Silvergate Bank Reports Third Quarter 2014 Results

LA JOLLA, Calif., Nov. 5, 2014 /PRNewswire/ -- Silvergate Bank today announced financial results for the quarter and nine-month period ended September 30, 2014 with net income of $980 thousand and $3.43 million, respectively.  The Bank's total assets increased to $761.8 million and equity grew to $73.9 million.

"We are pleased to announce Silvergate Bank's third quarter earnings which further extend our record of consistently profitable performance," said Alan J. Lane, the Bank's chief executive officer. "Although our earnings declined from the prior quarter due to one-time events in the second quarter, our continued asset growth, diligent cost containment efforts and better than peer asset quality contributed to solid core earnings.  Our high levels of profitability, capital and asset quality all support our ability to continue providing our clients with the innovative products and services they have come to expect from us to help them grow their businesses."  

At September 30, 2014, Silvergate Bank's Tier 1 Leverage Capital Ratio was 10.05% and Total Risk-Based Capital Ratio was 15.35%, 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 but increased slightly to 0.65% and 0.57%, respectively.

"Our core commercial banking activities have continued to grow and our residential lending efforts have contributed to our 24% growth in assets over last year," said Dennis S. Frank, Silvergate Bank chairman.  "This growth in assets continues to generate core earnings that allow us to expand our business banking presence in San Diego as we continue to add new products and services to meet the lending and deposit needs of our clients." 

Financial Performance

The Bank's net income for the third quarter was $980 thousand, compared to $1.51 million for the prior quarter and $1.37 million for the third quarter last year.  Net income for the first three quarters of 2014 was $3.43 million, compared to $4.13 million last year.  Total assets at the end of the quarter increased to $761.8 million, up $27.67 million due to increased balances in commercial real estate loans, multi-family real estate loans, and single-family mortgage loans.

The Bank's net interest income for the quarter was $5.97 million, compared to $5.48 million for the prior quarter and $6.91 million in the third quarter of last year.  The Bank's net interest margin for the third quarter was 3.27%, compared to 3.18% for the prior quarter, and 4.39% for the third quarter last year.  Net interest margin improved over the prior quarter due to growth in the Bank's average interest earning assets.

Noninterest income was $638 thousand for the third quarter, compared to $2.57 million for the prior quarter, and $446 thousand in last year's third quarter.  The decline in noninterest income was primarily the result of a $1.4 million gain on the sale of a foreclosed asset in the prior quarter combined with lower gains on sales of loans held for sale in the current quarter.  Noninterest expense was $4.61 million for the quarter, compared to $5.55 million for the prior quarter and $5.03 million last year, due to a reduction in general and administrative costs as the Bank downsized its correspondent lending operations and discontinued reverse mortgage loan purchases.

Balance Sheet Activity

Loans funded and purchased by the Bank's Mortgage Warehouse Lending Division totaled $747.1 million for the third quarter and $1.74 billion for the first three quarters of 2014.  Mortgage warehouse loan balances totaled $132.8 million at September 30, 2014.  Commercial real estate loan balances grew 8% to $237.3 million at September 30, 2014 compared to $219.0 million as of June 30, 2014 reflecting the Bank's continuing active role in commercial real estate financing.  Residential loan balances, including reverse mortgages, increased 8% to $249.2 million compared to $231.1 million as of June 30, 2014 due to loan purchases in the quarter.

Total deposits grew by 4% in the third quarter. Year-to-date the Bank has experienced growth in deposits of 21%, or $85.1 million, excluding the deposits transferred in the sale of the Bank's Lancaster branch office in the first quarter.  At September 30, 2014, deposits totaled $493.2 million.

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.

SOURCE Silvergate Bank

Related Links

http://www.silvergatebank.com