SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-22407
SVB Financial Services, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 22-3438058
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
103 West End Avenue, Somerville, New Jersey 08876
(Address of principal executive officers) (Zip Code)
(908) 704-1188
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ X ] Yes [ ] No
As of June 30, 1998 there were 2,759,624 shares of common stock, $2.09 par
value outstanding. These numbers have been restated to show a 2 for 1 stock
split effective April 16, 1998.
<PAGE>
SVB FINANCIAL SERVICES, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements and Notes to Consolidated Financial
Statements
ITEM 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
ITEM 5 - Other Information
SIGNATURES
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
STATEMENTS OF CONDITION June 30, December 31,
June 30, 1998 and December 31, 1997 1998 1997
------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
Cash & Due from Banks $ 7,600,910 $ 5,794,622
Federal Funds Sold 5,725,000 --
Interest Bearing Time Deposits 998,010 --
Other Short Term Investments 627,184 188,304
------------- -------------
Total Cash and Cash Equivalents 14,951,104 5,982,926
------------- -------------
Securities
Available for Sale 14,518,009 11,266,269
Held to Maturity 15,607,030 22,101,977
------------- -------------
Total Securities 30,125,039 33,368,246
------------- -------------
Loans 114,717,535 106,470,674
Allowance for Possible Loan Losses (1,068,038) (982,198)
Unearned Income (108,835) (99,433)
------------- -------------
Net Loans 113,540,662 105,389,043
------------- -------------
Premises & Equipment, Net 1,792,918 1,733,516
Other Assets 2,155,038 2,075,757
------------- -------------
Total Assets $ 162,564,761 $ 148,549,488
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Demand
Non-interest Bearing $ 26,040,691 $ 21,965,676
NOW Accounts 16,747,852 13,014,148
------------- -------------
Savings 9,874,586 9,042,660
Money Market Accounts 18,847,619 16,227,255
Time
Greater than $100,000 10,030,684 12,879,808
Less than $100,000 66,368,539 60,800,469
------------- -------------
Total Deposits 147,909,971 133,930,016
Federal Funds Purchased -- 500,000
Obligations Under Capital Lease 441,006 443,697
Accrued Expenses & Other Liabilities 595,195 580,245
------------- -------------
Total Liabilities 148,946,172 135,453,958
------------- -------------
Commitments and Contingencies
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
STATEMENTS OF CONDITION June 30, December 31,
June 30, 1998 and December 31, 1997 1998 1997
------------- -------------
(unaudited)
<S> <C> <C>
SHAREHOLDERS' EQUITY
Common Stock $2.09 Par Value: 10,000,000 5,767,614 5,739,265
Shares Authorized; 2,759,624 Shares in 1998 and
2,739,220 Shares in 1997 Issued and Outstanding
Additional Paid-in Capital 5,487,552 5,459,397
Retained Earnings 2,343,074 1,859,173
Unrealized Gain on Securities Available for Sale,
Net of Income Taxes 20,349 37,695
------------- -------------
Total Shareholders' Equity 13,618,589 13,095,530
------------- -------------
Total Liabilities and Shareholders' Equity $ 162,564,761 $ 148,549,488
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
(unaudited)
CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended For the Six Months Ended
For the Period Ended June 30, 1998 and 1997 1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest on Loans $2,496,823 $2,134,406 $4,860,426 $4,138,695
Interest on Securities Available for Sale 194,372 194,660 358,237 340,314
Interest on Securities Held to Maturity 257,785 212,646 561,590 435,758
Interest on Other Short Term Investments 13,513 8,120 17,118 28,651
Interest on Federal Funds Sold 82,191 70,630 163,451 143,799
---------- ---------- ---------- ----------
Total Interest Income 3,044,684 2,620,462 5,960,822 5,087,217
---------- ---------- ---------- ----------
INTEREST EXPENSE
Interest on Deposits 1,370,025 1,196,057 2,688,779 2,302,455
