total deposits $ 69,166,064 $ 53,331,344
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis (11,218) (8,769)
Net interest income, as reported $ 1,564,804 $ 1,562,933

~~(1)~~Includes average interest-earning deposits in other financial institutions of $0.9 billion and $0.9 billion for the nine months ended September 30, 2020 and 2019, respectively. The balance also includes $8.9 billion and $3.9 billion deposited at the FRB, earning interest at the Federal Funds target rate for the nine months ended September 30, 2020 and 2019, respectively.

~~(2)Yields on interest-earning investment securities do not give effect to changes in fair value that are reflected in other comprehensive income.~~

~~(3)Interest income on non-taxable available-for-sale securities is presented on a fully taxable-equivalent basis using the federal statutory tax rate of 21.0 percent for all periods presented.~~

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

~~(5)Interest income includes loan fees of $135.8 million and $120.2 million for the nine months ended September 30, 2020 and 2019, respectively.~~

~~(6)~~Average investment securities of $1.9 billion and $1.1 billion for the nine months ended September 30, 2020 and 2019, respectively, were classified as other assets as they were noninterest-earning assets. These investments consisted primarily of non-marketable and other equity securities.

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~~(Reduction)~~ Provision for Credit Losses

The ~~(reduction)~~ provision for credit losses is the combination of (i) the provision for loans, (ii) the provision for unfunded credit commitments and (iii) the provision for HTM securities. Our ~~(reduction)~~ provision for credit losses equals our best estimate of probable credit losses that are inherent in the portfolios at the balance sheet date.

The following table summarizes our allowance for credit losses for loans, unfunded credit commitments and HTM securities for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands, except ratios)	(Dollars in thousands, except ratios)	2020			2019			2020			2019			(Dollars in thousands, except ratios)	2021			2020
Allowance for credit losses for loans, beginning balance	Allowance for credit losses for loans, beginning balance	$	589,828		$	301,888		$	304,924		$	280,903		Allowance for credit losses for loans, beginning balance	$	447,765		$	304,924
Day one impact of adopting ASC 326	Day one impact of adopting ASC 326	—			—			25,464			—			Day one impact of adopting ASC 326	—			25,464
(Reduction) provision for loans		(54,106)			35,985			246,694			80,954
Provision for loans														Provision for loans	34,026			248,901
Gross loan charge-offs	Gross loan charge-offs	(28,449)			(36,820)			(80,400)			(72,255)			Gross loan charge-offs	(95,005)			(36,896)
Loan recoveries	Loan recoveries	4,354			3,888			16,182			15,133			Loan recoveries	4,853			7,755
Foreign currency translation adjustments	Foreign currency translation adjustments	1,331			(531)			94			(325)			Foreign currency translation adjustments	112			(1,185)
Allowance for credit losses for loans, ending balance	Allowance for credit losses for loans, ending balance	$	512,958		$	304,410		$	512,958		$	304,410		Allowance for credit losses for loans, ending balance	$	391,751		$	548,963
Allowance for credit losses for unfunded credit commitments, beginning balance	Allowance for credit losses for unfunded credit commitments, beginning balance	99,294			62,664			67,656			55,183			Allowance for credit losses for unfunded credit commitments, beginning balance	120,796			67,656
Day one impact of adopting ASC 326	Day one impact of adopting ASC 326	—			—			22,826			—			Day one impact of adopting ASC 326	—			22,826
Provision for unfunded credit commitments		2,019			551			11,132			8,079
Reduction of unfunded credit commitments														Reduction of unfunded credit commitments	(16,067)			(5,477)
Foreign currency translation adjustments	Foreign currency translation adjustments	202			(107)			(99)			(154)			Foreign currency translation adjustments	21			(315)
Allowance for credit losses for unfunded credit commitments, ending balance (1)	Allowance for credit losses for unfunded credit commitments, ending balance (1)	$	101,515		$	63,108		$	101,515		$	63,108		Allowance for credit losses for unfunded credit commitments, ending balance (1)	$	104,750		$	84,690
Allowance for credit losses for HTM securities, beginning balance	Allowance for credit losses for HTM securities, beginning balance	222			—			—			—			Allowance for credit losses for HTM securities, beginning balance	392			—
Day one impact of adopting ASC 326	Day one impact of adopting ASC 326	—			—			174			—			Day one impact of adopting ASC 326	—			174
Provision for HTM securities	Provision for HTM securities	69			—			117			—			Provision for HTM securities	720			56
Allowance for credit losses for HTM securities, ending balance (2)	Allowance for credit losses for HTM securities, ending balance (2)	$	291		$	—		$	291		$	—		Allowance for credit losses for HTM securities, ending balance (2)	$	1,112		$	230
Ratios and other information:	Ratios and other information:													Ratios and other information:
(Reduction) provision for loans as a percentage of period-end total loans (annualized) (3)		(0.56)		%	0.46		%	0.86		%	0.35		%
Provision for loans as a percentage of period-end total loans (annualized)														Provision for loans as a percentage of period-end total loans (annualized)	0.29		%	2.78		%
Gross loan charge-offs as a percentage of average total loans (annualized)	Gross loan charge-offs as a percentage of average total loans (annualized)	0.30			0.49			0.30			0.33			Gross loan charge-offs as a percentage of average total loans (annualized)	0.83			0.44
Net loan charge-offs as a percentage of average total loans (annualized)	Net loan charge-offs as a percentage of average total loans (annualized)	0.26			0.44			0.24			0.26			Net loan charge-offs as a percentage of average total loans (annualized)	0.79			0.35
Allowance for credit losses for loans as a percentage of period-end total loans ~~(3)~~	Allowance for credit losses for loans as a percentage of period-end total loans ~~(3)~~	1.34			0.97			1.34			0.97			Allowance for credit losses for loans as a percentage of period-end total loans ~~(3)~~	0.82			1.53
(Reduction) provision for credit losses		$	(52,018)		$	36,536		$	257,943		$	89,033
Provision for credit losses														Provision for credit losses	$	18,679		$	243,480
Period-end total loans ~~(3)~~	Period-end total loans ~~(3)~~	38,413,891			31,229,003			38,413,891			31,229,003			Period-end total loans ~~(3)~~	47,675,166			35,968,085
Average total loans ~~(3)~~	Average total loans ~~(3)~~	37,318,600			29,979,522			35,835,927			29,373,264			Average total loans ~~(3)~~	46,281,476			33,660,728
Allowance for loan losses for nonaccrual loans	Allowance for loan losses for nonaccrual loans	64,479			53,728			64,479			53,728			Allowance for loan losses for nonaccrual loans	41,851			34,876
Nonaccrual loans	Nonaccrual loans	105,711			104,045			105,711			104,045			Nonaccrual loans	90,247			50,607

(1)The “allowance for credit losses for unfunded credit commitments” is included as a component of “Other liabilities” on our consolidated balance sheets.

(2)The "allowance for credit losses for HTM securities" is included as a component of ~~HTM securities~~"HTM securities" and presented net in our consolidated financial statements.

~~(3)~~
~~For~~

Potential Fraudulent Client Activity

During the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, we became aware of potentially fraudulent activity conducted by JES Global Capital, Inc., a client of Silicon Valley Bank, our principal banking subsidiary, and certain of its affiliates, in connection with a loan ~~amounts~~transaction funded in early February 2021. Our investigation into this incident to determine the potential credit exposure resulted in a charge-off of $80.0 million, or $59.2 million net of tax, relating to a Global Fund Banking capital call line of credit.

We are ~~disclosed,~~working with the appropriate law enforcement authorities in connection with this matter and ~~ratios are calculated, using~~intend to pursue all available sources of recovery and other measures to mitigate the ~~amortized cost basis as a result~~extent of the ~~adoption of CECL. Prior period loan amounts are disclosed, and ratios are calculated, using the gross basis.~~

loss.

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~~Three months ended September 30, 2020 and 2019~~Based on our review of the potentially fraudulent activity, as well as our risk assessment review of the Global Fund Banking loan portfolio conducted in light of the incident, we currently believe this incident to be an isolated occurrence involving a single business relationship.

~~The reduction of our expected~~Provision for Loans

We had a provision for credit losses ~~was $52.0~~for loans of $34.0 million for the three months ended ~~September 30, 2020, consisting of a reduction of our expected credit losses for loans of $54.1 million,~~March 31, 2021, compared to a provision ~~for credit losses for unfunded credit commitments~~ of ~~$2.0 million and a provision for our credit losses for our HTM securities of $69 thousand.Our provision for credit losses was $36.5~~$248.9 million for the three months ended ~~September 30, 2019, consisting of a~~March 31, 2020. The provision for loans of ~~$36.0 million and a provision for unfunded credit commitments of $0.5 million.~~

~~The reduction of our expected credit losses for loans of $54.1~~$34.0 million for the three months ended ~~September 30, 2020~~March 31, 2021 was driven primarily by an~~$82.4~~$85.8 million ~~reduction~~ in reserves for our performing loans reflective of improved economic scenarios in our forecast models, as well as a qualitative adjustment reflective of strong credit performance from our Private Bank portfolio segment, a $4.6 million decrease related to changes in loan composition within our portfolio segments and $4.4 million of recoveries. These decreases were partially offset by $23.3 million for net new nonaccrual loans and $15.2 million for charge-offs not specifically reserved for at ~~June 30, 2020. The reduction~~December 31, 2020, of which $80.0 million was related to ~~improved~~the potentially fraudulent activity discussed above, and a $17.9 million increase for loan growth. These increases were partially offset by $4.9 million of recoveries and a $61.7 million reduction in performing reserves a result of the ongoing improvement of economic scenarios in our forecast models was driven primarily by our Investor Dependent Early-Stage portfolio segment which is more sensitive to the underlying macro-economic forecasts utilized in our CECL model as compared to the remaining portfolio segments as well as a decrease in balances in that portfolio segment.

A provision for credit losses for unfunded credit commitments of $2.0 million was driven primarily by the forecast models of the current economic environment as well as changes in the unfunded credit commitments composition within our portfolio segments.models.

The provision for loan losses of ~~$36.0~~$248.9 million for the three months ended September 30, 2019 reflects an increase of $19.1 million for net new nonaccrual loans, $18.3 million for charge-offs not specifically reserved for and $15.2 million in additional reserves for period-end loan growth, partially offset by a decrease of $13.0 million for the qualitative component of our performing loans and $3.9 million of recoveries.

~~The provision for unfunded credit commitments of $0.5 million~~March 31, 2020, was driven primarily by the growth in unfunded credit commitments of $1.3 billion for the three months ended September 30, 2019, offset by a decrease related to the continued shift in the mix of our unfunded credit facilities to our large, higher credit quality private equity/venture capital clients.

Gross loan charge-offs were $28.4 million for the third quarter of 2020, of which $15.2 million was not specifically reserved for at June 30, 2020. Gross loan charge-offs were primarily driven by $28.3 million for our Investor Dependent clients.

Gross loan charge-offs were $36.8 million for the three months ended September 30, 2019, of which $18.3 million was not specifically reserved for in prior quarters. Gross loan charge-offs were primarily driven by a $9.4 million charge-off for one mid-stage life science/healthcare portfolio client and $7.6 million for one later-stage software client, both of which were previously included in our nonaccrual loan portfolio. The remaining charge-offs came primarily from our early-stage clients.

~~Nine Months Ended September 30, 2020 and 2019~~

Our provision for credit losses was $257.9 million for the nine months ended September 30, 2020, consisting of a provision for loan losses of $246.7 million, a provision for unfunded credit commitments of $11.1 million and a provision for HTM securities of $117 thousand. Our provision for credit losses was $89.0 million for the nine months ended September 30, 2019, consisting of a provision for loan losses of $81.0 million and a provision for unfunded credit commitments of $8.0 million.

~~The provision for credit losses for loans of $246.7 million was driven primarily by $134.5~~$190.7 million in additional reserves for our performing loans based on our forecast models of the ~~current~~ economic environment, ~~under the CECL methodology adopted January 1, 2020,~~ including the impact of the COVID-19 pandemic, as well as changes in loan composition within our portfolio segments, ~~$58.1~~$40.9 million in ~~net new nonaccrual loans, $38.8~~additional reserves for period-end loan growth, $13.1 million for charge-offs not specifically reserved for at December 31, 2019 and ~~$31.5~~$10.7 million in ~~additional reserves for period-end loan growth,~~net new nonaccrual loans, partially offset by ~~$16.2~~$7.8 million of recoveries.

~~A provision~~Provision for Unfunded Credit Commitments

We recorded a reduction of our credit loss estimate for unfunded credit commitments of $16.1 million and $5.5 million for the three months ended March 31, 2021 and 2020, respectively. The reduction of $16.1 million in the current period was driven primarily by improved economic scenarios in our forecast models, partially offset by changes in the unfunded credit commitments' composition within our portfolio segments.

The reduction of our expected credit losses for unfunded credit commitments of ~~$11.1~~$5.5 million for the three months ended March 31, 2020, was driven primarily by a decrease in the expected future commitments for milestone tranches, which are tied to company performance or additional funding rounds, based on our forecast models of the ~~current~~ economic environment, ~~under the CECL methodology adopted January 1, 2020,~~ including the impact of the COVID-19 ~~pandemic, as well as changes in the unfunded credit commitments composition within our portfolio segments.~~pandemic.

~~The provision for~~Gross Loan Charge-Offs

Gross loan ~~losses of $81.0~~charge-offs were $95.0 million for the ~~nine months ended September 30, 2019~~first quarter of 2021, of which $80.0 million relates to the potentially fraudulent Global Fund Banking activity discussed above, and an additional $5.8 million that was ~~reflective primarily of $57.5 million in net new specific reserves for nonaccrual loans, $30.5 million for charge-offs~~ not specifically reserved for ~~in prior quarters and $22.4~~at December 31, 2020. The remaining $15.0 million ~~from period-end~~gross loan ~~growth, partially offset by a decrease of $14.3 million for our performing loans and $15.1 million of recoveries.~~

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~~The provision for unfunded credit commitments of $8.0 million for nine months ended September 30, 2019 was~~charge-offs were driven primarily by ~~growth in unfunded credit commitments of $3.4 billion.~~our Investor Dependent loan portfolio.

Gross loan charge-offs were ~~$80.4~~$36.9 million for the ~~nine months ended September 30,~~first quarter of 2020, of which ~~$38.8~~$13.1 million was not specifically reserved for ~~in prior quarters.~~at December 31, 2019. Gross loan charge-offs were driven primarily ~~driven~~ by ~~$67.2~~a $33.4 million charge-off for our ~~Investor Dependent~~investor dependent clients ~~and a $4.9~~with one $10.7 million charge-off ~~from one Balance Sheet Dependent~~related to a later-stage life sciences/healthcare client. The remaining charge-offs came primarily from our ~~Cash Flow Dependent~~Sponsor Led Buyout risk-based ~~segments.~~

Gross loan charge-offs were $72.3 million for the nine months ended September 30, 2019, of which $30.5 million was not specifically reserved for in prior quarters. Gross loan charge-offs included $26.9 million from our life science/healthcare loan portfolio and $38.3 million from our software/internet loan portfolio. Gross loan charge-offs for our life science/healthcare portfolio were driven primarily by $22.5 million from one mid-stage client. Gross loan charge-offs for our software/internet loan portfolio were driven primarily by our early-stage clients.segment.

See “Consolidated Financial Condition—Credit Quality and Allowance for Credit Losses for Loans and for Unfunded Credit Commitments” below and Note 7 — “Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for further details on our allowance for credit losses for loans and unfunded credit commitments.

Provision for HTM Securities

We recorded a provision for credit losses for HTM securities of $0.7 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. Our provision for HTM securities of $0.7 million for the first quarter of 2021 was driven primarily by the purchase of corporate bonds during the first quarter of 2021. Our HTM portfolio as of March 31, 2021 was entirely made up of A1 or better rated bonds, all considered investment grade.

The provision for credit losses for HTM securities of $0.1 million for the first quarter of 2020 was driven primarily by our forecast models of the economic environment, including the impact of the COVID-19 pandemic. Our HTM portfolio as of March 31, 2020 was entirely made up of Aa3 or better rated bonds, all considered high quality.

See Note 6 - "Investment Securities" under Part I, Item 1 of this report for further details on our allowance for credit losses for HTM securities.

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Noninterest Income

For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, noninterest income was ~~$547.6~~$744.2 million ~~and $1.2 billion, respectively,~~ compared to ~~$294.0~~$301.9 million and ~~$908.1 million~~ for the comparable ~~2019 periods.~~2020 period. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, non-GAAP noninterest income, net of noncontrolling interests was ~~$519.7~~$719.1 million ~~and $1.2 billion, respectively,~~ compared to ~~$279.4 million and $871.6~~$303.8 million for the comparable ~~2019 periods.~~2020 period. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, non-GAAP core fee income plus ~~investment banking~~SVB Leerink revenue ~~and commissions~~ was ~~$254.8~~$325.6 million ~~and $777.1 million, respectively~~ compared to ~~$213.0 million and $651.6~~$231.3 million for the comparable ~~2019 periods.~~2020 period. For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, non-GAAP core fee income was ~~$146.3~~$158.9 million ~~and $447.3 million, respectively,~~ compared to ~~$162.2 million and $473.8~~$168.5 million for the comparable ~~2019 periods.~~2020 period. (See reconciliations of non-GAAP measures used below under “Use of Non-GAAP Financial Measures”.)

Included in results for three and nine months ended September 30, 2020 are revenues related to our investments in BigCommerce comprised of: (i) $108.4 million from unrealized gains on investment securities; (ii) $10.8 million from gains on equity warrant assets; and (iii) $30.0 million in gains included in other noninterest income as discussed further below.

Use of Non-GAAP Financial Measures

To supplement our unaudited interim consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures of financial performance (including, but not limited to, non-GAAP core fee income, non-GAAP SVB Leerink revenue, non-GAAP core fee income plus ~~investment banking~~SVB Leerink revenue, ~~and commissions,~~ non-GAAP noninterest income and non-GAAP net gains on investment securities). These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures by other companies in our industry. Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A non-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.

We believe these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding 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, and not as a substitute for or preferable to, financial measures prepared in accordance with GAAP.

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 SVB Leerink, the entire income or loss from funds consolidated in accordance with ASC Topic 810 as discussed in Note 1 — “Basis of Presentation” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report. We are required under GAAP to consolidate 100% of the results of these entities, 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 tables below for noninterest income and net gains on investment securities exclude noncontrolling interests.

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Core fee income is a non-GAAP financial measure, which represents GAAP noninterest income, but excludes (i) SVB Leerink revenue, (ii) certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, ~~(ii) our investment banking revenue and commissions,~~ and (iii) other noninterest income. Core fee income ~~includes~~represents client investment fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees.

SVB Leerink revenue is a non-GAAP financial measure, which represents noninterest income but excludes (i) Core fee income, and (ii) certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, and other noninterest income. SVB Leerink revenue represents investment banking revenue and commissions.

Core fee income plus ~~investment banking~~SVB Leerink revenue ~~and commissions~~ is a non-GAAP measure, which represents GAAP noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control, primarily our net gains (losses) on investment securities and equity warrant assets, and other noninterest income. Core fee income plus ~~investment banking~~SVB Leerink revenue ~~and commissions includes~~represents core fee income plus investment banking revenue and commissions.

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The following table provides a reconciliation of GAAP noninterest income to non-GAAP noninterest income, net of noncontrolling interests, for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
GAAP noninterest income	GAAP noninterest income	$	547,583	$	294,009	86.2	%	$	1,218,365	$	908,135	34.2	%	GAAP noninterest income	$	744,180	$	301,934	146.5	%
Less: income attributable to noncontrolling interests, including carried interest allocation		27,862		14,568		91.3		40,393		36,552		10.5
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation														Less: income (loss) attributable to noncontrolling interests, including carried interest allocation	25,067		(1,854)		NM
Non-GAAP noninterest income, net of noncontrolling interests	Non-GAAP noninterest income, net of noncontrolling interests	$	519,721	$	279,441	86.0		$	1,177,972	$	871,583	35.2		Non-GAAP noninterest income, net of noncontrolling interests	$	719,113	$	303,788	136.7

NM—Not meaningful

The following table provides a reconciliation of GAAP noninterest income to non-GAAP core fee income for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
GAAP noninterest income	GAAP noninterest income	$	547,583	$	294,009	86.2	%	$	1,218,365	$	908,135	34.2	%	GAAP noninterest income	$	744,180	$	301,934	146.5	%
Less: gains on investment securities, net	Less: gains on investment securities, net	189,837		29,849		NM		270,760		106,575		154.1		Less: gains on investment securities, net	167,078		46,055		NM
Less: gains on equity warrant assets, net	Less: gains on equity warrant assets, net	53,766		37,561		43.1		93,667		107,213		(12.6)		Less: gains on equity warrant assets, net	221,685		13,395		NM
Less: other noninterest income	Less: other noninterest income	49,222		13,631		NM		76,887		42,773		79.8		Less: other noninterest income	29,792		11,137		167.5
Non-GAAP core fee income plus investment banking revenue and commissions (1)		$	254,758	$	212,968	19.6		$	777,051	$	651,574	19.3
Less: investment banking revenue		92,181		38,516		139.3		280,551		137,005		104.8
Less: commissions		16,257		12,275		32.4		49,197		40,812		20.5
Non-GAAP core fee income (2)		$	146,320	$	162,177	(9.8)		$	447,303	$	473,757	(5.6)
Non-GAAP core fee income plus SVB Leerink revenue (1)														Non-GAAP core fee income plus SVB Leerink revenue (1)	$	325,625	$	231,347	40.8
Investment banking revenue														Investment banking revenue	142,302		46,867		NM
Commissions														Commissions	24,439		16,022		52.5
Non-GAAP SVB Leerink revenue (2)														Non-GAAP SVB Leerink revenue (2)	$	166,741	$	62,889	165.1
Non-GAAP core fee income (3)														Non-GAAP core fee income (3)	$	158,884	$	168,458	(5.7)

NM—Not meaningful

(1)Non-GAAP core fee income plus ~~investment banking~~SVB Leerink revenue ~~and commissions~~ represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and other noninterest income. Core fee income plus ~~investment banking~~SVB Leerink revenue ~~and commissions~~ is ~~Non-GAAP~~non-GAAP core fee income (as defined in ~~the subsequent footnote)~~footnote (3) below) with the addition of investment banking revenue and commissions.

(2)Non-GAAP SVB Leerink revenue represents investment banking revenue and commissions, but excludes certain line items where performance is typically subject to market or other conditions beyond our control and other noninterest income.

(3)Non-GAAP core fee income represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. Non-GAAP core fee income includes client investment fees, foreign exchange fees, credit card fees, deposit service charges, lending related fees and letters of credit and standby letters of credit fees.

Gains on Investment Securities, Net

Net gains on investment securities include gains and losses from our non-marketable and other equity securities, which include public equity securities held as a result of exercised equity warrant assets, as well as gains and losses from sales of our AFS debt securities portfolio, when applicable.

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~~(both~~ (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 and losses from distributions, changes in liquidity events and general economic and market conditions. Unrealized gains or losses from non-marketable and other equity 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 or losses from investment securities. As such, our results for a particular period are not necessarily indicative of our expected performance in a future period.

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The extent to which any unrealized gains or losses 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 (e.g. lock-up agreements), changes in prevailing market prices, market conditions, the actual sales or distributions of securities, and the timing of such actual sales or distributions, which, to the extent such securities are managed by our managed funds, are subject to our funds' separate discretionary sales/distributions and governance processes.

Our AFS securities portfolio is a fixed income investment portfolio that is managed with the objective of earning an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and credit diversification as well as addressing our asset/liability management objectives. Though infrequent, sales of debt securities in our AFS securities portfolio may result in net gains or losses and are conducted pursuant to the guidelines of our investment policy related to the management of our liquidity position and interest rate risk.

~~Three months ended September 30, 2020 and 2019~~

For the three months ended ~~September 30, 2020,~~March 31, 2021, we had net gains on investment securities of ~~$189.8~~$167.1 million, compared to ~~$29.8~~$46.1 million for the comparable ~~2019~~2020 period. Non-GAAP net gains on investment securities, net of noncontrolling interests, were ~~$162.1~~$142.0 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to non-GAAP net gains, net of controlling interest of ~~$15.2~~$47.6 million for the comparable ~~2019~~2020 period.

Non-GAAP net gains on investment securities, net of noncontrolling interests, of ~~$162.1~~$142.0 million for the three months ended ~~September 30, 2020~~March 31, 2021 were driven by the following:

•Gains of ~~$108.4~~$76.3 million from our public equity securities investments, driven primarily ~~driven~~ by ~~our previously announced investments in BigCommerce,~~realized gains on common stock shares sold, which ~~completed its IPO in August 2020,~~

•~~Gains of $23.1~~includes $43.3 million from the sale of BigCommerce Holdings, Inc. common stock shares, as well as gains from other public equity securities held in our ~~managed funds of funds~~ portfolio, ~~related primarily to unrealized valuation gains,~~ and

•Gains of ~~$18.4~~$47.9 million from our strategic and other investments and managed funds of funds portfolios, driven primarily ~~driven~~ by net unrealized valuation ~~increases in our strategic venture capital funds.~~increases.

