SVB Financial shares tumble after market volatility put pressure on NII’s growth outlook for the year

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SVB Financial (NASDAQ: SIVB) the stock fell 12.1% Thursday after-hours trading after its mixed third-quarter results reflected market volatility impacting cash flow to private companies as rising interest rates and recession risks put investors stalled.

As such, the company has guided lower net interest income growth in 2022, targeting weak 1940s growth from the prior year compared to mid-1940s growth in the previous outlook. .

“The challenging environment is putting pressure on NII’s balance sheet and growth, and we expect these conditions to persist for the foreseeable future until public markets stabilize,” said CEO and Chairman Greg Becker.

Q3 EPS of $7.21, meanwhile, beat the consensus of $7.10 and rose $5.60 in Q2 and $6.24 in the prior year quarter.

Net interest income (on a taxable equivalent basis) increased to $1.21 billion as of September 30, from $1.18 billion as of June 30 and $859 million as of September 30, 2021. interest stood at 2.28% compared to 2.24% in Q2 and 1.95% in the third quarter of 2021.

Non-interest revenue was $359 million, down slightly from $362 million in the prior quarter and $672 million in the third quarter last year.

Provision for credit losses of $72m compared to $196m in Q2 and $21m a year ago.

The tangible book value of $192.54 per share decreased by $199.27 in Q2 and $200.01 in Q3 2021.

Average loans were $71.1 billion versus $69.3 billion in Q2; average total deposits of $185.4 billion versus $192.1 billion in the second quarter.

“Despite increased M&A revenue over the past year (thanks to investments in expanding our investment banking capabilities), SVB Securities’ revenue was at its lowest level in eight quarters, due to lower equity markets and M&A activity in the quarter,” Becker wrote. in a letter to shareholders.

Earlier, SVB Financial GAAP EPS $7.21 beat $0.11, revenue $1.56 billion miss $80 million.

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