Silicon Valley Bank Results Presentation Deck
NII and NIM have peaked in this rising rate cycle as asset sensitivity has declined
Expect low 40s % FY'22 NII growth and 2.15-2.25% FY'22 NIM
Net Interest Income¹
$M
1,177
Q2'22
NII
2.24%
183
Q2'22
NIM
Higher
loan yields
Net Interest Margin
svb>
28
Loan
growth
0.42%
53
Higher
interest eaming
yields
9
Includes $50M benefit due to
adjustment from higher rates
incorporated in Q3 premium
amortization expense²
Higher Swap gains
cash
(AFS FV
hedge
yields
unwind)
0.03%
Includes 9 bps benefit from
-$50M adjustment reflective of
higher rates incorporated in Q3
premium amortization expense²
Balance
sheet mix
(8)
Fixed
Fixed
income income
premium paydowns
amortization
(0.33%)
(19)
Higher
deposit costs
(172)
(44)
Includes $72M of higher
deposit costs from shifting
OBS client funds to on-
balance sheet deposits
Higher
deposit
costs
(0.08%)
NII +3% QOQ
Higher
borrowing costs
Higher
borrowing
costs
1,207
Q3'22
NII
NIM +4 bps
2.28%
Q3'22
NIM
Q4'22 considerations
Expect Q4 NII ~$1,000-1,050M and Q4 NIM ~1.95-2.05% assuming
10/17/22 forward curve:
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
$73M remaining locked-in pre-tax swap gains from unwind of loan cash flow
hedges as of 9/30/22³
Balance sheet reduction
Driven by client funds net outflows
Higher deposit costs
Given rising rate environment and declining noninterest-bearing share of total
deposits (see page 24)
Increased borrowing activity
Driven by client funds net outflows
Premium amortization expense
From prepayments of securities purchased at a premium (see page 25)
Boston Private purchase accounting
Amortization of fair value mark ups on loans ($31M remaining at 9/30/22, vast
majority to be amortized by end of 2023)
Higher loan yields with future rate hikes
91% of Q3'22 average loans were variable rate
1. NII is presented on a fully taxable equivalent basis, while NII guidance excludes fully taxable equivalent adjustments.
2. 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.
3. Expect vast majority of remaining pre-tax gains from $5B swap unwind in Q1'20 to be amortized into loan interest income by the end of 2023.
Q3 2022 FINANCIAL HIGHLIGHTS 27View entire presentation