Silicon Valley Bancshares Announces First Quarter 2001 Financial Results

Apr 19, 2001, 01:00 ET from Silicon Valley Bancshares

    SANTA CLARA, Calif., April 19 /PRNewswire/ --
 Silicon Valley Bancshares (Nasdaq:   SIVB) (the "Company"), parent company of
 Silicon Valley Bank (the "Bank"), today announced "core" earnings per share,
 on a fully diluted basis, of $0.65, up 25.0%, compared to $0.52 for the first
 quarter of 2000. The Company defines core earnings as net income, excluding,
 on an after-tax basis, income from the disposition of client warrants,
 investment gain or losses, retention and warrant incentive plan expense,
 provision for loan losses in excess of 1% of average loans on an annualized
 basis. Core earnings in the first quarter of 2001 also excludes $2.2 million
 in noninterest expense associated with a nonrecurring operational loss.
     Net income for the quarter ended March 31, 2001, totaled $33.3 million, a
 decrease of $21.3 million, or 39.0%, compared with $54.7 million for the first
 quarter of 2000. This decrease primarily resulted from a decline in income
 from the disposition of client warrants and gains on venture capital fund
 investments. Diluted earnings per share totaled $0.65 for the first quarter of
 2001 compared to $1.15 per diluted share in the comparable 2000 period. Shares
 and per share amounts for all periods presented have been adjusted to give
 retroactive recognition to a two-for-one stock split distributed May 15, 2000.
     "We are pleased with our first quarter 2001 financial performance, in
 particular both the growth in core earnings over the prior year and a return
 on average equity of over 20%," said John C. Dean, President and Chief
 Executive Officer.
     Total assets were $4.8 billion at March 31, 2001, a decrease of
 $221.8 million, or 4.4%, compared to $5.1 billion at March 31, 2000. Total
 deposits decreased $473.6 million, or 10.5%, to $4.0 billion at
 March 31, 2001, from $4.5 billion a year earlier. Loans, net of unearned
 income, were $1.7 billion at March 31, 2001, an increase of $100.5 million, or
 6.2%, from $1.6 billion at March 31, 2000. Off-balance sheet client funds
 totaled $10.1 billion at March 31, 2001, compared with $9.5 billion at
 March 31, 2000.
     Net interest income totaled $81.7 million for the first quarter of 2001, a
 $10.2 million, or 14.3%, increase compared to the $71.5 million total for the
 prior year first quarter. The increase in net interest income was the result
 of a $260.7 million, or 5.9%, increase in average interest-earning assets over
 the same quarter last year, combined with an increase in the average yield on
 interest-earning assets. The net interest margin was 7.2% for the first
 quarter of 2001, compared to 6.6% for the prior year first quarter.
     Noninterest income decreased $57.3 million to a total of $23.9 million in
 the first quarter of 2001, versus $81.1 million in the prior year first
 quarter. The decrease in noninterest income was largely due to decreases in
 income from the disposition of client warrants and gains on venture capital
 fund investments. Income from the disposition of client warrants totaled
 $4.1 million in the first quarter of 2001 and resulted from the sale of
 warrants in 26 companies. Client investment fees increased $6.2 million to a
 total of $11.8 million in the first quarter of 2001, versus $5.6 million in
 the 2000 first quarter.
     Based on March 31, 2001 market valuations, the Company had additional
 potential pre-tax warrant gains totaling $1.1 million related to 22 companies.
 The Company is restricted from exercising many of these warrants until later
 in 2001.  As of March 31, 2001, the Company held 1,475 warrants in
 1,146 companies and had made investments in 219 venture capital funds and
 direct equity investments in 64 companies.  Many of these companies are
 non-public.  Thus, for those companies for which a readily determinable market
 value cannot be obtained, the Company values those equity instruments at cost
 less any identified impairment.  Additionally, the Company is typically
 precluded from using any type of derivative instrument to secure the current
 unrealized gains associated with many of these equity instruments.  Hence, the
 amount of income realized by the Company from these equity instruments in
 future periods may vary materially from the current unrealized amount due to
 fluctuations in the market prices of the underlying common stock of these
 companies.  Furthermore, the Company may reinvest some or all of the income
 realized from the disposition of these equity instruments in pursuing its
 business strategies.
     Noninterest expense totaled $46.2 million in the first quarter of 2001, a
 $1.4 million, or 2.9%, decrease over the $47.5 million incurred in the
 comparable 2000 period. The decrease in noninterest expense was primarily due
 to decreases in performance-based compensation associated with the Company's
 retention, warrant and incentive compensation plans. Other noninterest expense
 totaled $4.5 million, including a one-time $2.2 million operational loss
 related to a system issue associated with our off-balance sheet client funds.
 The increases in the remaining noninterest expense items, when compared to the
 same period last year, were largely attributable to overall growth in the
 Company's business as well as several ongoing business initiatives.
     For the first quarter of 2001, return on average assets (ROA) was
 2.7%, versus 4.6% in the first quarter of 2000. Return on average equity (ROE)
 was 21.2% in the first quarter of 2001, compared to 55.7% in the 2000 first
 quarter.
     The efficiency ratio is calculated by dividing the amount of noninterest
 expense, excluding costs associated with retention and warrant incentive plans
 and other real estate owned, by adjusted revenues, defined as the total of net
