SVB Financial : Q4 2021 Earnings Release

Exhibit 99.1

3003 Tasman Drive, Santa Clara, CA 95054	Contact:
www.svb.com	Meghan O'Leary
	Investor Relations
For release at 1:00 P.M. (Pacific Time)	[e-mail]
January 20, 2022	[phone]
NASDAQ: SIVB

SVB FINANCIAL GROUP ANNOUNCES 2021 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS

Board of Directors declared a quarterly dividend on Series A, B, C, D and E Preferred Stock

SANTA CLARA, Calif. - January 20, 2022 - SVB Financial Group (NASDAQ: SIVB) today announced financial results for the fourth quarter and year ended December 31, 2021.

Consolidated net income available to common stockholders for the fourth quarter of 2021 was $371 million, or $6.22 per diluted common share, compared to $365 million, or $6.24 per diluted common share, for the third quarter of 2021 and $388 million, or $7.40 per diluted common share, for the fourth quarter of 2020. Consolidated net income available to common stockholders for the year ended December 31, 2021 was $1.8 billion, or $31.25 per diluted common share, compared to $1.2 billion, or $22.87 per diluted common share, for the comparable 2020 period. Included in the consolidated net income available to common stockholders for the three months and year ended December 31, 2021 are merger-related charges of $27 million and $129 million, or $0.34 and $1.68 per diluted common share, respectively. Net income available to common stockholders for the year ended December 31, 2021 also included a day one provision on non-purchased credit deteriorated loans and unfunded credit commitments acquired from Boston Private of $46 million, or $0.60 per diluted common share, incurred in the third quarter of 2021.

"Our fourth quarter was a strong finish to an exceptional year of growth driven by outstanding client liquidity, with continued robust balance sheet and core fee income growth, excellent credit quality, and healthy market-related gains," said Greg Becker, President and CEO of SVB Financial Group. "Against this backdrop, we are starting 2022 on strong footing: our client markets remain vibrant, despite ongoing pandemic-related challenges and concerns over rising inflation; we are firing on all cylinders in terms of client acquisition and execution of our strategy. If interest rate increases materialize as the markets predict, we would expect them to significantly add to our earnings on top of our already positive 2022 outlook, while opening up additional investment opportunities."

Highlights of our fourth quarter 2021 results (compared to third quarter 2021, unless otherwise noted) included:

• Average loans of $62.6 billion, an increase of $3.3 billion (or 5.5 percent).
• Period-endloans of $66.3 billion, an increase of $4.8 billion (or 7.8 percent).
• Average fixed income investment securities of $111.7 billion, an increase of $17.9 billion (or 19.1 percent).
• Period-endfixed income investment securities of $125.4 billion, an increase of $20.1 billion (or 19.0 percent).
• Average total client funds (on-balance sheet deposits and off-balance sheet client investment funds) increased $36.0 billion (or 10.1 percent) to $390.6 billion, which includes an increase in average on-balance sheet deposits of $19.7 billion (or 12.0 percent).
• Period-endtotal client funds increased $27.9 billion (or 7.5 percent) to $399.3 billion, which includes an increase in period-endon-balance sheet deposits of $18.0 billion (or 10.5 percent).
• Issuance of $1.0 billion in depositary shares representing ownership interests in shares of Series D Preferred Stock resulting in net proceeds of approximately $988 million.
• Issuance of $600 million in depositary shares representing ownership interests in shares of Series E Preferred Stock resulting in net proceeds of approximately $593 million.
• Issuance of $650 million of 1.800% Senior Notes due October 2026.
• Period-endPrivate Bank Assets Under Management ("AUM") of $19.6 billion, flat from the prior quarter.
• Net interest income (fully taxable equivalent basis) of $947 million, an increase of $88 million (or 10.2 percent).
• Provision for credit losses was $48 million, compared to $21 million.

