SVB Financial Looks Undervalued Relative To Its Unusually High Quality

If you’re new to the banking sector, I’m not so sure SVB Financial (SIVB) is a good place to start. That’s not because SVB Financial is a bad bank (it’s far from that), but because it’s just so atypical of most bank companies. Instead of taking deposits from retail customers and smaller businesses and lending them out as mortgage, CRE, and “regular” business loans (typical “branch banking”), SVB Financial focuses on capital call loans to venture capital and private equity funds, as well as business loans to emerging/less-established companies in sectors like technology and health care.

While SVB Financial is a different sort of bank, I believe it has proven itself over the years and currently trades at a meaningful discount to fair value.

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SVB Financial Looks Undervalued Relative To Its Unusually High Quality