 interest income and noninterest income, excluding income from the disposition
 of client warrants and gains or losses related to sales of investment
 securities. The Company's efficiency ratio was 44.9% in the first quarter of
 2001, relatively unchanged from 45.2% in the comparable prior year period.
     Nonperforming loans totaled $20.1 million, or 1.2% of total loans, at
 March 31, 2001, compared to $28.8 million, or 1.8% of total loans, a year
 earlier. Total nonperforming loans at March 31, 2001 increased $1.8 million,
 or 9.6%, compared to $18.4 million at December 31, 2000.
     Nonperforming loans at the end of the 2001 first quarter included one
 commercial credit totaling $6.1 million in the Company's Healthcare Services
 niche. This credit has been nonperforming since the 2000 first quarter.
 Management believes this credit is adequately secured with collateral and
 reserves, and that any future charge-offs associated with this loan will not
 have a material impact on the future net income of the Company.
     The allowance for loans losses totaled $73.8 million, or 4.3% of total
 loans and 366.3% of nonperforming loans, at March 31, 2001, compared to
 $73.8 million, or 4.3% of total loans and 401.4% of nonperforming loans, at
 December 31, 2000. The Company incurred $4.9 million in net charge-offs during
 the first quarter of 2001.  Gross charge-offs for the 2001 first quarter
 totaled $12.3 million, including $3.8 million related to the Company's last
 entertainment credit. Gross recoveries totaled $7.4 million, including
 $5.0 million associated with one Healthcare Services loan charged off in the
 first quarter of 2000.
     "We continue to see good growth in our loan portfolio, and our overall
 credit quality continues to remain strong," stated Ken Wilcox, President and
 Chief Executive Officer of the Bank.
     Total stockholders' equity was $660.0 million at March 31, 2001, an
 increase of $259.3 million, or 64.7%, compared to $400.7 million a year prior.
 Total stockholders' equity plus the allowance for loan losses was
 $733.8 million at March 31, 2001, an increase of $260.2 million, or
 54.9%, compared to $473.6 million a year earlier.
     On April 5, 2001, the Company's Board of Directors authorized a share
 repurchase program of up to 5 million shares of common stock. The Company
 intends to repurchase shares under the program, from time to time, under
 conditions which allow such repurchases to be accretive to earnings while
 maintaining capital ratios that exceed the guidelines for a well capitalized
 financial institution. The Company has not yet repurchased any shares under
 this program.
     This release includes "forward-looking statements" as that term is used in
 the securities laws. All statements regarding the Company's expected financial
 position, business and strategies are forward-looking statements. In addition,
 in this release the words "anticipates," "believes," "estimates," "seeks,"
 "expects," "plans," "intends" and similar expressions, as they relate to the
 Company or its management, are intended to identify forward-looking
 statements. Although the Company believes that the expectations reflected in
 these forward-looking statements are reasonable, and has based these
 expectations on the Company's beliefs as well as assumptions it has made, such
 expectations may prove to be incorrect.
     For information with respect to factors that could cause actual results to
 differ from the expectations stated in the forward-looking statements, see the
 text under the caption "Risk Factors" included in Item 7 of our Report on Form
 10-K dated March 16, 2001. The Company urges investors to consider these
 factors carefully in evaluating the forward-looking statements contained in
 this release.  All subsequent written or oral forward-looking statements
 attributable to the Company or persons acting on the Company's behalf are
 expressly qualified in their entirety by these cautionary statements. The
 forward-looking statements included in this release are made only as of the
 date of this release. The Company does not intend, and undertakes no
 obligation, to update these forward-looking statements.
     The Company will host a conference call at 6:00 a.m. (PDT), on Friday,
 April 20, 2001, to discuss the 2001 first quarter financial results. The
 conference call can be accessed by dialing 888-955-3514 and referencing the
 passcode "Silicon Valley Bank." A digitized replay of this conference call
 will be available beginning at approximately 9:00 a.m. (PDT), on Friday,
 April 20, 2001, through 5:00 p.m. (PDT), on Friday, May 18, 2001, by dialing
 800-238-0563. An audio replay of this conference call will also be available
 on the World Wide Web at www.svb.com beginning Friday, April 20, 2001.
     Silicon Valley Bank serves emerging growth and middle-market companies in
 targeted niches, focusing on technology and life sciences, while also
 addressing other specific industries in which it can provide a higher level of
 service and better manage credit through specialization and focus.
     The Bank operates throughout the Silicon Valley:  Santa Clara, Palo Alto
 and Sand Hill, the center of the venture capital community in California.
 Other regional offices within California include: Irvine, Los Angeles, Napa
 Valley, San Diego, San Francisco, Santa Barbara, and Sonoma.  Office locations
 outside of California include: Phoenix, Arizona; Boulder, Colorado; West Palm
 Beach, Florida; Atlanta, Georgia; Chicago, Illinois; Boston, Massachusetts;
 Minneapolis, Minnesota; Durham, North Carolina; Northern Virginia; Portland,
 Oregon; Philadelphia, Pennsylvania; Austin, Texas; Dallas, Texas; and Seattle,
 Washington.
     More information about Silicon Valley Bank can be found at www.svb.com.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
                          CONDENSED INCOME STATEMENTS
 