~~Nine months ended September 30, 2020 and 2019~~

For the nine months ended September 30, 2020, we had net gains on investment securities of $270.8 million, compared to $106.6 million for the comparable 2019 period. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $230.2 million for the nine months ended September 30, 2020, compared to $69.9 million for the comparable 2019 period. Non-GAAP net gains, net of noncontrolling interests, of $230.2 million for the nine months ended September 30, 2020 were driven primarily by the following:

•~~Gains of $112.7 million from our public equity securities investments, primarily driven by our previously announced investments in BigCommerce, which completed its IPO in August 2020,~~

•~~Gains of $61.2 million from our AFS debt securities portfolio, resulting from the sale of $2.6 billion of U.S. Treasury securities, and~~

•~~Gains of $27.4 million from our managed funds of funds portfolio related primarily to unrealized valuation gains.~~

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The following tables provide a reconciliation of GAAP total gains (losses) on investment securities, net, to non-GAAP net gains (losses) on investment securities, net of noncontrolling interests, for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


(Dollars in thousands)	(Dollars in thousands)	Managed Funds of Funds		Managed Direct Venture Funds		Public Equity Securities		Debt Funds		Sales of AFS Securities		Strategic and Other Investments		SVB Leerink		Total		(Dollars in thousands)	Managed Funds of Funds		Managed Direct Venture Funds		Managed Credit Funds		Public Equity Securities		Debt Funds		Sales of AFS Debt Securities		Strategic and Other Investments		SVB Leerink		Total
Three months ended September 30, 2020
Three months ended March 31, 2021																		Three months ended March 31, 2021
Total gains on investment securities, net	Total gains on investment securities, net	$	42,885	$	14,775	$	108,417	$	15	$	—	$	18,426	$	5,319	$	189,837	Total gains on investment securities, net	$	30,692	$	18,487	$	7,048	$	76,321	$	414	$	—	$	30,367	$	3,749	$	167,078
Less: income attributable to noncontrolling interests, including carried interest allocation	Less: income attributable to noncontrolling interests, including carried interest allocation	19,832		7,492		—		—		—		—		461		27,785		Less: income attributable to noncontrolling interests, including carried interest allocation	13,165		8,668		868		—		—		—		—		2,330		25,031
Non-GAAP net gains on investment securities, net of noncontrolling interests	Non-GAAP net gains on investment securities, net of noncontrolling interests	$	23,053	$	7,283	$	108,417	$	15	$	—	$	18,426	$	4,858	$	162,052	Non-GAAP net gains on investment securities, net of noncontrolling interests	$	17,527	$	9,819	$	6,180	$	76,321	$	414	$	—	$	30,367	$	1,419	$	142,047

Three months ended September 30, 2019
Three months ended March 31, 2020																		Three months ended March 31, 2020
Total gains (losses) on investment securities, net	Total gains (losses) on investment securities, net	$	22,223	$	9,668	$	(11,488)	$	187	$	—	$	8,035	$	1,224	$	29,849	Total gains (losses) on investment securities, net	$	(2,464)	$	(2,272)	$	—	$	(4,206)	$	(362)	$	61,165	$	(4,017)	$	(1,789)	$	46,055
Less: income attributable to noncontrolling interests, including carried interest allocation		9,676		4,138		—		—		—		—		826		$	14,640
Less: (loss) income attributable to noncontrolling interests, including carried interest allocation																		Less: (loss) income attributable to noncontrolling interests, including carried interest allocation	(306)		(1,327)		—		—		—		—		—		98		(1,535)
Non-GAAP net gains (loss) on investment securities, net of noncontrolling interests	Non-GAAP net gains (loss) on investment securities, net of noncontrolling interests	$	12,547	$	5,530	$	(11,488)	$	187	$	—	$	8,035	$	398	$	15,209	Non-GAAP net gains (loss) on investment securities, net of noncontrolling interests	$	(2,158)	$	(945)	$	—	$	(4,206)	$	(362)	$	61,165	$	(4,017)	$	(1,887)	$	47,590

Nine months ended September 30, 2020
Total gains (losses) on investment securities, net		$	53,768	$	27,246	$	112,744	$	(253)	$	61,165	$	9,490	$	6,600	$	270,760
Less: income attributable to noncontrolling interests, including carried interest allocation		26,344		13,741		—		—		—		—		493		40,578
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests		$	27,424	$	13,505	$	112,744	$	(253)	$	61,165	$	9,490	$	6,107	$	230,182

Nine months ended September 30, 2019
Total gains (losses) on investment securities, net		$	60,787	$	13,135	$	(1,408)	$	1,529	$	(3,905)	$	30,348	$	6,089	$	106,575
Less: income attributable to noncontrolling interests, including carried interest allocation		30,273		5,540		—		—		—		—		861		36,674
Non-GAAP net gains (losses) on investment securities, net of noncontrolling interests		$	30,514	$	7,595	$	(1,408)	$	1,529	$	(3,905)	$	30,348	$	5,228	$	69,901

Gains on Equity Warrant Assets, Net

~~Three months ended September 30, 2020 and 2019~~

Net gains on equity warrant assets were ~~$53.8~~$221.7 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to net gains of ~~$37.6~~$13.4 million for the comparable ~~2019~~2020 period. Net gains on equity warrant assets for the three months ended ~~September 30, 2020~~March 31, 2021 consisted of:

•Net gains on exercises of ~~$30.2~~$159.6 million ~~from warrant valuations increases,~~reflective of $115.8 million in gains related to Coinbase Global, Inc.'s ("Coinbase") announcement to enter the public markets via a direct listing with remaining gains driven primarily by ~~valuation increases in our private company warrant portfolio,~~IPO activity, and

•~~Net gains of $23.9 million from the exercise of equity warrant assets driven by IPO and M&A activity, which included $10.8 million from our exercised warrant position in BigCommerce.~~

9373

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~~Nine months ended September 30, 2020 and 2019~~

Net gains on equity warrant assets were $93.7 million for the nine months ended September 30, 2020, compared to net gains of $107.2 million for the comparable 2019 period. Net gains on equity warrant assets for the nine months ended September 30, 2020 consisted of:

•Net gains of ~~$59.4 million from the exercise of equity warrant assets, driven by IPO and M&A activity, which, included $10.8 million from our exercised warrant position in BigCommerce, and~~

•~~Net gains of $35.6~~$62.3 million from warrant ~~valuation~~valuations increases, driven ~~primarily~~ by ~~valuation increases~~pending SPAC activity as well as pending M&A and IPO activity.

Investment in Coinbase

As of the date of this filing, we have sold all of our ~~private company warrant portfolio during~~common stock shares of Coinbase resulting in pre-tax gains on investment securities of approximately $38.2 million to be recorded in the ~~nine months ended September 30, 2020.~~second quarter of 2021.

A summary of gains on equity warrant assets, net, for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Equity warrant assets (1):	Equity warrant assets (1):													Equity warrant assets (1):
Gains on exercises, net	Gains on exercises, net	$	23,940	$	30,047	(20.3)	%	$	59,370	$	90,357	(34.3)	%	Gains on exercises, net	$	159,637	$	19,193	NM
Terminations	Terminations	(361)		(481)		(24.9)	%	(1,332)		(2,931)		(54.6)		Terminations	(249)		(326)		(23.6)	%
Changes in fair value, net	Changes in fair value, net	30,187		7,995		NM		35,629		19,787		80.1		Changes in fair value, net	62,297		(5,472)		NM
Total gains on equity warrant assets, net	Total gains on equity warrant assets, net	$	53,766	$	37,561	43.1		$	93,667	$	107,213	(12.6)		Total gains on equity warrant assets, net	$	221,685	$	13,395	NM

NM—Not meaningful

(1) At ~~September 30, 2020,~~March 31, 2021, we held warrants in ~~2,503~~2,670 companies, compared to ~~2,227~~2,342 companies at ~~September 30, 2019.~~March 31, 2020. The total fair value of our warrant portfolio was ~~$202.2~~$244.3 million at ~~September 30, 2020~~March 31, 2021 and ~~$149.1~~$152.7 million at ~~September 30, 2019.~~March 31, 2020. Warrants in 2842 companies each had fair values greater than $1.0 million and collectively represented ~~$83.0~~$113.7 million, or ~~41.1~~46.5 percent, of the fair value of the total warrant portfolio at ~~September 30, 2020.~~March 31, 2021. Warrants in 1519 companies each had fair values greater than $1.0 million and collectively represented ~~$43.7~~$46.7 million, or ~~29.3~~30.6 percent, of the fair value of the total warrant portfolio at ~~September 30, 2019.~~March 31, 2020.

~~Investment in Root, Inc.~~

As of September 30, 2020, we held investments in Root, Inc. (“Root”), consisting of: (i) approximately 600,000 shares related to warrants held by SVBFG, and (ii) approximately 15.6 million shares directly held by two of our SVB Capital funds (in which SVBFG holds certain carried interests), of which we estimated to be entitled to approximately $24.1 million before taxes in the form of carried interest subject to the fund's performance and assuming the fund exceeds certain performance targets.

In late October 2020, Root completed its initial public offering. As part of the IPO which priced at $27 per share: (i) SVBFG sold all of our warrant shares, which resulted in a pre-tax gain of $5.5 million; and (ii) our SVB Capital funds sold approximately 1.6 million shares, of which SVBFG would be entitled to approximately $3.7 millionbefore taxes in the form of carried interest, assuming the fund exceeds certain performance targets. SVB Capital currently holds approximately 14.0 million shares, which based on the closing price of Root’s common stock of $23.03 as of November 4, 2020, we currently estimate SVBFG to be entitled to approximately $29.8 million before taxes in the form of carried interest, assuming the fund exceeds certain performance targets. Carried interest may be subject to change to the extent fund performance levels fluctuate.

Gains (or losses) related to our equity securities in public companies such as Root, Inc are based on valuation changes or the sale of any securities, and are subject to such companies’ stock price, which are subject to market conditions and various other factors. Additionally, the public equity investment expected gains and losses, and the extent to which such gains or (losses) will become realized is subject to a variety of factors, including among other factors, changes in prevailing market prices and the timing of any sales of securities, which are subject to our securities sales and governance process, as well as certain sales restrictions (e.g. lock-up agreements). The lock up agreement for common stock shares held in Root, Inc, is scheduled to expire during April 2021.

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Non-GAAP Core Fee Income


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Non-GAAP core fee income (1):	Non-GAAP core fee income (1):													Non-GAAP core fee income (1):
Client investment fees	Client investment fees	$	31,914	$	46,679	(31.6)	%	$	107,192	$	136,905	(21.7)	%	Client investment fees	$	20,065	$	43,393	(53.8)	%
Foreign exchange fees	Foreign exchange fees	43,881		40,309		8.9		127,642		116,863		9.2		Foreign exchange fees	57,393		47,505		20.8
Credit card fees	Credit card fees	22,756		30,158		(24.5)		72,348		86,431		(16.3)		Credit card fees	27,567		28,304		(2.6)
Deposit service charges	Deposit service charges	22,015		22,482		(2.1)		67,115		65,496		2.5		Deposit service charges	25,151		24,589		2.3
Lending related fees	Lending related fees	13,562		11,707		15.8		37,851		36,857		2.7		Lending related fees	15,657		13,125		19.3
Letters of credit and standby letters of credit fees	Letters of credit and standby letters of credit fees	12,192		10,842		12.5		35,155		31,205		12.7		Letters of credit and standby letters of credit fees	13,051		11,542		13.1
Total non-GAAP core fee income (1)	Total non-GAAP core fee income (1)	$	146,320	$	162,177	(9.8)		$	447,303	$	473,757	(5.6)		Total non-GAAP core fee income (1)	$	158,884	$	168,458	(5.7)
Investment banking revenue	Investment banking revenue	92,181		38,516		139.3		280,551		137,005		104.8		Investment banking revenue	142,302		46,867		NM
Commissions	Commissions	16,257		12,275		32.4		49,197		40,812		20.5		Commissions	24,439		16,022		52.5
Total non-GAAP core fee income plus investment banking revenue and commissions (2)		$	254,758	$	212,968	19.6		$	777,051	$	651,574	19.3
Total non-GAAP Leerink revenue (2)														Total non-GAAP Leerink revenue (2)	$	166,741	$	62,889	165.1
Total non-GAAP core fee income plus SVB Leerink revenue (3)														Total non-GAAP core fee income plus SVB Leerink revenue (3)	$	325,625	$	231,347	40.8

NM—Not meaningful

(1)This non-GAAP measure represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) our investment banking revenue and commissions and (iii) other noninterest income. See “Use of Non-GAAP Measures” above.

(2)Non-GAAP ~~core fee income plus investment banking~~SVB Leerink revenue ~~and commissions~~ represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, (ii) non-GAAP core fee income, and (iii) other noninterest income. See “Use of Non-GAAP Measures” above.

(3)Non-GAAP core fee income plus SVB Leerink revenue represents noninterest income, but excludes (i) certain line items where performance is typically subject to market or other conditions beyond our control, and (ii) other noninterest income. See “Use of Non-GAAP Measures” above.

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Client Investment Fees

Client investment fees were ~~$31.9 million and $107.2~~$20.1 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021 compared to ~~$46.7 million and $136.9~~$43.4 million for the comparable ~~2019 periods.~~2020 period. The ~~decreases were~~decrease was reflective of a reduction in fee margin resulting from lower ~~spreads due to decreases in~~short-term market ~~interest~~ rates, offset by large increases in average off-balance sheet client investment funds. Given our expectations of a continued low rate environment, we generally expect client investment fees in ~~2020~~2021 to be lower than ~~2019.~~2020.

A summary of client investment fees by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Client investment fees by type:	Client investment fees by type:													Client investment fees by type:
Sweep money market fees	Sweep money market fees	$	18,155	$	26,202	(30.7)	%	$	60,617	$	79,698	(23.9)	%	Sweep money market fees	$	10,461	$	23,049	(54.6)	%
Asset management fees	Asset management fees	12,172		7,256		67.8		32,905		20,883		57.6		Asset management fees	9,020		9,137		(1.3)
Repurchase agreement fees	Repurchase agreement fees	1,587		13,221		(88.0)		13,670		36,324		(62.4)		Repurchase agreement fees	584		11,207		(94.8)
Total client investment fees	Total client investment fees	$	31,914	$	46,679	(31.6)		$	107,192	$	136,905	(21.7)		Total client investment fees	$	20,065	$	43,393	(53.8)

The following table summarizes average client investment funds for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in millions)	(Dollars in millions)	2020		2019		% Change		2020		2019		% Change		(Dollars in millions)	2021		2020		% Change
Sweep money market funds	Sweep money market funds	$	54,495	$	40,321	35.2	%	$	48,367	$	40,048	20.8	%	Sweep money market funds	$	67,138	$	43,045	56.0	%
Client investment assets under management (1)	Client investment assets under management (1)	59,338		42,834		38.5		53,928		40,969		31.6		Client investment assets under management (1)	72,478		50,746		42.8
Repurchase agreements	Repurchase agreements	9,731		9,670		0.6		9,809		8,947		9.6		Repurchase agreements	11,963		9,799		22.1
Total average client investment funds (2)	Total average client investment funds (2)	$	123,564	$	92,825	33.1		$	112,104	$	89,964	24.6		Total average client investment funds (2)	$	151,579	$	103,590	46.3

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

~~Table of Contents~~

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

The following table summarizes period-end client investment funds at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


(Dollars in millions)	(Dollars in millions)	September 30, 2020		December 31, 2019		% Change		(Dollars in millions)	March 31, 2021		December 31, 2020		% Change
Sweep money market funds	Sweep money market funds	$	56,395	$	43,226	30.5	%	Sweep money market funds	$	75,328	$	59,844	25.9	%
Client investment assets under management (1)	Client investment assets under management (1)	60,773		46,904		29.6		Client investment assets under management (1)	75,970		70,671		7.5
Repurchase agreements	Repurchase agreements	9,613		9,062		6.1		Repurchase agreements	12,584		10,538		19.4
Total period-end client investment funds (2)	Total period-end client investment funds (2)	$	126,781	$	99,192	27.8		Total period-end client investment funds (2)	$	163,882	$	141,053	16.2

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

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

Foreign Exchange Fees

Foreign exchange fees were ~~$43.9~~$57.4 million ~~and $127.6 million for the three and nine months ended September 30, 2020, respectively, compared to $40.3 million and $116.9 million for the comparable 2019 periods. The increase~~ for the three months ended ~~September 30,~~March 31, 2021 compared to $47.5 million for the comparable 2020 period. The increase in foreign exchange fees was driven primarily by increases in spot contract commissions driven by increased volume of trades for the three months ended March 31, 2021 compared to the ~~comparable~~2020 period, ~~ending September 30, 2019, was~~ driven ~~by increased trade volumes reflective~~ primarily by private equity deal activity coupled with quarterly hedging activity. The increase for the nine months ended September 30, 2020 compared to September 30, 2019, is due primarily to the overall increase in the number of clients executing spot contracts resulting in higher trade volumes from the previous year reflective of our global expansion initiative and increased client engagement efforts. ~~Foreign exchange fees have been, and may further be, impacted by effects of the COVID-19 pandemic.~~

A summary of foreign exchange fee income by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Foreign exchange fees by instrument type:
Spot contract commissions $ 38,794 $ 36,836 5.3 % $ 112,821 $ 106,561 5.9 %
Forward contract commissions 4,613 3,371 36.8 14,004 10,144 38.1
Option premium fees 474 102 NM 817 158 NM
Total foreign exchange fees $ 43,881 $ 40,309 8.9 $ 127,642 $ 116,863 9.2

~~NM—Not meaningful~~Table of Contents


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Foreign exchange fees by instrument type:
Spot contract commissions	$	54,929	$	40,934	34.2	%
Forward contract commissions	2,348		6,339		(63.0)
Option premium fees	116		232		(50.0)
Total foreign exchange fees	$	57,393	$	47,505	20.8

Credit Card Fees

Credit card fees were ~~$22.8 million and $72.3~~$27.6 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~$30.2 million and $86.4~~$28.3 million for the comparable ~~2019 periods. The decreases were primarily~~2020 period. Credit card fees decreased slightly due to lower transaction volumes ~~starting in March of 2020 reflective of the COVID-19 pandemic interrupting normal business activity. Credit card fees have been, and may further be, impacted by the effects~~resulting from a full quarter impact of the COVID-19 pandemic.

A summary of credit card fees by instrument type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Credit card fees by instrument type:
Card interchange fees, net $ 18,168 $ 24,560 (26.0) % $ 55,257 $ 68,808 (19.7) %
Merchant service fees 3,670 3,943 (6.9) 13,727 12,763 7.6
Card service fees 918 1,655 (44.5) 3,364 4,860 (30.8)
Total credit card fees $ 22,756 $ 30,158 (24.5) $ 72,348 $ 86,431 (16.3)

~~Table of Contents~~


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Credit card fees by instrument type:
Card interchange fees, net	$	22,848	$	21,775	4.9	%
Merchant service fees	3,772		5,027		(25.0)
Card service fees	947		1,502		(37.0)
Total credit card fees	$	27,567	$	28,304	(2.6)

Deposit Service Charges

Deposit service charges were ~~$22.0~~$25.2 million and $67.1 million for the three and nine months ended September 30, 2020, respectively, compared to $22.5 million and $65.5 million for the comparable 2019 periods. The decrease in deposit service charges for the three months ended ~~September 30, 2020,~~March 31, 2021 compared to $24.6 million for the comparable period ending September 30, 2019, was reflective of the decrease in client activity including the impact of a slower macro-economic environment resulting from the COVID-19 pandemic as well as increased earnings credits reflective of growth in deposit demand accounts from clients conserving cash resulting in qualifying balances to offset2020 period. Deposit service ~~charges. The increase for the nine months ended September 30, 2020 compared~~charges remained relatively flat due to the ~~comparable period ending September 30, 2019, was reflective of~~increases in product revenues being offset by higher ~~deposit client counts as well as higher volumes of our transaction-based fee products from the previous year.~~earnings credits.

Lending Related Fees

Lending related fees were ~~$13.6 million and $37.9~~$15.7 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 compared to ~~$11.7 million and $36.9~~$13.1 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was primarily due to increases in fees earned from unused lines of ~~credit.~~credit due to strong client liquidity.

A summary of lending related fees by type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Lending related fees by instrument type:	Lending related fees by instrument type:													Lending related fees by instrument type:
Unused commitment fees	Unused commitment fees	$	9,872	$	8,339	18.4	%	$	26,602	$	25,060	6.2	%	Unused commitment fees	$	12,256	$	8,406	45.8	%
Other	Other	3,690		3,368		9.6		11,249		11,797		(4.6)		Other	3,401		4,719		(27.9)
Total lending related fees	Total lending related fees	$	13,562	$	11,707	15.8		$	37,851	$	36,857	2.7		Total lending related fees	$	15,657	$	13,125	19.3

Letters of Credit and Standby Letters of Credit Fees

Letters of credit and standby letters of credit fees were ~~$12.2 million and $35.2~~$13.1 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~$10.8 million and $31.2~~$11.5 million for the comparable ~~2019~~2020 ~~periods.~~period. The ~~increases were~~increase was driven primarily ~~driven~~ by an increase in deferred fee income reflective of larger letter of credit issuances.

Investment Banking Revenue

Investment banking revenue was ~~$92.2 million and $280.6~~$142.3 million for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~$38.5 million and $137.0~~$46.9 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was attributable to ~~higher~~exceptional levels of funding activity in the life science/healthcare secondary markets, ~~and by the~~resulting in an increase in public equity underwriting fees.

A summary of investment banking revenue by type for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Investment banking revenue:
Underwriting fees $ 85,009 $ 31,016 174.1 $ 247,384 $ 109,371 126.2 %
Advisory fees 1,761 5,200 (66.1) 26,170 22,789 14.8
Private placements and other 5,411 2,300 135.3 6,997 4,845 44.4
Total investment banking revenue $ 92,181 $ 38,516 139.3 $ 280,551 $ 137,005 104.8

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	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Investment banking revenue:
Underwriting fees	$	125,076	$	31,290	NM
Advisory fees	4,450		15,487		(71.3)
Private placements and other	12,776		90		NM
Total investment banking revenue	$	142,302	$	46,867	NM

NM—Not meaningful

Commissions

Commissions for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 were ~~$16.3~~$24.4 million, ~~and $49.2 million, respectively,~~ compared to ~~$12.3 million and $40.8~~$16.0 million for the comparable ~~2019 periods. The increases were driven by client trading activity, consistent with market volumes.~~2020 period. Commissions include commissions received from clients for the execution of agency-based brokerage transactions in listed and over-the-counter equities.

~~Table~~ The increase was driven by higher trade volume as well as strategic hires made in the third quarter of ~~Contents~~

2020 to drive growth in derivatives and convertible revenue.

Other

Other noninterest income for the three ~~and nine~~ months ended ~~September 30, 2020 were $49.2~~March 31, 2021 was $29.8 million, ~~and $76.9 million, respectively,~~ compared to ~~$13.6 million and $42.8~~$11.1 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was driven primarily ~~driven~~ by ~~a $30.0 million recognized gain upon~~gains on other derivatives, compared to losses on other derivatives in the ~~exercise~~2020 period, and ~~conversion of our convertible debt option for BigCommerce during the third quarter of 2020.~~higher fund management fees due to additional funds managed.

Noninterest Expense

A summary of noninterest expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Compensation and benefits	Compensation and benefits	$	327,369	$	233,840	40.0	%	$	902,752	$	715,073	26.2	%	Compensation and benefits	$	445,425	$	255,586	74.3	%
Professional services	Professional services	67,215		55,202		21.8		169,748		133,018		27.6		Professional services	81,343		38,705		110.2
Premises and equipment	Premises and equipment	30,772		26,775		14.9		85,420		72,386		18.0		Premises and equipment	32,822		26,940		21.8
Net occupancy	Net occupancy	18,965		16,981		11.7		56,156		49,716		13.0		Net occupancy	17,681		18,346		(3.6)
Business development and travel	Business development and travel	2,214		19,539		(88.7)		19,277		51,915		(62.9)		Business development and travel	3,811		14,071		(72.9)
FDIC and state assessments	FDIC and state assessments	6,933		4,881		42.0		18,986		13,343		42.3		FDIC and state assessments	9,463		5,234		80.8
Other	Other	37,553		34,106		10.1		117,903		105,059		12.2		Other	45,456		40,703		11.7
Total noninterest expense	Total noninterest expense	$	491,021	$	391,324	25.5		$	1,370,242	$	1,140,510	20.1		Total noninterest expense	$	636,001	$	399,585	59.2

Included in noninterest expense is expense attributable to noncontrolling interests. See below for a description and reconciliation of non-GAAP noninterest expense and non-GAAP core 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 core operating efficiency ratio, which excludes noncontrolling interests and SVB Leerink. 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.