Interest on Federal Funds Purchased -- -- 183 --
Interest on Obligations Under Capital Lease 9,381 -- 18,791 --
---------- ---------- ---------- ----------
Total Interest Expense 1,379,406 1,196,057 2,707,753 2,302,455
---------- ---------- ---------- ----------
Net Interest Income 1,665,278 1,424,405 3,253,069 2,784,762
PROVISION FOR POSSIBLE LOAN LOSSES 70,000 75,000 135,000 150,000
---------- ---------- ---------- ----------
Net Interest Income after Provision For Possible Loan Losses 1,595,278 1,349,405 3,118,069 2,634,762
OTHER INCOME
Service Charges on Deposit Accounts 70,241 54,344 134,561 106,894
Gain on the Sale of Investment Securities 68,535 27,353 119,326 54,108
Other Income 26,565 27,038 56,663 58,011
---------- ---------- ---------- ----------
Total Other Income 165,341 108,735 310,550 219,013
OTHER EXPENSE
Salaries and Employee Benefits 678,647 513,717 1,352,276 1,034,433
Occupancy Expense 159,518 109,596 308,668 222,003
Equipment Expense 95,239 73,039 180,180 149,033
Other Expenses 407,409 341,971 775,150 640,969
---------- ---------- ---------- ----------
Total Other Expense 1,340,813 1,038,323 2,616,274 2,046,438
---------- ---------- ---------- ----------
Net Income Before Provision for Income Taxes 419,806 419,817 812,345 807,337
Provision for Income Taxes 169,539 168,991 328,444 325,018
---------- ---------- ---------- ----------
Net Income $ 250,267 $ 250,826 $ 483,901 $ 482,319
========== ========== ========== ==========
EARNINGS PER COMMON SHARES - Basic* $ 0.09 $ 0.09 $ 0.18 $ 0.18
========== ========== ========== ==========
EARNINGS PER COMMON SHARES - Diluted* $ 0.08 $ 0.08 $ 0.17 $ 0.17
========== ========== ========== ==========
</TABLE>
* Shares outstanding have been adjusted for the 2 for 1 stock split effective
April 16, 1998
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME For the Three Months Ended For the Six Months Ended
For the Quarter Ended June 30 1998 1997 1998 1997
--------- --------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C>
Net Income $ 250,267 $ 250,826 $ 483,901 $ 482,319
Other Comprehensive Income, Net of Tax
Unrealized Gains/(Losses) Arising in the Period 4,060 48,992 (17,346) (5,505)
--------- --------- --------- ---------
Comprehensive Income $ 254,327 $ 299,818 $ 466,555 $ 476,814
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
STATEMENTS OF CASH FLOW
(unaudited)
For the Period Ended June 30, 1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 483,901 $ 482,319
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Provision for Possible Loan Losses 135,000 150,000
Depreciation and Amortization 184,585 139,213
(Accretion) of Securities Premium/Discount (6,786) (10,374)
Increase in Other Assets (86,042) (207,042)
Increase (Decrease) in Accrued Expenses and Other Liabilities 23,886 (97,771)
Increase (Decrease) in Unearned Income 8,174 (3,706)
------------ ------------
Net Cash Provided By Operating Activities 742,718 452,639
------------ ------------
INVESTING ACTIVITIES
Proceeds from Maturities of Securities
Available for Sale 3,996,465 364,272
Held to Maturity 9,257,415 6,291,457
Purchases of Securities
Available for Sale (7,282,200) (4,497,188)
Held to Maturity (2,747,969) (7,230,331)
Increase in Loans (8,294,793) (8,504,009)
Capital Expenditures (237,226) (219,051)
------------ ------------
Net Cash Used for Investing Activities (5,308,308) (13,794,850)
------------ ------------
FINANCING ACTIVITIES
Net Increase in Demand Deposits 7,808,719 4,756,117
Net Increase in Savings Deposits 831,926 201,213
Net Increase in Money Market Deposits 2,620,364 2,311,610
Net Increase in Time Deposits 2,718,946 7,689,274
Decrease in Federal Funds Purchased (500,000) 0
Decrease in Obligation Under Capital Lease (2,691) 0
Proceeds from Issuance of Common Stock, Net 56,504 0
Increase in Common Stock from Non Acceptance of Exchange Offer 0 24,762
------------ ------------
Net Cash Provided by Financing Activities 13,533,768 14,982,976
------------ ------------
Increase in Cash and Cash Equivalents, Net 8,968,178 1,640,765
