Silvergate Bank Reports First Quarter 2014 Results

LA JOLLA, Calif., May 7, 2014 /PRNewswire/ -- Silvergate Bank today announced financial results for the first three months of 2014.  The Bank's net income was $943,000 for the first quarter, and at March 31, 2014 its total assets increased to $724.8 million and its equity capital grew to $71.1 million.

"Silvergate Bank's first quarter earnings continue its record of consistently profitable performance," said Alan J. Lane, Bank president and chief executive officer.  "Additionally, our capital and asset quality ratios remain superior to comparable averages for all FDIC insured banks.  Our levels of profitability, capital, and asset quality all support our ability to provide our clients with the innovative products and services they have come to expect from us to help them grow their businesses."  

At March 31, 2014, Silvergate Bank's Tier 1 Leverage Capital Ratio was 11.56% and Total Risk-Based Capital Ratio was 17.14%, both substantially exceeding 'well capitalized' minimums of 5% and 10%.  The Bank's ratios of nonperforming loans to total loans and nonperforming assets to total assets both remained low, declining to 0.59% and 0.99%, respectively.   

"In the face of challenges presented by the reduction in residential mortgage lending nationwide, Silvergate Bank continues to generate solid profitability from our core commercial banking activities and diversified revenue streams," said Dennis S. Frank, Bank chairman.

Financial Performance

The Bank's net income for the first quarter was $943,000, compared to $1.27 million for the prior quarter and $1.39 million for the first quarter last year, with these declines mainly due to the first quarter's lower level of net interest income than in the two prior comparative periods.  Total assets at the end of the quarter increased to $724.8 million, based on substantial quarterly additions of single-family residential mortgage loans, commercial real estate loans, and cash and short-term investments.  The Bank's equity capital grew to $71.1 million at March 31, 2014.

The Bank's net interest income for the quarter was $4.66 million, compared to $4.86 million for the prior quarter and $5.37 million in the first quarter of 2013.  In the continued low interest rate environment, yields on average earning assets decreased from the two prior periods, resulting in interest earned on both loans and investments declining to a greater degree in the first quarter than reductions in interest paid on total deposits and borrowings compared to the prior periods.  Net interest margin for the first quarter was 3.12%, compared to 3.19% for the prior quarter, and 3.41% for the first quarter last year, due mainly to the reduced yields noted above. 

Noninterest income was $1.63 million for the first quarter, compared to $1.65 million for the prior quarter, and $1.67 in last year's first quarter.  While each of these dollar amounts were comparable, core noninterest income declined in the first quarter, with the majority of noninterest income for the period comprised of gains on the sales of securities, a gain on the sale of the Bank's Lancaster branch office, and income from a foreclosed real estate property.  Noninterest expense was $4.76 million for the quarter, compared to $4.73 million for the prior quarter and $4.67 million last year, as general and administrative costs grew only modestly.

Commercial Banking Platform

Commercial real estate loans totaled $195.1 million at March 31, 2014, compared to $180.3 million at December 31, 2013, with this 8% growth reflecting the Bank's continuing active role in commercial real estate financing.  Total deposits declined by 9% over the past twelve months, primarily as a result of the sale of the Bank's Lancaster branch office at the end of March.  Our funding profile also changed due to the replacement of higher cost maturing time deposits with lower cost deposits and lower cost short-term borrowings better matching the repricing characteristics of the Bank's loan portfolios.  The Bank's profitability has continued to benefit from its core commercial lending operations and the expanded residential lending activities added in recent years.   

Residential Mortgage Loan Activities

With the slowdown experienced nationwide in residential mortgage loan originations, the volumes of new loan fundings and purchases in the Bank's Mortgage Warehouse Lending Division and Reverse Mortgage Division declined.  However, loan balances at the end of the first quarter in both divisions were in line with their totals at year-end 2013 and continued to contribute to the Bank's interest income and noninterest income.  In the first quarter the Bank also completed purchases of $41.0 million in single-family residential mortgage loans for its portfolio that will contribute to core interest income on a continuing basis.

Increasing Silvergate's Business Banking Focus in San Diego – Dino D'Auria Named Chief Banking Officer

Silvergate is in the process of significantly increasing its business banking focus in the San Diego market.  In March the Bank named Dino D'Auria executive vice president and chief banking officer, with primary responsibilities for the further growth of our commercial banking efforts.  Mr. D'Auria has an exceptional record as a successful business banker, with extensive experience in the greater San Diego area.  The addition of Mr. D'Auria and the sale of the Bank's Lancaster office noted above have strengthened both the Bank's resources and its commitment to providing superior business banking products and services for San Diego based clients.

