Double-digit loan growth, as well as gains on the company’s tech-related investments, drove profits higher at SVB Financial in Santa Clara, Calif.
The $50.7 billion-asset company reported third-quarter profits of $148.6 million, or 33% more than a year earlier. Earnings per share were $2.79, in line with the consensus estimate of analysts surveyed by Bloomberg.
Net interest income jumped 29% to $373.9 million. The net interest margin increased 35 basis points to 3.10%. Total loans, meanwhile, rose 16% to $21.9 billion thanks to a mix of stronger lending to private-equity firms, venture capital funds, software companies and consumers.
Fee-based income rose 10% to $158.8 million on higher client and lending fees, as well as gains on the company’s equity warrant assets. As of Sept. 30, Silicon Valley held investments in 277 venture capital funds, 86 companies and four debt funds.
Noninterest expenses increased 17% to $257.8 million on higher compensation and professional services costs.
CEO Greg Becker described the client base of SVB as "dynamic."
"Our commitment to the success of innovative companies and the people behind them, and our discipline in making decisions consistent with that focus, will enable us to continue growing," Becker said in a news release Thursday.
Also, SVB acknowledged the wildfires in Northern California, saying that its office in Santa Rosa remains closed as it undergoes restoration.
Additionally, while many wine-industry clients in Napa and Sonoma counties were affected by the fires, the company does not expect damage to its credit quality.
Still, SVB said it is watching the situation closely.
“We will continue to monitor this segment of the portfolio, as it may take some of our clients longer than expected to resume normal business operations, and some of our clients may experience a decline in wine sales or gross margins over the longer term,” the company said in the release.