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Here's How Much You'd Have If You Invested $1000 in SVB Financial a Decade Ago

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in SVB Financial ten years ago? It may not have been easy to hold on to SIVB for all that time, but if you did, how much would your investment be worth today?

SVB Financial's Business In-Depth

With that in mind, let's take a look at SVB Financial's main business drivers.

Headquartered in Santa Clara, CA, SVB Financial Group is a diversified financial services company. Incorporated in 1999, it operates through, among others, the Silicon Valley Bank, its primary subsidiary, providing a wide range of banking and financial products and services. SVB Financial has four operating segments:

Global Commercial Bank: (constituting 87.5% of total average assets in 2020) This segment consists of Commercial Bank, which offers lending, deposit products, cash management services, global banking, and trade products and services, in addition to certain investment services. Other divisions include Private Equity Division, SVB Wine, SVB Analytics and Debt Fund Investments.

SVB Private Bank: (4.9%) This being the private banking division of Silicon Valley Bank, it offers a customized suite of private banking services, including mortgages, home equity lines of credit, restricted stock purchase loans, capital call lines of credit, and other secured and unsecured lending. It also fulfills private banking clients’ cash management needs through deposit account products and services.

SVB Capital: (0.5%) This being the venture capital investment division, it focuses on funds management, comprising funding of funds and direct venture funds (or co-investment funds). The segment manages venture capital funds, primarily on the behalf of third-party limited partner investors and the company.

SVB Leerink: (0.6%) Operating as a wholly-owned subsidiary of SVB Financial, it provides investment banking services across all subsectors of healthcare.

The company reports for these segments their non-controlling interest under the heading ‘Other items’ (6.5%) , which reflects adjustments required for the reconciliation of results in conformity with U.S GAAP.

In 2019, SVB Financial acquired Leerink Holdings LLC ("SVB Leerink"). In 2020, it acquired the debt investment business of WestRiver Group.

As of Mar 31, 2021, the company had total assets worth $142.3 billion, deposits of $124.2 billion, net loans of $47.3 billion and shareholders’ equity of $9.9 billion.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in SVB Financial a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in June 2011 would be worth $10,547.21, or a gain of 954.72%, as of June 10, 2021, according to our calculations. This return excludes dividends but includes price appreciation.

The S&P 500 rose 227.35% and the price of gold increased 18.59% over the same time frame in comparison.

Analysts are forecasting more upside for SIVB too.

Shares of SVB Financial have outperformed the industry so far this year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters. The company’s first-quarter 2021 results were aided by higher revenues and a decline in provisions. Growth in loans and deposits, and its global expansion strategy will likely continue to support financials. The deal to acquire Boston Private is expected to be earnings accretive, while the acquisition of the debt investment business of WestRiver Group will likely help SVB Financial further cement its foothold in the innovation economy. Near-zero interest rates are likely to continue to put pressure on margins and elevated operating expenses are expected to hurt bottom-line growth. Yet, a strong balance sheet position and efforts to improve non-interest income bode well for SVB Financial.

The stock is up 8.58% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 12 higher, for fiscal 2021. The consensus estimate has moved up as well.

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