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The table below provides a summary of non-GAAP noninterest expense and non-GAAP core operating efficiency ratio for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
Non-GAAP core operating efficiency ratio (Dollars in thousands, except ratios) 2020 2019 % Change 2020 2019 % Change
GAAP noninterest expense $ 491,021 $ 391,324 25.5 % $ 1,370,242 $ 1,140,510 20.1 %
Less: expense attributable to noncontrolling interests 114 145 (21.4) 384 692 (44.5)
Non-GAAP noninterest expense, net of noncontrolling interests 490,907 391,179 25.5 1,369,858 1,139,818 20.2
Less: expense attributable to SVB Leerink 77,567 55,200 40.5 248,254 177,675 39.7
Non-GAAP noninterest expense, net of noncontrolling interests and SVB Leerink $ 413,340 $ 335,979 23.0 $ 1,121,604 $ 962,143 16.6
GAAP net interest income $ 527,740 $ 520,644 1.4 $ 1,564,804 $ 1,562,933 0.1
Adjustments for taxable equivalent basis 3,964 2,957 34.1 11,218 8,769 27.9
Non-GAAP taxable equivalent net interest income 531,704 523,601 1.5 1,576,022 1,571,702 0.3
Less: income attributable to noncontrolling interests — 14 (100.0) 26 41 (36.6)
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests 531,704 523,587 1.6 1,575,996 1,571,661 0.3
Less: net interest income attributable to SVB Leerink 175 277 (36.8) 373 961 (61.2)
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests and SVB Leerink $ 531,529 $ 523,310 1.6 $ 1,575,623 $ 1,570,700 0.3
GAAP noninterest income $ 547,583 $ 294,009 86.2 $ 1,218,365 $ 908,135 34.2
Less: income attributable to noncontrolling interests, including carried interest allocation 27,862 14,568 91.3 40,393 36,552 10.5
Non-GAAP noninterest income, net of noncontrolling interests 519,721 279,441 86.0 1,177,972 871,583 35.2
Less: non-GAAP net gains on investment securities, net of noncontrolling interests 162,052 15,209 NM 230,182 69,901 NM
Less: net gains on equity warrant assets 53,766 37,561 43.1 93,667 107,213 (12.6)
Less: investment banking revenue 92,181 38,516 139.3 280,551 137,005 104.8
Less: commissions 16,257 12,275 32.4 49,197 40,812 20.5
Non-GAAP noninterest income, net of noncontrolling interests and net of net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions $ 195,465 $ 175,880 11.1 $ 524,375 $ 516,652 1.5
GAAP total revenue $ 1,075,323 $ 814,653 32.0 $ 2,783,169 $ 2,471,068 12.6
Non-GAAP taxable equivalent revenue, net of noncontrolling interests and SVB Leerink, net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions $ 726,994 $ 699,190 4.0 $ 2,099,998 $ 2,087,352 0.6
Operating efficiency ratio 45.66 % 48.04 % (5.0) 49.23 % 46.15 % 6.7
Non-GAAP core operating efficiency ratio (1) 56.86 48.05 18.3 53.41 46.09 15.9

~~Table of Contents~~


	Three months ended March 31,
Non-GAAP core operating efficiency ratio (Dollars in thousands, except ratios)	2021			2020			% Change
GAAP noninterest expense	$	636,001		$	399,585		59.2	%
Less: expense attributable to noncontrolling interests	117			140			(16.4)
Non-GAAP noninterest expense, net of noncontrolling interests	635,884			399,445			59.2
Less: expense attributable to SVB Leerink	136,351			62,037			119.8
Non-GAAP noninterest expense, net of noncontrolling interests and SVB Leerink	$	499,533		$	337,408		48.1

GAAP net interest income	$	659,579		$	524,137		25.8
Adjustments for taxable equivalent basis	5,555			3,409			63.0
Non-GAAP taxable equivalent net interest income	665,134			527,546			26.1
Less: income attributable to noncontrolling interests	—			21			(100.0)
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests	665,134			527,525			26.1
Less: net interest income attributable to SVB Leerink	166			201			(17.4)
Non-GAAP taxable equivalent net interest income, net of noncontrolling interests and SVB Leerink	$	664,968		$	527,324		26.1

GAAP noninterest income	$	744,180		$	301,934		146.5
Less: income (loss) attributable to noncontrolling interests, including carried interest allocation	25,067			(1,854)			NM
Non-GAAP noninterest income, net of noncontrolling interests	719,113			303,788			136.7
Less: non-GAAP net gains on investment securities, net of noncontrolling interests	142,047			47,590			198.5
Less: net gains on equity warrant assets	221,685			13,395			NM
Less: investment banking revenue	142,302			46,867			NM
Less: commissions	24,439			16,022			52.5
Non-GAAP noninterest income, net of noncontrolling interests and net of net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions	$	188,640		$	179,914		4.9

GAAP total revenue	$	1,403,759		$	826,071		69.9
Non-GAAP taxable equivalent revenue, net of noncontrolling interests and SVB Leerink, net gains on investment securities, net gains on equity warrant assets, investment banking revenue and commissions	$	853,608		$	707,238		20.7

Operating efficiency ratio	45.31		%	48.37		%	(6.3)
Non-GAAP core operating efficiency ratio (1)	58.52			47.71			22.7

NM—Not meaningful

(1)The non-GAAP core operating efficiency ratio is calculated by dividing noninterest expense after adjusting for noninterest expense attributable to SVB Leerink by total revenue after adjusting for net interest income attributable to SVB Leerink, net gains or losses on investment securities and equity warrant assets investment banking revenue and commissions. Additionally, noninterest expense and total revenue are adjusted for income or losses and expenses attributable to noncontrolling interests and adjustments to net interest income for a taxable equivalent basis.

Table of Contents

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, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands, except employees)	(Dollars in thousands, except employees)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands, except employees)	2021		2020		% Change
Compensation and benefits:	Compensation and benefits:													Compensation and benefits:
Salaries and wages	Salaries and wages	$	135,705	$	109,473	24.0	%	$	375,844	$	316,472	18.8	%	Salaries and wages	$	163,558	$	115,614	41.5	%
Incentive compensation plans	Incentive compensation plans	103,898		59,602		74.3		291,101		200,483		45.2		Incentive compensation plans	149,645		66,674		124.4
Other employee incentives and benefits (1)	Other employee incentives and benefits (1)	87,766		64,765		35.5		235,807		198,118		19.0		Other employee incentives and benefits (1)	132,222		73,298		80.4
Total compensation and benefits	Total compensation and benefits	$	327,369	$	233,840	40.0		$	902,752	$	715,073	26.2		Total compensation and benefits	$	445,425	$	255,586	74.3
Period-end full-time equivalent employees	Period-end full-time equivalent employees	4,336		3,460		25.3		4,336		3,460		25.3		Period-end full-time equivalent employees	4,656		3,710		25.5
Average full-time equivalent employees	Average full-time equivalent employees	4,216		3,413		23.5		3,914		3,309		18.3		Average full-time equivalent employees	4,601		3,672		25.3

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

Compensation and benefits expense was ~~$327.4~~$445.4 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$233.8~~$255.6 million for the comparable ~~2019~~2020 period. The key changes in factors affecting compensation and benefits expense were as follows:

•An increase of ~~$26.2~~$47.9 million in salaries and wages reflective primarily of the increase in the number of average FTE to ~~4,216~~4,601 for the ~~third~~first quarter of ~~2020~~2021 compared to ~~3,413~~3,672 for ~~the second quarter of 2019,~~2020 driven by strong hiring for in-sourcing, product development and revenue growth, as well as annual pay raises during the first quarter of 2021,

•An increase of ~~$44.3~~$83.0 million in incentive compensation plans expense ~~attributable~~related primarily to anstrategic hires for SVB Leerink as well as the increase in SVB Leerink incentive compensation expense and our incentive accruals as a result of a strong ~~third~~first quarter performance as compared to the same period in ~~2019,~~2020, and

•An increase of ~~$23.0~~$58.9 million in other employee incentives and benefits driven primarily ~~driven~~ by an increase in warrant incentive plan of ~~$5.7~~$28.8 million due to strong warrant gains during the first quarter of 2021, an increase in payroll taxes of ~~$2.7~~$6.0 million reflective of our increased headcount since the first quarter of 2020 and an increase of ~~$2.6~~$7.5 million in share-based compensation expense due to an increase in the ~~increased~~annual vesting of our restricted stock awards ~~granted during 2020.~~

~~Compensation and benefits expense was $902.8 million for the nine months ended September 30, 2020, compared to $715.1 million for the comparable 2019 period. The key changes~~ in ~~factors affecting compensation and benefits expense were as follows:~~

•An increase of $59.4 million in salaries and wages reflective primarily of the increase in the number of average FTE to 3,914 for the nine months ended September 30, 2020 from 3,309 for the nine months ended September 30, 2019, as well as annual pay raises,

•~~An increase of $90.6 million in incentive compensation reflective primarily of the Leerink incentive compensation for the nine months ended September 30, 2020, and~~

•An increase of $37.7 million in other employee incentives and benefits primarily driven by an increase in agency fees of $10.6 million and an increase of $10.2 million in share-based compensation expense2021 due to ~~the increased restricted stock~~additional awards granted during the second quarter of 2020.

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Our variable compensation plans consist primarily of our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, Deferred Compensation Plan, 401(k) and ESOP Plan, SVB Leerink Incentive Compensation Plan and SVB Leerink Retention Award (see descriptions in our ~~2019~~2020 Form 10-K). Total costs incurred under these plans were ~~$127.2 million and $345.1~~$201.6 million for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$74.5 million and $249.1~~$85.2 million for the comparable ~~2019 periods.~~2020 period. These amounts are included in total compensation and benefits expense discussed above.

~~We anticipate higher incentive compensation expenses in 2020, compared to 2019, primarily due to strong SVB Leerink performance.~~

Professional Services

Professional services expense was ~~$67.2 million and $169.7~~$81.3 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$55.2 million and $133.0~~$38.7 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was driven primarily ~~related to~~by costs to support the ~~PPP during the~~ second ~~and third quarters~~round of ~~2020~~PPP as well as higher consulting fees related to our continued effort towards investments in our infrastructure, initiatives and operating projects to support our presence both domestically and globally.

Premises and Equipment

Premises and equipment expense was ~~$30.8 million and $85.4~~$32.8 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$26.8 million and $72.4~~$26.9 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was primarily related to ~~investments in projects, systems~~increased depreciation expense and ~~technology~~higher computer maintenance expenses for the first quarter of 2021 compared to ~~support our revenue growth and related initiatives as well as other operating costs.~~the 2020 period.

Net Occupancy

Net occupancy expense was ~~$19.0 million and $56.2~~$17.7 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$17.0 million and $49.7~~$18.3 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~decrease was driven primarily ~~due~~by our decision to vacate certain leased office spaces in the ~~expansion~~fourth quarter of ~~certain offices to support our growth and lease renewals at higher costs, reflective~~2020.

Table of ~~market conditions.~~Contents

Business Development and Travel

Business development and travel expense was ~~$2.2 million and $19.3~~$3.8 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$19.5 million and $51.9~~$14.1 million for the comparable ~~2019 periods.~~2020 period. The ~~decreases were~~decrease was primarily due to the continued impact of the COVID-19 ~~on the global economy and our restrictions placed~~pandemic on domestic and international travel beginning March 2020. In light of the economic impact of COVID-19 and the continuing travel restrictions, we expect our business development and travel expense to continue to remain lower for the remainder of 2020 compared to 2019.travel.

FDIC and State Assessments

FDIC and state assessments expense was ~~$6.9 million and $19.0~~$9.5 million for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$4.9 million and $13.3~~$5.2 million for the comparable ~~2019 periods.~~2020 period. The ~~increases were~~increase was due primarily to the increase in our average assets.

Other Noninterest Expense

~~Total other noninterest expense was $37.6 million and $117.9 million for the three and nine months ended September 30, 2020, compared to $34.1 million~~ ~~and~~ ~~$105.1 million~~ ~~for the comparable 2019 periods. The increases were driven primarily by the increase in investment banking expenses due to the strong investment banking activity.~~ A summary of other noninterest expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Lending and other client related processing costs	$	7,516	$	9,158	(17.9)	%
Correspondent bank fees	4,301		3,986		7.9
Investment banking activities	6,730		3,030		122.1
Trade order execution costs	2,988		2,745		8.9
Data processing services	4,606		3,454		33.4
Telephone	1,872		2,227		(15.9)
Dues and publications	1,103		1,130		(2.4)
Postage and supplies	570		856		(33.4)
Other	15,770		14,117		11.7
Total other noninterest expense	$	45,456	$	40,703	11.7

Total other noninterest expense was $45.5 million for the three months ended March 31, 2021, compared to $40.7 million for the comparable 2020 period. The increase was driven primarily by the increase in expenses related to investment banking activities due to strong investment banking revenue.

Operating Efficiency Ratio

~~101~~

~~Table~~GAAP operating efficiency ratio decreased from 45.31 percent, compared to 48.37 percent. Non-GAAP core operating efficiency ratio increased from 58.52 percent, compared to 47.71 percent. (See non-GAAP reconciliation under the section “Use of ~~Contents~~

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Lending and other client related processing costs $ 7,194 $ 7,502 (4.1) % $ 23,155 $ 21,442 8.0 %
Correspondent bank fees 3,581 3,657 (2.1) 11,400 10,970 3.9
Investment banking activities 2,835 1,864 52.1 13,633 9,918 37.5
Trade order execution costs 2,806 2,615 7.3 8,165 7,959 2.6
Data processing services 3,984 3,066 29.9 10,945 8,624 26.9
Telephone 2,342 2,466 (5.0) 6,458 7,629 (15.3)
Dues and publications 1,159 1,055 9.9 3,199 3,439 (7.0)
Postage and supplies 538 720 (25.3) 2,117 2,168 (2.4)
Other 13,114 11,161 17.5 38,831 32,910 18.0
Total other noninterest expense $ 37,553 $ 34,106 10.1 $ 117,903 $ 105,059 12.2
Non-GAAP Financial Measures.”) GAAP operating efficiency ratio decreased slightly primarily as a result of a greater increase in revenue, when compared to the increase in expenses, particularly in noninterest income driven by gains on investment securities and warrant assets and investment banking revenue. Non-GAAP core operating efficiency ratio increased due primarily to the overall increase in expenses related to our core business as a percentage of revenue attributable primarily to an increase in compensation and benefits and professional services expenses.

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 net 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 managed funds’ general partners. A summary of net income attributable to noncontrolling interests for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Net interest income (1) $ — $ (14) (100.0) % $ (26) $ (41) (36.6) %
Noninterest income (1) (8,620) (4,910) 75.6 (12,033) (19,586) (38.6)
Noninterest expense (1) 114 145 (21.4) 384 692 (44.5)
Carried interest allocation (2) (19,242) (9,658) 99.2 (28,360) (16,966) 67.2
Net income attributable to noncontrolling interests $ (27,748) $ (14,437) 92.2 $ (40,035) $ (35,901) 11.5

Table of Contents


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Net interest income (1)	$	—	$	(21)	(100.0)	%
Noninterest (gains) losses (1)	(15,796)		2,491		NM
Noninterest expense (1)	117		140		(16.4)
Carried interest allocation (2)	(9,271)		(637)		NM
Net (income) loss attributable to noncontrolling interests	$	(24,950)	$	1,973	NM

NM—Not meaningful

(1)Represents noncontrolling interests’ share in net interest income, noninterest income or loss 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.

~~Three months ended September 30, 2020 and 2019~~

Net income attributable to noncontrolling interests was $~~27.7~~25.0 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to a net ~~income~~loss of ~~$14.4~~$2.0 million for the comparable ~~2019~~2020 period. Net income attributable to noncontrolling interests of ~~$27.7~~$25.0 million for the three months ended ~~September 30, 2020~~ March 31, 2021was driven primarily ~~driven~~ by net gains on investments securities (including carried interest allocation) from our managed funds of funds and our managed direct venture funds portfolios reflective of the overall market performance during the ~~third~~first quarter of ~~2020.~~2021. See “Results of Operations—Noninterest Income—Gains on Investment Securities, ~~Net”.~~Net.”

~~Nine months ended September 30, 2020 and 2019~~

Net income attributable to noncontrolling interests was $40.0 million for the nine months ended September 30, 2020, compared to net income of $35.9 million for the comparable 2019 period. Net income attributable to noncontrolling interests of $40.0 million for the nine months ended September 30, 2020 was primarily a result of net gains on investment securities (including carried interest allocation) from our managed funds of funds and our managed direct funds portfolios related primarily to net unrealized valuation increases. See “Results of Operations—Noninterest Income—Gains on Investment Securities, Net”.

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Income Taxes

Our effective income tax rate was ~~26.7 percent and 26.9~~25.9 percent for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~28.2 percent and 27.5~~26.7 percent for the comparable ~~2019 periods.~~2020 period. The ~~effective tax rates are consistent year over year as tax adjustments impacting the~~decrease in our effective tax rate ~~have been proportional~~was driven primarily by an increase in the recognition of excess tax benefits from share-based compensation in the first quarter of 2021 which is reflective of a higher number of stock option exercises due to ~~changes~~the increase in ~~pre-tax income.~~our stock price. 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

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

We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reporting segments. Please refer to Note 1413 — “Segment Reporting” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional details.

The following is our reportable segment information for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Global Commercial Bank

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Net interest income $ 512,963 $ 455,161 12.7 % $ 1,461,768 $ 1,360,997 7.4 %
Reduction (provision for) credit losses 37,847 (34,075) NM (200,020) (79,175) 152.6
Noninterest income 147,594 161,029 (8.3) 447,902 471,492 (5.0)
Noninterest expense (258,035) (213,786) 20.7 (724,233) (617,933) 17.2
Income before income tax expense $ 440,369 $ 368,329 19.6 $ 985,417 $ 1,135,381 (13.2)
Total average loans, amortized cost $ 30,763,715 $ 25,839,647 19.1 $ 30,126,870 $ 25,457,997 18.3
Total average assets 77,802,730 58,384,473 33.3 69,212,733 54,196,976 27.7
Total average deposits 74,825,725 55,250,154 35.4 66,408,359 51,352,644 29.3

~~NM—Not meaningful~~

~~Three months ended September 30, 2020 and 2019~~


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Net interest income	$	618,609	$	463,835	33.4	%
Provision for credit losses	(44,503)		(194,411)		(77.1)
Noninterest income	158,671		166,834		(4.9)
Noninterest expense	(277,763)		(224,855)		23.5
Income before income tax expense	$	455,014	$	211,403	115.2
Total average loans, amortized cost	$	39,286,744	$	29,137,484	34.8
Total average assets	108,927,856		61,813,129		76.2
Total average deposits	106,267,572		59,217,433		79.5

Income before income tax expense from our Global Commercial Bank (“GCB”) increased to ~~$440.4~~$455.0 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$368.3~~$211.4 million for the comparable ~~2019~~2020 period. The key components of GCB's performance for the three months ended ~~September 30, 2020~~March 31, 2021 compared to the comparable ~~2019~~2020 period are discussed below.

Table of Contents

Net interest income from GCB increased by ~~$57.8~~$154.8 million for the three months ended ~~September 30, 2020,~~March 31, 2021, due primarily to an increase in loan interest income resulting ~~mainly~~primarily from higher average loan balances, partially offset by a decrease in loan yields as a result of ~~rate decreases.~~the shift in the loan mix.

~~GCB had a reduction of~~The provision for credit losses of ~~$37.8~~$44.5 million for the three months ended ~~September 30, 2020, compared to a provision of $34.1 million for the comparable 2019 period. The reduction of $37.8 million for the three months ended September 30, 2020~~March 31, 2021 was driven primarily by $85.8 million for charge-offs not specifically reserved for at December 31, 2020 and a ~~$57.7~~$16.5 million increase related to loan growth, partially offset by a $47.1 million reduction in reserves for our performing loans based on our forecast models of the ~~current~~ economic environment, ~~under~~$5.8 million in net new nonaccrual loans and $4.9 million of recoveries.

The provision for credit losses of $194.4 million for the ~~CECL methodology adopted January 1,~~three months ended March 31, 2020 ~~a $15.1~~was driven primarily by $140.4 million ~~decrease related to~~in additional reserves for our performing loans based on our forecast models of the economic environment, including the impact of the COVID-19 pandemic, as well as changes in loan composition within our portfolio segments, ~~and $4.4~~$40.9 million ~~of recoveries, partially offset by $25.4 million~~in additional reserves for ~~net new nonaccrual loans and $15.2~~period-end loan growth, $13.1 million for charge-offs not specifically reserved for at ~~June 30, 2020.~~December 31, 2019 and $10.7 million in net new nonaccrual loans, partially offset by $7.8 million of recoveries.

~~The provision of $34.1~~Noninterest income decreased by $8.2 million for the three months ended September 30, 2019 primarily reflects an increase of $19.1 million for net new nonaccrual loans, $18.3 million for charge-offs not specifically reserved for and $15.2 million in additional reserves for period-end loan growth, partially offset by a decrease of $13.0 million for the qualitative component of our performing loans and $3.9 million of recoveries.

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~~Noninterest income decreased by $13.4 million for the three months ended September 30, 2020~~March 31, 2021 related primarily to an overall decrease in our non-GAAP core fee income (lower client investment fees partially offset by higher foreign exchange fees and ~~credit card~~lending related fees).~~These decreases were~~ The overall decrease was due primarily to the impact of the federal funds rate ~~cuts~~decreases on ~~yield rates affecting~~ client investment ~~fees as well as a decrease~~fee yields partially offset by an increase in ~~transactional volume for credit cards.~~average client fund balances, higher foreign exchange transaction volumes and an increase in unused commitment fees.

Noninterest expense increased by ~~$44.2~~$52.9 million for the three months ended ~~September 30, 2020,~~March 31, 2021, due primarily to compensation and benefits expense and professional services expense, partially offset by a decrease in business development and travel expense.Compensation and benefits expense increased ~~$41.5~~$46.4 million as a result of higher salaries and wages expenses and higher incentive compensation expense. The increase in GCB salaries and wages was due primarily to an increase in the average number of FTEs at GCB, which increased to ~~3,102~~3,223 FTEs for the three months ended ~~September 30, 2020,~~March 31, 2021, from ~~2,364~~2,692 FTEs for the comparable ~~2019~~2020 period. Incentive compensation expense increased due primarily to an increase in our ~~2020~~2021 full-year projected financial performance. Professional services expense increased due to higher expenses primarily related to our continued effort towards investments in our infrastructure, initiatives and operating projects to support our presence both domestically and globally. Business development and travel expense decreased primarily due to the continued impact of COVID-19 on ~~the global economy and our restrictions placed on~~ domestic and international ~~travel beginning March 2020.~~

~~Nine Months Ended September 30, 2020 and 2019~~

Net interest income from our GCB increased by $100.8 million for the nine months ended September 30, 2020, due primarily to an increase in loan interest income resulting mainly from higher average loan balances, partially offset by a decrease in loan yields as a result of rate decreases.

travel.

GCB had a provision for credit losses of $200.0 million for the nine months ended September 30, 2020, compared to a provision of $79.2 million for the comparable 2019 period. The provision of $200.0 million for the nine months ended September 30, 2020was reflective primarily of $108.8 million in additional reserves for our performing loans based on our forecast models of the current economic environment under the CECL methodology adopted January 1, 2020, including the impact of the COVID-19 pandemic, as well as changes in loan composition within our portfolio segments, $12.2 million in additional reserves for period-end loan growth, $38.8 million for charge-offs not specifically reserved for at December 31, 2019 and $58.3 million in net new nonaccrual loans, partially offset by $16.2 million of recoveries.

The provision of $79.2 million for the nine months ended September 30, 2019 was reflective primarily of $57.5 million in net new specific reserves for nonaccrual loans, $30.5 million for charge-offs not specifically reserved for in prior quarters, and $22.4 million for period-end loan growth, partially offset by a decrease of $14.3 million for our performing loans and $15.1 million of recoveries.

Noninterest income decreased by $23.6 million for the nine months ended September 30, 2020, related primarily to an overall decrease in our non-GAAP core fee income (lower client investment fees and credit card fees partially offset by an increase in foreign exchange fees). The decreases were due primarily to the impact of the federal rate cuts on yield rates affecting client investment fees as well as a decrease in transactional volume on credit cards. The increase in foreign exchange fees was driven primarily by private equity deal activity coupled with quarterly hedging activity.

Noninterest expense increased by $106.3 million for the nine months ended September 30, 2020, due primarily to increased expenses for compensation and benefits expense and professional services expense, partially offset by a decrease in business development and travel expense. Compensation and benefits expense increased by $78.2 million primarily as a result of increased salaries and wages. The increase in GCB salaries and wages was due primarily to an increase in the average number of FTEs at GCB, which increased to 2,872 FTEs for the nine months ended September 30, 2020 from 2,283 FTEs for the comparable 2019 period. Professional services expense increased $24.1 million due to higher expenses primarily related to our continued effort towards investments in our infrastructure, initiatives and operating projects to support our presence both domestically and globally. Business development and travel expense decreased by $21.3 million primarily due to the impact of COVID-19 on the global economy and our restrictions placed on domestic and international travel beginning March 2020.

