A potent combination of rising interest rates and growth in most loan categories propelled profits at SVB Financial Group in Santa Clara, Calif., in the fourth quarter.
The $57 billion-asset company’s net income more than doubled from a year earlier to $266.3 million. Earnings per share of $4.96 were 23 cents higher than the mean estimate of analysts compiled by FactSet Research Systems. SVB is the parent company of Silicon Valley Bank.
“Despite broader market volatility and uncertainty, we believe the current health and historical resilience of our clients; our investments in client experience, employee enablement and process transformation; and our continued effective execution of growth initiatives across the business will enable us to deliver strong performance in 2019,” CEO Greg Becker said in a news release Thursday.
Net interest income climbed 31% to $514.5. The loan-loss provision dropped 39% to $13.6 million.
The yield on average interest-earning assets rose 60 basis points to 5.47%. That helped offset a 36-basis-point increase in the yield on average interest-bearing deposits. The net interest margin widened 49 basis points to 3.69%.
Total gross loans increased 23% to $28.5 billion. Loans to private-equity and venture capital funds of at least $20 million rose 48% to $10.1 billion. Commercial loans to life sciences, health care and premium wine companies showed strong growth, too.
Noninterest income climbed 23% to $186.7 million. The bank posted higher gains from equity warrant assets, higher client investment fees and an increase in fees from credit cards and deposit-service charges.
Noninterest expense rose 17% to $307.6 million on an increase in salaries and benefits, professional services and business development and travel costs.
