Lehman analyst upgrades SVB Financial to "Overweight"

NEW YORK—A Lehman Brothers analyst upgraded SVB Financial Group on Wednesday, saying the bank has ways to counter to a contraction in lending profit.

The Santa Clara, Calif.-based bank last month reported first-quarter profit shrank 19 percent. Profit on the bank's $4.35 billion loan portfolio slipped to $92.1 million from $97.3 million, mostly because of the Federal Reserve's campaign to stimulate the economy by cutting targets for interest rates.

The profit margin from lending compressed to 6.36 percent in the first quarter from 7.04 percent in the fourth quarter.

Lehman Brothers analyst Andrea Jao said Lehman Brothers has "levers to pull" to counteract these cuts in interest rates.

The bank, which runs 27 offices in the U.S. and five internationally, has been controlling costs and maintaining good credit quality in its portfolio, Jao said.

Jao upgraded SVB to "Overweight" from "Underweight."

Shares of SVB gained $1.54, or 3.1 percent, to $51.20. The shares have traded in a range of $39.68 to $55.48 in the past year.

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