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Investment Securities
 3 Months Ended
Mar. 31, 2014
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
Our investment securities portfolio consists of both an available-for-sale securities portfolio, which represents interest-earning investment securities, and a non-marketable and other securities portfolio, which primarily represents investments managed as part of our funds management business.
The major components of our investment securities portfolio at March 31, 2014 and December 31, 2013 are as follows:
 
 
March 31, 2014
 
December 31, 2013
(Dollars in thousands)
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Carrying
Value
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Carrying
Value
Available-for-sale securities, at fair value:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury securities
 
$
688,253

 
$
—

 
$
(4,734
)
 
$
683,519

 
$
—

 
$
—

 
$
—

 
$
—

U.S. agency debentures
 
4,106,269

 
39,175

 
(26,808
)
 
4,118,636

 
4,344,652

 
41,365

 
(40,785
)
 
4,345,232

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-issued mortgage-backed securities
 
3,003,393

 
26,130

 
(8,504
)
 
3,021,019

 
2,472,528

 
17,189

 
(16,141
)
 
2,473,576

Agency-issued collateralized mortgage obligations—fixed rate
 
3,280,209

 
23,459

 
(68,664
)
 
3,235,004

 
3,386,670

 
24,510

 
(85,422
)
 
3,325,758

Agency-issued collateralized mortgage obligations—variable rate
 
1,108,079

 
3,294

 
(55
)
 
1,111,318

 
1,183,333

 
3,363

 
(123
)
 
1,186,573

Agency-issued commercial mortgage-backed securities
 
577,086

 
399

 
(17,820
)
 
559,665

 
581,475

 
552

 
(17,423
)
 
564,604

Municipal bonds and notes
 
81,635

 
4,437

 
—

 
86,072

 
82,024

 
4,024

 
(21
)
 
86,027

Equity securities
 
37,489

 
328

 
(9,951
)
 
27,866

 
4,842

 
692

 
(483
)
 
5,051

Total available-for-sale securities
 
$
12,882,413

 
$
97,222

 
$
(136,536
)
 
$
12,843,099

 
$
12,055,524

 
$
91,695

 
$
(160,398
)
 
$
11,986,821

Non-marketable and other securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-marketable securities (fair value accounting):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and private equity fund investments (1)
 
 
 
 
 
 
 
976,922

 
 
 
 
 
 
 
862,972

Other venture capital investments (2)
 
 
 
 
 
 
 
28,306

 
 
 
 
 
 
 
32,839

Other securities (fair value accounting) (3)
 
 
 
 
 
 
 
381,928

 
 
 
 
 
 
 
321,374

Non-marketable securities (equity method accounting):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other investments (4)
 
 
 
 
 
 
 
144,636

 
 
 
 
 
 
 
142,883

Low income housing tax credit funds
 
 
 
 
 
 
 
84,463

 
 
 
 
 
 
 
72,241

Non-marketable securities (cost method accounting):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and private equity fund investments (5)
 
 
 
 
 
 
 
140,374

 
 
 
 
 
 
 
148,994

Other investments
 
 
 
 
 
 
 
13,827

 
 
 
 
 
 
 
14,191

Total non-marketable and other securities
 
 
 
 
 
 
 
1,770,456

 
 
 
 
 
 
 
1,595,494

Total investment securities
 
 
 
 
 
 
 
$
14,613,555

 
 
 
 
 
 
 
$
13,582,315

 
(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 March 31, 2014 and December 31, 2013 (fair value accounting):
 
 
March 31, 2014
 
December 31, 2013
(Dollars in thousands)
 
Amount
 
Ownership %
 
Amount
 
Ownership %
SVB Strategic Investors Fund, LP
 
$
27,134

 
12.6
%
 
$
29,104

 
12.6
%
SVB Strategic Investors Fund II, LP
 
97,960

 
8.6

 
96,185

 
8.6

SVB Strategic Investors Fund III, LP
 
264,661

 
5.9

 
260,272

 
5.9

SVB Strategic Investors Fund IV, LP
 
291,989

 
5.0

 
226,729

 
5.0

Strategic Investors Fund V Funds
 
159,794

 
Various

 
118,181

 
Various

Strategic Investors Fund VI Funds
 
9,871

 
0.2

 
7,944

 
0.2

SVB Capital Preferred Return Fund, LP
 
60,159

 
20.0

 
59,028

 
20.0

SVB Capital—NT Growth Partners, LP
 
61,230

 
33.0

 
61,126

 
33.0

SVB Capital Partners II, LP (i)
 
