Silvergate Bank Reports First Quarter 2017 Results
LA JOLLA, Calif., May 10, 2017 /PRNewswire/ -- Silvergate Bank today announced financial results for the quarter ended March 31, 2017, with net income of $1.6 million. The Bank's total assets were $948.9 million at quarter end, compared to $978.1 million at December 31, 2016, and equity increased to $87.0 million from $85.2 million over the same time period.
"We are pleased to report strong earnings for the first quarter of 2017," said Alan Lane, the Bank's chief executive officer. "We did this while continuing to invest in technology and people that allows Silvergate to offer an expanded array of products and services to our business customers."
Financial Performance
The Bank's net income for the first quarter of 2017 was $1.6 million, compared to $2.4 million for the prior quarter, and $1.9 million for the first quarter last year.
The Bank's net interest income for the first quarter of 2017 was $8.8 million, compared to $9.2 million for the prior quarter and $8.1 million for the first quarter last year. The decline from the prior quarter primarily reflects a decline in warehouse loan volumes. The Bank's net interest margin for the first quarter was 3.94%, compared to 3.88% for the prior quarter, and 3.71% for the first quarter last year. The increase from prior quarters reflects an increase in higher yielding assets over the prior periods.
The Bank's provision for loan losses totaled $23 thousand in the first quarter, compared to $52 thousand for the prior quarter, and $322 thousand for the first quarter last year. The Bank added to its allowance for loan losses during the quarter in response to the continued expansion of its commercial lending activities. The Bank experienced net charge-offs of $136 thousand in the first quarter of 2017, compared to net recoveries of $18 thousand in the previous quarter, and no net charge-offs or recoveries in the first quarter of 2016.
Noninterest income totaled $529 thousand for the quarter ended March 31, 2017, compared to $790 thousand for the prior quarter, and $1.0 million for the first quarter of 2016. The decrease over the prior quarter reflects a decline in warehouse loan fee income.
Noninterest expense was $6.8 million for the first quarter of 2017, compared to $5.8 million for the prior quarter and $5.7 million for 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.
"Strong earnings in the first quarter of 2017 were the result of our seasoned bankers continuing to find attractive lending opportunities in southern California and in our national residential lending niches," noted Derek Eisele, the Bank's president.
Balance Sheet Activity
The Bank's total assets were $948.9 million at March 31, 2017, compared to $978.1 million at December 31, 2016, and $952.7 million at March 31, 2016. The Bank's total loans were $809.9 million at March 31, 2017, compared to $836.1 million at December 31, 2016, and $787.0 million at March 31, 2016.
The Bank's Mortgage Warehouse Lending Division experienced lower production volumes, with $857.3 million in loans funded for the first quarter, compared to $1.3 billion in the prior quarter and $884.9 million in the first quarter of 2016. Total commercial real estate loan balances increased 4.3% during the first quarter, totaling $366.5 million at March 31, 2017, compared to $350.8 million and $283.0 million at December 31, 2016, and March 31, 2016, respectively. Single family residential loan balances totaled $401.0 million at March 31, 2017, compared to $451.1 million and $456.3 million at December 31, 2016, and March 31, 2016, respectively. Commercial and industrial loans increased 17.6% in the first quarter, totaling $49.1 million at March 31, 2017, compared to $40.5 million and $25.6 million at December 31, 2016 and March 31, 2016, respectively.
At March 31, 2017, deposits totaled $769.0 million, compared to $769.9 million at the prior quarter-end and $645.3 million at March 31, 2016. Deposit balances decreased by 0.12% compared to the prior quarter end, and increased 19.16% compared to March 31, 2016. The year-over-year growth is primarily driven by an increase of $115.8 million in noninterest bearing demand deposits
At March 31, 2017, Silvergate Bank's Tier 1 Leverage Capital Ratio was 9.60% and Total Risk-Based Capital Ratio was 15.26%, both substantially exceeding "well capitalized" minimums of 5.00% and 10.00%. At March 31, 2107, the ratios of nonperforming loans to total loans and nonperforming assets to total assets remained low, at 0.57% and 0.56%, respectively.
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 4250 Executive Square, Suite 300, 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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