IBOS member Silicon Valley Bank (SVB) has announced its financial results for Q2 2018, ending 30 June 2018, with a consolidated net income of $237.8 million ($4.42 per diluted common share).
SVB’s consolidated net income available to common stockholders for the six months ended 30 June, 2018 was $432.8 million ($8.05 per diluted common share), compared to Q2 2017 which was $224.7 million ($4.22 per diluted common share).
An increase in interest income from loans of $33.2 million to $330.3 million for Q2 2018. The increase was reflective primarily of the impact of $1.1 billion in average loan growth and higher interest rates compared to Q1 2018.
The increase of $37.2 million ($40.7 million net of non-controlling interests) in non-interest income from Q1 2018 to Q2 2018 was attributable primarily to higher net gains on investment securities and higher client investment fees.
SVB’s effective tax rate was 24.5% for Q2 2018, compared to 27.5% for the Q1 2018. The Bank’s effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and net income attributable to non-controlling interests. The decrease in SVB’s effective tax rate for Q2 2018 is due primarily to a $9.4 million increase in the recognition of excess tax benefits from share-based compensation in Q2 2018 compared to Q1 2018 which is reflective of the vesting, exercise activities of employees and increase in SVB’s stock price.
Below are the highlights of SVB’s Q2 2018 results, in comparison to Q1 2018:
• Average loan balances of $24.9 billion, an increase of $1.1 billion (4.4%)
• Period-end loan balances of $26.0 billion, an increase of $1.4 billion (5.7%)
• Average fixed income investment securities of $25.2 billion, an increase of $1.2 billion (4.9%)
• Period-end fixed income investment securities of $25.5 billion, an increase of $0.9 billion (3.5%)
• Average total client funds (on-balance sheet deposits and off-balance sheet client investment funds) increased $8.8 billion (or 8.0%) to $119.3 billion
• Period-end total client funds increased $11.0 billion (or 9.7%) to $124.7 billion
• Net interest income (fully taxable equivalent basis) of $468.5 million, an increase of $47.3 million (11.2%)
• Provision for credit losses of $29.1 million, compared to $28.0 million
• Net loan charge-offs of $13.5 million, or 22 basis points of average total gross loans (annualised), compared to $8.8 million
• Gains on investment securities, net, of $36.1 million, compared to $9.1 million
• Gains on equity warrant assets of $19.1 million, compared to $19.2 million
• Non-interest income of $192.7 million, an increase of $37.2 million (23.9%)
• Non-interest expense of $305.7 million, an increase of $40.3 million (15.2%)
• Effective tax rate of 24.5% compared to 27.5% in Q2 2017
Access SVB’s full Q2 2018 financial results analysis here.