SVB Financial : Announces 2020 Third Quarter Financial Results

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)	[phone]
October 22, 2020
NASDAQ: SIVB

SVB FINANCIAL GROUP ANNOUNCES 2020 THIRD QUARTER FINANCIAL RESULTS

Board of Directors declared a quarterly Series A Preferred Stock dividend

SANTA CLARA, Calif. - October 22, 2020 - SVB Financial Group (NASDAQ: SIVB) today announced financial results for the third quarter ended September 30, 2020.

Consolidated net income available to common stockholders for the third quarter of 2020 was $441.7 million, or $8.47 per diluted common share, compared to $228.9 million, or $4.42 per diluted common share, for the second quarter of 2020 and $267.3 million, or $5.15 per diluted common share, for the third quarter of 2019. Consolidated net income available to common stockholders for the nine months ended September 30, 2020 was $802.9 million, or $15.46 per diluted common share, compared to $874.0 million, or $16.67 per diluted common share, for the comparable 2019 period.

"We had an exceptional quarter driven by outstanding balance sheet growth, higher core fee income, strong investment banking revenue, solid credit resulting in a reduction of reserves, and outsized equity gains related to client IPO activity," said Greg Becker, President and CEO of SVB Financial Group. "These results reflect the resilience of our markets and our ability to execute effectively. Further, we believe our strong capital and liquidity will enable us to continue supporting our clients throughout this period of economic uncertainty, while investing in our long-term growth and scalability."

Highlights of our third quarter 2020 results (compared to second quarter 2020, unless otherwise noted) included:

• Average loans of $37.3 billion, an increase of $0.8 billion (or 2.2 percent).
• Period-endloans of $38.4 billion, an increase of $1.7 billion (or 4.6 percent).
• Average fixed income investment securities of $32.6 billion, an increase of $6.8 billion (or 26.2 percent).
• Period-endfixed income investment securities of $38.9 billion, an increase of $7.6 billion (or 24.2 percent).
• Average total client funds (on-balance sheet deposits and off-balance sheet client investment funds) increased $24.1 billion (or 13.6 percent) to $201.2 billion.
• Period-endtotal client funds increased $21.1 billion (or 11.1 percent) to $211.6 billion.
• Net interest income (fully taxable equivalent basis) of $531.7 million, an increase of $14.9 million (or 2.9 percent).
• Provision for credit losses was a net benefit of $52.0 million, compared to a provision of $66.5 million.
• Net loan charge-offs of $24.1 million, or 26 basis points of average total loans (annualized), compared to $11.0 million, or 12 basis points.
• Net gains on investment securities of $189.8 million compared to $34.9 million. Non-GAAP net gains on investment securities, net of noncontrolling interests, were $162.1 million, compared to $20.5 million. (See non- GAAP reconciliation under the section "Use of Non-GAAP Financial Measures.")
• Net gains on equity warrant assets of $53.8 million, compared to $26.5 million.
• Noninterest income of $547.6 million, an increase of $178.7 million (or 48.5 percent). Non-GAAP core fee income increased $13.8 million (or 10.4 percent) to $146.3 million. Non-GAAP core fee income plus investment banking revenue and commissions decreased $36.2 million (or 12.4 percent) to $254.8 million. (See non-GAAP reconciliation under the section "Use of Non-GAAP Financial Measures.")
• Included in third quarter 2020 results are revenues related to our investments in BigCommerce Holdings, Inc. ("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. See Investment Securities section for details related to BigCommerce activity during the third quarter of 2020.

• Noninterest expense of $491.0 million, an increase of $11.4 million (or 2.4 percent).
• GAAP operating efficiency ratio of 45.66 percent, a decrease of 873 basis points. Non-GAAP core operating efficiency ratio of 56.86 percent, an increase of 116 basis points. (See non-GAAP reconciliation under the section "Use of Non-GAAP Financial Measures.")

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

During the third quarter of 2020, we continued to manage through the COVID-19 pandemic, utilizing our business continuity plans to maintain client service while most of our employees and partners continue to work from home. We continue to support and engage with clients virtually, including the hosting of remote events designed to facilitate 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 Paycheck Protection Program ("PPP"). We continue to provide employees extended benefits, as well as practical support for working at 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.

