Regulatory Matters

12 Months Ended

Dec. 31, 2021

Banking and Thrift, Other Disclosures [Abstract]

Regulatory Matters

Regulatory Matters

SVB Financial and the Bank are subject to various regulatory capital adequacy requirements administered by the Federal Reserve Board and the DFPI. The Federal Deposit Insurance Corporation Improvement Act of 1991 additionally requires that the federal regulatory agencies adopt regulations defining five capital categories for banks: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

We are also subject to a comprehensive capital framework for U.S. banking organizations established by the federal banking agencies (the “Capital Rules”), which implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act. There are three categories of capital under the Capital Rules: CET 1, additional Tier 1 and Tier 2. Pursuant to the Capital Rules, the minimum capital ratios applicable to SVB Financial and the Bank are as follows:

•4.5% CET 1 capital to risk-weighted assets;

•6.0% Tier 1 capital (CET 1 plus Additional Tier 1 capital) to risk-weighted assets;

•8.0% Total capital (Tier 1 plus Tier 2 capital) to risk-weighted assets; and

•4.0% Tier 1 capital to average consolidated assets (the “leverage ratio”).

We must also meet a 2.5% “buffer” of CET 1 capital to avoid constraints on capital distributions, such as dividends and equity repurchases, and certain bonus compensation for executive officers. The severity of the constraints would depend on the amount of the shortfall and the banking organization’s “eligible retained income”.

As of December 31, 2021, both SVB Financial and the Bank exceed the required ratios under the Capital Rules and were considered “well-capitalized” for purposes of the Federal Reserve’s Regulation Y. The following table presents the capital ratios for the Company and the Bank under federal regulatory guidelines, compared to the minimum regulatory capital requirements, as of December 31, 2021 and December 31, 2020:

	Capital Ratios					Capital Amounts
(Dollars in millions)	Actual		Required Minimum (1)		Well Capitalized Minimum	Actual		Required Minimum (1)		Well Capitalized Minimum
December 31, 2021:
CET1 risk-based capital:
SVB Financial	12.09	%	7.0	%	N/A	$	12,186	$	7,057	N/A
Bank	14.89		7.0		6.5	14,622		6,875		$	6,384
Tier 1 risk-based capital:
SVB Financial	16.08		8.5		6.0	16,206		8,569		6,049
Bank	14.89		8.5		8.0	14,622		8,348		7,857
Total risk-based capital:
SVB Financial	16.58		10.5		10.0	16,712		10,585		10,081
Bank	15.40		10.5		10.0	15,129		10,313		9,821
Tier 1 leverage:
SVB Financial	7.93		4.0		N/A	16,206		8,175		N/A
Bank	7.24		4.0		5.0	14,622		8,075		10,094
December 31, 2020:
CET1 risk-based capital:
SVB Financial	11.04	%	7.0	%	N/A	$	7,138	$	4,528	N/A
Bank	10.70		7.0		6.5	6,530		4,272		$	3,967
Tier 1 risk-based capital:
SVB Financial	11.89		8.5		6.0	7,692		5,498		3,881
Bank	10.70		8.5		8.0	6,530		5,187		4,882
Total risk-based capital:
SVB Financial	12.64		10.5		10.0	8,175		6,791		6,468
Bank	11.49		10.5		10.0	7,014		6,407		6,102
Tier 1 leverage:
SVB Financial	7.45		4.0		N/A	7,692		4,129		N/A
Bank	6.43		4.0		5.0	6,530		4,060		5,075

N/A     "Well-Capitalized Minimum" CET1 risk-based capital and Tier 1 leverage ratios are not formally defined under applicable banking regulations for bank holding companies.

(1)     The percentages represent the minimum capital ratios plus, the fully phased-in 2.5% CET1 capital conservation buffer under the Capital Rules.