Cash and Cash Equivalents, Beginning of Year 5,982,926 12,128,176
------------ ------------
Cash and Cash Equivalents, End of Period $ 14,951,104 $ 13,768,941
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
STATEMENTS OF CASH FLOW
For the Period Ended June 30, (continued) 1998 1997
------------ ------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for Interest $ 2,742,500 $ 2,253,966
============ ============
Cash Paid During the Year for Federal Income Taxes $ 360,000 $ 427,562
============ ============
</TABLE>
<PAGE>
SVB FINANCIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 (UNAUDITED)
1. SVB Financial Services, Inc., (the "Company"), a bank holding company, was
incorporated on February 7, 1996 with authorized capital of 10,000,000 shares of
$4.17 par value common stock. On September 3, 1996, the Company acquired 100
percent of the shares of Somerset Valley Bank (the "Bank") by exchanging 6
shares of its Common Stock for each 5 shares of the Bank. This exchange has been
accounted for as a reorganization of entities under common control, similar to a
pooling of interests, which resulted in no changes to the underlying carrying
amounts of assets and liabilities. Effective April 16, 1998, the Company
declared a 2 for 1 stock split, resulting in a $2.09 par value common stock. All
financial statements have been restated to reflect this.
The consolidated financial statements included herein have been
prepared without an audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations. The accompanying condensed consolidated financial statements
reflect all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented. Such
adjustments are of a normal recurring nature. These consolidated condensed
financial statements should be read in conjunction with the audited financial
statements and the notes thereto. The results for the six months ended June 30,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998.
The consolidated financial statements include the accounts of Somerset
Valley Bank. All significant inter-company accounts and transactions have been
eliminated.
2. Loans
At June 30, 1998 and December 31, 1997 the composition of outstanding
loans is summarized as follows:
June 30, December 31,
1998 1997
------------ ------------
Secured by Real Estate:
Residential Mortgage $ 35,268,951 $ 33,248,717
Commercial Mortgage 37,404,903 29,793,163
Construction 2,714,472 4,851,720
Commercial and Industrial 20,895,220 20,889,305
Loans to Individuals 6,753,521 4,969,103
Loans to Individuals for Automobiles 11,234,008 12,177,339
Other Loans 446,460 541,327
------------ ------------
$114,717,535 $106,470,674
============ ============
There were no loans restructured during 1998 or 1997. Loans past due 90
days or more and still accruing totaled $150,000 at June 30, 1998 and $0 at
December 31, 1997. Loans in a non-accrual status totaled $69,663 at June 30,
1998 and $62,632 at December 31, 1997.
<PAGE>
3. Allowance for Possible Loan Losses
The allowance for possible loan losses is based on estimates and
ultimate losses may vary from the current estimates. These estimates are
reviewed periodically and as adjustments become necessary, they are reflected in
operations in the period in which they become known. An analysis of the
allowance for possible loan losses is as follows:
June 30, December 31,
1998 1997
----------- -----------
Balance January 1, $ 982,198 $ 783,366
Provision Charged to Operations 135,000 280,000
Charge Offs (49,610) (86,399)
Recoveries 450 5,231
----------- -----------
Balance End of Period $ 1,068,038 $ 982,198
=========== ===========
4. New Accounting Pronouncement
On January 1, 1998, the Corporation adopted Statements of Financial
Accounting Standards (SFAS) No. 129, "Disclosure Information about Capital
Structure." SFAS No. 129 summarizes previously issued disclosure guidance
contained within APB Opinion No. 10 and No. 15, as well as SFAS No. 47. The
Corporation's current disclosures were not affected by the adoption of SFAS No.
