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SVB Financial Earnings Rise 23%

The bank sees growth in loans and higher net interest margin.

SVB Financial Group

(SIVB) - Get SVB Financial Group Report

, a bank holding company, reported a 23.3% rise in profits for the fourth quarter, aided by growth in loans and higher net interest margin.

The Santa Clara, Calif.-based company earned $25.6 million, or 67 cents a share, in the quarter, compared with $20.8 million, or 54 cents a share, a year ago. Net income for the fourth quarter of 2005 included $4.0 million in expenses, largely professional service fees related to its restatement. Analysts polled by Thomson First Call had estimated profits of 61 cents a share.

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Net Interest Income was $81.5 million as compared with $67.5 million in the previous year's quarter. Non-interest income was $36.8 million in the quarter as compared with $31.9 million in the previous year.

Net interest margin stood at 6.78% in the quarter, as compared with 5.78% for the previous year. This increase was driven primarily by an increase in yield on interest-earning assets which resulted from a rise in average loans partially funded by a fall in average investment securities.

The company expects to earn 57 cents to 63 cents a share in the first quarter of 2006 after factoring the anticipated 25-basis-point increase in the federal funds rate during the first quarter and other charges. Analysts estimate 61 cents a share.

As on Dec. 31, 2005, approximately $31.5 million shares remained available for stock repurchases under its stock repurchase plan. On Jan. 19, 2006, the company's board increased the stock repurchase plan and authorized up to an additional $70 million of common stock to be repurchased.

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