Silvergate Bank Reports First Quarter 2016 Results
LA JOLLA, Calif., May 9, 2016 /PRNewswire/ -- Silvergate Bank today announced financial results for the quarter ended March 31, 2016, with net income of $1.9 million. The Bank's total assets increased to $952.7 million from $948.2 million compared to prior quarter and equity grew to $85.1 million from $83.5 million over the same time period.
"We are pleased to report that net income for the first quarter of 2016 outperformed the preceding quarter and comparable period in 2015," said Alan Lane, the Bank's chief executive officer. "We continue to invest our resources to further expand our business banking market share and provide innovative, valued services to our core client base."
Financial Performance
The Bank's net income for the quarter was $1.9 million, compared to $1.7 million for the prior quarter and $1.2 million for the first quarter last year.
The Bank's net interest income for the first quarter of 2016 was $8.1 million, consistent with the prior quarter and compared to $6.9 million in the first quarter last year. The Bank's net interest margin for the first quarter was 3.71%, compared to 3.64% for the prior quarter, and 3.33% for the first quarter last year. The increase in the net interest margin from prior quarters reflects an increase in loan yields over the prior periods.
The Bank's provision for loan losses totaled $322 thousand in the first quarter, compared to $679 thousand for the prior quarter and $319 thousand in the first quarter last year. The Bank experienced no net charge-offs or recoveries in the first quarter of 2016 compared to net charge-offs of $15 thousand in the previous quarter.
Noninterest income totaled $1.0 million for the quarter ended March 31, 2016, compared to $375 thousand for the prior quarter, and $446 thousand in the first quarter of 2015. The increase over the prior quarters reflects an increase in the gain on sale of loans during the quarter. Noninterest expense was $5.7 million for the first quarter of 2016, compared to $5.1 million for the prior quarter and the same period last year. The increase reflects higher compensation expense resulting from strong production activity and an increase in total employees as the Bank continues to expand its business banking activities.
"Our earnings success in the first quarter of 2016 was supported by continued strong loan production at good yields," noted Derek Eisele, the Bank's president. "Through the efforts of our seasoned bankers, we continue to find attractive lending opportunities in southern California and in our national residential lending niches."
Balance Sheet Activity
The Bank's total loan balance was $787.0 million at March 31, 2016, a 5.8% decrease from December 31, 2015, and a 6.2% decrease from March 31, 2015. Loans funded and purchased by the Bank's Mortgage Warehouse Lending Division totaled $884.9 million for the quarter, compared to $839.0 million in the prior quarter and $971.1 million in the first quarter of 2015.
Total commercial and commercial real estate loan balances decreased 0.85% from last quarter, totaling $278.5 million at March 31, 2016, compared to $280.9 million and $205.5 million as of December 31, 2015 and March 31, 2015, respectively. Residential loan balances, including reverse mortgage loans, totaled $299.7 million at March 31, 2016, compared to $351.4 million and $454.0 million at December 31, 2015 and March 31, 2015, respectively. The decline in residential loan balances reflected sales of reverse mortgage loans totaling $46.1 million during the first quarter of 2016 and sales of reverse and other residential mortgage loans totaling $73.3 million in 2015. The Bank continues to execute on the plan of replacing lower yielding reverse mortgage loans with higher yielding assets.
At March 31, 2016, deposits totaled $645.3 million, compared to $634.3 million at the prior quarter end and $535.3 million at March 31, 2015. Deposit balances have increased by 1.7% since December 31, 2015 and increased by 20.6% from March 31, 2015. The growth in deposits reflects focused local marketing efforts and includes increases of $12.2 million in noninterest bearing demand deposits, $84.6 million in transaction, money market and savings accounts, and $13.2 million in time deposits.
At March 31, 2016, Silvergate Bank's Tier 1 Leverage Capital Ratio was 9.65% and Total Risk-Based Capital Ratio was 14.89%, both substantially exceeding "well capitalized" minimums of 5.00% and 10.00%. The Bank's ratio of nonperforming loans to total loans increased from the prior quarter to 0.54% as well as the nonperforming assets to total assets ratio which increased to 0.59%.
About Silvergate Bank
Silvergate Bank is a San Diego-based bank that specializes in meeting the needs of businesses and residential loan producers 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 and a loan production office is located in Seal Beach in Orange County. 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.
CONTACT: Alan Lane
858-362-6300
SOURCE Silvergate Bank
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