About Silvergate Bank

Silvergate Bank is a San Diego-based bank that specializes in meeting the needs of small businesses through a comprehensive offering of lending products and personalized banking services.  Silvergate Bank opened in 1988 and is a subsidiary of Silvergate Capital Corporation.  Bank branches are located in Carlsbad, Escondido, La Jolla, and La Mesa.  Silvergate Bank's headquarters office is located at 4275 Executive Square, Suite 800, La Jolla, CA 92037.  The Bank's website is www.silvergatebank.com

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties.  Actual results may differ materially from stated expectations.  When used in this release, the words or phrases such as "will continue," "is anticipated," "estimate," "expect," "projected," "believe," "seeking," or similar expressions, are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Readers should not place undue reliance on the forward-looking statements, which reflect views only as of the date hereof.  Neither Silvergate Capital Corporation nor Silvergate Bank undertakes any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

 

 




Silvergate Bank Selected Financial and Operating Data

(Dollars in Thousands - Unaudited)






Three Months Ended







March 31,


December 31,


March 31,


Annual



INCOME STATEMENT


2014


2013


2013


Change


















Interest Income 


$    5,786


$         6,022


$          6,733


-14%





Interest Expense 


1,131


1,167


1,362


-17%





Net Interest Income


4,655


4,855


5,371


-13%





Provision for Loan Losses


-


-


50


-100%





Total Noninterest Income


1,625


1,646


1,671


-3%





Total Noninterest Expense


4,763


4,726


4,680


2%





Income Before Taxes


1,517


1,775


2,312


-34%





Income Tax Expense


574


506


919


-38%





     Net Income


$      943


$         1,269


$          1,393


-32%


















Performance Ratios













Net Interest Margin


3.12%


3.19%


3.41%







Return on Average Assets


0.61%


0.83%


0.86%







Return on Average Equity


5.30%


7.28%


7.86%







Efficiency Ratio


75.84%


72.70%


66.46%







Net Loan Charge-Offs to Average Total Loans

0.02%


0.01%


0.04%



































March 31,


December 31,


September 30,


June 30,


March 31,


Annual

BALANCE SHEET


2014


2013


2013


2013


2013


Change














Cash and Due from Banks


$  44,820


$       18,507


$        14,778


$  26,441


$  56,396


-21%

Investments


66,618


69,466


73,129


71,344


64,491


3%

     Total Cash & Investments


111,438


87,973


87,907


97,785


120,887


-8%

Securitzed Loans, at fair value


28,451


27,918


27,172


26,870


26,146


n/m

Loans Held for Investment ("HFI")


426,893


366,536


291,449


333,872


337,135


27%

Allowance for Loan Losses


(3,897)


(3,927)


(3,938)


(3,975)


(4,011)


-3%

     Loans HFI, net


422,996


362,609


287,511


329,897


333,124


27%

Loans Held for Sale


150,246


150,739


201,723


176,827


148,549


1%

Real Estate Owned ("REO")


3,549


3,559


3,511


3,511


-


n/a

Other Assets


8,164


8,349


8,613


7,770


9,811


-17%

Total Assets


$724,844


$     641,147


$      616,437


$642,660


$638,517


14%














Noninterest Bearing Demand Deposits


$  54,860


$       56,892


$        61,901


$  60,377


$  64,172


-15%

Interest Bearing Demand Deposits


5,850


5,998


5,470


3,810


3,497


67%

NOW, Money Market, and Savings Accounts

181,875


195,115


179,485


164,831


162,715


12%

Certificates of Deposit


201,598


195,729


221,459


254,551


259,457


-22%

     Total Deposits


444,183


453,734


468,315


483,569


489,841


-9%

FHLB Advances and Other Borrowings


177,000


85,000


49,128


58,136


50,144


253%

Payables under Securitizations


27,979


27,390


25,148


23,947


22,728


23%

Other Liabilities


4,536


4,736


4,913


4,420


4,416


3%

    Total Liabilities


653,698


570,860


547,504


570,072


567,129


15%

    Total Shareholder's Equity


71,146


70,287


68,933


72,588


71,388


0%

Total Liabilities and Shareholder's Equity


$724,844


$     641,147


$      616,437


$642,660


$638,517


14%














Asset Quality Ratios













Nonperforming Loans to Total Loans


0.59%


0.69%


0.86%


0.78%


1.26%



Loss Allowance to Nonperforming Loans


108.20%


105.10%


88.30%


94.73%


62.30%



Allowance for Loan Losses to Loans HFI


0.91%


1.08%


1.35%


1.19%


1.19%



Nonperforming Assets to Total Assets


0.99%


1.14%


1.29%


1.20%


1.01%
















Capital Ratios













Tier I Leverage Capital Ratio


11.56%


11.42%


10.85%


11.49%


11.01%



Total Risk-Based Capital Ratio


17.14%


18.40%


19.26%


18.08%


17.74%



 

CONTACT:

Sandra Grove


Grove Media


858-565-1905


sgrove@grove-media.com

Logo - http://photos.prnewswire.com/prnh/20120731/LA49618LOGO

SOURCE Silvergate Bank



RELATED LINKS
https://www.silvergatebank.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.