Though Silicon Valley Bancshares in Santa Clara, Calif., more than tripled its net income in 2000, company officials said Friday that the torrid growth would moderate this year.
On Thursday $5.6 billion-asset company reported full-year earnings of a record $159.1 million, or $3.23 a share. But in a conference call Friday with analysts, chief financial officer Christopher Lutes predicted 2001 earnings of $3 per share.
Ken Wilcox, president and chief executive officer of Silicon Valley Bank, the companys main subsidiary, said his institution was able to generate record earnings even while it adjusted its loan portfolio to exit two money-losing lines of business motion pictures and health care.
We ran off $160 million of assets we wanted to get rid of, decreased our average loan size, and ended the year with the highest-quality portfolio weve had in a number or years, said Mr. Wilcox, who will become president and chief executive officer of the holding company in April, the company also announced Thursday.
He will succeed John C. Dean, who said Thursday that he would resign after eight years in the jobs. Mr. Dean will remain with Silicon Valley as its nonexecutive chairman, the company said.
Silicon Valley reported significant growth in virtually every line item on its balance sheet in 2000. Income from loans increased 16%, to $189 million, while overall interest income rose 37%, to $386.8 million.
Non-interest income increased 222%, to $189.6 million, paced by gains from the sale of client warrants totaling $86.3 million, up 161% from 1999. Silicon Valley, which is considered a pioneer in the warrant business, obtained 1,700 additional warrants from borrowers during 2000, Mr. Wilcox said.
Deposits grew 18.3%, to $4.9 billion, helping the company achieve a 7.1% net interest margin in 2000. From the third to the fourth quarter of 2000, however, deposit growth slowed to just 2%.
That was the only disappointment, said Joseph K. Morford, an analyst at Dain Rausher Wessels in San Francisco. Deposits have been a big driver of their high growth.
Silicon Valleys loan portfolio grew only 5.7% in 2000, to $1.7 billion, but David A. Jones, the banks chief credit officer, attributed the slow loan growth to Silicon Valleys decision to stop making health care and movie production loans.
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