129.
On January 1, 1998, the Corporation adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards to provide prominent
disclosure of comprehensive income items. Comprehensive income is the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources. Prior period amounts have been
restated to conform to the provisions of SFAS No. 130. The adoption of SFAS 130
did not have a material impact on the Corporation's financial position or
results of operations.
On January 1, 1998, the Corporation adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." SFAS No. 131 requires
that public business enterprises report certain information about operating
segments in a complete set of financial statements of the enterprise and in
condensed financial statements of interim periods issued to shareholders. It
also requires the reporting of certain information about their product and
services, the geographic area in which they operate, and their major customers.
The adoption of SFAS No. 131 did not have an impact on the Corporation's
financial position or results of operations.
The American Institute of Certified Public Accountants (AICPA)
executive committee has issued Statement of Position (SOP) 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use. The SOP
was issued to provide authoritative guidance on the subject of accounting for
the cost associated with the purchase or development of computer software. The
statement is effective for fiscal years beginning after December 15, 1998 for
costs incurred in those fiscal years for all projects, including projects in
progress when the SOP is adopted. The adoption of SOP 98-1 is not expected to
have a material impact on the Corporation's financial position or results of
operations.
<PAGE>
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activity." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments imbedded in other contracts, and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liablities in the statement of financial position and measure those instruments
at fair value. If certain conditions are met, a derivative may be specifically
designated as a hedge. The accounting for changes in the fair value of
derivative (gains and losses) depends on the intended use of the derivative and
resulting designation. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. Earlier application is permitted
only as of the beginning of any fiscal quarter. The Company is currently
reviewing the provisions of SFAS No. 133.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net income for the first six months of 1998 was $483,901, an increase
of $1,582 or 0.33% as compared to the same period in 1997. Earnings per
share-Basic were $.18 in 1998 as compared to $.18 in 1997*. Earnings per share -
Diluted were $.17 in 1998 and 1997*.
*Based on the 2 for 1 stock split effective April 16, 1998.
A detailed discussion of the major components of net income follows:
Net Interest Income
Net interest income for the first six months of 1998 was $3,253,069
compared to $2,784,762 in 1997, an increase of $468,307 or 17%.
Almost all of the increase can be attributed to an increase in average
earnings assets. Average earning assets for the first six months of 1998 were
$144.8 million an increase of $20.6 million or 17% from the first six months of
1997. Loans accounted for 76% of this increase as loans averaged $107.6 million
during the six months. The increase in loan balances caused interest income to
increase $708,804. Furthermore, the yield on loans increased from 9.08%, to a
9.11%, which caused interest income to increase an additional $12,927. Overall,
interest income increased $873,605. Almost all of this amount was due to the
increase in average balances. The yield on earning assets was 8.30% for 1998 and
8.26% for 1997.
The overall cost of interest-bearing liabilities decreased one basis
points from 4.69% to 4.68%. Time deposits accounted for 66% of the increase in
interest expense, most of which was related to volume. Although average
non-interest sources of funds (capital and demand deposits) increased $3.3
million, the cost of funding earning assets increased from 3.74% to 3.77%. The
increase in the cost to fund earning assets resulted in an increase in interest
expense of $405,298.
The net result of the change in net interest income for the first six
months of 1998 versus the first six months of 1997 was an increase in earnings
of $468,307. However, due to a change in the mix of the assets and liabilities,
the net interest margin only increased one basis point from a 4.52% to a 4.53%.
<PAGE>
Provision for Loan Possible Losses
The provision for possible loan losses was $135,000 in the first six
months of 1998 as compared to $150,000 in the first six months of 1997. The
decrease in the provision was mostly related to the slowdown in the growth of
outstanding loans during the beginning of the year. Total gross loans increased
$8.2 million since December 31, 1997 but all of this growth was experienced
during the second quarter of 1998.