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

Coronavirus Disease 2019 ("COVID-19") Pandemic Update

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

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Fourth Quarter and Full-Year 2021 Summary

						Three months ended							Year ended
(Dollars in millions, except share data,		December		September			June 30,			March 31,			December		December		December
employees and ratios)			31, 2021			30, 2021			2021			2021			31, 2020			31, 2021			31, 2020
Income statement:
Diluted earnings per common share	$	6.22	$	6.24	$	9.09	$	10.03	$	7.40		$	31.25		$	22.87
Net income available to common stockholders		371			365			502			532			388			1,770			1,191
Net interest income		939			852			728			660			592			3,179			2,157
Provision (reduction) for credit losses (1) (2)		48			21			35			19			(38)			123			220
Noninterest income		561			672			761			744			622			2,738			1,840
Noninterest expense		902			879			653			636			665			3,070			2,035
Non-GAAP core fee income (3)		216			204			172			159			156			751			603
Non-GAAP core fee income plus SVB Leerink		361			311			292			325			307			1,289			1,084
revenue (3)
Non-GAAP SVB Leerink revenue (3)		145			107			120			166			151			538			481
Fully taxable equivalent:
Net interest income (3) (4)	$	947	$	859	$	735	$	665	$	597		$	3,207		$	2,173
Net interest margin		1.91 %			1.95 %			2.06 %			2.29 %			2.40 %			2.02 %			2.67 %
Balance sheet:
Average total assets	$	204,760	$	182,690	$	150,717	$	124,815	$	103,754		$	166,011		$	85,792
Average loans, amortized cost		62,573			59,291			49,812			46,281			41,525			54,547			37,266
Average available-for-sale securities		24,154			23,290			24,358			28,248			28,114			24,996			18,653
Average held-to-maturity securities		87,579			70,512			47,914			25,295			13,289			58,030			13,113
Average noninterest-bearing demand deposits		122,789			109,638			91,530			73,233			61,663			99,461			50,193
Average interest-bearing deposits		60,273			53,754			42,230			37,375			30,774			48,486			24,823
Average total deposits		183,062			163,392			133,760			110,608			92,437			147,947			75,016
Average short-term borrowings		145			99			39			12			10			74			401
Average long-term debt		2,380			1,936			1,604			1,162			843			1,775			632
Period-end total assets		211,478			190,996			163,399			142,347			115,511			211,478			115,511
Period-end loans, amortized cost		66,276			61,487			50,754			47,675			45,181			66,276			45,181
Period-endavailable-for-sale securities		27,221			22,984			23,876			25,986			30,913			27,221			30,913
Period-endheld-to-maturity securities		98,195			82,365			59,992			41,165			16,592			98,195			16,592
Period-endnon-marketable and other equity		2,543			2,485			1,943			1,858			1,802			2,543			1,802
securities
Period-endnoninterest-bearing demand deposits		125,851			115,388			101,259			84,440			66,519			125,851			66,519
Period-endinterest-bearing deposits		63,352			55,794			44,579			39,710			35,463			63,352			35,463
Period-end total deposits		189,203			171,182			145,838			124,150			101,982			189,203			101,982
Period-endshort-term borrowings		121			97			34			39			21			121			21
Period-endlong-term debt		2,570			1,925			1,834			1,338			844			2,570			844
Off-balance sheet:
Average client investment funds	$	207,578	$	191,286	$	174,327	$	151,579	$	133,105		$	181,193		$	117,380
Period-end client investment funds		210,086			200,234			183,167			163,882			141,053			210,086			141,053
Period-end assets under management		19,646			19,565			-			-			-		19,646			-
Total unfunded credit commitments		43,698			40,259			36,385			33,987			31,982			43,698			31,982
Earnings ratios:
Return on average assets (annualized) (5)		0.72 %			0.79 %			1.34 %			1.73 %			1.49 %			0.84 %			1.39 %
Return on average SVBFG common stockholders'		11.80			12.47			21.69			27.04			20.23			17.10			16.83
equity (annualized) (6)
Asset quality ratios:
Allowance for credit losses for loans as a % of		0.64 %			0.65 %			0.78 %			0.82 %			0.99 %			0.64 %			0.99 %
total loans
Allowance for credit losses for performing loans		0.58			0.59			0.71			0.74			0.87			0.58			0.87
as a % of total performing loans
Gross loan charge-offs as a % of average total		0.06			0.13			0.12			0.83			0.22			0.25			0.28
loans (annualized) (2)
Net loan charge-offs as a % of average total loans		0.01			0.07			0.10			0.79			0.09			0.21			0.20
(annualized) (2)
Other ratios:
Operating efficiency ratio (7)		60.13 %			57.68 %			43.85 %			45.31 %			54.79 %			51.88 %			50.92 %
Total cost of deposits (annualized) (8)		0.04			0.05			0.04			0.04			0.04			0.04			0.08
SVBFG CET 1 risk-based capital ratio		12.11			12.73			11.93			12.18			11.04			12.11			11.04
Bank CET 1 risk-based capital ratio		14.92			14.68			13.66			12.93			10.70			14.92			10.70
SVBFG tier 1 risk-based capital ratio		16.11			15.37			14.95			14.01			11.89			16.11			11.89
Bank tier 1 risk-based capital ratio		14.92			14.68			13.66			12.93			10.70			14.92			10.70
SVBFG total risk-based capital ratio		16.61			15.87			15.53			14.62			12.64			16.61			12.64

