Silicon Valley Bank

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SVB Financial Group
Public
Traded as
IndustryFinancial Services
Founded1983; 37 years ago (1983)
HeadquartersSanta Clara, California
Key people
Greg Becker, CEO
Roger F. Dunbar, Chairman
Michael R. Descheneaux, President
Total assetsIncrease $71.004 billion (2019)
Total equityIncrease $6.470 billion (2019)
Number of employees
3,600 (2019)
Capital ratio12.06% Tier 1 capital (2017)
Websitesvb.com
Footnotes / references
[1]

Silicon Valley Bank, a subsidiary of SVB Financial Group, is a U.S.-based high-tech commercial bank. The bank has helped fund more than 30,000 start-ups.[2] SVB is on the list of largest banks in the United States.

The bank is also one of the largest providers of financial services to wine producers in Napa Valley.[1]

History[edit]

Silicon Valley Bank (SVB) was founded in 1982 by Bill Biggerstaff and Robert Medearis over a poker game. Its first office opened in 1983 on North First Street in San Jose. The Palo Alto office opened in 1985.[3] The bank’s main strategy was collecting deposits from businesses financed through venture capital. It then expanded into banking and financing venture capitalists themselves, and added services aimed at allowing the bank to keep clients as they matured from their startup phase.[4] In 1986, SVB merged with National InterCity Bancorp and opened an office in Santa Clara. In 1988, the bank completed its IPO, raising $6 million. In 1990, the bank opened its first office on the East Coast, near Boston. The following year, the bank went international with the launch of the companies Pacific Rim and Trade Finance.[3]

By the mid-1990s, the bank had provided early venture capital to Cisco Systems and Bay Networks.[5]

In 1992, the bank was hit by the real estate burst (50% of the bank's assets) and recorded a $2.2 million yearly loss.[5] In 1993, the bank's founding CEO, Roger V. Smith, was replaced by John C. Dean; Smith became Vice Chairman of the bank.[6] Smith left in 1994 to launch the Smith Venture Group.[7] In 1994, the bank launched its Premium Wine Practice activities.[3] In 1995, the bank moved its headquarters from San Jose to Santa Clara.[5] In 1997, SVB opened a branch in Atlanta.[8] In 1999, the company was reincorporated in Delaware.[3] From March 1999 to March 2000, SVB's stock value soared from $20 to $70.[8]

In 2000, SVB opened a branch in Florida.[8] In 2001, SVB Securities acquired the Palo Alto investment banking firm Alliant Partners for $100 million.[9] Following the crash of the dot-com bubble, the bank's stock dropped 50%.[10] In 2002, the bank began expanding its private banking business, which up to that point had been done primarily as a favor to wealthy venture capitalists and entrepreneurs.[11]

In 2004, the bank opened international subsidiaries in Bangalore, India, and London.[12][13] In 2005 it opened offices in Beijing and Israel. In 2006, the bank began operations in the UK and opened its first branch there in 2012.[14] In 2006, the bank also ceased its investment banking activities, launched after the 2001 dotcom crash.[10]

In December 2008, SVB Financial received a $235 million investment from the U.S. Treasury through the Troubled Asset Relief Program.[15] The U.S. Treasury received $10 million in dividends from Silicon Valley bank and, in December 2009, the bank repurchased the outstanding stock and warrants held by the government, funding this through a stock sale of $300 million.[16]

In April 2011, Ken Wilcox, who had been CEO since 2000, left the CEO position, while remaining Chairman of the Board; he was replaced by Greg Becker.[17]

In November 2012, the bank announced a 50-50 joint venture with Shanghai Pudong Development Bank (SPDB) to provide capital to start-up technology entrepreneurs.[18] In July 2015, the joint venture was granted approval by the China Bank Regulatory Commission (CBRC) to operate in renminbi (RMB), the official currency of the People’s Republic of China. This license allows the joint venture to provide banking products and services to its clients in local Chinese currency.[19] According to the bank itself, in 2015 SVB was catering banking and financial services to 65% of all startups.[10]

In March 2017, Michael R. Descheneaux was named president of the company.[20]

Operations[edit]

The company focuses on lending to technology companies, providing multiple services to venture capital, revenue-based financing and private equity firms that invest in technology and biotechnology, and also on private banking services for high-net-worth individuals, in its home market in Silicon Valley.[21][22][1] In addition to taking deposits and making loans, the bank operates venture capital and private equity divisions that sometimes invest in the firm's commercial banking clients.[14]

