Shares in Durham-based venture capital bank Square 1 (Nasdaq: SQBK) surged nearly 5 percent Friday after the firm reported a 30 percent increase in quarterly earnings from a year ago.

The report was the second for Square 1 since the bank went public in March.

However, earnings did drop 4 cents from that first report in April although net income was $300,000 higher.

Shares traded at $19.01 in late-afternoon action, up 85 cents or 4.7 percent. Earlier in the day, shares hit a high of $19.18.

Since going public, SQBK has traded as high as $20.67 in March and as low as $17.38 on May 16.

Net income climbed to $8.1 million, or 27 cents a share, from $5.1 million, or 21 cents, a year ago.

Analysts had expected earnings of 19 cents. 

Interest income rose to just over $25 million compared to $22.8 million in the first quarter and $18 million one year ago.

“Solid loan and deposit growth across all segments and continued good credit performance drove another quarter of strong profitability,” said Square 1 CEO Douglas Bowers in a statement. “We believe that higher growth demonstrates increased awareness of our banking offerings among venture firms and venture-backed companies, and our ability to execute effectively.”

Second Quarter Highlights as reported by the bank:

  • Increase in net income available to common shareholders of $3.0 million, or 59.2%, compared to the second quarter of 2013 and $0.3 million, or 3.4%, compared to the first quarter of 2014.
  • Return on average common equity of 11.74% and return on average assets of 1.22%.
  • Tangible book value per share of $9.88 as of June 30, 2014.
  • Average on-balance sheet deposits grew $548.0 million, or 30.3%, compared to the second quarter of 2013 and increased $208.5 million, or 9.7%, compared to the first quarter of 2014. Average client investment funds grew $324.9 million, or 76.4%, compared to the second quarter of 2013 and grew $119.9 million, or 19.0%, compared to the first quarter of 2014.
  • Average loan balances grew $268.6 million, or 31.5%, to $1.1 billion, and period-end loans increased $245.9 million, or 27.1%, compared to the second quarter of 2013. Average loans grew $51.1 million, or 4.8%, while period-end loans increased $90.3 million, or 8.5%, compared to the first quarter of 2014.
  • Net interest margin increased to 4.03% from 3.78% for the second quarter of 2013, and decreased from 4.12% for the first quarter of 2014.
  • Warrant income decreased $2.6 million compared to the second quarter of 2013, and $2.2 million compared to the first quarter of 2014.
  • Second quarter 2014 noninterest income included $1.4 million in unrealized gains from our venture capital fund investments and a $0.5 million gain recorded on the transfer of the contract for the management of Square 1 Venture 1, L.P. to a third party.

The full financial report can be read online.