SVB Financial profits jump 28% on loan growth, investment gains

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Earnings at SVB Financial in Santa Clara, Calif., rose as the tech-focused banking company boosted lending to private-equity and venture capital firms.

The $45.3 billion-asset company reported first-quarter profit of $101.5 million, or 28% more than a year earlier. Earnings per share were $1.91, or seven cents higher than the average estimate of analysts compiled by FactSet Research Systems.

Net interest income rose 10% to $310 million. The net interest margin jumped 21 basis points to 2.88%. Total loans climbed 15% to $20.6 billion thanks to venture lending as well as growth in the company’s life sciences portfolio.

CEO Greg Becker said that although the pace of venture investments in upstart companies has begun to slow down, the market remains strong overall.

“While [venture capital] activity remains below recent historic highs as investors intensify their focus on disciplined investing, the brisk pace of first-time fund closings and significant levels of dry powder on the sidelines indicate that investors' appetites are still strong,” Becker said in a news release.

Fee-based income increased 37% to $111.7 million on stronger investment gains and fees on letters of credit.

Noninterest expenses edged up 16% to $237.6 million due to increases in compensation and professional services costs.

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Earnings Commercial lending