Other Income
During the first six months of 1998, other income increased $91,537 or
42% over the same period in 1997. Gains on the sale of loans accounted for
$65,218 of the increase. The Company is a preferred SBA lender and, as such, it
originates SBA loans and sells the government guaranteed portions in the
secondary market while retaining the servicing. The amount of gains recognized
on SBA loans is dependent on the volume of new SBA loans generated each quarter.
The amounts can vary greatly from quarter to quarter and from year to year.
Service charges on deposit accounts increased $27,667 or 26% from the
same period last year. The growth in the number of commercial and consumer
checking accounts resulted in increased overdraft, account maintenance and wire
transfer fees. Foreign transaction fees at the Company's ATM machines were
instituted in the latter half of 1997, which resulted in a $12,062 increase in
ATM fees over last year.
Other Expense
Other expenses for the six months ended June 30, 1998 increased
$569,836 or 28% from the same period in 1997. Since July of 1997, the Company
has opened a branch office in Bridgewater Township, a branch on Gaston Avenue in
Somerville, and a branch in the Arbor Glen assisted living facility in
Bridgewater Township. Expenses were impacted by additional personnel, occupancy
costs, and other expenses related to the opening of the new branches.
Consequently, total assets have grown $22.2 million or 16% since June 30, 1998.
Because of the growth in assets and in offices, the Company has had to hire
additional personnel to better service its customer base. These additions
combined with normal salary increases caused salary and benefits expense to
increase $317,843 or 31% from last year. The Company has also entered into a
rental agreement for another potential branch site in Aberdeen, in Monmouth
County. Rent on the newly opened locations and the potential branch site
location coupled with depreciation on improved facilities resulted in a $86,665
or 39% increase in occupancy expenses. The Company has also made an effort to
remain current with technology and to provide computer access for each employee.
These purchases as well as other purchases of equipment for new employees and
the additional branches increased equipment expense $31,147 or 21% from last
year. Other expenses increased from last year $134,181 or 21%. Much of this
increase was related to the growth of the Company which affected many areas, but
especially supplies, data processing costs, and outside services. Marketing and
business development costs increased $10,477 due to grand opening costs of the
Gaston Avenue and Arbor Glenn offices and to continued promotions of home equity
loans and several new banking products.
<PAGE>
Financial Condition
June 30, 1998 compared to December 31, 1997
Total assets increased $14.0 million or 9% from December 31, 1997.
Total loans increased $8.2 million. Loans secured by real estate increased $7.5
million. Commercial mortgages increased $7.6 million and construction loans
decreased $2.1 million. Activity varies in the marketplace depending upon
seasonality and competition. Loans to individuals for automobiles, declined by
$.9 million. The current interest rates earned on these loans in relation to
competition has caused the Company to not be as aggressive in generating new
automobile loans.
Deposits increased $14.0 million or 10% during the first six months.
All deposit categories, with the exception of CDs over $100,000, increased with
the largest increase of $5.6 million in the time deposits less than $100,000
category.
Investment securities decreased $3.2 million. The increase in deposits
coupled with flat yield curves in the market and pending loan growth has caused
a shift from longer term securities to short term investments.
Asset Quality
Loans past due 90 days or more and still accruing were $150,000 as of
June 30, 1998 and represented .13% of total loans. There were no loans past due
90 days or more and still accruing as of December 31, 1997.
Loans in a non-accrual status totaled $69,663 at June 30, 1998 and
$62,632 at December 31, 1997 and represented .06% of total loans as of June 30,
1998 and December 31, 1997.
The Company had no other real estate owned at June 30, 1998.
Allowance for Possible Loan Losses
The allowance for possible loan losses is maintained at a level
considered adequate to provide for potential loan losses. The level of the
allowance is based on management's evaluation of potential losses in the
portfolio, after consideration of risk characteristics of the loans and
prevailing and anticipated economic conditions. The allowance is increased by
provisions charged to expense and reduced by charge-offs, net of recoveries.