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SVB Private Bank

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Net interest income $ 19,145 $ 12,772 49.9 % $ 52,952 $ 37,200 42.3 %
Reduction (provision for) credit losses 14,881 (1,910) NM (44,194) (1,779) NM
Noninterest income 916 634 44.5 2,486 1,829 35.9
Noninterest expense (12,293) (11,638) 5.6 (32,547) (30,015) 8.4
Income (loss) before income tax expense $ 22,649 $ (142) NM $ (21,303) $ 7,235 NM
Total average loans, amortized cost $ 4,263,324 $ 3,400,889 25.4 $ 4,053,018 $ 3,235,943 25.2
Total average assets 4,297,011 3,431,313 25.2 4,087,786 3,264,071 25.2
Total average deposits 2,163,903 1,497,303 44.5 2,069,196 1,461,170 41.6

~~NM—Not meaningful~~


	Three months ended March 31,
(Dollars in thousands)	2021		2020		% Change
Net interest income	$	27,025	$	15,164	78.2	%
Reduction of (provision for) credit losses	8,567		(54,490)		(115.7)
Noninterest income	998		900		10.9
Noninterest expense	(12,958)		(10,090)		28.4
Income (loss) before income tax expense	$	23,632	$	(48,516)	(148.7)
Total average loans, amortized cost	$	4,977,080	$	3,857,478	29.0
Total average assets	5,028,004		3,892,400		29.2
Total average deposits	3,292,673		1,922,663		71.3

~~Three months ended September 30, 2020 and 2019~~

Net interest income from our SVB Private Bank increased by ~~$6.4~~$11.9 million for the three months ended ~~September 30, 2020,~~March 31, 2021, due primarily to the increase in average loans for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to the ~~2019~~2020 comparable period, partially offset by decreases in loan yields as a result of overall market rate decreases.

The reduction of credit losses of ~~$14.9~~$8.6 million for the three months ended ~~September 30, 2020,~~March 31, 2021 was reflective primarily of improved economic scenarios in our forecast models ~~as well as a qualitative adjustment reflective of strong credit performance,~~ partially offset by ~~loan growth.~~

~~Nine Months EndedSeptember 30, 2020 and 2019~~

Net interest income from our SVB Private Bank increased by $15.8 million for the nine months ended September 30, 2020, due primarily to the increase in average loans for the nine months ended September 30, 2020 as compared to the 2019 comparable period, partially offset by decreases in loan yields as a result of overall market rate decreases.net new nonaccruals.

The provision for credit losses ~~increased by $42.4~~of $54.5 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 ~~due~~was driven primarily by the adoption of CECL during the first quarter of 2020 attributable primarily to a ~~$24.9~~$50.3 million increase in additional reserves for our performing ~~loans and a $17.6 million increase due to loan growth.~~loans. The increase for our performing loans is reflective of the increases in reserves required for longer duration mortgage loans as well as the additional reserves for our performing loans based on our forecast models of the current economic environment, ~~under the CECL methodology adopted January 1, 2020,~~ including the impact of the COVID-19 pandemic.

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SVB Capital


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Net interest income	Net interest income	$	2	$	9	(77.8)	%	$	28	$	20	40.0	%	Net interest income	$	2	$	21	(90.5)	%
Noninterest income	Noninterest income	60,380		34,955		72.7		86,748		99,860		(13.1)		Noninterest income	68,594		4,918		NM
Noninterest expense	Noninterest expense	(11,198)		(8,129)		37.8		(28,040)		(21,794)		28.7		Noninterest expense	(15,233)		(8,585)		77.4
Income before income tax expense		$	49,184	$	26,835	83.3		$	58,736	$	78,086	(24.8)
Income (loss) before income tax expense														Income (loss) before income tax expense	$	53,363	$	(3,646)	NM
Total average assets	Total average assets	$	413,882	$	396,031	4.5		$	430,391	$	382,707	12.5		Total average assets	$	576,705	$	447,201	29.0

NM—Not meaningful

SVB Capital’s components of noninterest income primarily include net gains and losses on non-marketable and other equity securities, carried interest and fund management fees. All components of 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. The performance of these securities has been, and may further be, impacted by the effects of the COVID-19 pandemic.

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~~Three months ended September 30, 2020 and 2019~~

SVB Capital had noninterest income of ~~$60.4~~$68.6 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$35.0~~$4.9 million for the comparable ~~2019~~2020 period. The increase in noninterest income was due primarily to an increase in net gains on investment securities for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to net ~~gains~~losses for the comparable ~~2019~~2020 period. SVB Capital’s components of noninterest income primarily include the following:

•Net gains on investment securities of ~~$47.5~~$53.7 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to net ~~gains~~losses of ~~$26.0~~$5.9 million for the comparable ~~2019~~2020 period. The net gains on investment securities of ~~$47.5~~$53.7 million were driven primarily ~~driven~~ by unrealized net valuation increases from private company investments held in our strategic venture capital funds as well as in our managed funds of funds portfolio.

~~Nine Months EndedSeptember 30, 2020 and 2019~~

SVB Capital had noninterest income of $86.7 million for the nine months ended September 30, 2020, compared to $99.9 million for the comparable 2019 period. The decrease in noninterest income was due primarily to a decrease in net gains on investment securities for the nine months ended September 30, 2020, compared to the comparable 2019 period. SVB Capital’s components of noninterest income primarily include the following:

•Net gains on investment securities of $53.6 million for the nine months ended September 30, 2020, compared to net gains of $70.0 million for the comparable 2019 period. The net gains on investment securities of $53.6 million were primarily driven by unrealized net valuation increases from private company investments held in our managed funds of funds portfolio as well as in our managed direct venture fund portfolio.

SVB Leerink


		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		% Change		2020		2019		% Change		(Dollars in thousands)	2021		2020		% Change
Net interest income	Net interest income	$	175	$	277	(36.8)	%	$	373	$	961	(61.2)	%	Net interest income	$	166	$	201	(17.4)	%
Noninterest income	Noninterest income	113,651		52,947		114.7		340,145		188,064		80.9		Noninterest income	170,967		62,677		172.8
Noninterest expense	Noninterest expense	(77,567)		(55,200)		40.5		(248,254)		(177,675)		39.7		Noninterest expense	(136,352)		(62,037)		119.8
Income (loss) before income tax expense		$	36,259	$	(1,976)	NM		$	92,264	$	11,350	NM
Income before income tax expense														Income before income tax expense	$	34,781	$	841	NM
Total average assets	Total average assets	$	605,263	$	428,848	41.1		$	514,836	$	380,290	35.4		Total average assets	$	767,300	$	483,648	58.6

NM—Not meaningful

SVB Leerink’s components of noninterest income primarily include investment banking revenue, commissions and net gains and losses on non-marketable and other equity securities, carried interest and fund management fees. All components of income before income tax expense discussed below are net of noncontrolling interests.

~~Three months ended September 30, 2020 and 2019~~

SVB Leerink had noninterest income of ~~$113.7~~$171.0 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$52.9~~$62.7 million for the comparable ~~2019~~2020 period. The ~~$60.8~~$108.3 million increase in noninterest income was primarily due to a ~~$53.7~~$95.4 million increase in investment banking ~~revenues~~revenue attributable to higher levels of funding activity in the life science/healthcare secondary markets and by the increase in public equity underwriting fees.

SVB Leerink had noninterest expense of ~~$77.6~~$136.4 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$55.2~~$62.0 million for the comparable ~~2019~~2020 period. The ~~$22.4~~$74.3 million increase in noninterest expense was primarily ~~driven by an~~due to a $68.7 million increase ~~of $26.2 million~~ in compensation and ~~benefit~~benefits expense ~~due to~~driven primarily by an increase in incentive ~~plan~~compensation expense as a result of a strong first quarter performance as compared to the same period in 2020 and an increase in salaries and wages expense due to strategic hires subsequent to the ~~third~~first quarter of 2020.

~~Nine Months EndedSeptember 30, 2020 and 2019~~

SVB Leerink had noninterest income of $340.1 million for the nine months ended September 30, 2020, compared to $188.1 million for the comparable 2019 period. The $152.0 million increase was primarily driven by a $143.5 million increase investment banking revenues attributable to higher levels of funding activity in the life science/healthcare secondary markets and by the increase in public equity underwriting fees.

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SVB Leerink had noninterest expense of $248.3 million for the nine months ended September 30, 2020, compared to $177.7 million for the comparable 2019 period. The $70.6 million increase was primarily driven by an increase of $76.8 million in compensation and benefit expense due to an increase in incentive plan expense as a result of a strong performance during 2020, partially offset by a $6.6 million decrease in business travel expense due to the impact of travel restrictions put in place in response to the COVID-19 pandemic towards the end of the first quarter of 2020.

Consolidated Financial Condition

Our total assets, and total liabilities and stockholders' equity, were ~~$96.9~~$142.3 billion at ~~September 30, 2020~~March 31, 2021 compared to ~~$71.0~~$115.5 billion at December 31, ~~2019,~~2020, an increase of ~~$25.9~~$26.8 billion, or ~~36.5~~23.2 percent. Refer below to 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 ~~$15.7~~$21.3 billion at ~~September 30, 2020,~~ March 31, 2021,an increase of ~~$8.9~~$3.6 billion, or ~~131.3~~20.3 percent, compared to ~~$6.8~~$17.7 billion at December 31, ~~2019.~~2020. The increase was driven by the significant growth in deposits of ~~$23.0~~$22.2 billion. ~~We have also raised our cash target level to between $7.0 billion and $9.0 billion in response to the current economic environment.~~ As of ~~September 30, 2020, $11.9~~March 31, 2021, $16.6 billion 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 ~~$2.7~~$3.4 billion. As of December 31, ~~2019, $3.7~~2020, $13.7 billion 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 ~~$2.1~~$3.0 billion.

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Investment Securities

Investment securities totaled ~~$40.4~~$69.0 billion at ~~September 30, 2020,~~March 31, 2021, an increase of ~~$11.3~~$19.7 billion, or ~~39.1~~40.0 percent, compared to ~~$29.1~~$49.3 billion at December 31, ~~2019.~~2020. Our investment securities portfolio is comprised of: (i) an available-for-sale securities portfolio and a held-to-maturity securities portfolio, both of which represent interest earning fixed income investment securities; and (ii) a non-marketable and other equity securities portfolio, which represents primarily investments managed as part of our funds management business, investments in qualified affordable housing projects, as well as public equity securities held as a result of equity warrant assets exercised.

Available-for-Sale Securities

Period-end available-for-sale securities were ~~$25.9~~$26.0 billion at ~~September 30, 2020,~~March 31, 2021, compared to ~~$14.0~~$30.9 billion at December 31, ~~2019, an increase~~2020, a decrease of ~~$11.9~~$4.9 billion, or ~~84.8~~15.9 percent. The ~~$11.9~~$4.9 billion ~~increase~~decrease in period-end AFS securities balances from December 31, ~~2019~~2020 to ~~September 30, 2020,~~March 31, 2021, was driven primarily ~~driven~~ by ~~the purchase~~a $2.9 billion re-designation of ~~$16.6~~AFS securities to HTM securities, paydowns and maturities of $1.7 billion ~~of securities~~ and a ~~$0.5 billion increase in our AFS portfolio reflective of the 150 basis point~~ decrease in ~~Federal Funds~~fair value of $0.8 billion due to the increase in interest rates, partially offset by purchases of $0.5 billion during the ~~sale of $2.6 billion of securities and $2.6 billion of portfolio cash flows.~~quarter. Securities classified as available-for-sale are carried at fair value with changes in fair value recorded as unrealized gains or losses in a separate component of stockholders' equity.

The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on fixed income securities, carried at fair value, classified as available-for-sale as of ~~September 30, 2020.~~March 31, 2021. 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 securities, U.S. agency debentures and foreign government debt securities, the expected maturity is the actual contractual maturity of the notes. 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 interest rate environments. The weighted average yield on mortgage-backed securities is based on prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments.


		September 30, 2020																					March 31, 2021
		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)	(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		(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
U.S. Treasury securities	U.S. Treasury securities	$	4,547,294	1.86	%	$	60,221	1.57	%	$	2,989,181	1.84	%	$	1,497,892	1.91	%	$	—	—	%	U.S. Treasury securities	$	4,438,396	1.82	%	$	40,481	0.03	%	$	3,844,128	1.84	%	$	553,787	1.79	%	$	—	—	%
U.S. agency debentures	U.S. agency debentures	152,526		1.52		—		—		—		—		152,526		1.52		—		—		U.S. agency debentures	226,095		1.85		—		—		—		—		226,095		1.85		—		—
Foreign government debt securities	Foreign government debt securities	23,449		(0.82)		23,449		(0.82)		—		—		—		—		—		—		Foreign government debt securities	23,450		(0.70)		23,450		(0.70)		—		—		—		—		—		—
Residential mortgage-backed securities:	Residential mortgage-backed securities:																					Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	9,770,313		1.84		—		—		—		—		—		—		9,770,313		1.84		Agency-issued mortgage-backed securities	12,514,911		1.55		—		—		—		—		—		—		12,514,911		1.55
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	7,315,973		1.32		—		—		—		—		—		—		7,315,973		1.32		Agency-issued collateralized mortgage obligations—fixed rate	7,256,626		1.23		—		—		—		—		—		—		7,256,626		1.23

Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	4,094,769		1.80		—		—		—		—		1,431,547		1.81		2,663,222		1.80		Agency-issued commercial mortgage-backed securities	1,526,993		1.75		—		—		—		—		1,526,993		1.75		—		—
Total	Total	$	25,904,324	1.69		$	83,670	0.90		$	2,989,181	1.84		$	3,081,965	1.84		$	19,749,508	1.64		Total	$	25,986,471	1.52		$	63,931	(0.24)		$	3,844,128	1.84		$	2,306,875	1.77		$	19,771,537	1.43

Held-to-Maturity Securities

Period-end held-to-maturity securities were ~~$13.0~~$41.2 billion at ~~September 30, 2020,~~March 31, 2021, compared to ~~$13.8~~$16.6 billion at December 31, ~~2019, a decrease~~2020, an increase of ~~$0.8~~$24.6 billion, or ~~6.2~~148.1 percent. The ~~$0.8~~$24.6 billion ~~decrease~~increase in period-end HTM security balances from December 31, ~~2019~~2020 to ~~September 30, 2020~~March 31, 2021 was ~~due primarily~~driven by purchases of $23.5 billion and the re-designation of $2.9 billion of AFS securities to ~~pay downs and maturities of $2.8 billion,~~HTM securities, partially offset by $1.8 billion in paydowns and maturities during the ~~purchase of $2.0 billion of securities.~~quarter. The securities re-designated

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consisted of agency-issued commercial mortgage-backed securities with a total carrying value of $2.9 billion at March 31, 2021. At the time of re-designation the securities had unrealized gains totaling $8.7 million, 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.

Securities classified as held-to-maturity are accounted for at cost with no adjustments for changes in fair value. For securities previously re-designated as held-to-maturity from available-for-sale, the net unrealized gains at the date of transfer will continue to be reported as a separate component of shareholders' equity and amortized over the life of the securities in a manner consistent with the amortization of a premium or discount.

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, 2020.~~March 31, 2021. 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 21.0 percent. The weighted average yield is computed using the amortized cost of fixed income investment securities. For U.S. agency debentures, 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 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 interest rate environments. The weighted average yield on mortgage-backed securities is based on prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments.


		September 30, 2020																					March 31, 2021
		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)	(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		(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
U.S. agency debentures	U.S. agency debentures	$	402,346	2.61	%	$	4,675	3.22	%	$	148,559	2.59	%	$	249,112	2.67	%	$	—	—	%	U.S. agency debentures	$	404,571	2.46	%	$	4,066	2.76	%	$	141,117	2.55	%	$	259,388	2.40	%	$	—	—	%
Residential mortgage-backed securities:	Residential mortgage-backed securities:																					Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	Agency-issued mortgage-backed securities	5,363,541		2.86		7,113		2.39		28,722		1.89		588,606		2.47		4,739,100		2.92		Agency-issued mortgage-backed securities	23,525,681		1.67		6,319		1.64		11,663		2.18		494,951		2.47		23,012,748		1.65
Agency-issued collateralized mortgage obligations—fixed rate	Agency-issued collateralized mortgage obligations—fixed rate	1,909,965		1.50		—		—		—		—		551,213		1.62		1,358,752		1.45		Agency-issued collateralized mortgage obligations—fixed rate	2,425,024		1.34		—		—		5,356		1.76		447,781		1.62		1,971,887		1.28
Agency-issued collateralized mortgage obligations—variable rate	Agency-issued collateralized mortgage obligations—variable rate	147,714		0.74		—		—		—		—		—		—		147,714		0.74		Agency-issued collateralized mortgage obligations—variable rate	128,370		0.74		—		—		—		—		—		—		128,370		0.74
Agency-issued commercial mortgage-backed securities	Agency-issued commercial mortgage-backed securities	2,229,811		3.08		—		—		—		—		102,428		3.56		2,127,383		3.06		Agency-issued commercial mortgage-backed securities	10,075,165		1.02		—		—		—		—		536,203		1.98		9,538,962		0.97
Municipal bonds and notes	Municipal bonds and notes	2,929,137		3.21		44,340		2.52		134,029		2.63		540,308		3.20		2,210,460		3.26		Municipal bonds and notes	4,555,237		2.33		48,536		2.85		130,482		2.54		756,078		2.29		3,620,141		2.36
Corporate bonds																						Corporate bonds	51,684		1.96		—		—		—		—		51,684		1.96		—		—
Total	Total	$	12,982,514	2.75		$	56,128	2.56		$	311,310	2.54		$	2,031,667	2.51		$	10,583,409	2.80		Total	$	41,165,732	1.64		$	58,921	2.71		$	288,618	2.52		$	2,546,085	2.52		$	38,272,108	1.58

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. The estimated weighted-average duration of our fixed income investment securities portfolio was ~~4.1 years~~4.8 and ~~3.9~~3.7 years at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The weighted-average duration of our total fixed income securities portfolio including the impact of our fair value swaps was 4.3 years at March 31, 2021. We are focused on shortening AFS portfolio duration to less than two years to mitigate OCI risk while buying three- to five-year duration HTM securities to support portfolio yields. We continue to invest excess on-balance sheet liquidity in high-quality securities (agency MBS/CMOs/CMBS and municipal securities), primarily classified as HTM.

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Non-Marketable and Other Equity Securities

Our non-marketable and other equity securities portfolio primarily represents investments in venture capital and private equity funds, SPD Silicon Valley Bank Co., Ltd. (the Bank's joint venture bank in China (“SPD-SVB”)), debt funds, private and public portfolio companies, including public equity securities held as a result of equity warrant assets exercised, and qualified affordable housing projects. Included in our non-marketable and other equity 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 equity securities compared to the amounts attributable to SVBFG.

Period-end non-marketable and other equity securities were ~~$1.5~~$1.9 billion ($~~1.4~~1.6 billion net of noncontrolling interest) at ~~September 30, 2020~~March 31, 2021 compared to ~~$1.2~~$1.8 billion ($~~1.1~~1.6 billion net of noncontrolling interest) at December 31, ~~2019,~~2020, an increase of ~~$0.3~~$0.1 billion, or ~~27.5~~3.1 percent. The increase in period end non-marketable and other equity securities of $0.3 billion was primarily attributable to the increase in other equity securities in public companies of $0.2 billion, driven by our investment in BigCommerce, private equity fund investments driven by an increase in valuations, and new investments within our qualified housing projects portfolio. The following table summarizes the carrying value (as reported) of non-marketable and other equity securities compared to the amounts attributable to SVBFG (which generally represents the carrying value times our ownership percentage) at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Non-marketable and other equity securities:	Non-marketable and other equity securities:									Non-marketable and other equity securities:
Non-marketable securities (fair value accounting):	Non-marketable securities (fair value accounting):									Non-marketable securities (fair value accounting):
Consolidated venture capital and private equity fund investments (1)	Consolidated venture capital and private equity fund investments (1)	$	74,293	$	19,132	$	87,180	$	22,482	Consolidated venture capital and private equity fund investments (1)	$	96,016	$	25,192	$	88,937	$	22,783
Unconsolidated venture capital and private equity fund investments (2)	Unconsolidated venture capital and private equity fund investments (2)	152,367		152,367		178,217		178,217		Unconsolidated venture capital and private equity fund investments (2)	178,407		178,407		184,886		184,886
Other investments without a readily determinable fair value (3)	Other investments without a readily determinable fair value (3)	56,008		56,008		55,255		55,255		Other investments without a readily determinable fair value (3)	200,367		200,367		60,975		60,975
Other equity securities in public companies (fair value accounting (4)	Other equity securities in public companies (fair value accounting (4)	229,297		229,151		59,200		59,056		Other equity securities in public companies (fair value accounting (4)	160,810		160,810		280,804		280,804
Non-marketable securities (equity method accounting) (5):	Non-marketable securities (equity method accounting) (5):									Non-marketable securities (equity method accounting) (5):
Venture capital and private equity fund investments	Venture capital and private equity fund investments	274,721		161,699		215,367		131,403		Venture capital and private equity fund investments	394,349		239,338		362,192		214,904
Debt funds	Debt funds	6,918		6,918		7,271		7,271		Debt funds	5,813		5,813		5,444		5,444
Other investments	Other investments	192,776		192,776		152,863		152,863		Other investments	205,002		205,002		202,809		202,809
Investments in qualified affordable housing projects, net	Investments in qualified affordable housing projects, net	560,983		560,983		458,476		458,476		Investments in qualified affordable housing projects, net	616,997		616,997		616,188		616,188
Total non-marketable and other equity securities	Total non-marketable and other equity securities	$	1,547,363	$	1,379,034	$	1,213,829	$	1,065,023	Total non-marketable and other equity securities	$	1,857,761	$	1,631,926	$	1,802,235	$	1,588,793

(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, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Strategic Investors Fund, LP	Strategic Investors Fund, LP	$	4,646	$	584	$	5,729	$	720	Strategic Investors Fund, LP	$	5,165	$	649	$	4,850	$	609
Capital Preferred Return Fund, LP	Capital Preferred Return Fund, LP	39,246		8,458		45,341		9,772		Capital Preferred Return Fund, LP	48,572		10,468		49,574		10,684
Growth Partners, LP	Growth Partners, LP	30,267		10,076		35,976		11,976		Growth Partners, LP	42,279		14,075		34,513		11,490
CP I, LP		134		14		134		14

Total consolidated venture capital and private equity fund investments	Total consolidated venture capital and private equity fund investments	$	74,293	$	19,132	$	87,180	$	22,482	Total consolidated venture capital and private equity fund investments	$	96,016	$	25,192	$	88,937	$	22,783

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activities and financial policies. Our unconsolidated venture capital and private equity fund investments are carried at fair value based on the fund investments' net asset values per share as obtained from the general partners of the funds. For each fund investment, 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 31thst for our ~~September 30~~March 31thst consolidated financial statements, adjusted for

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any contributions paid, distributions received from the investment, and significant fund transactions or market events during the reporting period.

(3)Investments classified as "Other investments without a readily determinable fair value" include direct equity investments in private companies. The carrying value is based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. We consider a range of factors when adjusting the fair value of these investments, including, but not limited to, the term and nature of the investment, local market conditions, values for comparable securities, current and projected operating performance, exit strategies, financing transactions subsequent to the acquisition of the investment and a discount for certain investments that have lock-up restrictions or other features that indicate a discount to fair value is warranted. For further details on the carrying value of these investments refer to Note 6 — “Investment Securities" of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

(5)The following table shows the carrying value and our ownership percentage of each investment at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (equity method accounting):


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG		(Dollars in thousands)	Carrying value (as reported)		Amount attributable to SVBFG		Carrying value (as reported)		Amount attributable to SVBFG
Venture capital and private equity fund investments:	Venture capital and private equity fund investments:									Venture capital and private equity fund investments:
Strategic Investors Fund II, LP	Strategic Investors Fund II, LP	$	3,519	$	3,271	$	3,612	$	3,387	Strategic Investors Fund II, LP	$	4,624	$	4,350	$	3,705	$	3,435
Strategic Investors Fund III, LP	Strategic Investors Fund III, LP	14,984		12,113		15,668		12,701		Strategic Investors Fund III, LP	21,281		18,238		16,110		13,005
Strategic Investors Fund IV, LP	Strategic Investors Fund IV, LP	25,451		21,399		27,064		22,780		Strategic Investors Fund IV, LP	29,681		25,715		25,169		21,145
Strategic Investors Fund V, LP	Strategic Investors Fund V, LP	52,575		27,602		46,830		24,586		Strategic Investors Fund V, LP	60,992		32,021		67,052		35,202
CP II, LP (i)	CP II, LP (i)	4,773		2,871		5,907		3,567		CP II, LP (i)	8,954		5,419		7,887		4,766
Other venture capital and private equity fund investments	Other venture capital and private equity fund investments	173,419		94,443		116,286		64,382		Other venture capital and private equity fund investments	268,817		153,595		242,269		137,351
Total venture capital and private equity fund investments	Total venture capital and private equity fund investments	$	274,721	$	161,699	$	215,367	$	131,403	Total venture capital and private equity fund investments	$	394,349	$	239,338	$	362,192	$	214,904
Debt funds:	Debt funds:									Debt funds:
Gold Hill Capital 2008, LP (ii)	Gold Hill Capital 2008, LP (ii)	$	5,317	$	5,317	$	5,525	$	5,525	Gold Hill Capital 2008, LP (ii)	$	4,380	$	4,380	$	3,941	$	3,941
Other debt funds	Other debt funds	1,601		1,601		1,746		1,746		Other debt funds	1,433		1,433		1,503		1,503
Total debt funds	Total debt funds	$	6,918	$	6,918	$	7,271	$	7,271	Total debt funds	$	5,813	$	5,813	$	5,444	$	5,444
Other investments:	Other investments:									Other investments:
SPD Silicon Valley Bank Co., Ltd.	SPD Silicon Valley Bank Co., Ltd.	$	107,969	$	107,969	$	74,190	$	74,190	SPD Silicon Valley Bank Co., Ltd.	$	111,838	$	111,838	$	115,232	$	115,232
Other investments	Other investments	84,807		84,807		78,673		78,673		Other investments	93,164		93,164		87,577		87,577
Total other investments	Total other investments	$	192,776	$	192,776	$	152,863	$	152,863	Total other investments	$	205,002	$	205,002	$	202,809	$	202,809

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

(ii)Our ownership includes 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.

