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The Facebook IPO Trade You Can Bank On Right Now (Update 3)

Updated with market close information.

NEW YORK ( TheStreet) -- Investors shut out of the Facebook IPO might consider SVB Financial Group (SIVB - Get Report), which is a Silicon Valley growth story that will directly benefit from the mega wealth created by the social network.

SVB Financial main subsidiary is Silicon Valley Bank. The stock has been on fire, with shares rising 22% year-to-date, through Thursday's close at $59.96.

With billions flowing to Facebook investors -- including DST Global Limited and Elevation Partners -- following the IPO, it's not unreasonable to expect a flurry of new funding to expand Silicon Valley companies or to fund tech startups, which can only help SVB Financial, which has seen major expansion of its lending activity over the past year, along with revenue improvement.
SVB Financial Group CEO Gregory W. Becker

SVB Financial is headquartered in Santa Clara, Calif., with 26 offices in the U.S., as well as a presence in China, India, Israel and the Hong Kong. The company had $20 billion in total assets as of Dec. 31.

SVB reported fourth-quarter earnings to common shareholders of $35.6 million, or 81 cents a share, increasing from $17.5 million, or 41 cents a share, a year earlier.

While the bottom line improvement reflected lower credit costs, with the quarterly provision for loan losses declining to $8.2 million from $15.5 million a year earlier, the big story was loan growth.

Total loans grew 26% year-over-year, to $7.0 billion, and net interest income increased 34%, to $140.1 million in the fourth quarter. The company's net interest margin -- the difference between a bank's average yield on loans and investments and its average cost for deposits and wholesale borrowings -- expanded to 3.10% in the fourth quarter, from 2.74% a year earlier.

CEO Greg Becker said during SVB Financial's fourth-quarter conference call that the company had "received approval to move forward with setting up our joint venture bank in China, and are in the process of preparing for a launch in 2012," and that he was hoping to open a UK branch in 2012, after being "disappointed we didn't get the branch up and running in 2011."

CFO Mike Descheneaux gave some aggressive guidance for loan growth during the conference call, saying that "in light of our clients' continued strength and our strategy for keeping them longer and supporting them globally, we expect average loans in 2012 to grow at a percentage rate in the mid-20's."
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