SVB Quarterly News Digest - Spring 2010

Company news  |  May 17, 2010

Tech start-ups creating jobs in 2010
Our first ever Startup Outlook Survey generated responses from 304 U.S.-based emerging and early-stage technology and life science companies with annual revenues less than $5 million. The results show that companies are optimistic about 2010, with most expecting their performance to improve, and three-quarters expecting to hire new employees. A majority of companies also recognize the important role of government in their ability to succeed. Three in five respondents rank continued federal R&D funding as their top government priority.

Technical and policy experts gather at SVB for Clean Tech Summit
On April 9, we hosted a full-day event "Crossing the Clean Tech Divide: The Road to 2020". We brought together a select group of 100 leaders from the venture capital, entrepreneurial, public policy, energy, academic and NGO communities. We focused the attention, insight, and energy of the group on the question of how best to promote the development of high-growth, innovative technology companies in the energy generation, energy storage and energy efficiency sectors, over the course of the coming decade. Speakers included Drs. Bjorn Lomborg and Jonathan Koomey in a debate on climate change and energy policy, as well as a conversation with Dr. John Zysman, utility executives, and regulators on the changing role of the utility in a decentralized energy world and the implications for entrepreneurial companies. Video of the event is available online.

Repealing climate bill would hurt Silicon Valley economy – Op-Ed by Ken Wilcox
The forward momentum of the cleantech economy, what some call the new green economy, is enhanced by the California Global Warming Solutions Act (AB32). We support AB32 because it sends a clear policy signal that creates stability in the cleantech and clean energy markets, and we oppose the efforts to roll back or delay its implementation. Full Article

Loan commitment to U.S. Exporters continues to grow, breaking previous record
The Export-Import Bank of the United States (Ex-Im Bank) helps create and maintain U.S. jobs by financing the sale of U.S. exports. As an Ex-Im Bank Super-Delegated Authority lender, we have grown our working capital loan commitments to U.S. exporters to $213 million, which surpasses our previous record set six months ago and makes us one of only three lenders in the United States to reach this level. These working capital loans expand our clients' borrowing capability, thereby fueling their export sales, shareholder value, and job growth. We are proud that our activities support the efforts of the U.S. government's National Export Initiative to increase financing, advocacy and assistance for small and medium-sized American exporters. The loan commitments will generate more than $1 billion in U.S. export sales and support more than 5,400 new and existing U.S. jobs.

Risk without responsibility – Op-Ed by Ken Wilcox
For more than six decades, the United States has enjoyed unprecedented economic growth built on the fundamental principles of capitalism. Certain institutions have taken advantage of the freedom offered within a market economy to engage in excessive risk-taking, often with other people's money. However, Congress' most likely response to the excessive risk-taking seems to be equally excessive intervention, with the apparent intent of completely eliminating risk for investors. But without risk there is no responsibility for investors and there can be no reward, which endangers the system that has provided us with generations of growth and prosperity. Full Article

Signs of recovery in the first quarter of 2010
We announced our fiscal results for the first quarter of 2010 on April 22nd. We reported net income of $18.6 million, or earnings per share of $0.44. During the quarter, we continued to make new loans - adding 318 new loan clients – despite an overall decrease in average loan balances. Credit quality continued to improve. We also saw growth in average deposit balances and average interest-earning investment securities. In announcing our results, we noted that our clients appear more confident about their prospects than they've been in many quarters. The number of deals we booked in the first quarter was higher than in any recent quarter, and our pipeline is continuing to grow. While it's difficult to predict exactly how the recovery will play out from quarter to quarter, our clients appear to be preparing for more robust business opportunities ahead, which we believe will translate into growth for SVB.

Our perspective on Financial Services Reform
Congress is turning with full force to financial services reform legislation. We support many of the reforms in the bill and agree that our regulatory system needs updating. That said, we think the bill will have unintended consequences that could hurt emerging technology companies and we are working with members of Congress to get these issues addressed before the bill becomes law. We believe it's important that banks like SVB that have optimized our offerings and our geographic scope to meet the needs of growing tech companies, continue to be regulated by the Federal Reserve. We also believe the Volcker Rule was never intended to – and should not be allowed to – constrain the flow of capital into venture capital firms and emerging technology companies.