Volcker Rule

The Volcker Rule prohibits, subject to certain exceptions, a banking entity, such as the Company, from sponsoring, investing in, or having certain relationships with covered funds. Under the currently effective regulations implementing the Volcker Rule, covered funds are defined to include many venture capital and private equity funds.

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OnIn June 6, 2017, we received notice that the Federal Reserve approved the Company’s application for an extension of the permitted conformance period for the Company’s investments in “illiquid” covered ~~funds.~~funds (“Restricted Volcker Investments”). The approval extends the deadline by which the Company must sell, divest, restructure or otherwise conform such investments to the provisions of the Volcker Rule by the earlier of (i) July 21, 2022, or (ii) the date by which each fund matures by its terms or is otherwise conformed to the Volcker Rule. As of ~~September 30, 2020,~~March 31, 2021, such ~~investments~~Restricted Volcker Investments had an estimated aggregate carrying value and fair value of approximately ~~$185~~$218 million.

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There have been various amendments to the Volcker Rule in recent years. In particular, certain amendments that became effective October 1, 2020, provide for, among other things, the adoption of new exclusions from the definition of “covered fund” for venture capital funds and credit funds that meet certain criteria. We believe that a substantial portion of our Restricted Volcker Investments will qualify for these new exclusions (or will have commenced or completed a liquidation or dissolution process), and thus, will not be required to be disposed of or otherwise conformed under the Volcker rule requirements. We continue to assess the extent of the impact of the applicable Volcker amendments on our fund investments and funds business, but expect that our Restricted Volcker Investments will comply with the Volcker Rule, as amended, by or before the conformance deadline. (For more information about the Volcker Rule, see ~~“Business~~—S~~upervision~~“Business—Supervision and Regulation” under Part 1, Item 1 of our ~~2019~~2020 Form 10-K.)

On June 25, 2020, the Federal Reserve and other agencies finalized revisions to the regulations implementing the Volcker Rule (“2020 Volcker Amendments”), which became effective on October 1, 2020. The amendments include, among other things, new exclusions for credit funds, venture capital funds, family wealth management vehicles and customer facilitation vehicles; revisions to existing exclusions for foreign public funds, loan securitizations and public welfare and small business funds; and modifications to the Super 23A provisions of the Volcker Rule. We believe that certain venture capital funds and credit funds in which we have investments qualify for these new exclusions, and, as a result, we will not be required to sell or otherwise conform such portion of "illiquid" fund holdings that are subject to the extension from the Federal Reserve as discussed above. We are continuing to assess the impact of the 2020 Volcker Amendments on the Company's existing fund investments and our future funds business.

~~Investment in BigCommerce Holdings, Inc.~~

As of September 30, 2020 we held approximately 2.8 million shares of common stock in BigCommerce comprised of: (i) common stock issued pursuant to our exercise of certain warrants, and (ii) common stock acquired through debt conversion. With respect to these securities and transactions, during the three months ending September 30, 2020, we recognized a $30.0 million gain upon the exercise and conversion of the convertible debt option (included in other noninterest income), a $10.8 million warrant gain from the exercise and conversion of our warrants, and a $108.4 million unrealized investment gain on the quarter-end valuation of equity shares at a price of $83.30.

Gains (or losses) related to our equity securities in public companies such as BigCommerce are based on valuation changes or the sale of any securities, and are subject to such companies' stock price, which are subject to market conditions and various other factors. Additionally, the public equity investment expected gains and losses, and the extent to which such gains (or losses) will become realized is subject to a variety of factors, including among other factors, changes in prevailing market prices and the timing of any sales of securities, which are subject to our securities sales and governance process as well as certain sales restrictions (e.g. lock-up agreements). The lock-up agreement for common stock shares held in BigCommerce is scheduled to expire during February 2021.

Loans

Loans, amortized cost basis, increased by ~~$5.2~~$2.5 billion to ~~$38.4~~$47.7 billion at ~~September 30, 2020,~~March 31, 2021, compared to ~~$33.2~~$45.2 billion at December 31, ~~2019.~~2020. Unearned income was ~~$222~~$248 million at ~~September 30, 2020~~March 31, 2021 and ~~$163~~$226 million at December 31, ~~2019. Period-end~~2020. The increase in period-end loans ~~increased compared to December 31, 2019,~~was driven primarily by growth in our Global Fund Banking ~~SBA, Investor Dependent~~ and ~~Balance Sheet Dependent risk-based segments. The increase in risk-based segments was primarily driven by participation in the Paycheck Protection Program~~Technology and ~~increased credit line utilization.~~Life Science/Healthcare portfolios as well as Private Bank.

The breakdown of total loans and loans as a percentage of total loans by risk-based segment is as follows:


	March 31, 2021				December 31, 2020
(Dollars in thousands)	Amount		Percentage		Amount		Percentage
Global fund banking	$	27,306,926	57.3	%	$	25,543,198	56.5	%
Investor dependent:
Early stage	1,523,208		3.2		1,485,866		3.3
Mid stage	1,588,185		3.3		1,564,870		3.5
Later stage	2,055,676		4.3		1,921,082		4.2
Total investor dependent	5,167,069		10.8		4,971,818		11.0
Cash flow dependent:
Sponsor led buyout	1,984,567		4.2		1,989,173		4.4
Other	2,959,609		6.2		2,945,360		6.5
Total cash flow dependent	4,944,176		10.4		4,934,533		10.9
Private bank	5,063,827		10.6		4,901,056		10.9
Balance sheet dependent	2,501,524		5.2		2,191,023		4.8
Premium wine	1,040,223		2.2		1,052,643		2.3
Other	45,688		0.1		27,687		0.1
SBA loans	1,605,733		3.4		1,559,530		3.5
Total loans	$	47,675,166	100.0	%	$	45,181,488	100.0	%

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September 30, 2020 December 31, 2019
(Dollars in thousands) Amount Percentage Amount Percentage
Global fund banking $ 19,584,518 51.0 % $ 17,712,797 53.1 %
Investor dependent:
Early stage 1,470,941 3.8 1,653,425 5.0
Mid stage 1,626,794 4.2 1,066,783 3.2
Later stage 2,013,934 5.3 1,698,676 5.1
Total investor dependent 5,111,669 13.3 4,418,884 13.3
Cash flow dependent:
Sponsor led buyout 2,062,243 5.4 2,203,020 6.6
Other 2,600,157 6.8 2,252,847 6.8
Total cash flow dependent 4,662,400 12.2 4,455,867 13.4
Private bank (1) 4,424,899 11.5 3,489,219 10.4
Balance sheet dependent 1,698,220 4.4 1,297,304 3.9
Premium wine (1) 1,081,963 2.8 1,063,512 3.2
Other (1) 48,206 0.1 890,121 2.7
SBA loans 1,802,016 4.7 — —
Total loans (2) $ 38,413,891 100.0 $ 33,327,704 100.0

~~(1)~~As of September 30, 2020, as a result of enhanced portfolio characteristic definitions for our risk-based segments, loans in the amount of $411.2 million and $50.3 million that would have been reported in Other under historical definitions, are now being reported in our Private Bank and Premium Wine risk-based segments, respectively.

~~(2)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~

Loan Concentration

The following table provides a summary of total loans by size and risk-based segment. The breakout below is based on total client balances (individually or in the aggregate) as of ~~September 30, 2020~~March 31, 2021 to any single client:


		September 30, 2020													March 31, 2021
(Dollars in thousands)	(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Global fund banking	Global fund banking	$	1,050,604	$	1,360,678	$	2,705,859	$	1,983,241	$	12,492,083	$	19,592,465	Global fund banking	$	1,084,600	$	1,562,403	$	3,139,710	$	2,645,364	$	18,883,222	$	27,315,299
Investor dependent:	Investor dependent:													Investor dependent:
Early stage	Early stage	1,988,463		226,895		84,560		27,738		34,818		2,362,474		Early stage	1,973,578		282,126		115,214		21,928		—		2,392,846
Mid stage	Mid stage	880,423		542,855		210,759		197,162		92,895		1,924,094		Mid stage	780,378		513,411		330,028		72,621		129,452		1,825,890
Later stage	Later stage	302,248		502,367		742,294		325,919		236,584		2,109,412		Later stage	285,656		583,338		729,340		371,112		165,994		2,135,440
Total investor dependent	Total investor dependent	3,171,134		1,272,117		1,037,613		550,819		364,297		6,395,980		Total investor dependent	3,039,612		1,378,875		1,174,582		465,661		295,446		6,354,176
Cash flow dependent:	Cash flow dependent:													Cash flow dependent:
Sponsor led buyout	Sponsor led buyout	13,838		77,169		500,763		658,535		821,589		2,071,894		Sponsor led buyout	8,647		66,432		532,863		542,014		842,583		1,992,539
Other	Other	426,605		255,151		620,051		587,133		1,119,861		3,008,801		Other	382,277		246,101		544,792		410,956		1,696,148		3,280,274
Total cash flow dependent	Total cash flow dependent	440,443		332,320		1,120,814		1,245,668		1,941,450		5,080,695		Total cash flow dependent	390,924		312,533		1,077,655		952,970		2,538,731		5,272,813
Private bank ~~(1)~~	Private bank ~~(1)~~	3,398,733		492,804		297,444		23,651		213,233		4,425,865		Private bank ~~(1)~~	3,590,861		559,204		393,877		140,695		379,791		5,064,428
Balance sheet dependent	Balance sheet dependent	205,838		370,864		380,100		209,427		581,967		1,748,196		Balance sheet dependent	229,950		326,346		393,394		466,363		1,126,791		2,542,844
Premium wine ~~(1)~~	Premium wine ~~(1)~~	249,620		247,718		330,815		125,283		160,868		1,114,304		Premium wine ~~(1)~~	246,087		267,727		286,765		120,720		151,809		1,073,108
Other ~~(1)~~	Other ~~(1)~~	9,328		7,583		39,475		—		—		56,386		Other ~~(1)~~	—		24,614		27,884		—		—		52,498
Total loans (2) (3)		$	8,525,700	$	4,084,084	$	5,912,120	$	4,138,089	$	15,753,898	$	38,413,891
Total loans (1)														Total loans (1)	$	8,582,034	$	4,431,702	$	6,493,867	$	4,791,773	$	23,375,790	$	47,675,166

(1)As of September 30, 2020, as a result of enhanced portfolio characteristic definitions for our risk-based segments, loans in the amount of $411.2 million and $50.3 million that would have been reported in Other under historical definitions, are now being reported in our Private Bank and Premium Wine risk-based segments, respectively.

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~~(2)As of September 30, 2020, loan amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~

~~(3)~~Included in total loans at amortized cost is approximately ~~$1.8~~$1.6 billion in PPP loans. The PPP loans consist of loans across all of our risk-based segments.

At ~~September 30, 2020,~~March 31, 2021, loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$19.9~~$28.2 billion, or ~~51.8~~59.1 percent of our total loan portfolio. These loans represented ~~433~~570 clients, and of these loans, ~~$45.8~~$43.9 million were on nonaccrual status as of ~~September 30, 2020.~~March 31, 2021.

The following table provides a summary of loans by size and risk-based segment. The breakout below is based on total client balances (individually or in the aggregate) as of December 31, ~~2019:~~2020:


		December 31, 2019													December 31, 2020
(Dollars in thousands)	(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total		(Dollars in thousands)	Less than Five Million		Five to Ten Million		Ten to Twenty Million		Twenty to Thirty Million		Thirty Million or More		Total
Global fund banking	Global fund banking	$	1,016,051	$	1,082,201	$	2,559,384	$	2,029,547	$	11,025,614	$	17,712,797	Global fund banking	$	1,052,067	$	1,360,621	$	2,636,556	$	2,777,270	$	17,722,678	$	25,549,192
Investor dependent:	Investor dependent:													Investor dependent:
Early stage	Early stage	1,090,852		260,685		191,661		76,542		33,685		1,653,425		Early stage	1,896,260		221,258		100,553		27,781		—		2,245,852
Mid stage	Mid stage	544,167		316,617		156,418		49,581		—		1,066,783		Mid stage	814,426		492,856		277,754		95,011		133,321		1,813,368
Later stage	Later stage	167,500		348,832		648,382		304,373		229,589		1,698,676		Later stage	281,953		596,965		692,923		269,587		174,159		2,015,587
Total investor dependent	Total investor dependent	1,802,519		926,134		996,461		430,496		263,274		4,418,884		Total investor dependent	2,992,639		1,311,079		1,071,230		392,379		307,480		6,074,807
Cash flow dependent:	Cash flow dependent:													Cash flow dependent:
Sponsor led buyout	Sponsor led buyout	16,034		97,458		550,753		723,737		815,038		2,203,020		Sponsor led buyout	17,821		66,823		546,416		653,706		714,085		1,998,851
Other	Other	206,209		86,929		465,304		463,073		1,031,332		2,252,847		Other	401,266		228,336		535,974		649,766		1,486,180		3,301,522
Total cash flow dependent	Total cash flow dependent	222,243		184,387		1,016,057		1,186,810		1,846,370		4,455,867		Total cash flow dependent	419,087		295,159		1,082,390		1,303,472		2,200,265		5,300,373
Private bank	Private bank	2,791,587		359,429		191,979		49,996		96,228		3,489,219		Private bank	3,505,413		597,344		319,019		94,935		385,270		4,901,981
Balance sheet dependent	Balance sheet dependent	256,247		269,744		404,356		78,197		288,760		1,297,304		Balance sheet dependent	230,787		332,523		461,204		289,502		926,121		2,240,137
Premium wine	Premium wine	243,094		267,389		261,951		148,469		142,609		1,063,512		Premium wine	241,806		272,506		300,292		120,740		144,924		1,080,268
Other	Other	526,850		40,511		106,247		112,764		103,749		890,121		Other	—		18,673		16,057		—		—		34,730
Total loans (1)	Total loans (1)	$	6,858,591	$	3,129,795	$	5,536,435	$	4,036,279	$	13,766,604	$	33,327,704	Total loans (1)	$	8,441,799	$	4,187,905	$	5,886,748	$	4,978,298	$	21,686,738	$	45,181,488

(1)~~As of September 30, 2020, loan amounts are disclosed using the~~Included in total loans at amortized cost ~~basis as a result~~is approximately $1.6 billion in PPP loans. The PPP loans consist of ~~the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~loans from all risk-based segments.

At December 31, ~~2019,~~2020, loans equal to or greater than $20 million to any single client (individually or in the aggregate) totaled ~~$17.8~~$26.7 billion, or ~~53.4~~59.0 percent of our total loan portfolio. These loans represented ~~397~~544 clients, and of these loans, ~~$37.3~~$65.0 million were on nonaccrual status as of December 31, ~~2019.~~2020.

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Our three main market segments include (i) Global Fund Banking, ~~(formerly private equity/venture capital),~~ (ii) technology (software/internet and hardware) and life science/healthcare and (iii) SVB Private Bank.

(i) Global Fund Banking

Our Global Fund Banking loan portfolio includes financial services to clients in the private equity/venture capital community. Our lending to private equity/venture capital firms and funds represented 5157 percent of total loans at ~~September 30, 2020~~both March 31, 2021 and ~~53 percent at~~ December 31, ~~2019.~~2020. The vast majority of this portfolio consists of 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. These facilities are generally governed by meaningful financial covenants oriented towards ensuring that the funds' remaining callable capital is sufficient to repay the loan, and larger commitments (typically provided to larger private equity funds) are often secured by an assignment of the general partner's right to call capital from the fund's limited partner investors.

(ii) Technology and Life Science/Healthcare

Our technology and life science/healthcare loan portfolios include loans to clients at the various stages of their life cycles. The risk-based segments for our technology and life science/healthcare market segments are classified as investor dependent, cash flow dependent or balance sheet dependent for reporting purposes.

Investor dependent loans represented 1311 percent of total loans at both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. These loans are made to companies in both our Accelerator (early-stage) and Growth practices (mid-stage and later-stage).

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Cash flow dependent loans, which include sponsor led buyout lending, represented 1210 percent of total loans at ~~September 30, 2020~~March 31, 2021 and 1311 percent at December 31, ~~2019.~~2020. Sponsor led buyout loans represented ~~five~~4 percent of total loans at ~~September 30, 2020, compared to seven percent at~~both March 31, 2021 and December 31, ~~2019.~~2020.

Balance sheet dependent loans, which include asset-based loans, represented ~~four~~5 percent of total loans at both ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. Working capital lines and accounts receivable financing, both part of our asset-based lending, each represented one percent ~~of total loans each, respectively, at September 30, 2020~~ and ~~two percent and one~~half a percent of total loans, respectively, at both March 31, 2021 and December 31, ~~2019.~~2020.

(iii) SVB Private Bank

Our SVB Private Bank clients are primarily ~~private equity/venture capital~~executive leaders and senior investment professionals ~~and executives of~~in the innovation ~~companies they support.~~economy. Our lending to SVB Private Bank clients represented 1211 percent of total loans at ~~September 30, 2020~~both March 31, 2021 and ~~10 percent at~~ December 31, ~~2019.~~2020. Many of ~~these clients have mortgages,~~our Private Bank products are secured by real estate, which represented 8683 percent of this portfolio at ~~September 30, 2020; the balance of this portfolio consisted of~~March 31, 2021; these products include mortgage loans, owner occupied commercial mortgage loans, home equity lines of credit and other secured lending products such as real estate secured loans to eligible employees through our EHOP. The remaining balance of our Private Bank portfolio consists of restricted and private stock loans, capital call lines of credit, lines of credit against liquid assets and other secured and unsecured lending products. ~~In addition, we provide owner occupied commercial mortgages to Private Bank clients and real estate secured loans to eligible employees through our EHOP.~~

Paycheck Protection Program

Beginning in April 2020, we accepted applications under the PPP administered by the ~~U.S. Small Business Association (“SBA”)~~SBA under the ~~Coronavirus~~CARES Act, as amended by the Economic Aid ~~Relief,~~Act enacted on December 27, 2020, and ~~Economic Security Act (the "CARES Act") and~~have originated loans to qualified small businesses. Under the terms of the program, loans funded through the PPP are eligible to be forgiven if certain requirements are met, including using the funds for certain costs relating to payroll, healthcare and qualifying mortgage interest, rent and utility payments. Eligible expenses also include covered operations expenditures, covered property damage costs, covered supplier costs and covered worker protection expenditures. To the extent not forgiven, loans are subject to certain terms including, among others, the following: maximum two-year term for loans issued before June 5, 2020 (unless borrower and lender agree otherwise); a maximum five-year term for loans issued on or after June 5, 2020; an interest rate of 1.0%; deferral of loan payments until a loan forgiveness decision is rendered or until 10 months after the end of a borrower’s forgiveness covered period; and no requirement for any collateral or personal guarantees. PPP borrowers are not required to pay any fees to the government or the lender, and the loans may be repaid by the borrower at any time. The SBA, however, will pay lenders a processing fee based on the size of the PPP loan, ranging from 1% to 5% of the ~~loan.~~loan for loans made before the enactment of the Economic Aid Act, and thereafter, a processing fee of (1) the lesser of 50% of the loan or $2,500 for loans of not more than $50,000, (2) 5% of the loan for loans above $50,000 but not more than $350,000, and (3) 3% of the loan for loans above $350,000 (and, in case of the first draw PPP loans only, a fee of 1% for the loans at or above $2,000,000). Additional loans may be issued up until May 31, 2021, pursuant to the PPP Extension Act of 2021, and qualifying PPP

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borrowers are able to apply for second draw loans in an amount of up to $2 million. We continued to participate in the PPP through the first quarter of 2021, including the second draw loan program.

As of ~~September 30, 2020,~~March 31, 2021, we have outstanding PPP loans in the amount of ~~$1.8~~$1.6 billion, as approved by the SBA. This funded amount reflects repayments received as of such date.

Additionally, we announced our intention to donate PPP loan origination fees, net of costs incurred, received from the SBA to COVID-19 relief efforts, currently estimated to be approximately $20 million to be donated in the fourth quarter of 2020 irrespective of when forgiveness amounts are actually received from the SBA.

Loan Deferral Programs

In April 2020, we implemented three loan payment deferral programs targeted to assist borrowers who were the most impacted by the COVID-19 pandemic. These programs included relief for venture-backed, private bank and wine borrowers who met certain criteria. The three-month private bank and wine deferral programs ended, and payments resumed, in the third quarter of 2020. The six-month venture debt and private bank deferral programs ~~are expected to end,~~ended, and payments ~~to resume,~~resumed, in the fourth quarter of ~~2020.~~2020 for a majority of participants. As of ~~September 30, 2020,~~March 31, 2021, loans modified under these programs had outstanding balances of ~~$1.9 billion, $13.6~~$607.3 million, ~~and $73.3~~of which $564.6 million is for venture-backed ~~private bank and wine borrowers, respectively.~~borrowers. These amounts reflect repayments received as of ~~September 30, 2020.~~March 31, 2021.

For loans modified under these programs, in accordance with the provisions of Section 4013 of the CARES Act, we elected to not apply troubled debt restructuring classification to borrowers who were current as of December 31, 2019. In addition, for loans modified under these programs that did not meet the CARES Act criteria, we applied the guidance in an interagency statement issued by bank regulatory agencies. Using this guidance, we may ~~assume~~find that borrowers are not experiencing financial difficulty that may otherwise result in a TDR classification, in accordance with ASC Subtopic 310-40, if loan modifications a) are performed in response to the COVID-19 pandemic, b) provide short-term loan payment deferrals ~~that are up to~~(e.g. six months in ~~duration~~duration) and c) are granted to borrowers who were current as of the implementation date of the loan modification program. We evaluated all loans modified under these programs against the CARES Act and interagency guidance, as applicable, and determined the loan modifications would not be considered TDRs. We dodid not ~~expect to~~ defer interest income recognition during periods of payment deferral, nor ~~do we expect~~did any qualifying modification to trigger nonaccrual status. The effectiveness of our programs is uncertain considering the unknown duration and impact of the COVID-19 pandemic.

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State Concentrations

Approximately 27 28percent of our outstanding total loan balances as of ~~both September 30, 2020 and December~~March 31, ~~2019~~2021 were to borrowers based in ~~California.~~California compared to 26 percent as of December 31, 2020. Additionally, as of ~~September 30, 2020,~~March 31, 2021, borrowers in ~~Massachusetts and~~ New York increased to 11 percent ~~and~~compared to 10 percent ~~of our outstanding total loan balances as of September 30, 2020, respectively, compared to nine percent each~~ as of December 31, ~~2019.~~2020. Borrowers in Massachusetts decreased to 9 percent at March 31, 2021, compared to 10 percent as of December 31, 2020. Other than California ~~Massachusetts~~ and New York, as of ~~September 30, 2020,~~March 31, 2021 there are no states with loan balances greater than or equal to 10 percent.

See generally “Risk Factors–Credit Risks” set forth under Part I, Item 1A in our ~~2019~~2020 Form 10-K and "Risk Factors" under Part II, Item 1A of this report.

Credit Quality Indicators

~~As of September 30, 2020 and December 31, 2019, our~~Our total criticized loans and nonaccrual loans represented ~~four and three~~3 percent of our total loans ~~respectively.~~as of both March 31, 2021 and December 31, 2020. Criticized and nonaccrual loans to early-stage clients represented 1117 and 2315 percent of our total criticized and nonaccrual loan balances at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. Loans to early-stage investor dependent clients represent a relatively small percentage of our overall portfolio at ~~four~~3 percent of total loans at ~~September 30, 2020~~both March 31, 2021 and ~~five percent at~~ December 31, ~~2019.~~2020. It is common for an 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. Based on our experience, for most early-stage clients, this situation typically lasts one to two quarters and generally resolves itself with a subsequent round of venture funding, though there are exceptions, from time to time. As a result, we expect that each of our early-stage clients will reside in our criticized portfolio during a portion of their life cycle.

~~More specifically, given~~We continue to monitor our loan portfolio as the ~~economic environment in light~~impact of the COVID-19 pandemic ~~we are closely monitoring our loan portfolio. Notwithstanding~~continues, but may be beginning to subside. With the ~~increase~~exception of ~~our allowance~~the potentially fraudulent client activity described under "Provision for ~~credit losses in the first quarter~~Credit Losses" above, which ~~was largely attributable to longer duration mortgage loans based on our forecast models,~~ we currently ~~expect particularly for 2020 continued~~believe to be an isolated occurrence, our Global Fund Banking portfolio continues to have strong credit performance, ~~for our Private Bank and Global Fund Banking portfolios,~~which is consistent with the ~~historic~~historically low credit losses we have typically experienced. ~~However, we expect that~~Likewise, our Private Bank portfolio also continues to have strong credit performance, consistent with our historical experience. Wine clients' sales are improving with the re-openings of tasting rooms and restaurants. We have seen robust venture capital investment activity in the technology and life science/healthcare sectors, supporting ongoing improvement of the credit quality of our clients in those spaces. We continue to monitor our investor dependent loans (primarily early-stage companies), cash flow dependent loans, and ~~premium wine portfolios will be likelier to be~~other clients impacted ~~negatively~~ by the ~~challenging economic environment in 2020. Particular areas~~effects of credit focus include: early-stage companies; Sponsor Finance clients; consumer internet and advertising technology clients; life science/healthcare companies that require clinical trials or provide elective services; and wine clients who are dependent on tasting room or restaurant sales.the COVID-19 pandemic.