                                                    For the three months ended
                                                     March 31,       March 31,
     (Dollars in thousands,
      except per share amounts)                        2001            2000
     Interest Income:
      Loans                                           $50,905        $44,293
      Investment Securities:
        Taxable                                        25,941         23,112
        Non-Taxable                                     2,239          1,444
     Federal Funds Sold and Securities
       Purchased Under Agreement to Resell             15,375         16,027
     Total Interest Income                             94,460         84,876
     Interest Expense                                  12,724         13,376
     Net Interest Income                               81,736         71,500
     Provision for Loan Losses                          4,903         12,572
     Net Interest Income After
      Provision for Loan Losses                        76,833         58,928
 
     Noninterest Income:
      Client Investment Fees                           11,790          5,619
      Letter of Credit and Foreign Exchange Income      4,546          3,631
      Disposition of Client Warrants                    4,078         39,354
      Deposit Service Charges                             822            714
      Investment (Losses) Gains                         (336)         29,888
      Other                                             2,975          1,928
     Total Noninterest Income                          23,875         81,134
 
     Noninterest Expense:
      Compensation and Benefits                        22,832         24,371
      Professional Services                             5,540          2,446
      Net Occupancy                                     3,723          1,904
      Business Development and Travel                   2,974          2,443
      Furniture and Equipment                           2,411          2,014
      Advertising and Promotion                         1,028            499
      Postage and Supplies                              1,013            788
      Telephone                                           858            496
      Trust Preferred Securities Distributions            825            825
      Retention and Warrant Incentive Plans               400          9,850
      Other                                             4,549          1,883
     Total Noninterest Expense                         46,153         47,519
 
     Minority Interest                                    503             --
 
     Income Before Income Tax Expense                  55,058         92,543
     Income Tax Expense                                21,722         37,888
     Net Income                                       $33,336        $54,655
 
     Basic Earnings per Share                           $0.68          $1.21
     Diluted Earnings per Share                         $0.65          $1.15
     Return on Average Assets                            2.7%           4.6%
     Return on Average Equity                           21.2%          55.7%
     Efficiency Ratio                                   44.9%          45.2%
     Weighted Average Shares Outstanding           48,825,835     45,247,486
     Weighted Average Diluted Shares Outstanding   51,075,560     47,528,972
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                  CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
 
                                                   For the three months ended
 
                                                    March 31,       March 31,
     (Dollars in thousands)                            2001           2000
 
     Net Income                                       $33,336       $ 54,655
 
     Other Comprehensive Income (Loss),
      Net of Tax:
      Change in Unrealized Gains (Losses) on
       Available-for-Sale Investments:
       Unrealized Holding Gains                         7,502          2,287
       Less: Reclassification Adjustment
        for Gains Included in Net Income              (2,266)       (40,894)
     Other Comprehensive Income (Loss)                  5,236       (38,607)
     Comprehensive Income                             $38,572        $16,048
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                            CONDENSED BALANCE SHEETS
 
 
     (Dollars in thousands,
      except par value and          March 31,    December 31,     March 31,
      per share amounts)              2001           2000           2000
 
     Assets:
     Cash and Due from Banks        $243,078        $332,632      $393,295
     Federal Funds Sold and
      Securities Purchased
       Under Agreement to Resell   1,076,102       1,389,734     1,070,542
     Investment Securities         1,724,119       2,107,590     1,910,499
     Loans:
       Gross Loans                 1,738,836       1,724,949     1,641,792
       Unearned Income on Loans      (6,861)         (8,400)      (10,350)
     Loans, Net of Unearned Income 1,731,975       1,716,549     1,631,442
     Allowance for Loan Losses      (73,800)        (73,800)      (72,900)
     Net Loans                     1,658,175       1,642,749     1,558,542
     Premises and Equipment           21,375          18,493        10,270
     Accrued Interest Receivable
      and Other Assets               119,906         135,577       121,377
     Total Assets                 $4,842,755      $5,626,775    $5,064,525
 
     Liabilities, Minority Interest
      and Stockholders' Equity:
     Liabilities:
     Deposits:
       Noninterest-Bearing
        Demand                    $2,042,532      $2,448,758    $2,405,490
       NOW                            35,271          57,857        81,941
       Money Market                1,138,068       1,519,563     1,597,660
       Time                          826,334         836,081       430,760
     Total Deposits                4,042,205       4,862,259     4,515,851
     Other Liabilities                71,364          81,138       109,440
     Total Liabilities             4,113,569       4,943,397     4,625,291
 
 Company Obligated Mandatorily
  Redeemable Trust
  Preferred Securities of
      Subsidiary Trust Holding
      Solely Junior Subordinated
      Debentures
      (Trust Preferred Securities)    38,602          38,589        38,550
     Minority Interest                30,614          30,668            --
     Stockholders' Equity:
     Common Stock,
      $0.001 Par Value                    49              49            46
     Additional Paid-In Capital      286,623         280,008       171,034
     Retained Earnings               368,434         335,098       230,685
     Unearned Compensation           (2,972)         (3,634)       (4,136)
     Accumulated Other
      Comprehensive Income:
       Net Unrealized Gains on
        Available-for-Sale
        Investments                    7,836           2,600         3,055
     Total Stockholders' Equity      659,970         614,121       400,684
     Total Liabilities,
      Minority Interest and
      Stockholders' Equity        $4,842,755      $5,626,775    $5,064,525
 