Third Quarter 2020 Summary

						Three months ended							Nine months ended
(Dollars in millions, except share	September 30,			June 30,			March 31,		December 31,		September 30,		September 30,		September 30,
data, employees and ratios)			2020			2020			2020			2019			2019			2020			2019
Income statement:
Diluted earnings per common share	$	8.47	$	4.42	$	2.55	$	5.06	$	5.15	$	15.46	$	16.67
Net income available to common		441.7			228.9			132.3			262.9			267.3			802.9			874.0
stockholders
Net interest income		527.7			512.9			524.1			533.7			520.6			1,564.8			1,562.9
(Reduction) provision for credit losses		(52.0)			66.5			243.5			17.4			36.5			257.9			89.0
Noninterest income		547.6			368.8			301.9			313.3			294.0			1,218.4			908.1
Noninterest expense		491.0			479.6			399.6			460.8			391.3			1,370.2			1,140.5
Non-GAAP core fee income (1)		146.3			132.5			168.5			168.1			162.2			447.3			473.8
Non-GAAP core fee income, plus
investment banking revenue and		254.8			290.9			231.3			241.8			213.0			777.1			651.6
commissions (1)
Non-GAAP noninterest income, net of		519.7			354.5			303.8			301.3			279.4			1,178.0			871.6
noncontrolling interests (1)
Non-GAAP noninterest expense, net		490.9			479.5			399.4			460.6			391.2			1,369.9			1,139.8
of noncontrolling interests (1)
Fully taxable equivalent:
Net interest income (1) (2)	$	531.7	$	516.8	$	527.5	$	536.8	$	523.6	$	1,576.0	$	1,571.7
Net interest margin		2.53 %			2.80 %			3.12 %			3.26 %			3.34 %			2.79 %			3.60 %
Balance sheet:
Average total assets	$	88,348.4	$	78,432.0	$	72,407.2	$	69,139.0	$	65,327.7	$	79,760.7	$	61,214.1
Average loans, amortized cost		37,318.6			36,512.2			33,660.7			32,008.9			29,822.4			35,835.9			29,211.0
Average available-for-sale securities		20,026.9			12,784.3			13,565.9			12,640.5			10,600.4			15,475.7			8,572.3
Average held-to-maturity securities		12,553.2			13,039.4			13,576.1			14,023.0			14,534.5			13,054.4			14,891.2
Average noninterest-bearing demand		51,543.9			46,086.9			41,336.0			39,627.7			39,146.2			46,341.3			38,499.0
deposits
Average interest-bearing deposits		26,136.1			21,829.4			20,472.2			20,549.8			18,088.8			22,824.7			14,832.4
Average total deposits		77,680.0			67,916.4			61,808.2			60,177.5			57,235.0			69,166.1			53,331.3
Average short-term borrowings		15.3			618.1			969.9			18.8			22.0			532.5			186.9
Average long-term debt		843.3			489.6			348.0			651.7			697.1			561.3			696.8
Period-end total assets		96,916.8			85,731.0			75,009.6			71,004.9			68,231.2			96,916.8			68,231.2
Period-end loans, amortized cost		38,413.9			36,727.2			35,968.1			33,164.6			31,064.0			38,413.9			31,064.0
Period-endavailable-for-sale		25,904.3			18,451.9			12,648.1			14,014.9			12,866.9			25,904.3			12,866.9
securities
Period-endheld-to-maturity securities		12,982.2			12,858.8			13,574.3			13,842.9			14,407.1			12,982.2			14,407.1
Period-endnon-marketable and other		1,547.4			1,270.6			1,200.6			1,213.8			1,150.1			1,547.4			1,150.1
equity securities
Period-endnoninterest-bearing		57,508.2			49,160.9			42,902.2			40,841.6			40,480.6			57,508.2			40,480.6
demand deposits
Period-endinterest-bearing deposits		27,264.8			25,344.9			19,009.8			20,916.2			19,062.3			27,264.8			19,062.3
Period-end total deposits		84,773.0			74,505.8			61,912.0			61,757.8			59,542.9			84,773.0			59,542.9
Period-endshort-term borrowings		19.1			50.9			3,138.2			17.4			18.9			19.1			18.9
Period-endlong-term debt		843.4			843.2			348.1			348.0			697.2			843.4			697.2
Off-balance sheet:
Average client investment funds	$	123,563.6	$	109,259.4	$	103,590.8	$	96,643.2	$	92,824.9	$	112,104.2	$	89,963.6
Period-end client investment funds		126,780.9			115,921.0			106,951.7			99,192.6			96,472.3			126,780.9			96,472.3
Total unfunded credit commitments		30,329.8			28,127.2			24,668.3			24,521.9			22,274.4			30,329.8			22,274.4
Earnings ratios:
Return on average assets		1.99 %			1.17 %			0.73 %			1.51 %			1.62 %			1.34 %			1.91 %
(annualized) (3)
Return on average SVBFG common
stockholders' equity (annualized)		24.19			13.36			8.17			17.03			18.27			15.56			21.16
(4)
Asset quality ratios:
Allowance for credit losses for loans		1.34 %			1.61 %			1.53 %			0.91 %			0.97 %			1.34 %			0.97 %
as a % of total loans (5)
Allowance for credit losses for
performing loans as a % of total		1.17			1.46			1.43			0.78			0.81			1.17			0.81
performing loans (5)
Gross loan charge-offs as a % of		0.30			0.17			0.44			0.25			0.49			0.30			0.33
average total loans (annualized) (5)
Net loan charge-offs as a % of		0.26			0.12			0.35			0.18			0.44			0.24			0.26
average total loans (annualized) (5)