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Bank total risk-based capital ratio	15.44	15.21	14.26	13.56	11.49	15.44	11.49
SVBFG tier 1 leverage ratio	7.93	7.77	7.77	8.01	7.45	7.93	7.45
Bank tier 1 leverage ratio	7.24	7.30	6.96	7.20	6.43	7.24	6.43
Period-end loans, amortized cost, to deposits ratio	35.03	35.92	34.80	38.40	44.30	35.03	44.30
Average loans, amortized cost, to average	34.18	36.29	37.24	41.84	44.92	36.87	49.68
deposits ratio
Book value per common share (9)	$ 214.30	$ 208.53	$ 176.10	$ 163.25	$ 151.86	$ 214.30	$ 151.86
Tangible book value per common share (3) (10)	205.20	200.01	172.44	159.50	147.92	205.20	147.92
Other statistics:
Average full-time equivalent ("FTE") employees	6,431	6,024	4,808	4,601	4,419	5,466	4,040
Period-endfull-time equivalent ("FTE") employees	6,567	6,208	4,932	4,656	4,461	6,567	4,461

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

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Investment Securities

Our investment securities portfolio is comprised of: (i) our available-for-sale ("AFS") and held-to-maturity ("HTM") securities portfolios, each consisting of fixed income investments which are managed to earn an appropriate portfolio yield over the long-term while maintaining sufficient liquidity and addressing our asset/liability management objectives; and (ii) our non-marketable and other equity securities portfolio, which represents investments managed as part of our funds management business as well as public equity securities held as a result of equity warrant assets exercised. Our total average fixed income investment securities portfolio increased $17.9 billion, or 19.1 percent, to $111.7 billion for the quarter ended December 31, 2021 compared to the third quarter of 2021. Our total period-end fixed income investment securities portfolio increased $20.1 billion, or 19.0 percent, to $125.4 billion at December 31, 2021. Our period-endnon-marketable and other equity securities portfolio was consistent with the prior quarter at $2.5 billion ($2.2 billion net of noncontrolling interests) at December 31, 2021, compared to the third quarter of 2021.

The weighted-average duration of our total fixed income securities portfolio was 4.0 years at December 31, 2021 and 4.5 years at September 30, 2021. The total notional value of our pay-fixed,receive-floating interest rate swap fair value hedge contracts for AFS securities was $10.7 billion as of December 31, 2021. The weighted-average duration of our total fixed income securities portfolio, including the impact of our fair value swaps, was 3.7 years at December 31, 2021 and 4.0 years at September 30, 2021.

AFS Securities

Average AFS securities were $24.2 billion for the fourth quarter of 2021 compared to $23.3 billion for the third quarter of 2021. Period-end AFS securities were $27.2 billion at December 31, 2021 compared to $23.0 billion at September 30, 2021. The increases in both average and period-end AFS securities were driven by purchases of $6.8 billion, partially offset by sales of AFS securities of $1.4 billion and paydowns and maturities of $877 million. The weighted-average duration of our AFS securities portfolio was 3.5 years at December 31, 2021 and 3.8 years at September 30, 2021. The weighted-average duration of AFS securities portfolio including the impact of our fair value swaps was 2.4 years at December 31, 2021 and 2.3 years at September 30, 2021.

HTM Securities

Average HTM securities were $87.6 billion for the fourth quarter of 2021, compared to $70.5 billion for the third quarter of 2021. Period-end HTM securities were $98.2 billion at December 31, 2021 compared to $82.4 billion at September 30, 2021. The increases in both average and period-end HTM securities were driven by purchases of $20.4 billion, partially offset by $4.4 billion in paydowns and maturities during the quarter. The weighted-average duration of our HTM securities portfolio was 4.1 years at December 31, 2021 and 4.7 years at September 30, 2021.

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