     Capital Ratios:
     Total Risk-Based Capital Ratio    19.2%           18.5%         16.2%
     Tier 1 Risk-Based Capital Ratio   17.9%           17.2%         14.9%
     Tier 1 Leverage Ratio             13.7%           12.6%          9.0%
     Average Stockholders' Equity
      as a Percentage of
      Average Assets(A)                12.7%           10.9%          8.2%
 
     Other Period End Statistics:
     Book Value per Share             $13.34          $12.54         $8.71
     Full-Time Equivalent Employees      960             959           725
     Shares Outstanding           49,472,775      48,977,906    46,008,180
 
     *Represents quarterly average balances for each respective period.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                       AVERAGE BALANCES, RATES AND YIELDS
 
                                For the three months ended March 31,
                                  2001                        2000
                                        Average                       Average
     (Dollars in       Average           Yield/   Average             Yield/
      thousands)       Balance  Interest  Rate    Balance   Interest   Rate
     Interest-Earning
      Assets:
      Federal Funds
      Sold and
      Securities
      Purchased
      Under
      Agreement
      to Resell     $ 1,092,609  $15,375  5.7%  $ 1,101,198  $16,027    5.9%
 
      Investment
       Securities:
        Taxable       1,727,919   25,941   6.1    1,588,349   23,112     5.9
        Non-
         Taxable(A)     206,781    3,445   6.8      143,040    2,221     6.2
      Loans:
        Commercial    1,465,713   45,981  12.7    1,397,920   39,331    11.3
        Real Estate
        Construction
        and Term        103,175    2,801  11.0      135,975    3,480    10.3
        Consumer
        and Other        96,086    2,123   9.0       65,069    1,482     9.2
        Total Loans   1,664,974   50,905  12.4    1,598,964   44,293    11.1
 
     Total Interest-
      Earning Assets  4,692,283   95,666   8.3    4,431,551   85,653     7.8
 
 
     Cash and Due
      from Banks        233,876                     283,142
     Allowance for
      Loan Losses      (78,245)                    (71,312)
     Other Assets       193,728                     186,009
     Total Assets   $ 5,041,642                 $ 4,829,390
 
     Funding Sources:
     Interest-Bearing
      Liabilities:
       NOW Deposits     $58,384      128   0.9      $52,596      260     2.0
       Regular Money
        Market
        Deposits        318,572    1,133   1.4      419,387    1,904     1.8
       Bonus Money
        Market
        Deposits        957,058    3,646   1.6    1,498,010    7,579     2.0
       Time Deposits    833,695    7,817   3.8      357,647    3,633     4.1
 
     Total Interest-
      Bearing
      Liabilities     2,167,709   12,724   2.4    2,327,640   13,376     2.3
     Portion of
      Noninterest-
      Bearing
      Funding
      Sources         2,524,574                   2,103,911
     Total Funding
      Sources         4,692,283   12,724   1.1    4,431,551   13,376     1.2
 
     Noninterest-
      Bearing Funding
      Sources:
      Demand
       Deposits       2,100,812                   1,981,318
      Other
       Liabilities       66,009                      86,945
      Trust
       Preferred
       Securities        38,591                      38,539
      Minority
       Interest          30,531                          --
      Stockholders'
       Equity           637,990                     394,948
      Portion Used
       to Fund
       Interest-
       Earning
       Assets       (2,524,574)                 (2,103,911)
 Total
  Liabilities,
  Minority
  Interest and
      Stockholders'
      Equity        $ 5,041,642                 $ 4,829,390
 
     Net Interest
      Income                     $82,942                     $72,277
     Net Interest
      Margin                              7.2%                          6.6%
 
     Memorandum:
      Total
      Deposits      $ 4,268,521                 $ 4,308,958
 
     (A) Interest income on non-taxable investments is presented on a fully
 taxable-equivalent basis.  The tax equivalent adjustments were $1,206 thousand
 and $777 thousand for the three months ended March 31, 2001 and 2000,
 respectively.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                                 CREDIT QUALITY
 
                                    March 31,     December 31,    March 31,
    (Dollars in thousands)             2001           2000           2000
 
     Nonperforming Assets:
     Loans Past Due 90 Days or More      $--             $98           $--
     Nonaccrual Loans                 20,149          18,287        28,789
     Total Nonperforming Assets      $20,149         $18,385       $28,789
 
     Nonperforming Loans as a
      Percentage of Total Loans         1.2%            1.1%          1.8%
     Nonperforming Assets as a
      Percentage of Total Assets        0.4%            0.3%          0.6%
 
     Allowance for Loan Losses       $73,800         $73,800       $72,900
      As a Percentage of
       Total Loans                      4.3%            4.3%          4.4%
      As a Percentage of
       Nonaccrual Loans               366.3%          403.6%        253.2%
      As a Percentage of
       Nonperforming Loans            366.3%          401.4%        253.2%
 
 