The bank is the largest bank in Silicon Valley in terms of deposits, with a 25.9% market share as of June 30, 2016.[23]

The bank operates from 29 offices in the United States and has banking operations in:

In addition, SVB Global Services India LLP is a non-banking subsidiary of SVB Financial Group in Bangalore, India providing IT and back office support.[26]

References[edit]

  1. ^ a b c "SVB Financial Group 2019 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ^ Boudreau, John (October 16, 2011). "Silicon Valley Bank works to import startup culture to China". San Jose Mercury News.
  3. ^ a b c d "Silicon Valley Bank celebrates 20 years of dedication to entrepreneurs". Svb.com. 17 October 2003. Retrieved 16 June 2020.
  4. ^ Rooney, Ben (November 14, 2012). "Microsoft's Karia Jumps Ship to Silicon Valley Bank". The Wall Street Journal.(subscription required)
  5. ^ a b c Peter Sinton (22 May 1995). "High-Tech Bank Loves Startups / Silicon Valley Bancshares makes money by serving young firms". Sfgate.com. Retrieved 16 June 2020.
  6. ^ Schubarth, Cromwell (June 1, 2015). "CEO Greg Becker on Silicon Valley Bank's bubble-proof growth". American City Business Journals.
  7. ^ "Roger V. Smith". Bloomberg L.P.
  8. ^ a b c Jim Freer (3 April 2000). "Silicon Valley Bank plans Florida office". Bizjournals.com. Retrieved 16 June 2020.
  9. ^ "Silicon Valley Bank to acquire Alliant Partners". Bizjournals.com. 17 August 2001. Retrieved 16 June 2020.
  10. ^ a b c Nathaniel Popper (1 April 2015). "Silicon Valley Bank Strengthens Its Roots". Nytimes.com. Retrieved 16 June 2020.
  11. ^ Lacy, Sarah (August 17, 2003). "Silicon Valley Bank targeting San Jose for private banking". American City Business Journals.
  12. ^ "Silicon Valley Bank opens B'lore unit". Siliconindia.com. 15 October 2004. Retrieved 16 June 2020.
  13. ^ Lacy, Sarah (September 12, 2004). "Silicon Valley Bank extends reach to Bangalore, London". American City Business Journals.
  14. ^ a b Murphy, Richard McGill (October 22, 2012). "Silicon Valley Bank: The bank for startups". Fortune.
  15. ^ "SVB Financial Becomes Second Local Bank To Partake In TARP Program". The Mercury News. December 3, 2008.
  16. ^ Calvey, Mark (December 18, 2009). "Silicon Valley Bank's parent to repay all its $235M in TARP money". American City Business Journals.
  17. ^ Calvey, Mark (January 20, 2011). "CEO of Silicon Valley Bank's parent stepping down". American City Business Journals.
  18. ^ Muncaster, Phil (August 20, 2012). "Silicon Valley comes to China to spur tech innovation". The Register.
  19. ^ "Silicon Valley Bank's Joint Venture in China Receives License to Transact in Local Currency" (Press release). PR Newswire. August 6, 2015.
  20. ^ "Silicon Valley Bank and SVB Financial Group name new president, CFO". American City Business Journals. May 12, 2017.
  21. ^ Reckard, E. Scott (August 8, 2015). "At Silicon Valley Bank, risky tech start-ups are lucrative business". Los Angeles Times.
  22. ^ Soper, Taylor. "Lighter Capital partners with Silicon Valley Bank to offer startups debt financing and banking services". GeekWire. Retrieved 6 March 2019.
  23. ^ Druzin, Bryce (October 3, 2016). "Big growth in Silicon Valley deposits for J.P. Morgan but Comerica takes a hit". American City Business Journals.
  24. ^ Rijo, Daniel (June 2, 2018). "Silicon Valley Bank opens hub in Frankfurt". PPC Land.
  25. ^ Bank, Silicon Valley. "Silicon Valley Bank Opens in Canada". www.prnewswire.com. Retrieved 2020-01-09.
  26. ^ Group, SVB Financial. "SVB Financial Group Expands IT and Engineering Team to Support Growth of the Innovation Economy". www.prnewswire.com. Retrieved 2020-01-09.

External links[edit]