SVB Financial Group
American bank holding company From Wikipedia, the free encyclopedia
American bank holding company From Wikipedia, the free encyclopedia
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 the 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]
 | |
Former headquarters in Santa Clara | |
| Formerly | Silicon Valley Bancshares (1982–2005) |
|---|---|
| Company type | Public |
| |
| Industry | Financial services |
| Founded | April 23, 1982[1] |
| Founders |
|
| Headquarters | , United States |
Key people |
|
| Revenue |  US$7.40 billion (2022) |
 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 |
|
| Capital ratio | Tier 1 15.4% (2022) |
| Website | SVB Financial Group |
| Footnotes / references [3][4] | |
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]
SVB Financial was founded as Silicon Valley Bancshares on April 23, 1982, 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]
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]
In August 2024, SVB Financial Group received a U.S. judge's permission to turn over its assets to creditors and end its bankruptcy.[31] As part of its bankruptcy restructuring, SVB Financial sold various assets, spinning off its venture capital business and investment banking unit.[32]
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.[33] 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.[34] The holding company was not included in the bank closing or resulting receivership.[35] 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.[36] SVB Financial Group filed for Chapter 11 bankruptcy protection on March 17, one week after the bank's failure.[37] 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.[38][39] 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.[40]
On 20 March, SVB Financial Group announced that it would sell its Indian subsidiary SVB Global Services India to First Citizens BancShares.[41]
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]
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