Square 1 Bank's profit jumps 137 percent

Square 1 Bank’s profit more than doubled in the first quarter, thanks to across-the-board gains and a spike in income gained from warrants it received when making loans to startups.

The Durham-based specialty bank posted net income of $7.8 million, or 31 cents per share, up 137 percent from a year earlier.

“We are pleased with our results from the first quarter,” CEO Douglas Bowers said during a conference call — the company’s first as a publicly traded company. “Square 1 is off to a very good start for 2014.”

Square 1 went public at $18 per share last month. Its shares closed Wednesday at $18.85, up 19 cents.

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

“Our growth in loans, deposits and investments income increase nearly 36 percent over the same period of last year,” Bowers said. Average loan balances in the quarter rose 30 percent to $1.1 billion.

Noninterest income rose 77 percent to $7.1 million. That included $2.2 million in warrant income, up from a $227,000 loss a year ago.

Bowers noted that “warrant income can be unpredictable.”

“We had a big quarter of warrant income as six of the companies we held warrant positions in experienced successful IPOs,” he said.