595

 
5.1

 
708

 
5.1

Other private equity fund (ii)
 
3,529

 
58.2

 
3,695

 
58.2

Total venture capital and private equity fund investments
 
$
976,922

 
 
 
$
862,972

 
 
 
 
(i)
At March 31, 2014, we had a direct ownership interest of 1.3 percent and an indirect ownership interest of 3.8 percent in the fund through our ownership interest of SVB Strategic Investors Fund II, LP.
(ii)
At March 31, 2014, we had a direct ownership interest of 41.5 percent and indirect ownership interests of 12.6 percent and 4.1 percent in the fund through our ownership interest of SVB Capital—NT Growth Partners, LP and SVB Capital Preferred Return Fund, LP, respectively.
(2)
The following table shows the amounts of other venture capital investments held by the following consolidated funds and our ownership percentage of each fund at March 31, 2014 and December 31, 2013 (fair value accounting):
 
 
March 31, 2014
 
December 31, 2013
(Dollars in thousands)
 
Amount
 
Ownership %
 
Amount
 
Ownership %
Silicon Valley BancVentures, LP
 
$
6,520

 
10.7
%
 
$
6,564

 
10.7
%
SVB Capital Partners II, LP (i)
 
17,696

 
5.1

 
22,684

 
5.1

SVB Capital Shanghai Yangpu Venture Capital Fund
 
4,090

 
6.8

 
3,591

 
6.8

Total other venture capital investments
 
$
28,306

 
 
 
$
32,839

 
 
 
 
(i)
At March 31, 2014, we had a direct ownership interest of 1.3 percent and an indirect ownership interest of 3.8 percent in the fund through our ownership of SVB Strategic Investors Fund II, LP.
(3)
Investments classified as other securities (fair value accounting) represent direct equity investments in public companies held by our consolidated funds. This amount primarily includes total unrealized gains of $351 million in two of our public portfolio companies, FireEye, Inc. ("FireEye") and Twitter, Inc. ("Twitter"), of which one portfolio company, FireEye, is currently subject to a lock-up agreement. The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of certain sales restrictions to which FireEye securities are subject, the actual sales of the securities and the timing of such actual sales.
(4)
The following table shows the carrying value and our ownership percentage of each investment at March 31, 2014 and December 31, 2013 (equity method accounting):
 
 
March 31, 2014
 
December 31, 2013
(Dollars in thousands)
 
Amount
 
Ownership %
 
Amount
 
Ownership %
Gold Hill Venture Lending 03, LP (i)
 
$
10,380

 
9.3
%
 
$
7,900

 
9.3
%
Gold Hill Capital 2008, LP (ii)
 
21,076

 
15.5

 
21,867

 
15.5

China Joint Venture investment
 
79,765

 
50.0

 
79,940

 
50.0

Other investments
 
33,415

 
Various

 
33,176

 
Various

Total other investments (equity method accounting)
 
$
144,636

 
 
 
$
142,883

 
 

 
 
(i)
At March 31, 2014, we had a direct ownership interest of 4.8 percent in the fund and an indirect interest in the fund through our investment in Gold Hill Venture Lending Partners 03, LLC (“GHLLC”) of 4.5 percent.
(ii)
At March 31, 2014, we had a direct ownership interest of 11.5 percent in the fund and an indirect interest in the fund through our investment in Gold Hill Capital 2008, LLC of 4.0 percent.
(5)
Represents investments in 282 and 288 funds (primarily venture capital funds) at March 31, 2014 and December 31, 2013, respectively, where our ownership interest is typically less than 5% of the voting interests of each such fund and in which we do not have the ability to exercise significant influence over the partnerships operating activities and financial policies. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was $140 million, and $222 million, respectively, as of March 31, 2014. The carrying value, and estimated fair value, of these venture capital and private equity fund investments (cost method accounting) was $149 million and $215 million, respectively, as of December 31, 2013.
The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months and 12 months or longer as of March 31, 2014:
 
 
March 31, 2014
 
 
Less than 12 months
 
12 months or longer
 
Total
(Dollars in thousands)
 
Fair Value of
Investments
 
Unrealized
Losses
 
Fair Value of
Investments
 
Unrealized
Losses
 
Fair Value of
Investments
 
Unrealized
Losses
U.S. treasury securities
 
$
683,519

 
$
(4,734
)
 
$
—

 
$
—

 
$
683,519

 
$
(4,734
)
U.S. agency debentures
 
1,570,568

 
(26,808
)
 
