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Segment Reporting
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We have four reportable segments for management reporting purposes: Silicon Valley Bank, SVB Private, SVB Capital and SVB Securities. The results of our reportable and operating segments are based on our internal management reporting process.
We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reporting segments. During the quarter ended March 31, 2022, we reevaluated our segments. Based on this reevaluation, the Premium Wine reporting division was moved from Silicon Valley Bank to the SVB Private segment. These changes were made to reflect the manner in which the Company is organized for purposes of making operating decisions and assessing performance. For the year ended December 31, 2021, prior period balances for our Premium Wine reporting division previously reported in "Silicon Valley Bank" have been recast to the reportable segment “SVB Private” to properly reflect organizational changes effective January 1, 2022. The reclassification of historical segment information has no effect on the Company's previously reported consolidated balance sheets, statements of income, or cash flows, and the change did not have any impact on the determination of the reporting units used to assess impairment under ASC 350, Intangibles - Goodwill and Other.
Our Silicon Valley Bank and SVB Private segments' primary source of revenue is from net interest income, which is primarily the difference between interest earned on loans, net of 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, the provisions for unfunded credit commitments, or HTM securities (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:
•Silicon Valley Bank is our commercial bank which offers products and services 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 commercial bank consists of services provided to clients in the Healthcare and Technology industries, as well as private equity and venture capital firms, and includes clients from international operations in EMEA, Asia and Canada.
•SVB Private is our private bank and wealth management segment of the Bank. SVB Private 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 as well as high net worth clients acquired from Boston Private and our premium wine clients. 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, other secured and unsecured lending products and vineyard development loans, as well as planning-based financial strategies, wealth management, family office, financial planning, tax planning and trust services. In addition, we provide real estate secured loans to eligible employees through our EHOP.
•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 fund of funds that invest in other venture capital funds, as well as
debt funds that provide lending and other financing solutions. SVB Capital generates income for the Company primarily from investment returns (including carried interest allocations) and management fees.
•SVB Securities is an investment bank focused on the innovation economy and operates as a wholly-owned subsidiary of SVB Financial Group. SVB Securities provides investment banking services across all major sub-sectors of Healthcare and Technology. Healthcare sub-sectors include Biopharma, Digital Health and HealthTech, Healthcare Services, Medical Devices and Tools and Diagnostics. Technology sub-sectors include Consumer Internet, Commerce Enablement and Marketing Software, Digital Infrastructure and Tech-Enabled Services, Education Technology, Enterprise Software, Industrial Technology and FinTech. SVB Securities focuses on four main product and service offerings: Capital Raising, M&A Advisory, Equity Research and Sales and Trading.
The summary financial results of our operating segments are presented along with a reconciliation to our consolidated results.
Our segment information for 2022, 2021 and 2020 is as follows:
(Dollars in millions)Silicon Valley Bank (1)SVB Private SVB Capital (1)SVB Securities (1)Other Items (2) (3)Total
Year ended December 31, 2022
Net interest income$4,118 $407 $— $3 $(43)$4,485 
Provision for credit losses(277)(10)— — (133)(420)
Noninterest income1,107 96 (110)505 130 1,728 
Noninterest expense (4)(1,557)(361)(70)(603)(1,030)(3,621)
Income (loss) before income tax expense (5)$3,391 $132 $(180)$(95)$(1,076)$2,172 
Total average loans, amortized cost$54,647 $14,934 $— $— $708 $70,289 
Total average assets (6) (7)175,221 16,637 942 936 22,367 216,103 
Total average deposits172,106 12,884 — — 771 185,761 
Year ended December 31, 2021
Net interest income (8)$2,914 $226 $— $1 $38 $3,179 
Provision for credit losses(55)(14)— — (54)(123)
Noninterest income706 58 487 608 879 2,738 
Noninterest expense (4) (8)(1,266)(223)(71)(561)(949)(3,070)
Income (loss) before income tax expense (5) (8)$2,299 $47 $416 $48 $(86)$2,724 
Total average loans, amortized cost (8)$43,145 $9,986 $— $— $1,416 $54,547 
Total average assets (6) (7) (8)140,362 11,171 700 830 12,948 166,011 
Total average deposits (8)138,057 8,924 — — 966 147,947 
Year ended December 31, 2020
Net interest income (8)$1,990 $112 $— $1 $54 $2,157 
Provision for credit losses(166)(21)— — (33)(220)
Noninterest income604 5 226 497 508 1,840 
Noninterest expense (4) (8)(1,011)(55)(51)(379)(539)(2,035)
Income (loss) before income tax expense (5) (8)$1,417 $41 $175 $119 $(10)$1,742 
Total average loans, amortized cost (8)$30,116 $5,298 $— $— $1,852 $37,266 
Total average assets (6) (7) (8)73,929 5,335 437 557 5,534 85,792 
Total average deposits (8)71,911 2,388 — — 717 75,016 
(1)Silicon Valley Bank’s, SVB Capital’s and SVB Securities' components of NII, noninterest income, noninterest expense and total average assets are shown net of NCI for all periods presented. NCI 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. NII 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)Noninterest income included in “Other Items” decreased $749M in 2022. The decrease is driven by lower warrant and investment gains.
(4)The Silicon Valley Bank segment includes direct depreciation and amortization of $49 million, $34 million and $25 million for December 31, 2022, December 31, 2021, and December 31, 2020, respectively.
(5)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.
(6)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.
(7)Included in the total average assets is goodwill of $174 million and $138 million for SVB Securities for the year ended December 31, 2022, and December 31, 2021, respectively, and $201 million and $87 million for SVB Private for the years ended December 31, 2022, and December 31, 2021.
(8)For the years ended December 31, 2022, December 31, 2021, and December 31, 2020, prior period balances for our Premium Wine reporting division previously reported in "Silicon Valley Bank" have been allocated to the reportable segment “SVB Private” to properly reflect organizational changes effective January 1, 2022. The reallocation had no impact on the "Total" amount.