Silicon Valley Bank Results Presentation Deck
Improved economic scenarios and continued strong Private Bank performance drive
reserve release; Expect 2021 NCOs to be between 20-40 bps
Q4'20 activity
• Released $78M of performing reserves based on improved model economic
scenarios and continued strong performance from Private Bank portfolio
• Vast majority of deferrals expired with clients resuming payments (only 1.8%
of total loans remaining in deferral)
Stable credit metrics as innovation markets remained resilient
Low gross charge-offs ($22.5M) consisting primarily of Investor
Dependent loans and strong recoveries ($12.8M)
• NPLs decreased modestly to $104M vs. $106M in Q3'20
Criticized loans declined $185M qoq to $1.2B (3% of Q4 EOP loans)
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●
●
PROVISION FOR CREDIT LOSSES
$ Millions
17
16
(7)
Q4'19
0.18%
0.31%
47
(3)
svb >
243
191
41
Q1'20
0.35%
0.15%
6
11
(6)
66
26
15
24
(5)
Q2'20
0.12%
0.26%
6
2
10
23
(5)
(82)
19
23
(78)
(52)
(38)
Q3'20 Q4'20
0.26%
0.28%
0.09%
0.23%
Market
conditions
Unfunded
2 Net credit losses
Non-performing
loans
Loan
composition
Net charge-offs¹
Non-performing
loans²
1. Net loan charge-offs as a percentage of average total loans (annualized).
2. Non-performing loans as a percentage of periodend total loans.
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FY'21 outlook key drivers
Changes in economic outlook could drive volatility in provision:
Current COVID-19 economic scenarios
Moody's December forecasts
Credit performance drivers:
+
+
40%
baseline
+
30%
downside
30%
upside
Potential for higher Tech & Life Science/Healthcare NPLs
and losses
Near-term challenges remain with delayed vaccine distributions, continued
COVID-19 spread and extended shutdowns
If higher NPLs and losses occur, expect these to be primarily driven by Early-
Stage and some Mid and LaterStage and Cash Flow dependent loans in 2H'21
Continued investor support and additional stimulus
Record VC investment and fundraising in 2020 bode well for continued
investor support in 2021
SBA PPP 2.0 and additional fiscal stimulus may help extend client runway
Improved risk profile of loan portfolio
Early-Stage - most vulnerable segment of Investor Dependent portfolio that
historically has produced the most losses- now only 3% of loans
68% of loans in low credit loss experience segments (GFBand Private Bank)
Limited exposure to industries most severely
impacted by efforts to combat COVID-19
No direct exposure to oil and gas
Limited indirect exposure to retail, travel and hospitality
Wine clients adapting well to COVID-19 environment
Q4 2020 Financial Highlights
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