SVB Financial Group (NASDAQ:SIVB) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 06:00 pm ET
Welcome to the SVB Financial Group Q1 2018 Earnings Call. My name is Adrienne, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. (Operator Instructions) Please note this conference is being recorded. I'll now turn the call over to Meghan O'Leary.
Meghan O'Leary, you may begin.
Thank you, Adrienne, and thank you, everyone, for joining us today. Our President and CEO, Greg Becker; and our CFO, Dan Beck, are here to talk about our first quarter and -- financial results and will be joined by other members of management for the Q&A. Our current earnings release is available on the Investor Relations section of our website at svb.com.
We'll be making forward-looking statements during this call, and actual results may differ materially. We encourage you to review the disclaimer in our earnings release dealing with forward-looking information, which applies equally to statements made in this call.
In addition, some of our discussion may include references to non-GAAP financial measures. Information about those measures, including reconciliation to GAAP measures, may be found in our SEC filings and in our earnings release. We expect the call, including Q&A, to last approximately an hour. And with that, I will turn the call over to Greg Becker.
Thank you, Meghan and thanks, everyone, for joining us today. We had an excellent first quarter with exceptionally strong performance across the business. We delivered earnings per share of $3.63 and net income of $195 million. These results were driven by continuing trends of strong client liquidity, healthy balance sheet growth, higher rates, strong core fee income and stable credit quality. Our results also reflect the impact of approximately $16 million after tax of losses related to the sale of shares we held in Roku, which equates to an earnings impact of $0.30 per share.
A few highlights from the first quarter compared to Q4. Net interest income increased by 6.5% to $421 million. Average loans grew 6.1% to $23.8 billion. Average total client funds grew by 7.9% to $110.5 billion. Core fee income increased by 8.1% to $115 million. And we delivered a return on equity of 18.1%.
Our business is doing well across the Board and performing better than expected on many fronts. We are seeing healthy activity among our clients, particularly private equity, life sciences and international, and our pipeline remains strong. Based on our performance in the first quarter and the dynamics we're seeing in the markets, we're making a number of positive revisions to our 2018 full year outlook for balance sheet and revenue growth, which Dan will get into in a few minutes. I'll preference his remarks with some commentary on our markets and the drivers behind our improved outlook, and I'll touch on a few business highlights as well.
The strong availability of capital has been a primary driver of our healthy client markets and our solid performance, and it appears to be getting even stronger.