—

 
—

 
1,570,568

 
(26,808
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Agency-issued mortgage-backed securities
 
1,599,028

 
(6,764
)
 
20,049

 
(1,740
)
 
1,619,077

 
(8,504
)
Agency-issued collateralized mortgage obligations—fixed rate
 
1,887,167

 
(63,005
)
 
139,570

 
(5,659
)
 
2,026,737

 
(68,664
)
Agency-issued collateralized mortgage obligations—variable rate
 
102,546

 
(55
)
 
—

 
—

 
102,546

 
(55
)
Agency-issued commercial mortgage-backed securities
 
369,831

 
(10,143
)
 
91,258

 
(7,677
)
 
461,089

 
(17,820
)
Equity securities
 
25,738

 
(9,951
)
 
—

 
—

 
25,738

 
(9,951
)
Total temporarily impaired securities (1)
 
$
6,238,397

 
$
(121,460
)
 
$
250,877

 
$
(15,076
)
 
$
6,489,274

 
$
(136,536
)
 
 
(1)
As of March 31, 2014, we identified a total of 245 investments that were in unrealized loss positions, of which 11 investments totaling $251 million with unrealized losses of $15.1 million have been in an impaired position for a period of time greater than 12 months. As of March 31, 2014, we do not intend to sell any impaired debt securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis. Based on our analysis as of March 31, 2014, we deem all impairments to be temporary, and therefore changes in value for our temporarily impaired securities as of the same date are included in other comprehensive income. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis.
The following table summarizes our unrealized losses on our available-for-sale securities portfolio into categories of less than 12 months and 12 months or longer as of December 31, 2013:
 
 
December 31, 2013
 
 
Less than 12 months
 
12 months or longer
 
Total
(Dollars in thousands)
 
Fair Value of
Investments
 
Unrealized
Losses
 
Fair Value of
Investments
 
Unrealized
Losses
 
Fair Value of
Investments
 
Unrealized
Losses
U.S. agency debentures
 
$
1,821,045

 
$
(40,785
)
 
$
—

 
$
—

 
$
1,821,045

 
$
(40,785
)
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Agency-issued mortgage-backed securities
 
$
1,480,870

 
$
(14,029
)
 
$
19,830

 
$
(2,112
)
 
$
1,500,700

 
$
(16,141
)
Agency-issued collateralized mortgage obligations—fixed rate
 
2,098,137

 
(79,519
)
 
134,420

 
(5,903
)
 
2,232,557

 
(85,422
)
Agency-issued collateralized mortgage obligations—variable rate
 
109,699

 
(123
)
 
—

 
—

 
109,699

 
(123
)
Agency-issued commercial mortgage-backed securities
 
464,171

 
(17,423
)
 
—

 
—

 
464,171

 
(17,423
)
Municipal bonds and notes
 
3,404

 
(21
)
 
—

 
—

 
3,404

 
(21
)
Equity securities
 
910

 
(483
)
 
—

 
—

 
910

 
(483
)
Total temporarily impaired securities
 
$
5,978,236

 
$
(152,383
)
 
$
154,250

 
$
(8,015
)
 
$
6,132,486

 
$
(160,398
)
The following table summarizes the remaining contractual principal maturities and fully taxable equivalent yields on debt securities classified as available-for-sale as of March 31, 2014. Interest income on certain municipal bonds and notes (non-taxable investments) are presented on a fully taxable equivalent basis using the federal statutory tax rate of 35.0 percent. The weighted average yield is computed using the amortized cost of debt securities, which are reported at fair value. For U.S. treasury securities, the expected maturity is the actual contractual maturity of the notes. Expected remaining maturities for certain U.S. agency debentures may occur earlier than their contractual maturities because the note issuers have the right to call outstanding amounts ahead of their contractual maturity. Expected maturities for mortgage-backed securities may differ significantly from their contractual maturities because mortgage borrowers have the right to prepay outstanding loan obligations with or without penalties. Mortgage-backed securities classified as available-for-sale typically have original contractual maturities from 10 to 30 years whereas expected average lives of these securities tend to be significantly shorter and vary based upon structure and prepayments in lower rate environments.
 
