SVB Financial Upped to Strong Buy - Analyst Blog

On Mar 29, Zacks Investment Research upgraded SVB Financial Group SIVB to a Zacks Rank #1 (Strong Buy).
 
Why the Upgrade?

SVB Financial has been witnessing rising earnings estimates on the back of strong fourth-quarter 2013 results, which included improved revenues, growth in deposits & loans and a steady capital position. The long-term expected earnings growth rate for the company is 10.25%. Further, SVB Financial recorded a solid year-to-date return of 22.04%.

SVB Financial reported its fourth-quarter earnings on Jan 23 with earnings per share of $1.27 beating the Zacks Consensus Estimate by 14.41%. In all the quarters of 2013, the company scripted positive earnings surprises, with average earnings beat for the year at 7.25%.

Robust results were primarily driven by strong loan growth and increased revenues. Yet these positives were partially offset by rising operating expenses.

For 2014, management expects non-GAAP operating expenses to rise in the mid-single digits and it expects the net interest income growth in low double digits. The company also anticipates the average deposit balance to grow in the mid-double digits and the average loan balance to grow in mid-to-high double digits.

For 2014, the Zacks Consensus Estimate increased 6.2% to $5.44 per share over the last 60 days. For 2015, the Zacks Consensus Estimate advanced 2.9% to $5.61 per share over the same time period.

Other Stocks to Consider

Apart from SVB Financial, other Western banks worth considering include Central Valley Community Bancorp CVCY, Summit State Bank SSBI and American River Bankshares AMRB. Central Valley Community Bancorp and Summit State Bank carry a Zacks Rank #1, while American River Bankshares carries a Zacks Rank #2 (Buy).