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Credit Quality, ~~and~~ Allowance for Credit Losses ~~for Loans~~ and ~~for Unfunded Credit Commitments~~Nonperforming Assets

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 credit losses for loans and unfunded credit commitments:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020			December 31, 2019			(Dollars in thousands)	March 31, 2021			December 31, 2020
Nonperforming, past due, and restructured loans:	Nonperforming, past due, and restructured loans:							Nonperforming, past due, and restructured loans:
Nonaccrual loans	Nonaccrual loans	$	105,711		$	102,669		Nonaccrual loans	$	90,247		$	104,244
Loans past due 90 days or more still accruing interest	Loans past due 90 days or more still accruing interest	—			3,515			Loans past due 90 days or more still accruing interest	4,491			—
Total nonperforming loans ~~(1)~~	Total nonperforming loans ~~(1)~~	105,711			106,184			Total nonperforming loans ~~(1)~~	94,738			104,244
OREO and other foreclosed assets	OREO and other foreclosed assets	1,179			—			OREO and other foreclosed assets	1,179			1,179
Total nonperforming assets	Total nonperforming assets	$	106,890		$	106,184		Total nonperforming assets	$	95,917		$	105,423
Performing TDRs	Performing TDRs	$	14,163		$	31,990		Performing TDRs	$	1,634		$	4,550
Nonperforming loans as a percentage of total loans ~~(1)~~	Nonperforming loans as a percentage of total loans ~~(1)~~	0.28		%	0.32		%	Nonperforming loans as a percentage of total loans ~~(1)~~	0.20		%	0.23		%
Nonperforming assets as a percentage of total assets	Nonperforming assets as a percentage of total assets	0.11			0.15			Nonperforming assets as a percentage of total assets	0.07			0.09
Allowance for credit losses for loans	Allowance for credit losses for loans	$	512,958		$	304,924		Allowance for credit losses for loans	$	391,751		$	447,765
As a percentage of total loans (1)		1.34		%	0.91		%
As a percentage of total loans								As a percentage of total loans	0.82		%	0.99		%
As a percentage of total nonperforming loans ~~(1)~~	As a percentage of total nonperforming loans ~~(1)~~	485.25			287.17			As a percentage of total nonperforming loans ~~(1)~~	413.51			429.54
Allowance for credit losses for nonaccrual loans	Allowance for credit losses for nonaccrual loans	$	64,479		$	44,859		Allowance for credit losses for nonaccrual loans	$	41,851		$	54,029
As a percentage of total loans ~~(1)~~	As a percentage of total loans ~~(1)~~	0.17		%	0.13		%	As a percentage of total loans ~~(1)~~	0.09		%	0.12		%
As a percentage of total nonperforming loans ~~(1)~~	As a percentage of total nonperforming loans ~~(1)~~	61.00			42.25			As a percentage of total nonperforming loans ~~(1)~~	44.18			51.83
Allowance for credit losses for total performing loans	Allowance for credit losses for total performing loans	$	448,479		$	260,065		Allowance for credit losses for total performing loans	$	349,900		$	393,736
As a percentage of total loans (1)		1.17		%	0.78		%
As a percentage of total loans								As a percentage of total loans	0.73		%	0.87		%
As a percentage of total performing loans ~~(1)~~	As a percentage of total performing loans ~~(1)~~	1.17			0.78			As a percentage of total performing loans ~~(1)~~	0.74			0.87
Total loans ~~(1)~~	Total loans ~~(1)~~	$	38,413,891		$	33,327,704		Total loans ~~(1)~~	$	47,675,166		$	45,181,488
Total performing loans ~~(1)~~	Total performing loans ~~(1)~~	38,308,180			33,221,520			Total performing loans ~~(1)~~	47,580,428			45,077,244
Allowance for credit losses for unfunded credit commitments ~~(2)~~(1)	Allowance for credit losses for unfunded credit commitments ~~(2)~~(1)	101,515			67,656			Allowance for credit losses for unfunded credit commitments ~~(2)~~(1)	104,750			120,796
As a percentage of total unfunded credit commitments	As a percentage of total unfunded credit commitments	0.33		%	0.28		%	As a percentage of total unfunded credit commitments	0.31		%	0.38		%
Total unfunded credit commitments ~~(3)~~(2)	Total unfunded credit commitments ~~(3)~~(2)	$	30,329,796		$	24,521,920		Total unfunded credit commitments ~~(3)~~(2)	$	33,986,627		$	31,982,251

(1)As of September 30, 2020, loan amounts are disclosed, and ratios are calculated, using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed, and ratios calculated, using the gross basis.

~~(2)~~The “allowance for credit losses for unfunded credit commitments” is included as a component of other liabilities and any provision is included in the ~~“(reduction) provision~~“provision for credit losses” in the statement of income. See ~~“(Reduction) Provision~~“Provision for Credit Losses” for a discussion of the changes to the allowance.

~~(3)~~(2)Includes unfunded loan commitments and letters of credit.

Our allowance for credit losses for loans as a percentage of total loans increased 43 basis points to 1.34 percent at September 30, 2020, compared to 0.91 percent at December 31, 2019. The 43 basis points increase was due primarily to a 39 basis points increase for our performing loan reserve as a percentage of total loans and a four basis points increase for nonaccrual loans.

Our allowance for credit losses for performing loans was $448.5 million at September 30, 2020, compared to $260.1 million at December 31, 2019. Included in the allowance for credit losses at September 30, 2020 is the day one impact of adopting CECL of $22.4 million driven by an increase in our expected credit loss for our Investor Dependent loan portfolio given the higher relative risk and longer-duration, which is taken into account under the CECL methodology, partially offset by a decrease for our Global Fund Banking loan portfolio, given its higher historical credit quality and shorter duration. The remaining $166.0 million increase was due primarily to an increase of $134.5 million related to the expected credit losses for our performing loan reserves based on our forecast models of the current economic environment and $31.5 million related to period-end loan growth of $5.2 billion.

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To determine the ~~allowance for credit losses~~ACL for performing loans as of ~~September 30, 2020,~~March 31, 2021, we utilized three scenarios, on a weighted basis, from ~~Moody’s~~Moody's Analytics ~~September 2020~~March 2021 forecast in our expected lifetime loss ~~estimates.~~estimate. The baseline scenario, which carries the highest weighting, reflected an ~~improvement in the economic forecast utilized for our ACL as of June 30, 2020. Those assumptions included an improvement in the~~ unemployment rate ~~from 13~~of 6 percent as of ~~June 30, 2020, to 9 percent as of September 30, 2020,~~March 31, 2021, as a result of ~~businesses re-opening~~business re-openings and the effect of government aid ~~programs. The gross domestic product ("GDP") contraction~~programs, and a GDP growth rate ~~improved from 33~~of 5 percent as of ~~June 30, 2020~~March 31, 2021, reflecting ongoing expected economic recovery as the impact of the COVID-19 pandemic appears to ~~27 percent as of September 30, 2020..~~be subsiding. We also utilized a more favorable ~~(Moody’s~~(Moody's S1, Upside) and a less favorable ~~(Moody’s~~(Moody's S3, Downside) economic forecast scenario, both weighted at 30 percent, in addition to the baseline. To the extent we identified credit risk considerations that were not captured by the Moody's Analytics ~~September 2020~~March 2021 scenarios, we addressed the risk through management's qualitative adjustments to our ACL for performing loans.

Our allowance for credit losses for loans as a percentage of total loans decreased 17 basis points to 0.82 percent at March 31, 2021, compared to 0.99 percent at December 31, 2020. The 17 basis points decrease was due primarily to a 14 basis point decrease for our performing loans reserve as a percentage of total loans and a 3 basis point decrease for our nonaccrual individually assessed loans.

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Our allowance for credit losses for performing loans was ~~$64.5~~$349.9 million at ~~September 30, 2020,~~March 31, 2021, compared to ~~$44.9~~$393.7 million at December 31, ~~2019.~~2020. The ~~$19.6~~$43.8 million ~~increase~~decrease was ~~due~~driven primarily ~~to $90.4 million~~by the improved economic scenarios in ~~reserves for new nonaccrual loans as noted below and $3.1 million due to~~our forecast models, reflective of the ~~day one impact~~ongoing improvement of adopting CECL, partially offset by $34.6 million in repayments and $39.3 million in charge-offs. Reserves for new nonaccruals were primarily driven by reserves of $31.7 million for five Investor Dependent clients and $14.1 million for one Sponsor Led Buyout client. Repayments were primarily driven by $12.9 million for one Sponsor Led Buyout client that was added to our nonaccrual loan portfolio duringeconomic outlooks despite the ~~third quarter of 2019.~~COVID-19 pandemic.

The following table presents a summary of changes in nonaccrual loans for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2020		2019		2020		2019		(Dollars in thousands)	2021		2020
Balance, beginning of period ~~(1)~~	Balance, beginning of period ~~(1)~~	$	94,326	$	96,641	$	102,669	$	94,142	Balance, beginning of period ~~(1)~~	$	104,244	$	102,669
Additions	Additions	70,000		53,643		172,462		143,960		Additions	5,552		36,346
Paydowns and other reductions	Paydowns and other reductions	(38,754)		(22,493)		(119,215)		(86,430)		Paydowns and other reductions	(9,418)		(62,677)
Charge-offs	Charge-offs	(19,861)		(23,729)		(50,205)		(47,559)		Charge-offs	(10,131)		(25,731)
Other reductions		—		(17)		—		(68)
Balance, end of period (1)		$	105,711	$	104,045	$	105,711	$	104,045
Balance, end of period										Balance, end of period	$	90,247	$	50,607

~~(1)For the quarter ended September 30, 2020,~~Our nonaccrual loan ~~amounts are disclosed using the amortized cost basis as a result of the adoption of CECL. Prior period loan amounts are disclosed using the gross basis.~~

~~Nonaccrual loans were $105.7~~balance decreased by $14.0 million to $90.2 million at ~~September 30, 2020,~~March 31, 2021, compared to ~~$102.7~~$104.2 million at December 31, ~~2019. Our nonaccrual loan balance increased $3.0~~2020. The decrease was driven primarily by $9.5 million ~~primarily driven by $172.4~~in repayments and $10.1 million in charge-offs, partially offset by new nonaccrual loans ~~partially offset~~of $5.6 million. Repayments were driven primarily by ~~$119.2 million~~clients in ~~paydowns and other reductions and $50.2 million charge-offs.~~our Investor Dependent loan portfolio. New nonaccrual loans were driven primarily by ~~$57.4 million for six clients in our Investor Dependent portfolio, $21.8~~$2.9 million for one client in our Sponsor Led Buyout portfolio and $14.8 million for one client in our Balance Sheet Dependent portfolio. Repayments were primarily driven by $34.5 million for one Sponsor Led Buyout client that was added to our nonaccrual loan portfolio during the third quarter of 2019 and $11.7 million for one Balance Sheet Dependent client that was added in the second quarter of 2020.Private Bank client. As of ~~September 30, 2020,~~March 31, 2021, we have specifically reserved ~~$64.5~~$41.9 million for our nonaccrual loans.

Average nonaccrual loans for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 were ~~$96.1~~$129.5 million, ~~and $78.9 million, respectively,~~ compared to ~~$90.3 million and $98.1~~$71.6 million for the comparable ~~2019~~2020 period. The ~~$5.8~~$57.9 million increase in average nonaccrual loans for the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~September 30, 2019~~March 31, 2020 was driven primarily ~~driven~~ by ~~new nonaccruals occurring~~fewer repayments and charge-offs in ~~the latter part of the second quarter and third quarter.~~2021 than in 2020. If the nonaccrual loans had not been nonperforming, ~~$0.7 million and $1.7~~$0.9 million in interest income would have been recorded for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~$1.0 million and $4.1~~$0.4 million for the comparable ~~2019~~2020 period.

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Accrued Interest Receivable and Other Assets

A summary of accrued interest receivable and other assets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is as follows:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		% Change		(Dollars in thousands)	March 31, 2021		December 31, 2020		% Change
Derivative assets (1)	Derivative assets (1)	$	427,044	$	332,814	28.3	%	Derivative assets (1)	$	549,640	$	488,269	12.6	%
Foreign exchange spot contract assets, gross	Foreign exchange spot contract assets, gross	1,243,419		810,275		53.5		Foreign exchange spot contract assets, gross	2,918,476		2,107,510		38.5
Accrued interest receivable	Accrued interest receivable	203,633		216,962		(6.1)		Accrued interest receivable	288,107		244,748		17.7
FHLB and Federal Reserve Bank stock	FHLB and Federal Reserve Bank stock	61,232		60,258		1.6		FHLB and Federal Reserve Bank stock	83,355		61,232		36.1
Net deferred tax assets ~~(2)~~	Net deferred tax assets ~~(2)~~	347		28,433		(98.8)		Net deferred tax assets ~~(2)~~	1,847		776		138.0
Accounts receivable	Accounts receivable	33,320		47,663		(30.1)		Accounts receivable	30,999		36,812		(15.8)
Other assets	Other assets	347,984		248,828		39.8		Other assets	311,690		266,478		17.0
Total accrued interest receivable and other assets	Total accrued interest receivable and other assets	$	2,316,979	$	1,745,233	32.8		Total accrued interest receivable and other assets	$	4,184,114	$	3,205,825	30.5

(1)See "Derivatives" ~~section below.~~

~~(2)See "Other Liabilities"~~ section below.

Foreign Exchange Spot Contract Assets

Foreign exchange spot contract assets represent unsettled client trades at the end of the period. The increase of ~~$433.1~~$811.0 million was primarily due to an overall increase in the amount of unsettled spot trades at period-end as compared to December 31, ~~2019.~~2020.

Accrued Interest Receivable

The ~~decrease~~increase of ~~$13.3~~$43.4 million in accrued interest receivable is ~~reflective~~primarily due to increases in the period-end balances of ~~lower accrued interest receivables on loans and fixed income~~our held-to-maturity investment securities ~~from lower overall market rates offset by an increase in accrued interest receivable reflective of growth in period-end fixed income investment securities of $11.0 billion~~portfolio and loans at ~~September 30, 2020~~March 31, 2021 as compared to December 31, ~~2019.~~2020.

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Other Assets

Other assets includes various asset amounts for other operational transactions. The increase of ~~$99.2~~$45.2 million was primarily due to a ~~$31.9~~$31.2 million increase in SVB Leerink trade receivables reflective of increased investment banking activity ~~during the nine months ended September 30, 2020.~~and a $9.1 million increase in prepaid expenses.

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 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

(Dollars in thousands) September 30, 2020 December 31, 2019 % Change
Assets:
Equity warrant assets $ 202,184 $ 165,473 22.2 %
Foreign exchange forward and option contracts 145,591 115,854 25.7
Client interest rate derivatives 79,270 28,811 175.1
Interest rate swaps — 22,676 —
Total derivative assets $ 427,045 $ 332,814 28.3
Liabilities:
Foreign exchange forward and option contracts $ 112,223 $ 98,207 14.3
Client interest rate derivatives 25,558 14,154 80.6
Interest rate swaps — 25,623 —
Total derivative liabilities $ 137,781 $ 137,984 (0.1)

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(Dollars in thousands)	March 31, 2021		December 31, 2020		% Change
Assets:
Equity warrant assets	$	244,334	$	203,438	20.1	%
Foreign exchange forward and option contracts	240,183		216,977		10.7
Client interest rate derivatives	65,123		67,854		(4.0)

Total derivative assets	$	549,640	$	488,269	12.6
Liabilities:
Foreign exchange forward and option contracts	$	202,532	$	210,833	(3.9)
Client interest rate derivatives	68,954		26,646		158.8

Total derivative liabilities	$	271,486	$	237,479	14.3

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, 2020,~~March 31, 2021, we held warrants in ~~2,503~~2,670 companies, compared to ~~2,268~~2,602 companies at December 31, ~~2019.~~2020. Warrants in 2842 companies each had fair values greater than $1.0 million and collectively represented ~~$83.0~~$113.7 million, or ~~41.1~~46.5 percent, of the fair value of the total warrant portfolio at ~~September 30, 2020.~~March 31, 2021. The change in fair value of equity warrant assets is recorded in "Gains on equity warrant assets, 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, 2020~~March 31, 2021 and ~~2019:~~2020:

Three months ended September 30, Nine months ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Balance, beginning of period $ 171,082 $ 158,048 $ 165,473 $ 149,238
New equity warrant assets 4,726 3,843 16,598 11,365
Non-cash changes in fair value, net 30,187 7,995 35,629 19,787
Exercised equity warrant assets (3,450) (20,292) (14,184) (28,346)
Terminated equity warrant assets (361) (481) (1,332) (2,931)
Balance, end of period $ 202,184 $ 149,113 $ 202,184 $ 149,113


	Three months ended March 31,
(Dollars in thousands)	2021		2020
Balance, beginning of period	$	203,438	$	165,473
New equity warrant assets	6,743		4,519
Non-cash changes in fair value, net	62,297		(5,472)
Exercised equity warrant assets	(27,895)		(11,484)
Terminated equity warrant assets	(249)		(326)
Balance, end of period	$	244,334	$	152,710

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’ needs. 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. Net gains and losses on the revaluation of foreign currency denominated instruments are recorded in 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. Our net exposure for foreign exchange forward and foreign currency option contracts, net of cash collateral, was ~~$27.2~~$57.8 million at ~~September 30, 2020~~March 31, 2021 and ~~$22.2~~$31.0 million at December 31, ~~2019.~~2020. For additional information on our foreign exchange forward contracts and foreign currency option contracts, see Note 1110 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

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Client Interest Rate Derivatives

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. Our net exposure for client interest rate derivative contracts, net of cash collateral, was ~~$78.6~~$11.7 million at ~~September 30, 2020~~March 31, 2021 and ~~$28.6~~$67.3 million at December 31, ~~2019.~~2020. For additional information on our client interest rate derivatives, see Note 1110 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Interest Rate Swaps

To manage interest rate risk on our ~~variable-interest rate loan~~AFS securities portfolio, we enter into interest rate swap contracts to hedge against future changes in interest rates by using hedging instruments to lock in future cash inflows that would otherwise be impacted by movements in the market interest rates. We designate these interest rate swap contracts as ~~cash flow~~fair value hedges that qualify for hedge accounting under ASC 815 and record them in other assets and other liabilities. Our net exposure for interest rate swaps was zero at March 31, 2021. Refer to Note 1110 — “Derivative Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for additional ~~information regarding the termination of our interest rate swap cash flow hedges during the first quarter of 2020.~~information.

Deposits

Deposits were ~~$84.8~~$124.2 billion at ~~September 30, 2020,~~March 31, 2021, an increase of ~~$23.0~~$22.2 billion, or ~~37.3~~21.7 percent, compared to ~~$61.8~~$102.0 billion at December 31, ~~2019.~~2020. The increase in deposits was driven by growth across all portfolios with the primary contributors coming from our Technology and Life Science/Healthcare portfolios driven by strong public and private ~~fundraising as well as from clients conserving cash.~~

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fundraising.

At ~~September 30, 2020,~~March 31, 2021, the aggregate balance of time deposit accounts individually equal to or greater than $100,000 totaled ~~$332~~$693 million, compared to ~~$185~~$686 million at December 31, ~~2019.~~2020. At ~~September 30, 2020, $331~~March 31, 2021, $693 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. Approximately 1114 percent and 1312 percent of our total deposits at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, were from our clients in Asia.

~~We expect in 2020 that our deposit growth will be impacted by slower cash burn rates as clients look to conserve cash.~~

Long-Term Debt

Our long-term debt was ~~$843.4 million~~$1.3 billion at ~~September 30, 2020~~March 31, 2021 and ~~$348.0~~$843.6 million at December 31, ~~2019.~~2020. The increase in our long-term debt was due to the issuance of ~~3.125%~~1.800% Senior Notes during the ~~second~~first quarter of ~~2020.~~2021.

As of ~~September 30, 2020,~~March 31, 2021, long-term debt included our ~~3.50%~~3.500% Senior Notes, 3.125% Senior Notes and ~~3.125%~~1.800% Senior Notes. For more information on our long-term debt, see Note 109 — “Short-Term Borrowings and Long-Term Debt” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Other Liabilities

A summary of other liabilities at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is as follows:


(Dollars in thousands)	(Dollars in thousands)	September 30, 2020		December 31, 2019		% Change	(Dollars in thousands)	March 31, 2021		December 31, 2020		% Change
Foreign exchange spot contract liabilities, gross	Foreign exchange spot contract liabilities, gross	$	1,468,525	$	888,360	65.3	Foreign exchange spot contract liabilities, gross	$	3,083,189	$	2,164,805	42.4
Accrued compensation	Accrued compensation	353,759		354,393		(0.2)	Accrued compensation	266,166		545,376		(51.2)
Allowance for unfunded credit commitments	Allowance for unfunded credit commitments	101,515		67,656		50.0	Allowance for unfunded credit commitments	104,750		120,796		(13.3)
Derivative liabilities (1)	Derivative liabilities (1)	137,781		137,984		(0.1)	Derivative liabilities (1)	271,486		237,478		14.3
Net deferred tax liabilities	Net deferred tax liabilities	159,967		—		—	Net deferred tax liabilities	—		173,030		(100.0)
Other liabilities	Other liabilities	845,674		593,359		42.5	Other liabilities	2,686,114		730,489		NM
Total other liabilities	Total other liabilities	$	3,067,221	$	2,041,752	50.2	Total other liabilities	$	6,411,705	$	3,971,974	61.4

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 ~~$580.2~~$918.4 million was due primarily to an increase in the fair value of unsettled spot trades at ~~September 30, 2020~~March 31, 2021 as compared to December 31, ~~2019.~~2020.

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Accrued Compensation

Accrued compensation includes amounts for our Incentive Compensation Plan, Direct Drive Incentive Compensation Plan, Retention Program, Warrant Incentive Plan, ESOP, SVB Leerink Incentive Compensation Plan, SVB Leerink Retention Award and other compensation arrangements. The ~~accruals remained relatively flat, as~~decrease of $279.2 million was primarily result of the ~~increase in~~payout of our 2020 incentive compensation plans during the ~~number~~first quarter of ~~average FTEs~~2021, partially offset by the accrual for the ~~first nine~~three months ended of 2020 as well as the SVB Leerink incentive compensation resulting from strong year-to-date performance offsets the decrease in incentive compensation accrued for the nine months ended September 30, 2020, reflective of strong prior year performance compared to the current year forecasted performance.ending March 31, 2021.

Allowance for Unfunded Credit Commitments

Allowance for unfunded credit commitments includes an allowance for both our unfunded loan commitments and our letters of credit. The ~~increase~~decrease of ~~$33.9~~$16.0 million was due primarily to ~~the day one impact~~a reduction of ~~the adoption of CECL of $22.8 million as well as an $11.1 million increase~~our credit loss estimate for ~~the nine months ended September 30, 2020,~~unfunded credit commitments driven primarily by ~~growth~~improved economic scenarios in ~~unfunded credit commitments of $5.8 billion.~~our forecast models.

Net Deferred Tax Liabilities

Net deferred tax liabilities ~~increased to $160.0~~decreased $173.0 million due to ~~an increase~~a large decrease in ~~unrealized gains recorded to accumulated other comprehensive income from our available-for-sale securities and~~ the ~~termination~~fair value of our AFS securities portfolio due to increases in interest ~~rate swap cash flow hedge contracts, as well as gains from conversion of convertible debt options, partially offset by an increase in allowance for credit losses for loans.~~

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rates.

Other Liabilities

Other liabilities includes various accrued liability amounts for other operational transactions. The increase of ~~$252.3 million~~$2.0 billion was ~~reflective~~driven primarily by $1.8 billion of ~~a $225.1 million increase in investment securities payable due to~~ unsettled ~~purchases of~~ fixed income investment securities purchases and ~~a $30.0~~an $81.5 million increase in ~~new commitments for our qualified affordable~~current tax ~~credit funds.~~payables.

Noncontrolling Interests

Noncontrolling interests totaled ~~$174.4~~$225.9 million and ~~$150.8~~$213.8 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The ~~$23.6~~$12.1 million increase was due primarily to net income attributable to noncontrolling interests of ~~$40.0~~$25.0 million, partially offset by ~~$16.4~~$12.9 million in distributions for the ~~nine~~three months ended ~~September 30, 2020.~~

~~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, 2020 and December~~March 31, ~~2019:~~

September 30, 2020 December 31, 2019
(Dollars in thousands) Total Balance Level 3 Total Balance Level 3
Assets carried at fair value $ 26,787,326 $ 192,817 $ 14,672,330 $ 161,172
As a percentage of total assets 27.6 % 0.2 % 20.7 % 0.2 %
As a percentage of assets carried at fair value 0.7 1.1
Liabilities carried at fair value $ 137,781 $ — $ 137,984 $ —
As a percentage of total liabilities 0.2 % — % 0.2 % — %

Financial assets valued using Level 3 measurements consist of our non-marketable investment securities in shares of private company stock and equity warrant assets (rights to shares of private and public company capital stock). The valuation methodologies of our non-marketable securities carried under fair value accounting and equity warrant assets involve a significant degree of management judgment. Refer to Note 17 — “Fair Value of Financial Instruments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report for a summary of the valuation techniques and significant 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. See generally “Risk Factors” set forth under Part I, Item 1A in our 2019 Form 10-K, and under Part II, Item 1A of this report.

