SVB Financial Group

SVB Financial Group

Former headquarters in Santa Clara
Formerly	Silicon Valley Bancshares (1982–2005)
Company type	Public
Traded as	Expert Market: SIVBQ Nasdaq: SIVB (1988–2023)
Industry	Financial services
Founded	April 23, 1982; 42 years ago (1982-04-23)[1]
Founders	Bill Biggerstaff Robert Medearis
Headquarters	New York City[2] , United States
Key people	Gregory W. Becker (CEO) Roger F. Dunbar (chairman) Michael R. Descheneaux (president)
Revenue	US$7.40 billion (2022)
Net income	US$1.51 billion (2022)
Total assets	US$211.8 billion (2022)
Total equity	US$16.0 billion (2022)
Number of employees	8,553 (December 2022)
Subsidiaries	Silicon Valley Bank (1983–2023) SVB Private (1983–2023) SVB Capital (1999-2023) Leerink Partners (2019–2023)
Capital ratio	Tier 1 15.4% (2022)
Website	SVB Financial Group
Footnotes / references [3][4]

SVB Financial Group (SVB or SVBFG) is a financial services holding company headquartered in New York City.^[2] The company's main business unit was commercial bank Silicon Valley Bank, until the bank failed in March 2023 after a bank run.^[5][6] The company was a member of the S&P 500 index until March 15, 2023.^[7][8] According to public filings, as of December 31, 2022, SVB Financial Group had 164 subsidiaries.^[9]

Until March 2023, the companies subsidiaries included Silicon Valley Bank and SVB Private, a private banking service affiliated with Silicon Valley Bank that, along with its affiliates SVB Investment Services and SVB Wealth, offered client services especially catered to private equity and high-net-worth individuals. Both Silicon Valley Bank and SVB Private were placed in receivership and sold to First Citizens Bank.^[10][11] SVB Securities was sold to its management in July 2023 and renamed Leerink Partners.^[12] SVB Capital was sold in May 2024 to a newly formed entity affiliated with Pinegrove Capital Partners.^[13]

History

SVB Financial was founded as Silicon Valley Bancshares on April 23, 1982,^[1] by Bill Biggerstaff and Robert Medearis over a poker game.^[14][15] Silicon Valley Bank was incorporated as a wholly-owned subsidiary in October 17, 1983.^[1]

In 1988, the company went public via an initial public offering, raising $6 million.^[16]

The company's stock price soared through the dot-com bubble but fell 50% when the bubble burst.^[17] The company reincorporated as a Delaware corporation in 1999.^[3][18] Ken Wilcox became CEO in 2000^[19]

In 2001, the company's investment banking arm, SVB Securities, expanded its business with a $100 million acquisition of Palo Alto Alliant Partners, which was rebranded SVB Alliant.^[20] In 2002, it formally entered the private banking business, building on prior experience and relationships with wealthy venture capitalists and entrepreneurs.^[21]

The SVB Private offices in San Jose, formerly operated by Boston Private Bank & Trust Company, on March 13 following Silicon Valley Bank's collapse

On May 31, 2005, Silicon Valley Bankshares rebranded as SVB Financial Group, signaling the company's diversification away from commercial banking.^[22] SVB Alliant ceased operations in 2007.^[23]

In December 2008, SVB Financial received a $235 million investment from the U.S. Treasury through the Troubled Asset Relief Program.^[24] The U.S. Treasury received $10 million in dividends from SVB Financial and, in December 2009, the company repurchased the outstanding stock and warrants held by the government, funding this through a stock sale of $300 million.^[25]

In 2015, CEO Greg Becker indicated that SVB had yet to make immediate plans to re-enter the investment banking sector as it had before 2006.^[26]

In January 2019, SVB Financial acquired Leerink Partners LLC, and renamed the business SVB Leerink.^[27] In 2021, SVB acquired Boston Private Financial Holdings and merged its subsidiary Boston Private Bank & Trust Company into Silicon Valley Bank and SVB Private.^[28] In 2021, SVB acquired media and telecom research company MoffettNathanson LLC.^[29] In February 2022, SVB Leerink was rebranded as SVB Securities.^[30]

