Bank of the Tech Stars: a Great Stock to Own
NEW YORK (TheStreet) -- SVB Financial (SIVB) has been on a loan-growth tear, which sets the company apart during a time of major challenge for the banking industry.
JPMorgan Chase analyst Steven Alexopoulos on Tuesday said that "in the backdrop of a slowing economy and the fiscal cliff, as people and companies continue to innovate, we see SIVB as one of the few banks positioned to post strong loan growth, with a 3-year avg loan
That's an amazingly strong loan growth rate during a sluggish economic recovery, and "with loan growth being one of the very few remaining tools left in the industry's toolkit to combat the
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SVB Financial is the holding company for Silicon Valley Bank, which has offices in the United Kingdom, Israel, China and India, in addition to 27 offices throughout the United States.
The company focuses on lending to technology companies, providing multiple services to venture capital and private equity firms that invest in tech and biotech, and also on private banking services for high net worth individuals, in its home market in the Silicon Valley area.
SVB Financial had $21.6 billion in total assets as of Sept. 30. The company reported third-quarter net income available to common shareholders of $42.3 million, or 94 cents a share, declining from $47.6 million, or $1.06 a share, in the second quarter, but increasing from $37.6 million, or 86 cents a share, during the third quarter of 2011.
Earnings were down sequentially because SVB in the second quarter booked "pre-tax gains of $5.0 million from the sale of certain available-for-sale securities and pre-tax gains of $4.2 million from the sale of certain assets related to our equity management services business." Excluding the gains, second-quarter earnings would have been $42.1 million, or 94 cents a share.
The company's total loans grew 5% sequentially and 29% year-over-year, to $8.2 billion, as of Sept. 30.