BOG-FRS - Public Release, April 2023

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Federal Reserve Bank of San Francisco
 Redacted

|

Redacted

 | 101 Market Street, San Francisco, CA 94105

LARGE INSTITUTIONS SUPERVISION GROUP 

SUPERVISION + CREDIT 

Redacted

 LFBO DEDICATED SUPERVISORY TEAM LEAD 

October 11, 2022 

BY SECURE EMAIL 

Board of Directors 

Silicon Valley Bank Financial Group 

3003 Tasman Drive 

Santa Clara, California 95054 

Dear Board Members: 

This letter conveys the Capital component rating of the LFI Rating System for Silicon Valley 

Bank Financial Group (SVBFG or the “Firm”) based on recently conducted supervisory work. 

The rating assessment reflects the body of work since the previous ratings were 

communicated. The body of work includes conclusions from horizontal and firm-specific 

examination work, continuous monitoring, engagement with other regulators, and meetings 

with management and directors. 

LFI Rating(s) 

Capital – Broadly Meets Expectations 

LFI Rating Previous Rating / Previous Rating / Current Rating / 

Component N/A 06/30/2022 10/11/2022 

Capital Planning N/A Broadly Meets Broadly Meets 

& Positions Expectations Expectations 

The capital rating reflects the Federal Reserve’s assessment of: (1) the governance and 

planning processes used by the firm to determine amount of capital necessary to cover risks 

and exposures, and support activities through a range of conditions; and (2) the sufficiency of 

capital positions to comply with regulatory requirements and support the firm’s ability to 

continue to serve as a financial intermediary through a range of conditions. The ratings 

Unreserved Opportunity | Supervision + Credit 

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assessment reflects the conclusions from horizontal and firm-specific examination work, 

continuous monitoring, and meetings with management and directors. 

The Capital rating for SVBFG remains unchanged at Broadly Meets Expectations (BME). 

SVBFG maintains adequate levels of high-quality capital to support ongoing operations and 

initiatives commensurate with its risk profile. The firm’s internal post-stress capital positions 

reflect a sufficient buffer to comply with applicable regulatory requirements and support the 

firm through a range of conditions. In managing capital adequacy, the firm established 

generally effective governance and capital planning processes and successfully developed 

and submitted a Capital Plan as a new entrant under the Capital Plan Rule. While overall 

results were encouraging, practices for internal audit and CECL methodology were not fully 

consistent with supervisory expectations. The firm is expected to address corresponding 

supervisory concerns promptly. 

The board and senior management should continue to focus on maintaining prudent capital 

positions and improving capital planning practices. This is especially prudent given emerging 

economic risks and market volatility. While recent changes in market conditions have slowed 

deposit growth and delayed the firm’s progression towards Category III and Category II 

standards, the firm should continue executing internally developed improvement plans for 

capital planning in a timely manner as conditions may shift quickly. 

Closing 

We request that this supervisory letter be reviewed at the next meeting of the board of 

directors and the meeting minutes record its consideration. 

We appreciate the assistance received from your management team and staff. As a 

reminder, this letter is the property of the Board of Governors and is furnished to directors and 

management for their confidential use under applicable law.1 We welcome the opportunity 

to further discuss any aspect of this letter or our supervisory process with members of the 

1 THIS DOCUMENT IS STRICTLY CONFIDENTIAL 

This document has been prepared by an examiner selected or approved by the Board of Governors of the Federal Reserve 

System. The document is the property of the Board of Governors and is furnished to directors and management for their 

confidential use. The document is strictly privileged and confidential under applicable law, and the Board of Governors has 

forbidden its disclosure in any manner without its permission, except in limited circumstances specified in the law (12 U.S.C 1817(a) 

and 1831m) and in the regulations of the Board of Governors (12 C.F.R. 261.20). Under no circumstances should the directors, 

officers, employees, trustees or independent auditors disclose or make public this document or any portion thereof except in 

accordance with applicable law and the regulations of the Board of Governors. Any unauthorized disclosure of the document 

may subject the person or persons disclosing or receiving such information to the penalties of Section 641 of the U.S. Criminal 

Code (18 U.S.C. 641). Each director or trustee, in keeping with his or her responsibilities, should become fully informed regarding 

the contents of this document. In making this review, it should be noted that this document is not an audit, and should not be 

considered as such. 

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board or management.2 Should you have any comments or questions regarding this letter, 

please directly contact 

Redacted

at 

Redacted

or 

Redacted

@sf.frb.org. 

Sincerely, 

LFBO Dedicated Supervisory Team Lead 

Redacted Redacted

cc: Ben Jones, Head of Regulatory Affairs

Redacted Redacted

 Federal Deposit Insurance Corporation 

California Department of Financial 

Protection and Innovation 

2 Any institution about which the Federal Reserve makes a written material supervisory determination is eligible to utilize the 

appeals process as described in the Appeals Process and Board Ombudsman (Ombuds) Policy Statement (See also 85 Fed. Reg. 

15,175 (March 17, 2020)). The Ombuds can provide assistance regarding questions related to the appeals process and claims of 

retaliation as well as assist in facilitating the informal resolution of a supervised institution’s concerns prior to the filing of a 

formal appeal. For more information about the Ombuds, please visit the Federal Reserve Board’s public website. 

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