Hot Stock Analysis: SVB Financial Group (NASDAQ: SIVB)
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SANTA CLARA, Calif., January 22, 2020 – Shares of SVB Financial Group (NASDAQ: SIVB) showed the bullish trend with a higher momentum of 2.42% to $258.40. The company traded total volume of 385.769K shares as contrast to its average volume of 414.19K shares. The company has a market value of $13.32B and about 51.55M shares outstanding.
For the third quarter of 2019, SVB Financial Group (NASDAQ: SIVB) reported consolidated net income of $267.30M, or $5.15 per diluted common share available to common stockholders, compared to $318.00M, or $6.08 per diluted common share, for the second quarter of 2019 and $274.80M, or $5.10 per diluted common share, for the third quarter of 2018. Consolidated net income available to common stockholders for the nine months ended September 30, 2019 was $874.00M, or $16.67 per diluted common share, compared to $707.60M, or $13.15 per diluted common share, for the comparable 2018 period. For the third quarter of 2019, a net loss attributable to SVB Leerink was $1.40M, or $0.03 per diluted common share. Net income for the nine months ended September 30, 2019 attributable to SVB Leerink was $8.20M, or $0.16 per diluted common share.
Net Interest Income and Margin:
Net interest income, on a fully taxable equivalent basis, was $523.60M for the third quarter of 2019, compared to $532.30M for the second quarter of 2019. The $8.70M decrease from the second quarter of 2019 to the third quarter of 2019, was attributable primarily to the following:
- A decrease in interest income from loans of $19.80M to $394.20M for the third quarter of 2019. The decrease was reflective primarily of $21.70M in lower interest income earned on gross loans and $4.70M related to lower loan fees, partially offset by a $4.90M increase related to $0.40B in average loan growth. Overall loan yields decreased 41 basis points to 5.24 percent, driven primarily by an 18 basis point decrease in our gross loan yields reflective primarily of the two 25 basis point decreases in the Federal Funds rate during the third quarter of 2019 as well as by lower LIBOR rates, an 11 basis point decrease due to the continued shift in the mix of our total loan portfolio into our lower yielding private equity/venture capital loans, a six basis point decrease due to a decrease in the level of loan prepayments and a six basis point decrease from the continued compression on our loan yields due to pricing competition,
- An $8.00M increase in interest paid on our interest-bearing deposits due to a $3.20B increase in average interest-bearing deposits partially offset by decreases in market rates through the third quarter of 2019, partially offset by
- An increase in interest income from our fixed income investment securities of $15.50M to $163.70M for the third quarter of 2019. The increase was reflective primarily of higher average fixed income securities of $2.00B during the third quarter of 2019 due to deposit growth, and
- An increase of $2.50M in interest income from short-term investment securities reflective primarily of a $1.80B increase in average interest-earning cash balances, partially offset by decreases in Federal Funds interest rates.
For the third quarter of 2019, approximately 92 percent, or $27.70B, of our average gross loans were variable-rate loans that adjust at prescribed measurement dates. Of our variable-rate loans, approximately 65 percent are tied to prime-lending rates and 35 percent are tied to LIBOR.
The Company offered net profit margin of 50.40%. ROE was recorded as 20.80% while beta factor was 2.23. The stock, as of recent close, has shown the weekly upbeat performance of 2.65% which was maintained at 2.93% in this year.
