SVB Financial Group (NASDAQ:SIVB) profit falls

SVB Financial Group (NASDAQ:SIVB) stock fell 5.51% (As on Jan 21, 12:03:23 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 21. The company’s bottom line totaled $371 million in the fourth quarter of FY 21 compared with $388 million, in last year’s fourth quarter. Average assets grew by 12% during the quarter and nearly doubled to $166 billion in 2021. Average client funds grew by 10% in Q4, and by 71% year over year to $329 billion. This growth reflects a near doubling of the low-cost on-balance sheet deposits. Average loans increased by $3.3 billion to $62.6 billion for the fourth quarter of 2021, compared to $59.3 billion for the third quarter of 2021. Period-end loans increased $4.8 billion to $66.3 billion at December 31, 2021, compared to $61.5 billion at September 30, 2021. Average and period-end loan growth came primarily from the Global Fund Banking, Technology Banking and Private Bank loan portfolios. Net interest income, on a fully taxable equivalent basis, was $947 million for the fourth quarter of 2021, compared to $859 million for the third quarter of 2021. Net interest margin, on a fully taxable equivalent basis, was 1.91 percent for the fourth quarter of 2021, compared to 1.95 percent for the third quarter of 2021. The 4 basis point decrease in the net interest margin was due primarily to the overall shift in balance sheet growth into lower yielding fixed income investment securities. The allowance for credit losses for loans increased $24 million to $422 million at December 31, 2021, compared to $398 million at September 30, 2021. The $24 million increase was driven primarily by an increase of $20 million in the performing reserves for loan growth and a $2 million increase in reserves for nonaccrual loans.

SIVB in the fourth quarter of FY 21 has reported the adjusted earnings per share of $6.56, beating the analysts’ estimates for the adjusted earnings per share of $6.29. The company had reported the adjusted revenue of $1.51 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $1.4 billion. Total SVBFG stockholders’ equity increased by $1.9 billion to $16.2 billion at December 31, 2021, compared to $14.3 billion at September 30, 2021, primarily due to $1.6 billion of capital raised related to the Series D and Series E Preferred Stock issuances and net income of $371 million during the fourth quarter of 2021.

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