For tech investors, banks don't usually get much attention, but there is one that just might pique your interest. SVB Financial Group (SIVB.Q 2.00%) primarily serves Silicon Valley tech companies but has expanded recently to the East Coast with an acquisition of a wealth management firm. On a Fool Live episode recorded on April 28, Fool contributors Brian Stoffel and Brian Withers discuss the latest record results and take a glimpse into the CEO's history. After reviewing their perspectives, you just might be convinced to put this financial powerhouse on your watch list.
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Brian Withers: SVB Financial Group. The stock ticker is SIVB. This is a new company to this format, but it's got 55,000 Motley Fool members favorited with the stock, [which] brings it in to No. 49 in the most favorite stocks in the Fool universe. It's also The Motley Fool's bank.
It had earnings come out on April 22 and the thing that caught my attention was the CEO called it the "best quarter ever." It's not surprising given the SaaS-like growth numbers that it's had. Let's go over them, period earning assets reached $142 billion, a 90% increase year over year. Total client funds reached 288 billion, a 71% year-over-year increase. The record loan book, 48 billion, 11% sequential quarter increase, 32% year over year. They had a rock-solid balance sheet that drove better-than-forecast net interest income of 665 million, even in the low-interest environment.
The company delivered record $10.03 earnings per share almost 4X the previous Q1. Wow. What to watch? 2021 looks like it's going to be a solid year for the company as well. Management is forecasting mid-30s growth on loans, mid-60s for deposits, net interest income in the mid-30s. All of this doesn't include its latest acquisition of a Boston private and wealth management firm it paid $900 million for and its $10 billion in assets under management. If this isn't one that you've looked into, maybe it's time you take a peek.
Brian Stoffel: Brian, there is no industry that will put me to sleep faster than banking. [laughs] But I spent some time earlier this week on Motley Fool Live talking to our own banking expert John Maxfield. I love John's thinking on this because he tells it as this isn't about banking, it's about people, the management team. In fact, he's even said that if you want to know how well a company will do, look at the upbringing and values of its CEO, what their childhood was like, which I thought was just fascinating. What can you tell me about the leadership at this company?
Withers: Well, I don't have president and CEO Greg Baker's childhood friends spying on him, but I will tell you a little bit about it. He's been with SVB since 1993 and CEO since 2011. Under his leadership, the revenue has climbed 400% plus, net income 280% plus, and the stock has achieved almost 10-bagger status in the last decade. I think that's a pretty good track record. But don't take my word for it. Employees give Baker a stellar 93% approval rating on Glassdoor.
The thing that topped it off for me, Brian, was I read through the last conference call and the investor relations guy comes on and gives his spiel about don't take this forward-looking guidance and all this stuff. He talked for longer than the CEO did. The CEO basically opened up the call and said, "We had our best quarter on record, let me open it up for questions." It was awesome.
Stoffel: All right. OK.
