Silicon Valley Bank Results Presentation Deck
Securities balances declined as deposit net outflows limited securities purchases
Q3'22 activity
Purchased $2.1B foreign government and UST securities (2.52% w.a. yield) related to
the subsidiarization of our U.K. branch vs. $2.8B paydowns (1.81% w.a. yield)
●
Q4'22 considerations
Estimated $2-3B paydowns in Q4; expect limited securities
purchases/reinvestment activity
• Expect Q4 portfolio yield ~1.70-1.75% (implies FY'22 portfolio yield ~1.83-1.85%)
Premium amortization expense¹
From prepayments of securities purchased at a premium
Expect Q4 premium amortization expense -$130-140M based on 10-year UST
at 4.01% as of 10/17/22 - changes in 10-year UST will impact premium
amortization expense
If 10-year drops 50 bps, premium amortization expense could increase by
~$10-15M
Rate protections
Executed $550M receive floating swaps on AFS portfolio in Oct 22 (105 bps
cost at 10/17/22)
$301M remaining locked-in pre-tax gains from unwind of $6B AFS fair value
hedges in Jul '22 to be amortized into interest income over the life of the
underlying hedged securities, ~7 years
svb>
Average fixed income investment securities
$B
1.55%
93.8
Q3'21
4.5y
4.0y
$133M
21.8
5.9
15.9
1.54%
Q3'21
111.7
Q4'21
4.0y
3.7y
$160M
Average cash and equivalents
$B
22.1
6.0
16.1
1.79%
Q4'21
125.6
Q1'22
4.9y
4.8y
$112M
14.8
5.6
9.2
Q1'22
1.92%
126.7
Q2'22
5.4y
5.3y
$86M
14.8
5.5
9.3
Q2'22
1.90%²
123.0
Q3'22
5.7y Portfolio duration
n/a
$94M
15.7
6.1
9.6
Tax-effected Yield
Q3'22
$8B Fed Cash at 9/30/22
Targeting Fed cash at
4-6% of total deposits ($7-11B)³
1. SVB applies the retrospective method of amortization for discounts/premiums. When a change is made to the estimated lives of the securities, the related premium or
discount is adjusted with a corresponding charge or benefit to interest income as if the current estimated lives had been applied since the acquisition of the securities.
2. Q3'22 portfolio yield decreased 2 bps QoQ due to annualization of bond coupon yields. Bonds accrue interest according to 30/360 day count, while reported yields
are based off of actual/365 day count.
3. Actual balances depend on timing of fund flows.
Hedge-adjusted
Premium amortization expense¹
Cash in other
financial institutions and
foreign central banks
Fed cash
Q3 2022 FINANCIAL HIGHLIGHTS 25View entire presentation