SVB Financial Group (NASDAQ: SIVB), the parent of Silicon Valley Bank, said Friday it has received federal approval to repay $235 million it received under the government's financial rescue program, according to Associated Press.
The permission granted by the U.S. Department of Treasury also covers payment of accrued but unpaid dividends, SVB Financial said.
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SVB Financial, which is based in Santa Clara, said it expects by the end of the year to redeem all its shares of the Series B preferred stock it issued to the Treasury under part of the Troubled Asset Relief Program that invested in banks. The government launched the program at the height of the financial crisis in the fall of 2008.
SVB Financial sold $235 million of preferred shares to the Treasury last December, and agreed to send a 5 percent annual dividend, as well as grant the Treasury a warrant for common shares in SVB Financial. After SVB Financial redeems all its preferred shares, it expects to repurchase the warrant early next year.
The company closed a $300 million stock offering last month, part of which is to be used to repay the government.
TO account for redeeming preferred shares, SVB Financial expects to record a one-time, non-cash charge that will reduce net income available to common shareholders by about $11.4 million in the fourth quarter.
SVB Financial and subsidiaries including Silicon Valley Bank specialize in lending and other financial services to technology and life sciences firms, as well venture capitalists and private equity firms, and the premium wine industry.
Shares of SVB Financial rose 41 cents, or 1.1 percent, to $38.63 in morning trading.
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