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NIM hikes to 3.59% at SVB Financial

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NIM hikes to 3.59% at SVB Financial

Santa Clara, Calif.-based SVB Financial Group on July 26 reported second-quarter net income available to common stockholders of $237.8 million, or $4.42 per share. A year ago, it was $123.2 million, or $2.32 per share.

The S&P Capital IQ consensus normalized EPS estimate for the most recent quarter was $3.89.

The company's net interest margin climbed to 3.59% for the quarter, from the linked period's 3.38% and the year-ago quarter's 3.00%. The company attributed the increase in NIM to rising interest rates as well as a shift in the mix of the company's interest-earning assets to loans and fixed income investment securities from its interest-earning cash and other short-term investment securities.

Additionally, total nonperforming assets totaled $125.3 million, as compared to $116.7 million in the previous quarter and $120.3 million a year ago.

The company also said that its provision for loan losses for the quarter was $27.7 million. It was $27.0 million in the linked quarter and $15.2 million in the year-ago quarter.

The annualized return on average stockholder's equity rose to 20.82%, from the prior quarter's 18.12% and the year-ago period's 12.75%.

For full year 2018, SVB expects average loan balances to increase at a percentage rate in the high teens, which is the same as its previous outlook as of April 26. Average deposit balances are expected to grow at a percentage rate in the low teens instead of low double digits. For net interest income, growth is now projected to be at a percentage rate in the mid 30s instead of the previous low 30s projection. The company's 2018 net interest margin may be between 3.55% and 3.65%, up from the earlier prediction of 3.50% to 3.60%.