Collapse of Silicon Valley Bank

Main article: Collapse of Silicon Valley Bank

In March 2023, Silicon Valley Bank experienced a bank run and collapsed. Then Federal Reserve Board Vice Chair for Supervision Michael Barr reported its customers tried to withdraw 81% of its deposits ($142 billion of a $175 billion total, as of the end of 2022) over two days.^[31] The failure of Silicon Valley Bank was the largest of any bank since the 2007–2008 financial crisis by assets, and the second-largest in U.S. history behind that of Washington Mutual.^[6] On March 10, 2023, the California Department of Financial Protection and Innovation closed SVB, Santa Clara, and appointed the FDIC as receiver,^[5] which transferred all the bank's assets to a newly-established bridge bank.^[32] The holding company was not included in the bank closing or resulting receivership.^[33] It is no longer affiliated with either Silicon Valley Bank or SVB Private.^[10] When the FDIC took over Silicon Valley Bank on March 10, it seized the Santa Clara headquarters shared by the bank and SVB Financial Group; as a result, the holding company moved its headquarters to its offices in New York City.^[2]

On March 13, 2023, SVB Financial Group began exploring a potential sale of the bank's sister companies SVB Capital and SVB Securities. The latter's founder, Jeffrey Leerink, expressed interest in buying back the firm.^[34] SVB Financial Group filed for Chapter 11 bankruptcy protection on March 17, one week after the bank's failure.^[35] A group including Centerbridge Partners, Davidson Kempner Capital Management, and PIMCO reportedly bought a stake in the company in anticipation of the bankruptcy.^[10]

On June 18, 2023, SVB Financial Group announced it had agreed to sell SVB Securities in a management buyout, led by Leerink, with funds from the Baupost Group. MoffettNathanson LLC was not included in the sale.^[36][37] In July 2023, the buyout was approved in bankruptcy court, and SVB Securities was renamed to Leerink Partners.^[12]

On January 9, 2024, SVB Financial Group announced it planned to turn control of SVB Capital over to a new company controlled by its creditors.^[38]

On 20 March, SVB Financial Group announced that it would sell its Indian subsidiary SVB Global Services India to First Citizens BancShares.^[39]

On 3 May, SVB Financial Group entered into a definitive agreement to sell its investment platform business, SVB Capital, to a newly formed entity affiliated with Pinegrove Capital Partners and backed by Brookfield Asset Management and Sequoia Heritage.^[13]