Other ratios:

2

Operating efficiency ratio (6)		45.66 %		54.39 %		48.37 %		54.40 %		48.04 %		49.23 %		46.15 %
Non-GAAP core operating		56.86		55.70		47.71		53.78		48.05		53.41		46.09
efficiency ratio (1)
Total cost of deposits (annualized) (7)		0.04		0.03		0.24		0.31		0.38		0.10		0.33
SVBFG CET 1 risk-based capital ratio		12.31		12.63		12.35		12.58		12.71		12.31		12.71
Bank CET 1 risk-based capital ratio		10.76		11.08		10.90		11.12		11.48		10.76		11.48
SVBFG total risk-based capital ratio		14.19		14.77		14.45		14.23		13.70		14.19		13.70
Bank total risk-based capital ratio		11.76		12.28		12.04		11.96		12.36		11.76		12.36
SVBFG tier 1 leverage ratio		8.26		8.68		9.00		9.06		8.64		8.26		8.64
Bank tier 1 leverage ratio		6.45		6.91		7.21		7.30		7.48		6.45		7.48
Period-end loans, amortized cost, to		45.31		49.29		58.10		53.70		52.17		45.31		52.17
deposits ratio
Average loans, amortized cost, to		48.04		53.76		54.46		53.19		52.11		51.81		54.77
average deposits ratio
Book value per common share (8)	$	143.91	$	134.89	$	130.02	$	118.67	$	114.26	$	143.91	$	114.26
Other statistics:
Average full-time equivalent ("FTE")		4,216		3,855		3,672		3,522		3,413		3,914		3,309
employees
Period-endfull-time equivalent ("FTE")		4,336		3,984		3,710		3,564		3,460		4,336		3,460
employees

1. 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."
2. 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 $4.0 million for the quarter ended September 30, 2020, $3.8 million for the quarter ended June 30, 2020, $3.4 million for the quarter ended March 31, 2020, $3.2 million for the quarter ended December 31, 2019 and $3.0 million for the quarter ended September 30, 2019.
3. Ratio represents annualized consolidated net income available to common stockholders divided by average assets.
4. Ratio represents annualized consolidated net income available to common stockholders divided by average SVB Financial Group ("SVBFG") common stockholders' equity.
5. For the three months ended September 30, 2020, June 30, 2020, and March 31, 2020, and the nine months ended September 30, 2020, loan amounts are disclosed, and ratios are calculated using the amortized cost basis for total loans as a result of the adoption of CECL. Prior period loan amounts are disclosed, and ratios were calculated, using the gross basis in accordance with previous methodology.
6. Ratio is calculated by dividing noninterest expense by total net interest income plus noninterest income.
7. Ratio represents annualized total cost of deposits and is calculated by dividing interest expense from deposits by average total deposits.
8. Book value per common share is calculated by dividing total SVBFG common stockholders' equity by total outstanding common shares.

Net Interest Income and Margin

Net interest income, on a fully taxable equivalent basis, was $531.7 million for the third quarter of 2020, compared to $516.8 million for the second quarter of 2020. The $14.9 million increase from the second quarter of 2020 to the third quarter of 2020 was attributable primarily to the following:

• An increase in interest income from loans of $3.9 million to $369.0 million for the third quarter of 2020 was due primarily to a $6.4 million increase in loan interest reflective of $0.8 billion in average loan growth driven primarily by increased loan utilization and a $3.3 million increase in loan income due to one additional day in the third quarter of 2020 as compared to the second quarter of 2020, partially offset by a $6.0 million decrease from lower gross loan yields.
• • Overall loan yields decreased nine basis points to 3.93 percent, reflective primarily of a shift in the mix of our total loan portfolio into our lower yielding Global Fund Banking (formerly Private Equity/ Venture Capital) and private bank loan portfolios as well as lower LIBOR re-pricing rates. Also included in the overall loan yield decrease for the third quarter of 2020 was four basis points attributable to our PPP loan portfolio.
• An increase of $15.5 million in interest income from our fixed income investment securities reflective primarily of a $6.8 billion increase in average fixed income securities, partially offset by a decrease in yields reflective of higher prepayments on mortgage-backed securities resulting in higher premium amortization and lower reinvestment rates for the third quarter of 2020 compared to the second quarter. The overall increase in interest income was partially offset by,
• A $4.8 million increase in interest expense driven primarily by a $2.5 million increase of interest paid on our interest-bearing deposits driven by growth in our average interest-bearing deposits of $4.3 billion and a $2.3 million increase in interest expense on borrowings due to the full quarter impact of interest for our 3.125% Senior Notes issued towards the end of the second quarter of 2020.