At June 30, 1998, the allowance for loans losses was $1,068,038 and
represented .93% of total loans and 486% of non-performing loans compared to an
allowance for loan losses at December 31, 1997 of $982,198 or .92% of total
loans and 1,568% of non-performing loans at December 31, 1997.
Charge-offs for the first six months of 1998 totaled $49,610 compared
to $86,399 for the year ended December 31, 1997.
Capital Resources
Total Shareholders' Equity was $13,618,589 at June 30, 1998 compared to
$13,095,530 at December 31, 1997.
<PAGE>
Under the FDIC Improvement Act of 1991, banks are required to maintain
a minimum ratio of total capital to risk based assets of 8% of which at least 4%
must be in the form of Tier I Capital (primarily Shareholders' Equity). The
following are the Company's capital ratios at the end of the periods indicated.
March 31, December 31,
1998 1997
--------- ------------
Tier I Capital to Risk Weighted Assets 10.75% 11.89%
Total Capital to Risk Weighted Assets 11.62% 12.81%
Leverage Ratio 8.48% 8.72%
Liquidity
Cash and cash equivalents totaled $15.0 million at June 30, 1998 an
increase of $9.0 million.
The increase in Cash and Cash Equivalents was partially attributable to
an increase in deposits which contributed to an increase in cash provided by
financing activities of $13.5 million. Demand deposits experienced the largest
increase for the six month period of $7.8 million.
The increase in financing activities was partially offset by net cash
used for investing activities of $5.3 million. Investing activities were made up
of loans ($8.3 million) and purchases of securities ($10.0 million). Security
purchases were offset by security maturities of $13.3 million.
<PAGE>
PART II-OTHER INFORMATION
Item 1 - Legal Proceedings
The Company is party in the ordinary course of business to
litigation involving collection matters, contract claims and
other miscellaneous causes of action arising from its
business. Management does not consider that such proceedings
depart from usual routine litigation and, in its judgment, the
Company's financial position and results of operations will
not be affected materially by such proceedings.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
None.
Item 5 - Other Information
On July 6, 1998, the common stock of the Company began trading
on the Nasdaq National Market, under the trading symbol SVBF.
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
3(i) Articles of Incorporation
Certificate of Incorporation of the Company is incorporated by
reference to the Company's Registration Statement on Form SB-2
File Number 333-12305 Amendment No. 2, Filed
November 4, 1996.
3(ii) Bylaws
Bylaws of the Company are incorporated by reference to the
Company's Registration Statement on Form SB-2 File No.
333-12305 Amendment No. 2, Filed November 4, 1996.
(27) Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SVB FINANCIAL SERVICES, INC.
(Registrant)
Dated: August 7, 1998 By: /s/ Keith B. McCarthy
Keith B. McCarthy
Executive Vice President
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,600,910
<INT-BEARING-DEPOSITS> 998,010
<FED-FUNDS-SOLD> 5,725,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,518,009
<INVESTMENTS-CARRYING> 15,607,030
<INVESTMENTS-MARKET> 0
<LOANS> 114,717,535
<ALLOWANCE> (1,068,038)
<TOTAL-ASSETS> 162,564,761
<DEPOSITS> 147,909,971
<SHORT-TERM> 0
<LIABILITIES-OTHER> 595,195
<LONG-TERM> 0
0
0
<COMMON> 5,767,614
<OTHER-SE> 7,850,975
<TOTAL-LIABILITIES-AND-EQUITY> 162,564,761
<INTEREST-LOAN> 4,860,426
<INTEREST-INVEST> 919,827
<INTEREST-OTHER> 180,569
<INTEREST-TOTAL> 5,960,822
<INTEREST-DEPOSIT> 2,668,779
<INTEREST-EXPENSE> 2,707,753
<INTEREST-INCOME-NET> 3,253,069
<LOAN-LOSSES> 135,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,616,274
<INCOME-PRETAX> 812,345
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</TABLE>