References

1. Silicon Valley Bancshares (March 19, 1999). "Silicon Valley Bancshares Form 10-K" (PDF). EDGAR. Securities and Exchange Commission. p. 3. Retrieved March 11, 2023.
2. Schubarth, Cromwell (March 23, 2023). "Silicon Valley Bank's ex-parent company is no longer based in Silicon Valley". Silicon Valley Business Journal. San Jose, California: American City Business Journals. Retrieved March 24, 2023.
3. "SVB Financial Group 2022 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. February 24, 2023. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
4. "Exhibit 21.1-Subsidiaries of SVB Financial Group". U.S. Securities and Exchange Commission. February 24, 2023.
5. "FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California". www.fdic.gov. Retrieved March 12, 2023.
6. Palumbo, Angela; Vanjani, Karishma; English, Carleton. "Silicon Valley Bank Shut Down, Biggest Bank to Fail Since Financial Crisis". MarketWatch. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
7. Assis, Claudia. "Silicon Valley Bank out of S&P 500 index; Insulet selected to replace it". MarketWatch. Archived from the original on March 11, 2023. Retrieved March 11, 2023.
8. https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20230310-1461992/1461992_sivb-5.pdf
9. SVB Financial Group (February 24, 2023). "Exhibit 21.1-Subsidiaries of SVB Financial Group – SVB Financial Group Annual Report on Form 10-K". EDGAR. U.S. Securities and Exchange Commission. Retrieved March 14, 2021.
10. Schubarth, Cromwell (March 17, 2023). "SVB Financial files for bankruptcy protection as it weighs sale of non-bank units". Silicon Valley Business Journal. San Jose, California: American City Business Journals. Retrieved March 17, 2023.
11. Britton, Diane (March 27, 2023). "SVB Private Goes to First Citizens, But How Much of It Is Left?". Informa. Retrieved March 28, 2023.
12. Chesto, Jon (July 17, 2023). "How Boston's biggest investment bank was reborn after SVB collapsed". Boston Globe. Archived from the original on July 17, 2023. Retrieved July 27, 2023.
13. PYMNTS (May 3, 2024). "Pinegrove Capital Partners-Affiliated Entity to Buy SVB Capital". PYMNTS.com. Retrieved May 5, 2024.
14. Pollard, Amelia (March 10, 2023). "Silicon Valley Bank Collapses in Biggest Failure Since 2008". Bloomberg Law. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
15. "Silicon Valley Bank celebrates 20 years of dedication to entrepreneurs". Svb.com. October 17, 2003. Archived from the original on December 18, 2003. Retrieved June 16, 2020.
16. Kokalitcheva, Kia (March 11, 2023). "The rise and stunning fall of Silicon Valley Bank". Axios.
17. Popper, Nathaniel (April 1, 2015). "Silicon Valley Bank Strengthens Its Roots". The New York Times. Archived from the original on April 1, 2020.
18. Lacy, Sarah (September 12, 2004). "Silicon Valley Bank extends reach to Bangalore, London". American City Business Journals. Archived from the original on September 27, 2017.
19. Calvey, Mark (December 18, 2009). "Silicon Valley Bank's parent to repay all its $235M in TARP money". American City Business Journals. Archived from the original on September 27, 2017.
20. "Silicon Valley Bank to acquire Alliant Partners". American City Business Journals. August 17, 2001. Archived from the original on February 22, 2004.
21. Lacy, Sarah (August 17, 2003). "Silicon Valley Bank targeting San Jose for private banking". American City Business Journals. Archived from the original on September 27, 2017.
22. "Silicon Valley Bank Parent Changes Name to Reflect Successful Strategy and Future Growth; SVB Financial Group Becomes Holding Company Name; Debuts on Nasdaq Exchange Today" (Press release). Santa Clara, California: SVB Financial Group. May 31, 2005. Retrieved March 11, 2023.
23. "SVB Financial Group Announces it Will Cease Operations at SVB Alliant and Writes Off Remaining Goodwill of Investment Banking Arm" (Press release). Santa Clara, California: SVB Financial Group. July 18, 2007. Retrieved March 18, 2023.
24. "SVB Financial Becomes Second Local Bank To Partake In TARP Program". The Mercury News. December 3, 2008. Archived from the original on September 27, 2017. Retrieved November 14, 2012.
25. Calvey, Mark (December 18, 2009). "Silicon Valley Bank's parent to repay all its $235M in TARP money". American City Business Journals. Archived from the original on September 27, 2017. Retrieved October 17, 2017.
26. Popper, Nathaniel (April 1, 2015). "Silicon Valley Bank Strengthens Its Roots". The New York Times. ISSN 0362-4331. Retrieved March 12, 2023.
27. Group, SVB Financial. "SVB Financial Group Completes Acquisition of Healthcare Investment Bank Leerink Partners" (Press release). PR Newswire. Archived from the original on February 1, 2019. Retrieved January 31, 2019. {{cite press release}}: |last= has generic name (help)
28. "SVB Financial Group Completes Acquisition of Boston Private" (Press release). Santa Clara, California: SVB Financial Group. July 1, 2021. Retrieved March 11, 2023.
29. Sherman, Alex (December 13, 2021). "Silicon Valley Bank agrees to acquire boutique media and telecom research firm MoffettNathanson". CNBC. Retrieved July 13, 2023.
30. "SVB Leerink LLC Announces Company Name Change to SVB Securities LLC". Leerink Partners. February 1, 2022. Retrieved November 7, 2023.
31. Son, Hugh (March 28, 2023). "SVB customers tried to withdraw nearly all the bank's deposits over two days, Fed's Barr testifies". CNBC. Retrieved April 10, 2023.
32. "FDIC Acts to Protect All Depositors of the former Silicon Valley Bank, Santa Clara, California" (Press release). Washington, D.C.: Federal Deposit Insurance Corporation. March 13, 2023. Retrieved March 13, 2023.
33. "Silicon Valley Bank - Santa Clara, California: Frequently Asked Questions". Federal Deposit Insurance Corporation. March 12, 2023. Retrieved March 12, 2023.
34. Schubarth, Cromwell (March 13, 2023). "After Silicon Valley Bank's collapse, parent company SVB is looking at selling itself and its other units". Silicon Valley Business Journal. San Jose, California: American City Business Journals. Archived from the original on March 13, 2023. Retrieved March 13, 2023.
35. "SVB Financial seeks bankruptcy protection". Reuters. March 17, 2023. Retrieved March 17, 2023.
36. "SVB agrees to sell its investment banking division". Reuters. June 18, 2023. Retrieved June 21, 2023.
37. Kokalitcheva, Kia (June 18, 2023). "SVB Financial Group agrees to sell investment bank to CEO Jeff Leerink". Axios. Retrieved June 21, 2023.
38. Knauth, Dietrich (January 9, 2024). "SVB Financial plans to hand VC business to creditors". Reuters. Retrieved March 31, 2024.
39. "Defunct SVB Financial Group to sell Indian subsidiary to First Citizens Bancshares". Reuters. March 20, 2024. Retrieved March 31, 2024.

External links

• Official website
• Bankruptcy website
• • Historical business data for SVB Financial Group:
  • SEC filings