WAL - SVB Financial Blows Out Expectations On Surging Client Funds

• SVB posted a large beat in the fourth quarter, as net interest income outperformed on surging loan and earning asset growth and the bank recognized significant investment gains.
• Earning assets and deposits grew by more than 50% on a year-over-year basis, and SVB management is looking for loan growth "in the mid-20%s" in 2021.
• SVB enjoys over 50% share in its core lending markets, but more competition is targeting the capital call lending market, and there are high growth expectations embedded into the valuation.
• SVB has made itself the bank of choice for tech/life science companies and investors in those sectors, and I wouldn't bet against it, but the expectations make it hard to recommend at this price.

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