SVB Financial Group (NASDAQ:SIVB) stock plunges 15.58% (As on July 22, 11:45:10 AM UTC-4, Source: Google Finance) after the company missed the earnings estimates for the second quarter of FY 22. Consolidated net income available to common stockholders for the second quarter of 2022 was $333 million compared to $472 million for the first quarter of 2022 and $502 million for the second quarter of 2021. Average loans increased by $2.2 billion to $69.3 billion for the second quarter of 2022, compared to $67.1 billion for the first quarter of 2022. Period-end loans increased $2.3 billion to $71.0 billion at June 30, 2022, compared to $68.7 billion at March 31, 2022. Average and period-end loan growth was driven primarily by our Global Fund Banking portfolio, with continued growth in the Technology and Life Science/Healthcare and Private Bank loan portfolios. The allowance for credit losses for loans increased $124 million to $545 million at June 30, 2022, compared to $421 million at March 31, 2022. As a percentage of total loans, our allowance for credit losses for loans increased 16 basis points to 0.77 percent at June 30, 2022, compared to 0.61 percent at March 31, 2022. Included in the 16 basis point increase in our allowance for credit losses for loans is an 8 basis point increase in reserves for the overall deterioration in economic conditions.

SIVB in the second quarter of FY 22 has reported the adjusted earnings per share of $5.60, missing the analysts’ estimates for the adjusted earnings per share of $7.66, according to figures compiled by Thomson Reuters. Net interest income, on a fully taxable equivalent basis, was $1.2 billion for the second quarter of 2022, compared to $1.1 billion for the first quarter of 2022. Net interest margin, on a fully taxable equivalent basis, was 2.24 percent for the second quarter of 2022, compared to 2.13 percent for the first quarter of 2022. The 11 basis point increase in the net interest margin was due primarily to improved yields reflective of the higher rate environment and the decrease in premium amortization, partially offset by the increase in interest-bearing deposit expense.

Moreover, total SVBFG stockholders’ equity decreased by $62 million to $15.9 billion at June 30, 2022, compared to $16.0 billion at March 31, 2022. The decrease was driven primarily by other comprehensive income from unrealized losses recorded on AFS securities, net of tax, reflective of an increase in market rates. The decrease was further offset by an increase in the fair value of hedging instruments.