 
March 31, 2014
 
 
Total
 
One Year
or Less
 
After One
Year to
Five Years
 
After Five
Years to
Ten Years
 
After
Ten Years
(Dollars in thousands)
 
Carrying
Value
 
Weighted-
Average
Yield
 
Carrying
Value
 
Weighted-
Average
Yield
 
Carrying
Value
 
Weighted-
Average
Yield
 
Carrying
Value
 
Weighted-
Average
Yield
 
Carrying
Value
 
Weighted-
Average
Yield
U.S. treasury securities
 
$
683,519

 
1.90
%
 
$
—

 
—
%
 
$
99,063

 
1.50
%
 
$
584,456

 
1.96
%
 
$
—

 
—
%
U.S. agency debentures
 
4,118,636

 
1.71

 
470,663

 
1.44

 
2,300,971

 
1.55

 
1,347,002

 
2.09

 
—

 
—

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency-issued mortgage-backed securities
 
3,021,019

 
2.44

 
—

 
—

 
47,706

 
2.43

 
899,214

 
2.24

 
2,074,099

 
2.52

Agency-issued collateralized mortgage obligations - fixed rate
 
3,235,004

 
1.91

 
—

 
—

 
—

 
—

 
173,604

 
2.92

 
3,061,400

 
1.85

Agency-issued collateralized mortgage obligations - variable rate
 
1,111,318

 
0.70

 
—

 
—

 
—

 
—

 
—

 
—

 
1,111,318

 
0.70

Agency-issued commercial mortgage-backed securities
 
559,665

 
2.19

 
—

 
—

 
—

 
—

 
—

 
—

 
559,665

 
2.19

Municipal bonds and notes
 
86,072

 
5.99

 
1,338

 
5.50

 
27,992

 
5.74

 
43,592

 
6.07

 
13,150

 
6.27

Total
 
$
12,815,233

 
1.90

 
$
472,001

 
1.45

 
$
2,475,732

 
1.61

 
$
3,047,868

 
2.21

 
$
6,819,632

 
1.90

The following table presents the components of gains and losses (realized and unrealized) on investment securities for the three months ended March 31, 2014 and 2013:
 
 
Three months ended March 31,
(Dollars in thousands)
 
2014
 
2013
Gross gains on investment securities:
 
 
 
 
Available-for-sale securities, at fair value (1)
 
$
373

 
$
—

Non-marketable securities (fair value accounting):
 
 
 
 
Venture capital and private equity fund investments
 
111,436

 
27,381

Other venture capital investments
 
2,582

 
2,640

Other securities (fair value accounting) (2)
 
116,750

 
1,918

Non-marketable securities (equity method accounting):
 
 
 
 
Other investments
 
3,642

 
2,715

Non-marketable securities (cost method accounting):
 
 
 
 
Venture capital and private equity fund investments
 
3,303

 
1,023

Other investments
 
134

 
145

Total gross gains on investment securities
 
238,220

 
35,822

Gross losses on investment securities:
 
 
 
 
Available-for-sale securities, at fair value (1)
 
(313
)
 
(45
)
Non-marketable securities (fair value accounting):
 
 
 
 
Venture capital and private equity fund investments
 
(101
)
 
(4,742
)
Other venture capital investments
 
(744
)
 
(464
)
Other securities (fair value accounting)
 
(12,773
)
 
(2,073
)
Non-marketable securities (equity method accounting):
 
 
 
 
Other investments
 
(212
)
 
(245
)
Non-marketable securities (cost method accounting):
 
 
 
 
Venture capital and private equity fund investments (3)
 
(156
)
 
(469
)
Other investments
 
(9
)
 
(346
)
Total gross losses on investment securities
 
(14,308
)
 
(8,384
)
Gains on investment securities, net
 
$
223,912

 
$
27,438

 
 
(1)
Includes realized gains (losses) on sales of available-for-sale securities that are recognized in the income statement. Unrealized gains (losses) on available-for-sale securities are recognized in other comprehensive income. The cost basis of available-for-sale securities sold is determined on a specific identification basis.
(2)
Other securities (fair value accounting) and other venture capital investments include gains of $113.0 million, of which $46.1 million consists of realized gains, for the quarter ended March 31, 2014, attributable to one of our portfolio companies, FireEye. Our investment in FireEye is currently subject to a lock-up agreement. The extent to which any unrealized gains will become realized is subject to a variety of factors, including, among other things, the expiration of the current lock-up agreement to which the FireEye securities are subject, the actual sales of the securities and the timing of such actual sales.
(3)
Includes OTTI of $0.1 million from the declines in value for 7 of the 282 investments and $0.5 million from the declines in value for 16 of the 309 investments held at March 31, 2014 and 2013, respectively. We concluded that any declines in value for the remaining investments were temporary, and as such, no OTTI was required to be recognized.