SOURCE Silicon Valley Bancshares
    SANTA CLARA, Calif., April 19 /PRNewswire/ --
 Silicon Valley Bancshares (Nasdaq:   SIVB) (the "Company"), parent company of
 Silicon Valley Bank (the "Bank"), today announced "core" earnings per share,
 on a fully diluted basis, of $0.65, up 25.0%, compared to $0.52 for the first
 quarter of 2000. The Company defines core earnings as net income, excluding,
 on an after-tax basis, income from the disposition of client warrants,
 investment gain or losses, retention and warrant incentive plan expense,
 provision for loan losses in excess of 1% of average loans on an annualized
 basis. Core earnings in the first quarter of 2001 also excludes $2.2 million
 in noninterest expense associated with a nonrecurring operational loss.
     Net income for the quarter ended March 31, 2001, totaled $33.3 million, a
 decrease of $21.3 million, or 39.0%, compared with $54.7 million for the first
 quarter of 2000. This decrease primarily resulted from a decline in income
 from the disposition of client warrants and gains on venture capital fund
 investments. Diluted earnings per share totaled $0.65 for the first quarter of
 2001 compared to $1.15 per diluted share in the comparable 2000 period. Shares
 and per share amounts for all periods presented have been adjusted to give
 retroactive recognition to a two-for-one stock split distributed May 15, 2000.
     "We are pleased with our first quarter 2001 financial performance, in
 particular both the growth in core earnings over the prior year and a return
 on average equity of over 20%," said John C. Dean, President and Chief
 Executive Officer.
     Total assets were $4.8 billion at March 31, 2001, a decrease of
 $221.8 million, or 4.4%, compared to $5.1 billion at March 31, 2000. Total
 deposits decreased $473.6 million, or 10.5%, to $4.0 billion at
 March 31, 2001, from $4.5 billion a year earlier. Loans, net of unearned
 income, were $1.7 billion at March 31, 2001, an increase of $100.5 million, or
 6.2%, from $1.6 billion at March 31, 2000. Off-balance sheet client funds
 totaled $10.1 billion at March 31, 2001, compared with $9.5 billion at
 March 31, 2000.
     Net interest income totaled $81.7 million for the first quarter of 2001, a
 $10.2 million, or 14.3%, increase compared to the $71.5 million total for the
 prior year first quarter. The increase in net interest income was the result
 of a $260.7 million, or 5.9%, increase in average interest-earning assets over
 the same quarter last year, combined with an increase in the average yield on
 interest-earning assets. The net interest margin was 7.2% for the first
 quarter of 2001, compared to 6.6% for the prior year first quarter.
     Noninterest income decreased $57.3 million to a total of $23.9 million in
 the first quarter of 2001, versus $81.1 million in the prior year first
 quarter. The decrease in noninterest income was largely due to decreases in
 income from the disposition of client warrants and gains on venture capital
 fund investments. Income from the disposition of client warrants totaled
 $4.1 million in the first quarter of 2001 and resulted from the sale of
 warrants in 26 companies. Client investment fees increased $6.2 million to a
 total of $11.8 million in the first quarter of 2001, versus $5.6 million in
 the 2000 first quarter.
     Based on March 31, 2001 market valuations, the Company had additional
 potential pre-tax warrant gains totaling $1.1 million related to 22 companies.
 The Company is restricted from exercising many of these warrants until later
 in 2001.  As of March 31, 2001, the Company held 1,475 warrants in
 1,146 companies and had made investments in 219 venture capital funds and
 direct equity investments in 64 companies.  Many of these companies are
 non-public.  Thus, for those companies for which a readily determinable market
 value cannot be obtained, the Company values those equity instruments at cost
 less any identified impairment.  Additionally, the Company is typically
 precluded from using any type of derivative instrument to secure the current
 unrealized gains associated with many of these equity instruments.  Hence, the
 amount of income realized by the Company from these equity instruments in
 future periods may vary materially from the current unrealized amount due to
 fluctuations in the market prices of the underlying common stock of these
 companies.  Furthermore, the Company may reinvest some or all of the income
 realized from the disposition of these equity instruments in pursuing its
 business strategies.
     Noninterest expense totaled $46.2 million in the first quarter of 2001, a
 $1.4 million, or 2.9%, decrease over the $47.5 million incurred in the
 comparable 2000 period. The decrease in noninterest expense was primarily due
 to decreases in performance-based compensation associated with the Company's
 retention, warrant and incentive compensation plans. Other noninterest expense
 totaled $4.5 million, including a one-time $2.2 million operational loss
 related to a system issue associated with our off-balance sheet client funds.
 The increases in the remaining noninterest expense items, when compared to the
 same period last year, were largely attributable to overall growth in the
 Company's business as well as several ongoing business initiatives.
     For the first quarter of 2001, return on average assets (ROA) was
 2.7%, versus 4.6% in the first quarter of 2000. Return on average equity (ROE)
 was 21.2% in the first quarter of 2001, compared to 55.7% in the 2000 first
 quarter.
     The efficiency ratio is calculated by dividing the amount of noninterest
 expense, excluding costs associated with retention and warrant incentive plans
 and other real estate owned, by adjusted revenues, defined as the total of net
 interest income and noninterest income, excluding income from the disposition
