Silicon Valley Bank

Silicon Valley Bank is an American commercial bank. SVB is on the list of largest banks in the United States, and is the biggest bank in Silicon Valley based on local deposits. It is a subsidiary of SVB Financial Group.

History

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. 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. 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 the same year they opened another office in San Jose. 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.

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

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. In 1993, the bank's founding CEO, Roger V. Smith, was replaced by John C. Dean; Smith became Vice Chairman of the bank. Smith left in 1994 to launch the Smith Venture Group. In 1994, the bank launched its Premium Wine Practice activities. In 1995, the bank moved its headquarters from San Jose to Santa Clara. In 1997, SVB opened a branch in Atlanta. In 1999, the company was reincorporated in Delaware. From March 1999 to March 2000, SVB's stock value soared from $20 to $70.

In 2000, SVB opened a branch in Florida. In 2001, SVB Securities acquired the Palo Alto investment banking firm Alliant Partners for $100 million. Following the crash of the dot-com bubble, the bank's stock dropped 50%. 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.

In 2004, the bank opened international subsidiaries in Bangalore, India, and London. 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. In 2006, the bank also ceased its investment banking activities, launched after the 2001 dotcom crash.

In December 2008, SVB Financial received a $235 million investment from the U.S. Treasury through the Troubled Asset Relief Program. 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.

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 as CEO.

By 2011 the bank had helped fund more than 30,000 start-ups.

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. 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. According to the bank itself, in 2015 SVB was catering banking and financial services to 65% of all startups.

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

In January 2021, the bank announced its plan to acquire Boston Private Financial Holdings (NASDAQ: BPFH), the parent company of Boston Private Bank & Trust Company, which expanded Silicon Valley Bank's wealth management solutions.

Operations

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. 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.

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

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

* London, United Kingdom
* Hong Kong
* Beijing and Shanghai, China
* Herzliya Pituah, Israel
* Frankfurt, Germany
* Toronto, Canada

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.

References

External links

{{NASDAQ Financial-100

1980s initial public offerings
1982 establishments in California
Banks based in California
American companies established in 1982
Banks established in 1982
Companies listed on the Nasdaq
Companies based in Santa Clara, California