IBOS member Silicon Valley Bank, SVB Financial Group, has announced their financial results for the first quarter ended 31 March 2016, in a report released on 21 April 2016.
Consolidated net income available to common stockholders for the first quarter of 2016 was $79.2 million, or $1.52 per diluted common share. This compares to $87.5 million, or $1.68 per diluted common share, for the fourth quarter of 2015, and $88.5 million, or $1.71 per diluted common share, for the first quarter of 2015.
“Our core business remained healthy in the first quarter, with outstanding loan growth and solid core fee income,” said Greg Becker, President and CEO of SVB Financial Group. “Credit overall remained sound, although softness in the VC markets pressured our early-stage loan portfolio and drove lower warrant and VC-related investment gains.”
Highlights of SVBs first quarter 2016 results (compared to fourth quarter 2015, unless otherwise noted) included:
- Average loan balances of $17.0 billion, an increase of $1.3 billion (or 8.0 percent)
- Average investment securities, excluding non-marketable and other securities, of $23.4 billion, a decrease of $0.1 billion (or 1.0 percent)
- Average total client funds (consisting of both on-balance sheet deposits and off-balance sheet client investment funds) of $81.7 billion, a decrease of $0.6 billion (or 1.0 percent) with average off-balance sheet client investment funds decreasing by $1.0 billion (or 2.2 percent), offset by average on-balance sheet deposits increasing by $0.4 billion (or 1.0 percent)
- Net interest income (fully taxable equivalent basis) of $281.7 million, an increase of $12.3 million (or 4.6 percent)
- Net interest margin of 2.67 percent, an increase of 13 basis points
- Provision for loan losses of $33.3 million, compared to $31.3 million
- Losses on investment securities of $4.7 million, compared to gains of $12.4 million. Non-GAAPlosses on investment securities, net of noncontrolling interests, were $2.0 million, compared to gains of $9.6 million. (See non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”)
- Gains on equity warrant assets of $6.6 million, compared to $16.4 million
- Non-GAAP core fee income increased $3.8 million (or 5.2 percent) to $76.5 million (see non-GAAP reconciliation under the section “Use of Non-GAAP Financial Measures”)
- Noninterest expense of $204.0 million, a decrease of $4.6 million (or 2.1 percent)
Both SVB Financial and Silicon Valley Bank’s (the “Bank”) capital ratios (CET 1, tier 1, total risk-based capital and tier 1 leverage) increased as of March 31, 2016, compared to the same ratios as of December 31, 2015. The increases are a result of the proportionally higher increase in SVBs capital compared to the increases in risk-weighted and average assets during the first quarter of 2016. Increased capital is reflective primarily of quarterly earnings. The growth in risk-weighted assets was primarily from loan growth and partially offset by a decrease in fixed income securities, while the growth in average assets was primarily from loan growth and partially offset by the decrease in their fixed income securities and cash balances during the quarter.
SVBs outlook for the year ending 31 December 2016 is also provided, on a GAAP basis, unless otherwise noted in the report. The outlook and the underlying assumptions presented are, by their nature, forward-looking statements and subject to substantial risks and uncertainties, which are also discussed in detail.
For more than 30 years, SVB Financial Group (NASDAQ: SIVB) and its subsidiaries have helped innovative companies and their investors move bold ideas forward, fast. SVB Financial Group serves companies in technology-related, life science/healthcare, private equity/venture capital, and premium wine industries. Along with commercial banking products and services provided by Silicon Valley Bank, the company offers investment advisory, asset management, private wealth management and brokerage services. They also offer non-banking products and services, such as funds management, private equity/venture capital investment and business valuation services, through our other subsidiaries and divisions. Headquartered in Santa Clara, Calif., SVB Financial Group operates in centres of innovation in the U.S. and around the world.
Access the full report, via SVBs website, here.