Results for the quarter were released this afternoon, and the company's top and bottom lines went in opposite directions. Total revenue was $869 million, an improvement of nearly 5% on a year-over-year basis. On the other hand, net profit dived by 54% to land at just over $132 million ($2.55 per share).
In terms of profitability, analysts had collectively expected the bank to book a per-share net profit of $3.56.
SVB Financial's steep decline on the bottom line was due heavily to credit loss provisioning. This is a trend across the banking sector, as lenders gird themselves for what's expected to be a sharp increase in loan defaults deriving from the SARS-CoV-2 coronavirus' harmful effects on the world's economy.
The company's average loans, meanwhile, rose by slightly more than 5% to $33.7 billion, and total deposits climbed 18% to $61.9 billion.
SVB Financial doesn't see a grim, post-pandemic future for its business. In the earnings release, it wrote:
[O]ur solid financial foundation of strong capital, ample liquidity and a high-quality balance sheet should position us well for the current environment. We believe we can continue to support and lend to our clients and manage the impact of a weaker economy while investing in our long-term growth.
Perhaps that optimism spurred investors to buy the company's stock, which closed a bit over 2% higher on Thursday, beating an equities market that basically traded flat on the day.