SVB Financial stock climbs as Q1 earnings beat on strong credit quality, client activity

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SVB Financial (NASDAQ:SIVB) shares are climbing nearly 5% in afterhours trading Thursday following stronger-than-expected Q1 results, as "credit quality was pristine, and client activity remained robust," said Greg Becker, president and CEO.

Q1 EPS of $7.92 topped the average analyst estimate of $5.58 and up from $6.22 in Q4 2021, though down from $10.03 in Q1 of last year.

Q1 net interest income of $1.08B rose from $939M in Q4 2021 and $660M in the year-ago period. Net interest margin was 2.13% in Q1, up from 1.91% in the previous quarter but down from 2.29% in Q1 2021.

Q1 noninterest income of $517M compared with $561M in Q4 2021 and $744M in Q1 2021.

Average loans of $67.07B in Q1 increased from $62.57B in Q4 2021 and $46.28B in Q1 a year ago. Average deposits were $190.72B in Q1 vs. $183.1B in Q4 2021 and $110.61B in Q1 2021.

Average client investment funds of $206.14B inched lower from $207.6B in the prior quarter but up from $151.6B in Q1 2021.

Allowance for credit losses as a percentage of total loans of 0.61% in Q1 compared with 0.64% in Q4 2021 and 0.82% in Q1 2021.

Q1 operating efficiency ratio was 54.60% vs. 60.13% in Q4 of last year and 45.31% in the year-ago quarter.

In mid-March, Jefferies expected SVB Financial to see fast core net interest income growth.