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Segment Reporting
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We have four 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 for unfunded credit commitments (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 four 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.
•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 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. 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.
Our segment information for the three and nine months ended September 30, 2020 and 2019 is as follows:
(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 losses37,847 14,881 — — (710)52,018 
Noninterest income147,594 916 60,380 113,651 225,042 547,583 
Noninterest expense (3)(258,035)(12,293)(11,198)(77,567)(131,928)(491,021)
Income before income tax expense (4)$440,369 $22,649 $49,184 $36,259 $87,859 $636,320 
Total average loans, amortized cost$30,763,715 $4,263,324 $— $— $2,291,561 $37,318,600 
Total average assets (5) (6)77,802,730 4,297,011 413,882 605,263 5,229,480 88,348,366 
Total average deposits74,825,725 2,163,903 — — 690,388 77,680,016 
Three months ended September 30, 2019
Net interest income$455,161 $12,772 $9 $277 $52,425 $520,644 
Provision for credit losses(34,075)(1,910)— — (551)(36,536)
Noninterest income161,029 634 34,955 52,947 44,444 294,009 
Noninterest expense (3)(213,786)(11,638)(8,129)(55,200)(102,571)(391,324)
Income (loss) before income tax expense (4)$368,329 $(142)$26,835 $(1,976)$(6,253)$386,793 
Total average loans, amortized cost$25,839,647 $3,400,889 $— $— $581,890 $29,822,426 
Total average assets (5) (6) (8)58,384,473 3,431,313 396,031 428,848 2,687,083 65,327,748 
Total average deposits55,250,154 1,497,303 — — 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)— — (13,729)(257,943)
Noninterest income447,902 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 $— $— $1,656,039 $35,835,927 
Total average assets (5) (6)69,212,733 4,087,786 430,391 514,836 5,514,904 79,760,650 
Total average deposits66,408,359 2,069,196 — — 688,509 69,166,064 
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)— — (8,079)(89,033)
Noninterest income471,492 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 $— $— $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 deposits51,352,644 1,461,170 — — 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 exercised warrant assets. Noninterest expense consists primarily of expenses associated with corporate support functions such as finance, human resources, marketing, legal and other expenses.
(3)The Global Commercial Bank segment includes direct depreciation and amortization of $6.4 million and $5.1 million for the three months ended September 30, 2020 and 2019, respectively, and $17.7 million and $14.8 million for the nine months ended September 30, 2020 and 2019.
(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 and 2019.