for only the 2™ time in the past 20 years}. We target it to move 7.22 million carloads in 2016, with an average revenue per car of $1,371. Coal represents 14% of total revenues, down from 36% 2 years prior. Intermodal represents 22% of revenues, and Ag/Consumer/Gov’t represents 16% of revenues. SVB Financial Group (SIVB) Ebrahim H. Poonawala +1 646 743 0490 Research Analyst, MLPF&S Buy, PO $190 1Q investment thesis We view SIVB as the best positioned bank in our coverage universe by a wide margin to benefit from the combination of 1) rising interest rates — with SIVB ranking among the most rate sensitive banks in the mid-cap banks group 2) stronger economic growth - with SIVB's 2017 guidance (issued before the US elections) already calling for double digit revenue growth 3) de-regulation 4) tax reform. Our '17e EPS of $9 and '18e EPS of $12 imply YoY EPS growth of 24% and 33% respectively. SIVB trades at 18x our '17e EPS and 2x YE17e TBV. Our PO of $190 implies P/'17e EPS of 20x (and 16x ‘18e EPS) and P/YE17e TBV of 2.4x. This compares to an average P/E of 22.7x and P/TBV of 2.6x that the stock traded at heading into and during the initial stages of the 2004-2006 interest rate cycle. Table 1: SIVB key stock data Industry Commercial Banks Market Cap (mn) $8,584 Price $170.38 P/E (2017) 19.1x % of sell-side rated Buy 77.8% Short interest % of float 4.68% Source: Bloomberg and BofA Merrill Lynch Global Research estimates Deregulation/Gov’t Legislation: Among the one legislative action on the regulatory front that appears likely to be passed under the new administration is the increase in the $50bn SIFI asset threshold which brings with a heightened level of regulatory scrutiny (such as undergoing the CCAR stress test). While we were not concerned about SIVB's ability to transition into a CCAR bank, the removal of this should no doubt serve as a positive. At $43bn in assets, becoming a CCAR bank had been weighing on investor sentiment. With expectations for this thres