Silvergate Bank Reports Second Quarter 2017 Results
LA JOLLA, Calif., Aug. 15, 2017 /PRNewswire/ -- Silvergate Bank today announced financial results for the quarter ended June 30, 2017, with net income of $2.2 million. The Bank's total assets increased to $1.2 billion at quarter end, compared to $948.9 million at March 31, 2017.
"We are pleased to report strong earnings for the second quarter of 2017," said Alan Lane, the Bank's chief executive officer. "We did this while growing the Bank's balance sheet to over $1.2 billion during the second quarter. We continue to invest in technology and people that allow Silvergate to offer innovative products and services to our business customers."
Financial Performance
The Bank's net income for the second quarter of 2017 was $2.2 million, compared to $1.6 million in the first quarter, and $1.7 million for the second quarter last year. For the six-month period ending June 30, 2017, net income was $3.8 million, compared to $3.6 million for the same period in 2016.
The Bank's net interest income for the second quarter of 2017 was $9.9 million, compared to $8.8 million for the prior quarter and $8.5 million for the second quarter last year. The Bank's net interest margin for the second quarter was 4.10%, compared to 3.94% for the first quarter, and 3.76% for the second quarter last year. The improvement from prior quarters reflects both an increase in higher yielding loans and a reduction in our cost of funds as compared to both of the prior periods.
The Bank's reserve for loan losses remained strong at $7.9 million, or 1.17% of loans held for investment at June 30, 2017. The Bank had no charge-offs or recoveries in the second quarter of 2017, compared to net charge-offs of $136 thousand in the previous quarter and $8 thousand in the second quarter of 2016.
Noninterest income totaled $704 thousand for the quarter ended June 30, 2017, compared to $529 thousand for the prior quarter, and $652 thousand for the second quarter of 2016. The increase over the prior quarter reflects higher fee income from deposit and loan growth.
Noninterest expense was $7.0 million for the second quarter of 2017, compared to $6.8 million for the prior quarter and $5.8 million for the second quarter of 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.
"The Bank continues to experience strong loan production at good yields," noted Dennis Frank, the Bank's chairman. "The Bank remains focused on expanding the partnerships that we have developed with both our local business customers and our national residential loan originators."
Balance Sheet Activity
The Bank's total loans increased by $32.2 million to $842.1 million at June 30, 2017, compared to $809.9 million at March 31, 2017, and $815.1 million at June 30, 2016.
Loans funded and purchased by the Bank's Mortgage Warehouse Lending Division totaled $1.0 billion in the second quarter, compared to $857.3 million in the prior quarter and $1.2 billion in the second quarter of 2016. Total commercial real estate loan balances rose to $371.4 million at June 30, 2017, compared to $366.5 million and $307.7 million at March 31, 2017, and June 30, 2016, respectively. Single family residential loan balances totaled $431.1 million at June 30, 2017, compared to $401.0 million and $480.0 million at March 31, 2017, and June 30, 2016, respectively.
Deposit balances increased by 26.1% compared to the prior quarter end, and increased 34.5% compared to June 30, 2016. This significant deposit increase was driven by a combination of continued growth in our local market as well as the success of a deposit initiative launched a few years ago focused on the Financial Technology industry, resulting in an increase of $323.9 million in noninterest bearing demand deposits. At June 30, 2017, deposits totaled $969.4 million, compared to $769.0 million at the prior quarter-end and $720.8 million at June 30, 2016.
At June 30, 2017, Silvergate Bank's Tier 1 Leverage Capital Ratio was 9.08% and Total Risk-Based Capital Ratio was 15.04%, both substantially exceeding "well capitalized" minimums of 5.00% and 10.00%. At June 30, 2017, the ratios of nonperforming loans to total loans and nonperforming assets to total assets remained low, at 0.64% and 0.51%, 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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