SVB Financial Group ("SVB Financial") 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 variety of banking
and financial products and services to clients across the United States, as
well as in key international entrepreneurial markets. For over 30 years, we
have been dedicated to helping entrepreneurs succeed, primarily in the technology,
life science/healthcare, private equity/venture capital and premium wine industries.
We provide our clients of all sizes and stages with a diverse set of products
and services to support them throughout their life cycles.
We offer commercial and private banking products and services through our principal
subsidiary, Silicon Valley Bank (the “Bank”), which is a California
state-chartered bank founded in 1983 and a member of the Federal Reserve System.
The Bank and its subsidiaries, also offer asset management, private wealth management,
brokerage and other investment services. Through SVB Financial's other subsidiaries
and divisions, we also offer non-banking products and services, such as funds
management and business valuation services. Additionally, we focus on cultivating
strong relationships with firms within the private equity and venture capital
community worldwide, many of which are also our clients and may invest in our
corporate clients.
Our Global Commercial Bank segment is comprised of results primarily from our
Commercial Bank, our Private Equity Division, SVB Wine, SVB Analytics and our
Debt Fund Investments, each as further described below.
Commercial Bank. Our Commercial Bank products and services are provided by the
Bank and its subsidiaries to commercial clients in the technology, life science/healthcare,
and private equity/venture capital industries. The Bank provides solutions to
the financial needs of commercial clients through credit, global treasury management,
foreign exchange, global trade finance, and other services. We broadly serve
clients within the U.S., as well as non-U.S. clients in key international innovation
markets.
Through our credit products and services, the Bank extends loans and other credit
facilities to commercial clients. These loans may be secured by clients' assets
or based on clients' cash flows. In some cases, loans may be unsecured. Credit
products and services include traditional term loans, equipment loans, asset-based
loans, revolving lines of credit, accounts-receivable-based lines of credit,
capital call lines of credit and credit cards.
The Bank's global treasury management products and services include a wide range
of deposit, receivables, payments, and cash management solutions accessible
through our expanding online and mobile banking platforms. Deposit products
include business and analysis checking accounts, money market accounts, multi-currency
accounts, in-country bank accounts and sweep accounts. In connection with deposit
services, the Bank provides 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
quickly, as well as business bill pay, business credit and debit cards, account
analysis, and disbursement services.
The Bank's foreign exchange and global trade products and services facilitate
clients' global finance and business needs. These products and services include
foreign exchange services that allow commercial clients to manage their foreign
currency needs and risks through the purchase and sale of currencies, swaps
and hedges on the global inter-bank market. The Bank also offers letters of
credit, including export, import, and standby letters of credit, to enable clients
to ship and receive goods globally.
The Bank and its subsidiaries offer a variety of investment services and solutions
to its clients that enable them to effectively manage their assets. Through
its registered investment advisory subsidiary, SVB Asset Management, the Bank
offers discretionary investment advisory services based on its clients investment
policies, strategies and objectives. Through its broker-dealer subsidiary, SVB
Securities, the Bank offers clients access to investments in third party money
market mutual funds and fixed-income securities. The Bank also offers investment
solutions through our repurchase agreement program.
Private Equity Division. Our Private Equity Division provides banking products
and services primarily to our private equity and venture capital clients.
SVB Wine. SVB Wine provides banking products and services to our premium wine
industry clients, including vineyard development loans.
SVB Analytics. SVB Analytics provides equity valuation services to companies
and private equity/venture capital firms.
Debt Fund Investments. Debt Fund Investments is comprised of our investments
in debt funds in which we are a strategic investor: (i) Gold Hill funds, which
provide secured debt to private companies of all stages, and (ii) Partners for
Growth funds, which provide secured debt primarily to mid-stage and late-stage
companies.
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 leaders of the innovation
companies they support. We offer a customized suite of private banking services,
including mortgages, home equity lines of credit, restricted stock purchase
loans, capital call lines of credit, and other secured and unsecured lending.
We also help our private banking clients meet their cash management needs by
providing deposit account products and services, including checking, money market,
certificates of deposit accounts, online banking, credit cards and other personalized
banking services. SVB Private Bank also includes SVB Wealth Advisory, an investment
advisory subsidiary of the Bank, which provides private wealth management services
to individual clients.
VB Capital
SVB Capital is the venture capital investment arm of SVB Financial Group, which
focuses primarily on funds management. SVB Capital manages over $2.5 billion
of funds on behalf of third party limited partner investors, 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. SVB Capital generates income for the Company
primarily through investment returns (including carried interest) and management
fees.
Revenue Sources
Our total revenue is comprised of our net interest income and noninterest income.
Net interest income on a fully taxable equivalent basis and noninterest income
for the year ended December 31, 2015 were $1.0 billion and $473 million, respectively.
Net interest income is primarily income generated from interest rate differentials.
The difference between the interest rates received on interest-earning assets,
such as loans extended to clients and securities held in our fixed income securities
portfolio, and the interest rates paid by us on interest-bearing liabilities,
such as deposits and borrowings, accounts for the major portion of our earnings.
Our deposits are largely obtained from commercial clients within our technology,
life science/healthcare and private equity/venture capital industry sectors.
Deposits are also obtained from the premium wine industry commercial clients
and from our Private Bank clients. We do not obtain deposits from conventional
retail sources.
Noninterest income is primarily income generated from our fee-based services
and gains on our investments and derivative securities. We offer a wide range
of fee-based financial services to our clients, including global commercial
banking, private banking and other business services. Our ability to integrate
and cross-sell our diverse financial services to our clients is a strength of
our business model. Additionally, we hold available-for-sale, held-to-maturity,
non-marketable and marketable investment securities. Subject to applicable regulatory
requirements, we manage and invest in private equity/venture capital funds that
invest directly in privately-held companies, as well as funds that invest in
other private equity/venture capital funds. Gains on these investments are reported
in our consolidated statements of income and include noncontrolling interests.
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