 of client warrants and gains or losses related to sales of investment
 securities. The Company's efficiency ratio was 44.9% in the first quarter of
 2001, relatively unchanged from 45.2% in the comparable prior year period.
     Nonperforming loans totaled $20.1 million, or 1.2% of total loans, at
 March 31, 2001, compared to $28.8 million, or 1.8% of total loans, a year
 earlier. Total nonperforming loans at March 31, 2001 increased $1.8 million,
 or 9.6%, compared to $18.4 million at December 31, 2000.
     Nonperforming loans at the end of the 2001 first quarter included one
 commercial credit totaling $6.1 million in the Company's Healthcare Services
 niche. This credit has been nonperforming since the 2000 first quarter.
 Management believes this credit is adequately secured with collateral and
 reserves, and that any future charge-offs associated with this loan will not
 have a material impact on the future net income of the Company.
     The allowance for loans losses totaled $73.8 million, or 4.3% of total
 loans and 366.3% of nonperforming loans, at March 31, 2001, compared to
 $73.8 million, or 4.3% of total loans and 401.4% of nonperforming loans, at
 December 31, 2000. The Company incurred $4.9 million in net charge-offs during
 the first quarter of 2001.  Gross charge-offs for the 2001 first quarter
 totaled $12.3 million, including $3.8 million related to the Company's last
 entertainment credit. Gross recoveries totaled $7.4 million, including
 $5.0 million associated with one Healthcare Services loan charged off in the
 first quarter of 2000.
     "We continue to see good growth in our loan portfolio, and our overall
 credit quality continues to remain strong," stated Ken Wilcox, President and
 Chief Executive Officer of the Bank.
     Total stockholders' equity was $660.0 million at March 31, 2001, an
 increase of $259.3 million, or 64.7%, compared to $400.7 million a year prior.
 Total stockholders' equity plus the allowance for loan losses was
 $733.8 million at March 31, 2001, an increase of $260.2 million, or
 54.9%, compared to $473.6 million a year earlier.
     On April 5, 2001, the Company's Board of Directors authorized a share
 repurchase program of up to 5 million shares of common stock. The Company
 intends to repurchase shares under the program, from time to time, under
 conditions which allow such repurchases to be accretive to earnings while
 maintaining capital ratios that exceed the guidelines for a well capitalized
 financial institution. The Company has not yet repurchased any shares under
 this program.
     This release includes "forward-looking statements" as that term is used in
 the securities laws. All statements regarding the Company's expected financial
 position, business and strategies are forward-looking statements. In addition,
 in this release the words "anticipates," "believes," "estimates," "seeks,"
 "expects," "plans," "intends" and similar expressions, as they relate to the
 Company or its management, are intended to identify forward-looking
 statements. Although the Company believes that the expectations reflected in
 these forward-looking statements are reasonable, and has based these
 expectations on the Company's beliefs as well as assumptions it has made, such
 expectations may prove to be incorrect.
     For information with respect to factors that could cause actual results to
 differ from the expectations stated in the forward-looking statements, see the
 text under the caption "Risk Factors" included in Item 7 of our Report on Form
 10-K dated March 16, 2001. The Company urges investors to consider these
 factors carefully in evaluating the forward-looking statements contained in
 this release.  All subsequent written or oral forward-looking statements
 attributable to the Company or persons acting on the Company's behalf are
 expressly qualified in their entirety by these cautionary statements. The
 forward-looking statements included in this release are made only as of the
 date of this release. The Company does not intend, and undertakes no
 obligation, to update these forward-looking statements.
     The Company will host a conference call at 6:00 a.m. (PDT), on Friday,
 April 20, 2001, to discuss the 2001 first quarter financial results. The
 conference call can be accessed by dialing 888-955-3514 and referencing the
 passcode "Silicon Valley Bank." A digitized replay of this conference call
 will be available beginning at approximately 9:00 a.m. (PDT), on Friday,
 April 20, 2001, through 5:00 p.m. (PDT), on Friday, May 18, 2001, by dialing
 800-238-0563. An audio replay of this conference call will also be available
 on the World Wide Web at www.svb.com beginning Friday, April 20, 2001.
     Silicon Valley Bank serves emerging growth and middle-market companies in
 targeted niches, focusing on technology and life sciences, while also
 addressing other specific industries in which it can provide a higher level of
 service and better manage credit through specialization and focus.
     The Bank operates throughout the Silicon Valley:  Santa Clara, Palo Alto
 and Sand Hill, the center of the venture capital community in California.
 Other regional offices within California include: Irvine, Los Angeles, Napa
 Valley, San Diego, San Francisco, Santa Barbara, and Sonoma.  Office locations
 outside of California include: Phoenix, Arizona; Boulder, Colorado; West Palm
 Beach, Florida; Atlanta, Georgia; Chicago, Illinois; Boston, Massachusetts;
 Minneapolis, Minnesota; Durham, North Carolina; Northern Virginia; Portland,
 Oregon; Philadelphia, Pennsylvania; Austin, Texas; Dallas, Texas; and Seattle,
 Washington.
     More information about Silicon Valley Bank can be found at www.svb.com.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
                          CONDENSED INCOME STATEMENTS
 
