Profits at the tech-focused SVB Financial in Santa Clara, Calif, soared in the first quarter, offsetting a $22.2 million loss tied to an equity investment in Roku.
The $52.4 billion-asset SVB reported earnings of $194.9 million, or 92% more than a year earlier. Earnings per share were $3.69, 59 cents higher than an estimate of analysts compiled by FactSet Research Systems.
CEO Greg Becker pointed to the increases in venture funding across the tech sector as a key factor in the company’s strong results.
“Our effective execution across all of our initiatives, together with the exceptional liquidity being deployed in the innovation ecosystem, drove outstanding growth on and off the balance sheet,” Becker said in a press release announcing the results Thursday.
Total loans increased 20% to $24.3 billion thanks mostly to increases in the company’s venture capital, private-equity and software portfolios.
The net interest margin, meanwhile, rose 50 basis points to 3.38%. Net interest income climbed 35% to $419.9 million.
SVB added 1,300 commercial clients, executives said in a conference call with analysts.
Noninterest income rose 32% to $155.5 million, boosted by a sharp uptick in gains on equity warrant assets, as well as higher client investment fees and service charges. Strong performance in the company's fee-based lines of business helped to offset a loss on the sale of its shares in Roku, the streaming device company that went public in September. Roku's shares are well off their peak since the initial public offering last fall.
As of March 31, SVB held warrants in 1,929 privately held companies that have a combined fair value of $135.7 million.
Noninterest expenses rose 12% to $265.4 million, mostly from higher salary costs.