Business

Square 1 Bank net income rises 9 percent

The corporate parent of Square 1 Bank reported record net income of $9.5 million in the fourth quarter, up 9 percent from a year ago and better than analysts expected.

Investors reacted positively to the news, pushing shares of Square 1 Financial up 5 percent Wednesday.

Net income totaled 32 cents per share for the Durham-based bank. Analysts had projected 28 cents per share, according to Bloomberg News.

The bank attributed the improved net income to a $2.8 million increase in net interest income and an approximately $600,000 increase in noninterest income. That was partially offset by a $1.5 million hike in the provision for loan losses and an approximately $700,000 increase in noninterest expense.

For all of 2014, the average loan balance rose nearly 29 percent thanks to an increased presence in key markets, increased loans to later-stage companies and “the growing momentum of our overall brand awareness,” CEO Doug Bowers told analysts in a conference call Wednesday morning.

“Altogether, these result add up to strong financial performance for the quarter and a very good full year 2014 for Square 1,” Bowers said.

Net income for all of 2014 rose 54 percent to $34.1 million, or $1.25 per share.

Square 1 provides loans and other banking services to venture capital firms and the businesses they invest in. It has about a dozen offices nationwide.

Bowers also highlighted the performance of Square 1 Asset Management, which was launched in 2013 to provide investment advice to companies and their institutional investors.

That business “had zero investments as late as the summer of 2013 and ended 2014 with $976 million in client investment funds under management,” he said.

Bowers also was upbeat about the bank’s prospects for 2015 in light of a robust market for venture capital investments.

Shares of Square 1 Financial closed at $23.25, up $1.18. Square 1 went public at $18 per share in March.

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