                                                    For the three months ended
                                                     March 31,       March 31,
     (Dollars in thousands,
      except per share amounts)                        2001            2000
     Interest Income:
      Loans                                           $50,905        $44,293
      Investment Securities:
        Taxable                                        25,941         23,112
        Non-Taxable                                     2,239          1,444
     Federal Funds Sold and Securities
       Purchased Under Agreement to Resell             15,375         16,027
     Total Interest Income                             94,460         84,876
     Interest Expense                                  12,724         13,376
     Net Interest Income                               81,736         71,500
     Provision for Loan Losses                          4,903         12,572
     Net Interest Income After
      Provision for Loan Losses                        76,833         58,928
 
     Noninterest Income:
      Client Investment Fees                           11,790          5,619
      Letter of Credit and Foreign Exchange Income      4,546          3,631
      Disposition of Client Warrants                    4,078         39,354
      Deposit Service Charges                             822            714
      Investment (Losses) Gains                         (336)         29,888
      Other                                             2,975          1,928
     Total Noninterest Income                          23,875         81,134
 
     Noninterest Expense:
      Compensation and Benefits                        22,832         24,371
      Professional Services                             5,540          2,446
      Net Occupancy                                     3,723          1,904
      Business Development and Travel                   2,974          2,443
      Furniture and Equipment                           2,411          2,014
      Advertising and Promotion                         1,028            499
      Postage and Supplies                              1,013            788
      Telephone                                           858            496
      Trust Preferred Securities Distributions            825            825
      Retention and Warrant Incentive Plans               400          9,850
      Other                                             4,549          1,883
     Total Noninterest Expense                         46,153         47,519
 
     Minority Interest                                    503             --
 
     Income Before Income Tax Expense                  55,058         92,543
     Income Tax Expense                                21,722         37,888
     Net Income                                       $33,336        $54,655
 
     Basic Earnings per Share                           $0.68          $1.21
     Diluted Earnings per Share                         $0.65          $1.15
     Return on Average Assets                            2.7%           4.6%
     Return on Average Equity                           21.2%          55.7%
     Efficiency Ratio                                   44.9%          45.2%
     Weighted Average Shares Outstanding           48,825,835     45,247,486
     Weighted Average Diluted Shares Outstanding   51,075,560     47,528,972
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                  CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
 
                                                   For the three months ended
 
                                                    March 31,       March 31,
     (Dollars in thousands)                            2001           2000
 
     Net Income                                       $33,336       $ 54,655
 
     Other Comprehensive Income (Loss),
      Net of Tax:
      Change in Unrealized Gains (Losses) on
       Available-for-Sale Investments:
       Unrealized Holding Gains                         7,502          2,287
       Less: Reclassification Adjustment
        for Gains Included in Net Income              (2,266)       (40,894)
     Other Comprehensive Income (Loss)                  5,236       (38,607)
     Comprehensive Income                             $38,572        $16,048
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                            CONDENSED BALANCE SHEETS
 
 
     (Dollars in thousands,
      except par value and          March 31,    December 31,     March 31,
      per share amounts)              2001           2000           2000
 
     Assets:
     Cash and Due from Banks        $243,078        $332,632      $393,295
     Federal Funds Sold and
      Securities Purchased
       Under Agreement to Resell   1,076,102       1,389,734     1,070,542
     Investment Securities         1,724,119       2,107,590     1,910,499
     Loans:
       Gross Loans                 1,738,836       1,724,949     1,641,792
       Unearned Income on Loans      (6,861)         (8,400)      (10,350)
     Loans, Net of Unearned Income 1,731,975       1,716,549     1,631,442
     Allowance for Loan Losses      (73,800)        (73,800)      (72,900)
     Net Loans                     1,658,175       1,642,749     1,558,542
     Premises and Equipment           21,375          18,493        10,270
     Accrued Interest Receivable
      and Other Assets               119,906         135,577       121,377
     Total Assets                 $4,842,755      $5,626,775    $5,064,525
 
     Liabilities, Minority Interest
      and Stockholders' Equity:
     Liabilities:
     Deposits:
       Noninterest-Bearing
        Demand                    $2,042,532      $2,448,758    $2,405,490
       NOW                            35,271          57,857        81,941
       Money Market                1,138,068       1,519,563     1,597,660
       Time                          826,334         836,081       430,760
     Total Deposits                4,042,205       4,862,259     4,515,851
     Other Liabilities                71,364          81,138       109,440
     Total Liabilities             4,113,569       4,943,397     4,625,291
 
 Company Obligated Mandatorily
  Redeemable Trust
  Preferred Securities of
      Subsidiary Trust Holding
      Solely Junior Subordinated
      Debentures
      (Trust Preferred Securities)    38,602          38,589        38,550
     Minority Interest                30,614          30,668            --
     Stockholders' Equity:
     Common Stock,
      $0.001 Par Value                    49              49            46
     Additional Paid-In Capital      286,623         280,008       171,034
     Retained Earnings               368,434         335,098       230,685
     Unearned Compensation           (2,972)         (3,634)       (4,136)
     Accumulated Other
      Comprehensive Income:
       Net Unrealized Gains on
        Available-for-Sale
        Investments                    7,836           2,600         3,055
     Total Stockholders' Equity      659,970         614,121       400,684
     Total Liabilities,
      Minority Interest and
      Stockholders' Equity        $4,842,755      $5,626,775    $5,064,525
 