During the three and nine months ended September 30, 2020, the Level 3 assets that are measured at fair value on a recurring basis experienced net realized and unrealized gains of $52.5 million and $91.2 million, respectively, primarily reflective of net gains realized on exercised warrant assets. During the three and nine months ended September 30, 2019, the Level 3 assets that are measured at fair value on a recurring basis experienced net realized and unrealized gains of $39.6 million and $105.4 million, respectively, primarily reflective of valuation increases from our private company warrant portfolio driven by net gains realized on exercised warrant assets.

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Capital Resources

We maintain an adequate capital base to support anticipated asset growth, operating needs, and credit and other business risks, and to provide for SVB Financial and the Bank to be in compliance with applicable regulatory capital guidelines, including the joint agency rules implementing the "Basel III" capital rules (the "Capital Rules"). Our primary sources of new capital include retained earnings and proceeds from the sale and issuance of our capital stock or other securities. Under the oversight of 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 capital stress tests allow us to assess the impact of adverse changes in the economy and interest rates on our capital adequacy position.

SVBFG Stockholders’ Equity

SVBFG stockholders’ equity totaled ~~$7.8~~$9.9 billion at ~~September 30, 2020,~~March 31, 2021, an increase of ~~$1.3~~$1.7 billion, or 20.4 percent, compared to ~~$6.5~~$8.2 billion at December 31, ~~2019. This~~2020. The increase was ~~due~~driven primarily toby a $1.0 billion issuance of common stock, a $0.7 billion issuance of preferred stock and $536.8 million of net income, ~~available to common stockholders of $802.9 million and an increase~~partially offset by the decrease in accumulated other comprehensive income of ~~$535.9~~$601.6 million. The ~~increase~~decrease in accumulated other comprehensive income was driven primarily by ~~a $604.5~~an $823.3 million ~~($436.9~~(or $594.5 million net of tax) ~~increase~~decrease in the fair value of our AFS securities portfolio reflective of ~~decreases~~increases in market interest rates and a $198.0 million ($143.1 million net of tax) gain from the termination of our interest rate swap cash flow hedge contracts, partially offset by a reclassification to net income for realized gains of $61.2 million ($44.2 million net of tax) attributable to sales of AFS securities.rates.

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

Common Stock

On March 22, 2021, to support the continued growth of our balance sheet, we issued and sold 2,000,000 shares of common stock at a price of $500.00 per share. We received net proceeds of $972.1 million after deducting underwriting discounts and commissions. On April 14, 2021, we issued and sold an additional 300,000 shares of common stock under the full exercise of the underwriter's over-allotment option resulting in additional net proceeds of approximately $146.0 million after deducting discounts and commissions.

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Preferred Stock

On February 2, 2021, SVB Financial Group issued 750,000 depositary shares each representing a 1/100th ownership interest in a share of Series B Preferred Stock with a $0.001 par value and a liquidation preference of $100,000 per share, or $1,000 per depositary share. The Series B Preferred Stock is perpetual and has no stated maturity. Dividends are approved by the Board of Directors and, if declared, are payable quarterly, in arrears, at a rate per annum equal to (i) 4.10 percent from the original issue date to, but excluding, February 15, 2031 and (ii) for the February 15, 2031 dividend date and during each subsequent ten year period, the ten-year treasury rate (calculated three business days prior to each reset date as the five day average of the yields on actively traded U.S. treasury securities adjusted to constant maturity, for ten-year maturities) plus 3.064 percent. As of March 31, 2021, our Series B Preferred Stock had a carrying value of $739.2 million and a liquidation preference of $750.0 million.

Capital Ratios

Both SVB Financial and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies.

Regulatory capital ratios for SVB Financial and the Bank exceeded minimum federal regulatory guidelines under the Capital Rules as well as for a "well capitalized" bank holding company and insured depository institution, respectively, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. Capital ratios for SVB Financial and the Bank, compared to the minimum capital ratios, are set forth below:


		September 30, 2020		December 31, 2019		Required Minimum (1)		Well Capitalized Minimum			March 31, 2021		December 31, 2020		Required Minimum (1)		Well Capitalized Minimum
SVB Financial:	SVB Financial:									SVB Financial:
CET 1 risk-based capital ratio (2)(3)	CET 1 risk-based capital ratio (2)(3)	12.31	%	12.58	%	7.0	%	N/A		CET 1 risk-based capital ratio (2)(3)	12.18	%	11.04	%	7.0	%	N/A
Tier 1 risk-based capital ratio (3)	Tier 1 risk-based capital ratio (3)	13.25		13.43		8.5		6.0		Tier 1 risk-based capital ratio (3)	14.01		11.89		8.5		6.0
Total risk-based capital ratio (3)	Total risk-based capital ratio (3)	14.19		14.23		10.5		10.0		Total risk-based capital ratio (3)	14.62		12.64		10.5		10.0
Tier 1 leverage ratio (2)(3)	Tier 1 leverage ratio (2)(3)	8.26		9.06		4.0		N/A		Tier 1 leverage ratio (2)(3)	8.01		7.45		4.0		N/A
Tangible common equity to tangible assets ratio (4)(5)	Tangible common equity to tangible assets ratio (4)(5)	7.52		8.39		N/A		N/A		Tangible common equity to tangible assets ratio (4)(5)	6.06		6.66		N/A		N/A
Tangible common equity to risk-weighted assets ratio (4)(5)	Tangible common equity to risk-weighted assets ratio (4)(5)	13.28		12.76		N/A		N/A		Tangible common equity to risk-weighted assets ratio (4)(5)	12.11		11.87		N/A		N/A
Bank:	Bank:									Bank:
CET 1 risk-based capital ratio (3)	CET 1 risk-based capital ratio (3)	10.75	%	11.12	%	7.0	%	6.5	%	CET 1 risk-based capital ratio (3)	12.93	%	10.70	%	7.0	%	6.5	%
Tier 1 risk-based capital ratio (3)	Tier 1 risk-based capital ratio (3)	10.75		11.12		8.5		8.0		Tier 1 risk-based capital ratio (3)	12.93		10.70		8.5		8.0
Total risk-based capital ratio (3)	Total risk-based capital ratio (3)	11.75		11.96		10.5		10.0		Total risk-based capital ratio (3)	13.56		11.49		10.5		10.0
Tier 1 leverage ratio (3)	Tier 1 leverage ratio (3)	6.45		7.30		4.0		5.0		Tier 1 leverage ratio (3)	7.20		6.43		4.0		5.0
Tangible common equity to tangible assets ratio (4)(5)	Tangible common equity to tangible assets ratio (4)(5)	6.42		7.24		N/A		N/A		Tangible common equity to tangible assets ratio (4)(5)	6.25		6.24		N/A		N/A
Tangible common equity to risk-weighted assets ratio (4)(5)	Tangible common equity to risk-weighted assets ratio (4)(5)	11.79		11.31		N/A		N/A		Tangible common equity to risk-weighted assets ratio (4)(5)	12.87		11.58		N/A		N/A

(1)Percentages represent the minimum capital ratios plus, as applicable, the fully phased-in 2.5% CET1 capital conservation buffer under the Capital Rules.

(2)"Well-Capitalized Minimum" CET 1 risk-based capital and Tier 1 leverage ratios are not formally defined under applicable banking regulations for bank holding companies.

(3)Capital ratios include regulatory capital phase-in of the allowance for credit losses under the 2020 CECL Transition ~~Rule for periods beginning March 31, 2020.~~Rule.

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

(5)The Federal Reserve 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.

~~Regulatory Capital Phase-In under the 2020 CECL Transition Rule~~

In March 2020, the federal banking agencies issued the 2020 CECL Transition Rule, which provides transitional relief to banking organizations with respect to the impact of CECL on regulatory capital. Under the rule, banking organizations that adopt CECL during the 2020 calendar year, such as SVB Financial and the Bank, may delay the estimated impact of CECL on regulatory capital for two years, followed by a three-year period to phase out the aggregate capital benefit provided during the initial two-year delay. The rule prescribes a methodology for estimating the impact of differences in credit loss allowances reflected under CECL versus under the incurred loss methodology during the five-year transition period. We have elected to use the five-year transition option under the 2020 CECL Transition Rule.

~~Capital Simplification Rules~~

In July 2019, the federal banking agencies adopted final rules intended to simplify compliance with capital rules for non-advanced approaches banking organizations (the “Capital Simplification Rules”), such as SVB Financial and the Bank. The Capital Simplification Rules took effect for SVB Financial as of January 1, 2020 and simplify the capital treatment of mortgage servicing assets, certain deferred tax assets, investments in unconsolidated financial institutions and minority interests for banking organizations.

Our risk-based capital ratios, tier 1 capital ratios and leverage ratios ~~decreased~~increased for both SVB Financial and Silicon Valley Bank as of ~~September 30, 2020,~~March 31, 2021, compared to December 31, ~~2019.~~2020. The ~~decrease~~increase in capital ratios iswas driven primarily ~~driven~~by increases in our capital, partially offset by increases in our risk-weighted and average ~~assets, partially offset~~assets. The increase in capital for SVB Financial was driven by the issuance of common and preferred stock and net income. The ~~increases~~increase in ~~risk-weighted assets~~capital for Silicon Valley Bank was driven by ~~increases in~~a $2.0 billion downstream capital infusion from our ~~loan and fixed income investment security portfolios.~~bank holding company during the first quarter of 2021. The increase in average assets was driven by increases in our fixed income investments and ~~cash and cash equivalents, as well as~~ loan ~~growth.~~portfolios. All of our reported capital ratios remain above the levels considered to be “well capitalized” under applicable banking regulations.

The tangible common equity, or tangible book value, 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, these

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financial measures 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 stockholders' 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 ended ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:

SVB Financial Bank
Non-GAAP tangible common equity and tangible assets
(Dollars in thousands, except ratios)
September 30,
2020 December 31,
2019 September 30,
2020 December 31,
2019
GAAP SVBFG stockholders’ equity $ 7,792,935 $ 6,470,307 $ 6,104,361 $ 5,034,095
Less: preferred stock 340,138 340,138 — —
Less: intangible assets 183,203 187,240 — —
Tangible common equity $ 7,269,594 $ 5,942,929 $ 6,104,361 $ 5,034,095
GAAP total assets $ 96,916,771 $ 71,004,903 $ 95,012,287 $ 69,563,817
Less: intangible assets 183,203 187,240 — —
Tangible assets $ 96,733,568 $ 70,817,663 $ 95,012,287 $ 69,563,817
Risk-weighted assets $ 54,738,028 $ 46,577,485 $ 51,792,822 $ 44,502,150
Non-GAAP tangible common equity to tangible assets 7.52 % 8.39 % 6.42 % 7.24 %
Non-GAAP tangible common equity to risk-weighted assets 13.28 12.76 11.79 11.31

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	SVB Financial						Bank
Non-GAAP tangible common equity and tangible assets (Dollars in thousands, except ratios)	March 31, 2021			December 31, 2020			March 31, 2021			December 31, 2020
GAAP SVBFG stockholders’ equity	$	9,894,892		$	8,219,700		$	8,765,837		$	7,068,964
Less: preferred stock	1,079,333			340,138			—			—
Less: intangible assets	202,010			204,120			—			—
Tangible common equity	$	8,613,549		$	7,675,442		$	8,765,837		$	7,068,964
GAAP total assets	$	142,346,620		$	115,511,007		$	140,231,319		$	113,303,370
Less: intangible assets	202,010			204,120			—			—
Tangible assets	$	142,144,610		$	115,306,887		$	140,231,319		$	113,303,370
Risk-weighted assets	$	71,125,723		$	64,680,666		$	68,125,278		$	61,023,462
Non-GAAP tangible common equity to tangible assets	6.06		%	6.66		%	6.25		%	6.24		%
Non-GAAP tangible common equity to risk-weighted assets	12.11			11.87			12.87			11.58

The tangible common equity to tangible assets ratio decreased and remained flat for SVBFG and the Bank, respectively, during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The tangible common equity to tangible assets ratio ~~decreased as a result of~~was impacted primarily by the significant growth in our period-end assets due to increases in cash and cash equivalents and ~~the~~our fixed income investment security portfolio.

The tangible common equity to risk weighted assets ratio increased for SVBFG and the Bank during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The tangible common equity to risk-weighted assets ratio increased as a result of the proportionally higher increase in tangible common equity ~~due to unrealized gains on AFS securities and unrealized gains due~~as compared to the ~~termination~~increase in risk-weighted assets. The increase in tangible common equity was driven primarily by the issuance of ~~our interest rate swap cash flow hedge contracts during the first quarter of 2020.~~common stock and net income. The growth in ~~period-end~~ risk-weighted assets was primarily due to increases in cash and cash equivalents and an increase in fixed income investments.

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 1514 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

Commitments to Invest in Venture Capital and Private Equity Funds

Subject to applicable regulatory requirements, including the Volcker Rule, 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.

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For further details on our commitments to invest in venture capital and private equity funds, refer to Note 1514 — “Off-Balance Sheet Arrangements, Guarantees and Other Commitments” of the “Notes to Interim Consolidated Financial Statements (unaudited)” 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. Additionally, we routinely conduct liquidity stress testing as part of our liquidity management practices.

Historically, client deposits have 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 for our off-balance sheet products which may impact deposit levels. At ~~September 30, 2020,~~March 31, 2021, our period-end total deposit balances were ~~$84.8~~$124.2 billion, compared to ~~$61.8~~$102.0 billion at December 31, ~~2019.~~2020.

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.

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In connection with our participation in the PPP under the CARES Act as discussed, we considered participating in the Federal Reserve’s Paycheck Protection Program Lending Facility ("PPPLF"). The PPPLF was established to allow participating institutions to facilitate lending under the PPP and extends credit to eligible PPP loan originators on a non-recourse basis, taking PPP loans as collateral at face value. Ultimately, we were able to extend credit to PPP borrowers without relying on the PPPLF. Additionally, interim final capital rules issued by federal bank regulatory agencies have neutralized the regulatory capital effects of participating in the PPP, in that loans outstanding are assessed a zero percent risk weight for regulatory capital purposes.

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. ~~For the three months ended September 30, 2020, no dividend was paid to SVB Financial, and for the nine months ended September 30, 2020, $50.0 million was paid.~~ 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 ~~2019~~2020 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, 2020~~March 31, 2021 and ~~2019.~~2020. For further details, see our “Interim Consolidated Statements of Cash Flows (Unaudited)” under Part I, Item 1 of this report.

Nine months ended September 30,
(Dollars in thousands) 2020 2019
Average cash and cash equivalents $ 11,977,637 $ 6,250,024
Percentage of total average assets 15.0 % 10.2 %
Net cash provided by operating activities $ 1,053,291 $ 709,744
Net cash used for investing activities (15,588,371) (6,564,776)
Net cash provided by financing activities 23,441,073 9,229,689
Net increase in cash and cash equivalents $ 8,905,993 $ 3,374,657

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	Three months ended March 31,
(Dollars in thousands)	2021			2020
Average cash and cash equivalents	$	19,720,854		$	8,106,167
Percentage of total average assets	15.8		%	11.2		%
Net cash provided by operating activities	$	213,922		$	168,125
Net cash used for investing activities	(21,009,939)			(599,041)
Net cash provided by financing activities	24,376,113			3,210,581
Net increase in cash and cash equivalents	$	3,580,096		$	2,779,665

Average cash and cash equivalents increased by ~~$5.7~~$11.6 billion, or ~~91.6~~143.3 percent, to ~~$12.0~~$19.7 billion for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$6.3~~$8.1 billion for the comparable ~~2019~~2020 period.

Cash provided by operating activities was ~~$1.1~~$0.2 billion for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, reflective primarily of net income before noncontrolling interests and dividends of ~~$855.5~~$562 million, partially offset by changes in other assets and liabilities of $306 million and ~~a net increase of $197.8~~$42 million infrom adjustments to reconcile net income to net ~~cash primarily driven by the provision for credit losses.~~cash.

Cash used for investing activities of ~~$15.6~~$21.0 billion for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was driven by ~~$18.4~~$22.1 billion in purchases of fixed income investment securities and a ~~$5.2~~$2.5 billion increase in loan balances, partially offset by ~~$2.7~~$3.4 billion in ~~proceeds from the sale of AFS securities and $5.5 billion of~~ proceeds from maturities and principle pay downs from our fixed income investment securities portfolio.

Cash provided by financing activities was ~~$23.4~~$24.4 billion for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, reflective primarily of a ~~$23.0~~$22.2 billion increase in deposits, $1.7 billion in capital raised by our preferred and common stock issuances and a $0.5 billion increase from the issuance of long-term debt.

Cash and cash equivalents were ~~$15.7~~$21.3 billion and ~~$6.9~~$9.6 billion, respectively, at ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

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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.~~interest rates. 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 (including the effect of competition on product pricing). ~~All these~~These risks and related impacts are important market considerations but are ~~also~~ inherently difficult to ~~predict and to~~ assess ~~the impact of each on~~through simulation results. Consequently, simulations used to analyze the sensitivity of net interest income to changes in interest rates will differ from actual results due to differences in the timing and frequency of rate resets, the magnitude of changes in market rates, the impact of competition, fluctuating business conditions and the impact of strategies taken by management to mitigate these risks.

Interest rate risk is managed by our ALCO. ALCO reviews the sensitivity of the market valuation on earning assets and funding liabilities and ~~the~~ modeled 12-month ~~projection~~projections of net interest income from changes in interest rates, structural changes in investment and funding portfolios, loan and deposit activity and ~~current~~ market conditions. Relevant metrics and guidelines, which are approved by the Finance Committee of our Board of Directors and are included in our Interest Rate Risk Policy, are monitored on an ongoing basis.

Interest rate risk is managed 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 derivatives, such as interest rate swaps, to assist with 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 business strategies. The simulation model provides a dynamic assessment of interest rate sensitivity which is embedded within our balance sheet. Rate sensitivity measures the potential variability in economic value and net interest income relating solely to changes in market interest rates over time. We review our interest rate risk position and sensitivity to market interest rates regularly.

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Model Simulation and Sensitivity Analysis

A specific application of our simulation model involves measurement of the impact of changes in market interest rates on the economic value of equity (“EVE”). EVE is defined as the market value of assets, less the market value of liabilities. Another application of the simulation model measures the impact of changes in market interest rates on net interest income (“NII”) assuming a static balance sheet, in both size and composition, as of the period-end reporting date. In the NII simulation, the level of market interest rates ~~as well as~~and the size and composition of the balance sheet are held constant over the simulation horizon. Simulated cash flows during the scenario horizon are assumed to be replaced as they occur, which maintains the balance sheet at its current size and composition. Yield and spread assumptions on cash and investment balances reflect current market rates and the shape of the yield curve. Yield and spread assumptions on loans reflect recent market impacts on product pricing. Similarly, we make certain deposit balance decay rate assumptions on demand deposits and interest-bearing deposits, which are replenished to hold the level and mix of funding liabilities constant. Changes in market interest rates that affect net interest income are principally short-term interest rates and include the following benchmark indexes: (i) the National Prime Rate, (ii) 1-month and 3-month LIBOR and (iii) the Federal Funds target rate. Changes in these short-term rates impact interest earned on our variable rate loans and balances held as cash and cash equivalents. Additionally, simulated changes in deposit pricing relative to changes in market rates, commonly referred to as deposit beta, generally follow overall changes in short-term interest rates, although actual changes may lag in terms of timing and magnitude.

~~During~~Both EVE and NII measures rely upon the ~~third quarter~~use of ~~2020, ALCO approved~~models to simulate cash flow behavior for loans and deposits. These models were developed internally and are based on historical balance and rate observations. Investment portfolio cash flow is based on a ~~modeling change~~combination of third-party prepayment models and internally managed prepayment vectors depending on security type. As part of our ongoing governance structure, each of these models and assumptions are periodically reviewed and recalibrated as needed to ensure that they are representative of our ~~Funds Transfer Pricing (“FTP”) model used in the simulation~~understanding of NII and EVE sensitivity measures. Model changes focused on assumed deposit balance behaviors, which primarily impacted the EVE sensitivity profile. The remaining underlying assumptions in our FTP model for the valuation of loans, investments, and deposits were not changed.

The key deposit assumption change that drives the difference between the EVE metrics in the revised model is the treatment of core balances. Core balances represent the portion of deposits we assume to be present over an extended time period and can be relied upon as a longer-term source of funding. The revised model generally assumes a lower core deposit balance than the previous model leading to a lower duration of deposits. In the previous model, the higher core balance assumption for deposits resulted in a larger liability duration contribution to EVE sensitivity. A lower core deposit balance reflective of the model changes simulates a lower duration of liabilities that contributes to a greater EVE sensitivity compared

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to the previous model. Since our non-maturity deposits constitute such a large portion of the balance sheet, any changes to the market value sensitivity profile can have a significant impact on our overall EVE results.

The EVE simulation results using the revised model changes the EVE sensitivity profile from being liability sensitive to being asset sensitive. The EVE sensitivity is greater with the model changes in both the up and down rate shock scenarios. Our December 31, 2019 NII sensitivity results were also affected by this change, but to a lesser degree.existing behaviors.

Simulation results presented include an "asymmetric" beta assumption that is applied in the NII and EVE simulation models for interest-bearing deposits. This reflects management expectations that deposit repricing behavior in a falling rate environment would be different than repricing behavior in a rising rate environment. This model assumes the overall beta for interest-bearing deposits in a falling rate environment would be approximately 60 percent. That is, overall changes in interest-bearing deposit rates would be approximately 60 percent of the change in short-term market rates. The deposit beta assumption for an increasing rate environment is 50 percent. These repricing assumptions are reflected as changes in interest expense on interest-bearing deposit balances.

The following table presents our EVE and NII sensitivity exposure related to an instantaneous and sustained parallel shift in market interest rates of 100 and 200 basis points ("bps") at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019. Net Interest Income sensitivity and the modeled Economic Value of Equity for December 31, 2019 has been revised to reflect the revised model assumptions for comparability purposes.~~2020.


Change in interest rates (bps) (Dollars in thousands)	Change in interest rates (bps) (Dollars in thousands)	Estimated		Estimated Increase/(Decrease) in EVE				Estimated		Estimated Increase/(Decrease) in NII				Change in interest rates (bps) (Dollars in thousands)	Estimated		Estimated Increase/(Decrease) in EVE				Estimated		Estimated Increase/(Decrease) in NII
		EVE		Amount		Percent		NII		Amount		Percent			EVE		Amount		Percent		NII		Amount		Percent
September 30, 2020:
March 31, 2021:														March 31, 2021:
+200	+200	$	9,759,888	$	(2,974,849)	(23.4)	%	$	2,598,515	$	556,572	27.3	%	+200	$	9,880,447	$	(2,897,234)	(22.7)	%	$	3,645,851	$	865,561	31.1	%
+100	+100	11,314,703		(1,420,034)		(11.2)		2,310,317		268,374		13.1		+100	11,379,409		(1,398,272)		(10.9)		3,206,088		425,798		15.3
—	—	12,734,737		—		—		2,041,943		—		—		—	12,777,681		—		—		2,780,290		—		—
-100	-100	14,039,442		1,304,705		10.2		2,017,397		(24,546)		(1.2)		-100	13,590,441		812,760		6.4		2,648,156		(132,134)		(4.8)
-200	-200	14,134,314		1,399,577		11.0		2,011,461		(30,482)		(1.5)		-200	13,465,180		687,499		5.4		2,625,928		(154,362)		(5.6)

December 31, 2019: (as revised)
December 31, 2020:														December 31, 2020:
+200	+200	$	7,269,359	$	(1,509,966)	(17.2)	%	$	2,588,319	$	523,423	25.3	%	+200	$	9,499,738	$	(1,724,648)	(15.4)	%	$	3,063,350	$	691,748	29.2	%
+100	+100	8,039,360		(739,965)		(8.4)		2,326,428		261,532		12.7		+100	10,558,232		(666,154)		(5.9)		2,728,691		357,089		15.1
—	—	8,779,325		—		—		2,064,896		—		—		—	11,224,386		—		—		2,371,602		—		—
-100	-100	9,254,622		475,297		5.4		1,789,625		(275,271)		(13.3)		-100	11,581,718		357,332		3.2		2,309,596		(62,006)		(2.6)
-200	-200	9,779,377		1,000,052		11.4		1,514,354		(550,542)		(26.7)		-200	11,534,332		309,946		2.8		2,306,280		(65,322)		(2.8)

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 to determine discounting factors on projected cash flows. The model simulations and calculations are highly ~~assumption-dependent~~assumption-

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dependent and will change regularly as the composition of earning assets and funding liabilities change (including the impact of changes in the value of interest rate derivatives, if any), as interest rate environments evolve, and as we change our assumptions in response to relevant market conditions, competition or business circumstances. These calculations do not reflect forecast changes in our balance sheet or changes we may make to reduce our EVE exposure 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, basis risk and yield spread compression, 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 our estimate of the underlying EVE or forecast of NII.

