Calling it a "milestone in its global growth," Silicon Valley Bank announced late Thursday that it has received permission from British banking authorities to open a full-service banking office in London.
The $20.2 billion-asset bank has had a loan office for several years, but the new license would permit it to accept deposits as well as offer cash management services and foreign exchange transactions. The bank said in a Securities and Exchange Commission filing that it expects the branch to open within six to 10 weeks.
Also on Thursday, the bank's parent SVB Financial Group (SIVB), reported a first-quarter profit of $34.8 million, up 5.5% from the same period last year, as strong loan growth and increased wallet share more than offset a sharp jump in its loan-loss provision. Earnings per share rose 2 cents, to 78 cents, which beat Keefe, Bruyette & Woods' analysts' estimates by a dime and Sandler O'Neill & Partners' estimates by 11 cents.
Compared to the prior quarter, however, SVB's earnings fell 2.2% and 3 cents per share.
Based in Santa Clara, Calif., Silicon Valley Bank caters largely to technology firms, both in its home market and other technology hotbeds throughout the U.S. It also specializes in serving California's wine industry.
In a news release, the company said that its loan balances in the first quarter grew 6.4% from just three months earlier, to a record $6.8 billion. The surge of new loans led to record high net interest income of $151 million and a higher-than-expected 20-basis point jump in its net interest margin from the prior quarter, to 3.30%.
Average deposits increased 2.7%, to $17 billion, but more notably its total client funds — which includes both deposits and off-balance sheet client investment funds — increased by $375 million, or nearly 11%, to a record $35.8 billion.
The one blemish in the quarter was a $14.5 million provision for loan losses, the bulk of which was related to a single nonperforming loan. Its provision in the fourth quarter was $8.2 million and in last year's first quarter it took no provision for loan losses.