     Capital Ratios:
     Total Risk-Based Capital Ratio    19.2%           18.5%         16.2%
     Tier 1 Risk-Based Capital Ratio   17.9%           17.2%         14.9%
     Tier 1 Leverage Ratio             13.7%           12.6%          9.0%
     Average Stockholders' Equity
      as a Percentage of
      Average Assets(A)                12.7%           10.9%          8.2%
 
     Other Period End Statistics:
     Book Value per Share             $13.34          $12.54         $8.71
     Full-Time Equivalent Employees      960             959           725
     Shares Outstanding           49,472,775      48,977,906    46,008,180
 
     *Represents quarterly average balances for each respective period.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                       AVERAGE BALANCES, RATES AND YIELDS
 
                                For the three months ended March 31,
                                  2001                        2000
                                        Average                       Average
     (Dollars in       Average           Yield/   Average             Yield/
      thousands)       Balance  Interest  Rate    Balance   Interest   Rate
     Interest-Earning
      Assets:
      Federal Funds
      Sold and
      Securities
      Purchased
      Under
      Agreement
      to Resell     $ 1,092,609  $15,375  5.7%  $ 1,101,198  $16,027    5.9%
 
      Investment
       Securities:
        Taxable       1,727,919   25,941   6.1    1,588,349   23,112     5.9
        Non-
         Taxable(A)     206,781    3,445   6.8      143,040    2,221     6.2
      Loans:
        Commercial    1,465,713   45,981  12.7    1,397,920   39,331    11.3
        Real Estate
        Construction
        and Term        103,175    2,801  11.0      135,975    3,480    10.3
        Consumer
        and Other        96,086    2,123   9.0       65,069    1,482     9.2
        Total Loans   1,664,974   50,905  12.4    1,598,964   44,293    11.1
 
     Total Interest-
      Earning Assets  4,692,283   95,666   8.3    4,431,551   85,653     7.8
 
 
     Cash and Due
      from Banks        233,876                     283,142
     Allowance for
      Loan Losses      (78,245)                    (71,312)
     Other Assets       193,728                     186,009
     Total Assets   $ 5,041,642                 $ 4,829,390
 
     Funding Sources:
     Interest-Bearing
      Liabilities:
       NOW Deposits     $58,384      128   0.9      $52,596      260     2.0
       Regular Money
        Market
        Deposits        318,572    1,133   1.4      419,387    1,904     1.8
       Bonus Money
        Market
        Deposits        957,058    3,646   1.6    1,498,010    7,579     2.0
       Time Deposits    833,695    7,817   3.8      357,647    3,633     4.1
 
     Total Interest-
      Bearing
      Liabilities     2,167,709   12,724   2.4    2,327,640   13,376     2.3
     Portion of
      Noninterest-
      Bearing
      Funding
      Sources         2,524,574                   2,103,911
     Total Funding
      Sources         4,692,283   12,724   1.1    4,431,551   13,376     1.2
 
     Noninterest-
      Bearing Funding
      Sources:
      Demand
       Deposits       2,100,812                   1,981,318
      Other
       Liabilities       66,009                      86,945
      Trust
       Preferred
       Securities        38,591                      38,539
      Minority
       Interest          30,531                          --
      Stockholders'
       Equity           637,990                     394,948
      Portion Used
       to Fund
       Interest-
       Earning
       Assets       (2,524,574)                 (2,103,911)
 Total
  Liabilities,
  Minority
  Interest and
      Stockholders'
      Equity        $ 5,041,642                 $ 4,829,390
 
     Net Interest
      Income                     $82,942                     $72,277
     Net Interest
      Margin                              7.2%                          6.6%
 
     Memorandum:
      Total
      Deposits      $ 4,268,521                 $ 4,308,958
 
     (A) Interest income on non-taxable investments is presented on a fully
 taxable-equivalent basis.  The tax equivalent adjustments were $1,206 thousand
 and $777 thousand for the three months ended March 31, 2001 and 2000,
 respectively.
 
                           SILICON VALLEY BANCSHARES
                       CONSOLIDATED FINANCIAL HIGHLIGHTS
 
                                 CREDIT QUALITY
 
                                    March 31,     December 31,    March 31,
    (Dollars in thousands)             2001           2000           2000
 
     Nonperforming Assets:
     Loans Past Due 90 Days or More      $--             $98           $--
     Nonaccrual Loans                 20,149          18,287        28,789
     Total Nonperforming Assets      $20,149         $18,385       $28,789
 
     Nonperforming Loans as a
      Percentage of Total Loans         1.2%            1.1%          1.8%
     Nonperforming Assets as a
      Percentage of Total Assets        0.4%            0.3%          0.6%
 
     Allowance for Loan Losses       $73,800         $73,800       $72,900
      As a Percentage of
       Total Loans                      4.3%            4.3%          4.4%
      As a Percentage of
       Nonaccrual Loans               366.3%          403.6%        253.2%
      As a Percentage of
       Nonperforming Loans            366.3%          401.4%        253.2%
 
 SOURCE  Silicon Valley Bancshares

RELATED LINKS

http://www.sivb.com