Our base EVE as of ~~September 30, 2020~~March 31, 2021 increased ~~$4.0~~$1.6 billion from December 31, ~~2019,~~2020, driven by overall balance sheet growth ~~and~~as well as a ~~significant decrease in market rates since~~marked steepening of the yield curve during the first quarter of ~~2020.~~2021. For the period ended ~~September 30, 2020,~~March 31, 2021, compared to December 31, ~~2019,~~2020, cash balances ~~and~~increased by $3.6 billion, fixed income investments in our AFS portfolio decreased by $4.9 billion and ~~HTM portfolios~~ increased by ~~$8.9~~$24.6 billion ~~and $11.0 billion, respectively,~~in our HTM portfolio while loan balances increased by ~~$5.2~~$2.5 billion. Funding for these assets came

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primarily from growth of ~~$23.0~~$22.2 billion in total deposits, which consisted of a ~~$16.7~~$17.9 billion and ~~$6.3~~$4.3 billion increase in ~~noninterest bearing~~noninterest-bearing and interest-bearing accounts, respectively. The mix of ~~noninterest bearing~~noninterest-bearing and interest-bearing deposits to total deposits ~~remained relatively unchanged~~increased slightly by 3 bps at ~~September 30, 2020,~~March 31, 2021, compared to December 31, ~~2019.~~2020.

Rapid deposit growth has exceeded the pace of our loan growth, and as a result, a significant amount of excess deposits not used to fund loan growth have contributed to the growth of our cash and investments balances. Much of the investment portfolio is held in fixed rate MBS and ~~CMOs~~CMO's which generally have a higher market value sensitivity than variable rate loans or cash. Thus, under an upward rate shock scenario, the market value of investments changes more than the market value of deposits resulting in a negative EVE sensitivity in those scenarios.

In March 2021 we purchased interest rate swaps to offset some of the additional EVE sensitivity that has resulted from this unforeseen, rapid balance sheet growth. As of March 31, 2021, the estimated change in EVE in an up 100 bps rate shock would be -13.7 percent without any hedging applied. The addition of pay fixed swaps reduces this exposure to -10.9 percent in the same scenario. The EVE exposures shown in the table above include the impact of our hedging activity.

Due to low rates at the ~~sudden decrease in market rates that occurred in March 2020,~~short end of the yield curve, EVE sensitivity measures in the -100 and -200 bps rate shock scenarios do not represent the full magnitude of ~~those~~ rate shocks at certain points on the curve because we assume that U.S. ~~Federal Fund~~ rates are floored at zero. As a result, the ~~September 30, 2020~~March 31, 2021 EVE sensitivity of the -100 and -200 bps rate shock scenarios are similar.

~~The modeling assumption change described above fundamentally changed the view of deposits from a market value perspective, which results in an asset sensitive EVE risk profile. However, continued~~Ongoing balance sheet growth ~~combined with~~and a ~~lower rate environment are also~~steepening yield curve were the primary contributing factors to the overall change in EVE sensitivity.

12-Month Net Interest Income Simulation

NII sensitivity is measured as the percentage change in projected 12-month net interest income earned in +/-100 and +/-200 basis point interest rate shock scenarios compared to a base scenario where balances and interest rates are held constant over the forecast horizon. At ~~September 30,2020,~~March 31,2021, NII sensitivity was ~~13.1~~15.3 percent in the +100 bps interest rate scenario, compared to ~~12.7~~15.1 percent at December 31, ~~2019.~~2020. Our NII sensitivity in the +200 bps interest rate shock scenario was ~~27.3~~31.1 percent compared to ~~25.3~~29.2 percent at December 31, ~~2019.~~2020. NII sensitivity in the -100 bps scenario of negative ~~1.2~~4.8 percent was ~~lower~~higher at ~~September 30, 2020,~~March 31, 2021, compared to a negative ~~13.3~~2.6 percent at December 31, ~~2019.~~2020. The -200 bps scenario currently indicates a ~~lower~~higher percentage change in NII of negative ~~1.5~~5.6 percent at ~~September 30, 2020,~~March 31, 2021, compared to negative ~~26.7~~2.8 percent at December 31, ~~2019.~~2020. However, as noted above, the -100 and -200 bps scenarios are not complete rate shocks in this rate environment, since rates are assumed to be floored at zero. The ~~September 30, 2020~~March 31, 2021 NII sensitivity percentages are inclusive of the realized income or expense associated with interest rate swaps that were ~~partially~~ unwound reflective of the macro hedging process initiated in 2019 to reduce the impact of decreasing rates on ~~NII.~~NII as well as unrealized income associated with more recent hedging activity that has been undertaken to reduce EVE exposure. The changes in NII sensitivity are primarily the result of the changes in balance sheet composition described previously, combined with the impact of hedges in the respective parallel rate shock scenarios.

Our base case static 12-month NII forecast at ~~September 30, 2020 decreased~~March 31, 2021 increased compared ~~than~~to December 31, ~~2019~~2020 by ~~$23~~$4 million, driven primarily ~~driven~~ by the growth in the balance sheet that has taken place ~~year-to-date combined with an overall relatively lower rate environment, reflective of the decrease in the Fed Funds rate during March 2020, compared to last year.~~year-to-date. Specifically, a large portion of the loan portfolio is indexed to the Prime rate, which decreased 150 bps due to actions undertaken by the Federal Reserve in March of 2020 to mitigate a possible economic downturn. The adverse impact of changes in interest rates on NII was partially tempered to a certain degree by continuedasset growth has been deployed in the ~~loan~~fixed income investment securities portfolio as ~~well as continued balance sheet growth as previously described. The adverse impact~~noted above. As of ~~changes in interest rates on NII was tempered by continued growth~~March 31, 2021, we also held a relatively high cash position which we expect to be invested in the ~~balance sheet.~~near future.

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A majority of our loans are indexed to Prime and LIBOR. In the upward parallel simulated rate shock scenarios, interest income on assets that are tied to variable rate indexes, primarily our variable rate loans, are expected to benefit our base 12-month NII projections. The opposite is true for downward rate shock scenarios.

The 12-month NII simulations include repricing assumptions on our interest-bearing deposit products which we set at our discretion based on client needs and our overall funding mix. Repricing of interest-bearing deposits impacts estimated interest expense.

InFor the interest rate scenarios, the simulation model incorporates embedded rate floors on loans, where present, which prevents model benchmark rates from moving below zero percent in the down rate scenarios. The embedded rate floors are also a factor in the up-rate scenarios to the extent a simulated increase in rates is needed before floored rates are cleared. In addition, we assume ~~different~~ deposit balance decay rates based on a historical deposit study of our clients. These assumptions may change in future periods based on changes in client behavior and at management's discretion. Actual changes in our deposit pricing strategies may differ from our current model assumptions and may have an impact on our actual sensitivity overall.

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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

~~Except as set forth below, there~~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.

Beginning January 1, 2020, we adopted and implemented ASC 326, CECL and have implemented changes to our processes, systems and control activities related to the modeling and recognition of our allowance for credit loss estimates. The key changes to our processes and control activities included data management, economic forecasting, modeling, qualitative framework, governance and gathering of information provided for disclosures.

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PART II–OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note 1817 — “Legal Matters” of the “Notes to Interim Consolidated Financial Statements (unaudited)” under Part I, Item 1 of this report.

ITEM 1A. RISK FACTORS

~~With the exception of the additional risk factor due to ongoing outbreak of COVID-19 below, there~~There are no material changes to the risk factors set forth in our ~~2019~~2020 Annual Report on Form 10-K.

~~Our business, financial condition, liquidity, capital and results of operations have been, and will likely continue to be, adversely affected by the COVID-19 pandemic.~~

The COVID-19 pandemic has created significant economic and financial disruptions that have adversely affected, and are likely to continue to adversely affect, our business, financial condition, liquidity, capital and results of operations. We remain unable to predict the extent to which the COVID-19 pandemic will continue to negatively affect our business, financial condition, liquidity, capital and results of operations. The extent of any continued or future adverse effects of the COVID-19 pandemic will depend on future developments, which are highly uncertain and outside our control, including the scope and duration of the pandemic, the direct and indirect impact of the pandemic on our employees, clients, customers, counterparties and service providers, as well as other market participants, actions taken by governmental authorities and other third parties in response to the pandemic, and the scope and duration of future phases or outbreaks, or seasonal or other resurgences, of the disease.

The COVID-19 pandemic has contributed to, among other things (i) increased unemployment and decreased consumer confidence and business generally, leading to an increased risk of delinquencies, defaults and foreclosures; (ii) sudden and significant declines, and significant increases in volatility, in financial markets; (iii) ratings downgrades, credit deterioration and defaults in many industries; (iv) significant draws on credit lines as clients seek to increase liquidity; (v) significant reductions in the targeted federal funds rate; and (vi) heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements and the current environment, including increased fraudulent activity. In addition, we also face an increased risk of client disputes, litigation and governmental and regulatory scrutiny as a result of the effects of COVID-19 on market and economic conditions, actions that governmental authorities take in response to those conditions, and our implementation of and participation in special financial relief programs, such as the Paycheck Protection Program ("PPP"). Moreover, we have focused resources and management attention towards managing the impacts of the COVID-19 pandemic, and we have and likely will have to continue to prioritize managing these impacts over certain growth initiatives and other investments in the near term.

We are prioritizing the safety of our employees. During the first quarter of 2020, we moved to a work-from-home plan, prohibited all business travel, postponed or moved online all SVB-hosted events, and enabled remote access to our systems. Although, our work-from-home plan has been effective thus far, we may experience negative effects of a prolonged work-from-home arrangement, such as increasing risks of systems access or connectivity issues, cybersecurity or information security breaches, or imbalances between work and home life, which may lead to reduced productivity and/or significant disruptions in our business operations. We are also continuing to provide support for our workforce related to technology, physical working conditions, work/life balance and remote collaboration. If these support measures are not effective over a prolonged period, our employees or business may not operate effectively. Moreover, we are developing a plan for employees to eventually return to work in our offices, the manner and timing of which are unclear. Our return to office plan will be subject to a variety of complex considerations including, among others, international, federal, state and local government and health organization guidance, health and safety implications (including potential health testing requirements), employee needs, and the practical requirements of potential office reconfigurations or a phased return. It is also possible that our current extended work-from-home model may affect or change our prior work-in-the-office model, as we may allow an increase in remote working practices.

Many of our counterparties and third-party service providers have also been, and may further be, affected by “stay-at-home” orders, market volatility and other factors that increase their risks of business disruption or that may otherwise affect their ability to perform under the terms of any agreements with us or provide essential services. As a result, our operational and other risks are generally expected to increase until the pandemic subsides.

During the third quarter, we continued to provide special financial assistance to support certain clients who are experiencing financial hardships related to the COVID-19 pandemic, including offering certain venture-backed companies, Private Bank, Wine and other clients the opportunity to temporarily defer their scheduled loan principal payments. We

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continue to engage with our clients to understand client needs, and we may implement additional assistance or other relief to supporting clients across various sectors and life stages. Additionally, we participated as a lender in the PPP under CARES Act and the U.K. CBILS and CLBILS, and may participate in other government relief programs in the U.S. or internationally. These government programs are complex and our participation in any of these programs may lead to governmental, regulatory and other scrutiny, litigation and negative publicity and reputation damage for us and our customers who participate. For example, like many other participating banks, we have been named in various lawsuits regarding the right to agent fees under the PPP. Overall, these relief measures, whether our own programs or our participation in government programs, are new programs for us (with new or revised regulatory guidance for the government programs that may be issued at different times throughout the process) and we may not be successful in implementing or administering the programs as intended. Further, the extent to which these programs are successful in assisting our clients is uncertain. These relief programs are temporary in nature, as the PPP, as currently designed, provides one-time relief, and our loan payment deferral programs expire during the second half of the year (certain of our programs ended in the third quarter with the remaining ending by year end). Our clients may experience financial difficulties without the continued support from these programs. If these relief measures are not effective, or if these relief measures are effective for only a limited period and our clients experience delayed financial hardship, there may be an adverse effect on our revenue and results of operations, including increased provisions in our allowance for credit losses, higher rates of default and increased credit losses in future periods.

Certain industries where the Company has credit exposure, including the technology, life science/healthcare and premium wine industries, have experienced, and are expected to continue to experience, significant operational and financial challenges as a result of COVID-19. As examples, many of our early-stage clients have limited cash on hand with limited or no financing sources available. Although these challenges have been somewhat offset by relief programs and decreased cash utilization, many of these companies may experience difficulties sustaining their businesses over time. In addition, our premium wine industry clients have and may continue to be impacted by the loss of restaurant and winery sales and have needed to alter their sales strategies to offset these declines, which may or may not be successful. These negative effects resulted in a number of clients making higher than usual draws on outstanding lines of credit, which may negatively affect our liquidity if economic conditions persist. The effects of COVID-19 may also cause our clients to be unable to pay their loans as they come due or decrease the value of collateral, such as accounts receivable, which we expect would cause significant increases in our credit losses. For certain early-stage and mid-stage clients, repayment of loans is dependent upon receipt of additional financing from venture capitalists or others, or in some cases, upon a successful sale to a third party, public offering or other form of liquidity or “exit” event. Further, many of our private equity/venture capital loans are dependent on the payment of capital calls or management fees by underlying limited partner investors in funds managed by private equity and venture capital firm clients. The effects of the COVID-19 pandemic have caused certain client valuations to drop, reduced the rate of financing or other “exit” events and impaired the ability of investors to meet their financial obligations to our clients, all of which has had and may continue to have an adverse effect on certain of our clients’ ability to repay their loans to us.

In connection with negotiated 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, life science and healthcare industries subject to applicable regulatory limits. We have also made investments through SVB Financial, SVB Leerink and our SVB Capital family of funds in venture capital funds and direct investments in companies, many of which are required to be carried at fair value or are impacted by changes in fair value. Due to the negative effects of the COVID-19 pandemic as well as recent declines, and significant increases in volatility, in financial markets, the value of these assets has decreased, and may continue to decrease (potentially in a significant manner). Additionally, because valuations of private companies are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value for private companies may differ materially from the values that would have been used if a ready market for these securities existed.

The effects of the COVID-19 pandemic led to a significant slowdown in IPO and M&A activity in many industries. Although there was strong capital markets activity in the healthcare and life sciences sector in the third quarter of 2020, a decline in this activity in future quarters could lead to decreased revenues of SVB Leerink, our investment banking business, as such revenues stem primarily from underwriting and advisory fees associated with capital markets and M&A transactions. The IPO and M&A slowdown in other industries, including the technology industry, also impacts our ability to monetize and realize gains from our equity warrant assets and other nonmarketable securities. Additionally, a slowdown in overall private equity and venture capital investment levels may reduce the need for our clients to borrow from our capital call lines of credit, which are typically utilized by our private equity and venture capital fund clients to make investments prior to receipt of capital called from their respective limited partners.

Our earnings and cash flows are dependent to a large degree on net interest income (the difference between interest income from loans and investments and interest expense on deposits and borrowings). Net interest income is significantly affected by market rates of interest. The significant reductions to the federal funds rate have led to a decrease in the rates and yields on U.S. Treasury securities, in some cases declining below zero. If interest rates are reduced further in response to COVID-19, we expect that our net interest income will decline, perhaps significantly. The overall effect of lower interest rates

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cannot be predicted at this time and depends on future actions the Federal Reserve may take to increase or reduce the targeted federal funds rate in response to the COVID-19 pandemic, and resulting economic conditions. Our net interest income is also impacted by our loan volume. If our loan levels were to decline, our net interest income would also be negatively impacted. Specifically, PPP loans, of which we had $1.8 billion as of September 30, 2020, will be eligible to be forgiven during the second half of the year. Although the ultimate timing and amount of loans forgiven is uncertain and depends on when borrowers apply and how long the SBA takes to process forgiveness applications, we currently estimate that 10% of PPP loans will be forgiven by year end.

Our core fee income has been and may continue to be negatively affected by decreasing business activity due to the COVID-19 pandemic. For example, credit card activity and fees have declined, and may continue to decline in the future. Foreign exchange fees and letters of credit and standby letters of credit fees may also decline if the negative effect on business activity persists for a prolonged period of time. Additionally, our deposit levels may fluctuate during the current environment. Although our deposit levels grew during the second and third quarters of 2020, it is difficult to predict client liquidity in a challenging economic environment, as clients may increase their draws on their lines of credit to bolster their cash positions, or clients may not be able to obtain additional financing which may lead to the depletion of their cash positions. Declines in client deposit levels may negatively affect our liquidity, as well as our net interest income.

The effects of the COVID-19 pandemic on economic and market conditions have increased demands on our liquidity as we meet our clients’ needs. In addition, these adverse developments may negatively affect our capital and leverage ratios. We have temporarily suspended our stock repurchases and will reevaluate the program once the economic environment is more stable. We will continue to exercise prudent capital management and monitor the business environment.

Governmental authorities worldwide have taken unprecedented measures to stabilize the markets and support economic growth. The success of these measures is unknown and they may not be sufficient to address the negative effects of COVID-19 or avert severe and prolonged reductions in economic activity.

Other negative effects of COVID-19 that may impact our business, financial condition, liquidity, capital and results of operations cannot be predicted at this time, but it is likely that our business, financial condition, liquidity, capital and results of operations will continue to be adversely affected until the pandemic subsides and the U.S. economy begins to recover. Further, the COVID-19 pandemic may also have the effect of heightening many of the other risks described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q. Although the effects of the pandemic remain uncertain, for the fourth quarter of 2020, we currently expect growth in average on-balance sheet deposits and average loans and lower core fees. While credit metrics have been stable to date, we continue to monitor our portfolio vigilantly, in light of continued economic uncertainty, fading government stimulus and expiring deferral programs. Additionally, volatile equity markets, IPO and M&A activity may impact investment banking and market-sensitive revenues. Even after the pandemic subsides, it is possible that the U.S. and other major economies will continue to experience a prolonged recession, which we expect would materially and adversely affect our business, financial condition, liquidity, capital and results of operations.

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

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

~~Stock repurchase activity during the three months ended September 30, 2020 was as follows:~~

Period ended Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Maximum dollar value that may yet be purchased under the programs (1)
July 31, 2020 — $ — — $ —
August 31, 2020 — — — —
September 30, 2020 — — — —
Total — $ — 244,223 $ 289,979,534

(1) On October 24, 2019, the Company announced that its Board of Directors had authorized a $350 million common stock repurchase program pursuant to which the Company may, from time to time and on or before the program’s expiration date, repurchase shares of its outstanding common stock in the open market, in privately-negotiated transactions, or otherwise, subject to applicable laws and regulations. The stock repurchase program expired on October 29, 2020. The

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~~Company paused its share repurchase program and expects to consider resuming repurchases when conditions warrant and subject to board approval of a new repurchase authority.~~None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number

Exhibit Description

Incorporated by Reference

Filed Herewith

Form

File No.

Exhibit

Filing Date

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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

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Note: Other instruments defining the rights of holders of the Company’s long-term debt are omitted pursuant to Section(b)(4)(iii) of Item 601 of Regulation S-K. The Company hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.

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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 5, 2020~~May 10, 2021						/s/ DANIEL BECK
						Daniel Beck
						Chief Financial Officer
						(Principal Financial Officer)

						SVB Financial Group

Date: ~~November 5, 2020~~May 10, 2021						/s/ KAREN HON
						Karen Hon
						Chief Accounting Officer
						(Principal Accounting Officer)

~~136~~107


(Dollars in thousands)	Balance at December 31, 2019		Adjustments Due to Adoption of ASC 326		Balance at January 1, 2020
Assets:
Allowance for credit losses: loans	$	304,924	$	25,464	$	330,388
Allowance for credit losses: held-to-maturity securities	0		174		174
Deferred tax assets	28,433		13,415		41,848
Other liabilities:
Allowance for credit losses: unfunded credit commitments	67,656		22,826		90,482
Stockholders' equity:
Retained earnings, net of tax	4,575,601		(35,049)		4,540,552


Three months ended September 30, 2019	Beginning Balance June 30, 2019		Charge-offs		Recoveries		Provision for (Reduction) Credit Losses		Foreign Currency Translation Adjustments		Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking	$	101,253	$	0	$	1,200	$	1,485	$	(22)	$	103,916
Investor dependent:
Early stage	30,969		(7,524)		1,760		5,783		(85)		30,903
Mid stage	28,264		(16,581)		385		5,778		(85)		17,761
Later stage	37,940		(11,449)		276		17,513		(259)		44,021
Total investor dependent	97,173		(35,554)		2,421		29,074		(429)		92,685
Cash flow dependent:
Sponsor led buyout	32,131		0		0		9,663		(143)		41,651
Other	24,551		0		250		(3,199)		47		21,649
Total cash flow dependent	56,682		0		250		6,464		(96)		63,300
Private Bank	20,397		0		15		1,307		(19)		21,700
Balance sheet dependent	17,256		0		0		(2,496)		37		14,797
Premium wine	4,227		0		0		27		0		4,254
Other	4,900		(1,266)		2		124		(2)		3,758
Total allowance for credit losses	$	301,888	$	(36,820)	$	3,888	$	35,985	$	(531)	$	304,410


Nine months ended September 30, 2019	Beginning Balance December 31, 2018		Charge-offs		Recoveries		Provision for (Reduction) Credit Losses		Foreign Currency Translation Adjustments		Ending Balance September 30, 2019
(Dollars in thousands)
Global fund banking	$	93,781	$	(2,047)	$	1,200	$	11,304	$	(322)	$	103,916
Investor dependent:
Early stage	25,885		(16,819)		5,685		16,547		(395)		30,903
Mid stage	20,999		(36,492)		1,288		31,443		523		17,761
Later stage	25,217		(11,449)		2,053		28,616		(416)		44,021
Total investor dependent	72,101		(64,760)		9,026		76,606		(288)		92,685
Cash flow dependent:
Sponsor led buyout	44,274		(2,402)		0		(253)		32		41,651
Other	21,754		(716)		4,647		(4,083)		47		21,649
Total cash flow dependent	66,028		(3,118)		4,647		(4,336)		79		63,300
Private Bank	20,583		(1,019)		240		1,999		(103)		21,700
Balance sheet dependent	21,707		0		0		(7,135)		225		14,797
Premium wine	3,646		0		0		611		(3)		4,254
Other	3,057		(1,311)		20		1,905		87		3,758
Total allowance for credit losses	$	280,903	$	(72,255)	$	15,133	$	80,954	$	(325)	$	304,410


	September 30, 2020	December 31, 2019
Weighted-average remaining term (in years) - operating leases	6.13	6.29
Weighted-average discount rate - operating leases (1)	2.54 %	2.92	%


Years ended December 31, (Dollars in thousands)	Operating Leases
2020 (excluding the nine months ended September 30, 2020)	$	12,782
2021	50,271
2022	45,430
2023	44,337
2024	38,437
2025 and thereafter	75,799
Total future lease payments (1)	$	267,056
Less: imputed interest	(20,404)
Total lease liabilities	$	246,652


	2020 Compared to 2019						2020 Compared to 2019
	Three months ended September 30, increase (decrease) due to change in						Nine months ended September 30, increase (decrease) due to change in
(Dollars in thousands)	Volume		Rate		Total		Volume		Rate		Total
Interest income:
Federal Reserve deposits, federal funds sold, securities purchased under agreements to resell and other short-term investment securities	$	1,306	$	(27,456)	$	(26,150)	$	10,986	$	(62,690)	$	(51,704)
Fixed income investment portfolio (taxable)	23,710		(16,849)		6,861		57,830		(16,149)		41,681
Fixed income investment portfolio (non-taxable)	5,452		(656)		4,796		13,220		(1,562)		11,658
Loans, amortized cost	73,886		(99,151)		(25,265)		206,671		(292,478)		(85,807)
Increase (decrease) in interest income, net	104,354		(144,112)		(39,758)		288,707		(372,879)		(84,172)
Interest expense:
Interest bearing checking and savings accounts	2,705		231		2,936		3,792		686		4,478
Money market deposits	935		(45,510)		(44,575)		12,998		(84,069)		(71,071)
Money market deposits in foreign offices	12		(3)		9		34		(6)		28
Time deposits	270		(401)		(131)		755		(310)		445
Sweep deposits in foreign offices	(14)		(5,113)		(5,127)		167		(12,900)		(12,733)
Total increase (decrease) in deposits expense	3,908		(50,796)		(46,888)		17,746		(96,599)		(78,853)
Short-term borrowings	—		(115)		(115)		2,147		(2,356)		(209)
3.125% Senior Notes	4,012		—		4,012		5,171		—		5,171
3.50% Senior Notes	3		—		3		10		—		10
5.375% Senior Notes	(4,873)		—		(4,873)		(14,611)		—		(14,611)


Total decrease in borrowings expense	(858)		(115)		(973)		(7,283)		(2,356)		(9,639)
Increase (decrease) in interest expense, net	3,050		(50,911)		(47,861)		10,463		(98,955)		(88,492)
Increase (decrease) in net interest income	$	101,304	$	(93,201)	$	8,103	$	278,244	$	(273,924)	$	4,320


Period ended	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Maximum dollar value that may yet be purchased under the programs (1)
July 31, 2020	—	$	—	—	$	—
August 31, 2020	—	—		—	—
September 30, 2020	—	—		—	—
Total	—	$	—	244,223	$	289,979,534