3

Net interest margin, on a fully taxable equivalent basis, was 2.53 percent for the third quarter of 2020, compared to

2.80 percent for the second quarter of 2020. The 27 basis point decrease in our net interest margin was due primarily to a 19 basis point decrease attributable to overall balance sheet growth resulting in a shift in the mix of interest earning assets comprised of a decrease in higher yielding loans and an increase in lower yielding cash and investments as a percentage of total interest earning assets, a seven basis point decrease from lower yields on our fixed income portfolio as discussed above and a one basis point decrease driven by the impact of lower LIBOR rates upon re-pricing of LIBOR-based loans during the third quarter of 2020.

For the third quarter of 2020, approximately 91 percent, or $34.0 billion, of our average loans were variable-rate loans that adjust at prescribed measurement dates. Of our variable-rate loans, approximately 63 percent are tied to prime-lending rates and 37 percent are tied to LIBOR.

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 $6.8 billion, or 26.2 percent, to $32.6 billion for the quarter ended September 30, 2020. Our total period-end fixed income investment securities portfolio increased $7.6 billion, or 24.2 percent, to $38.9 billion at September 30, 2020. The weighted- average duration of our fixed income investment securities portfolio was 4.1 years at September 30, 2020 and 3.4 years at June 30, 2020. Our period-endnon-marketable and other equity securities portfolio increased $0.3 billion to $1.5 billion ($1.4 billion net of noncontrolling interests) at September 30, 2020.

Available-for-Sale Securities

Average AFS securities were $20.0 billion for the third quarter of 2020 compared to $12.8 billion for the second quarter of 2020. Period-end AFS securities were $25.9 billion at September 30, 2020 compared to $18.5 billion at June 30, 2020. The increases in average and period-end AFS security balances from the second quarter of 2020 to the third quarter of 2020 was driven by purchases of $8.5 billion of AFS securities during the quarter, offset by paydowns and maturities of $1.1 billion. The weighted-average duration of our AFS securities portfolio was 4.2 years at September 30, 2020 and 3.6 years at June 30, 2020.

Held-to-Maturity Securities

Average HTM securities were $12.6 billion for the third quarter of 2020, compared to $13.0 billion for the second quarter of 2020. Period-end HTM securities were $13.0 billion at September 30, 2020 compared to $12.9 billion at June 30, 2020. The decrease in average, and marginal increase in period-end, HTM security balances from the second quarter of 2020 to the third quarter of 2020 was reflective primarily of $1.3 billion in portfolio paydowns and maturities, partially offset by purchases $1.4 billion during the end of the third quarter. The weighted-average duration of our HTM securities portfolio was 3.8 years at September 30, 2020 and 3.2 years at June 30, 2020.

Non-Marketable and Other Equity Securities

Our non-marketable and other equity securities portfolio increased $276.8 million to $1.5 billion ($1.4 billion net of noncontrolling interests) at September 30, 2020, compared to $1.3 billion ($1.1 billion net of noncontrolling interests) at June 30, 2020. The increase was attributable primarily to the increase in other equity securities in public companies of $184.0 million, driven by BigCommerce, as well as $54.0 million increase in venture capital and private equity fund investments driven by an increase in valuations, and $27.8 million of net new investments within our qualified housing projects portfolio. Reconciliations of our non-GAAPnon-marketable and other equity securities, net of noncontrolling interests, are provided under the section "Use of Non-GAAP Financial Measures."

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 ("Warrant Shares"), and (ii) common stock acquired through debt conversion. With respect to these securities and transactions, during the three months ending

4

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 lockup agreement for common stock shares held in BigCommerce is scheduled to expire during February 2021.

Loans

Average loans increased by $0.8 billion to $37.3 billion for the third quarter of 2020, compared to $36.5 billion for the second quarter of 2020. Period-end loans increased by $1.7 billion to $38.4 billion at September 30, 2020, compared to $36.7 billion at June 30, 2020. Average and period-end loan growth came primarily from our Global Fund Banking (formerly Private Equity/Venture Capital) and our Private Bank portfolios.

Loans (individually or in the aggregate) to any single client, equal to or greater than $20 million increased to $19.9 billion or 51.8 percent of total loans at September 30, 2020, as compared to $18.8 billion or 51.2 percent of total loans at June 30, 2020. Further details are provided under the section "Loan Concentrations."

5