San Diego Business Journal

Silvergate's Net Income Grows, Expects Federal Investment

Tuesday, August 2, 2011

Silvergate Bank, based in San Diego and with four offices, reported second quarter net income of $771,000 compared with net income of $722,000 for the like quarter of 2010.

For the half, Silvergate reported net income of $1.54 million compared with net income of $1.35 million for the first half of 2010.

The bank announced preliminary approval for receiving $12.4 million in funding from the U.S. Treasury’s Small Business Lending Fund, geared to extending more business loans by providing additional capital at reduced rates.

The bank said it expects to complete the federal investment in preferred stock in the third quarter, enabling it to expand its lending.

Silvergate’s loan portfolio as of June 30 was $262 million, down 5 percent from a year earlier.

It’s been far more active in building a warehouse mortgage division, which made $267 million in loans in the second quarter and $466 million in the half. The loans are made to smaller mortgage banks, which usually sell and repay the fundings quickly. Since the unit was founded in 2009 it’s made nearly $2 billion in loans.

Capital at the bank is far above levels for a well-capitalized bank with total risk-based ratio at 16.21 percent.

Silvergate opened a new office in Escondido in June, bringing its total to four.

— Mike Allen