San Diego Business Journal

Silvergate Bank Reports Growth in Net Income

Friday, February 17, 2012

Silvergate Bank, which is based in La Jolla and has four branches, reported 2011 net earnings of $3 million, beating last year’s net profit by $4,000, the bank announced Feb. 15.

In the fourth quarter, net income was $801,000, compared with $904,000 for the like quarter of 2010.

Silvergate reported total assets of $470 million at Dec. 31, compared with $370.5 million at the end of 2010. The big reasons for the growth came from the bank’s increases in residential mortgage warehouse loans, and loans it purchased through a new reverse mortgage lending division established last year.

The bank said it funded about 5,100 residential mortgages for small mortgage bankers last year for a total value of $1.4 billion, the best year in the three-year history of that division.

The reverse mortgage division buys mortgages guaranteed by the U.S. Federal Housing Administration, the bank said.

Last year, Silvergate Capital Corp., the bank’s parent firm, completed a private stock placement and the purchase of preferred stock, resulting in proceeds of $26.2 million in new capital. The parent contributed $22 million of that to the bank, helping boost its capital ratios to levels that exceed measures mandated by bank regulators.

The bank’s total risk-based capital at the end of the year was 18.86 percent, nearly double what regulators deem as well-capitalized.

The bank reported that its nonperforming asset ratio, including foreclosed real estate, grew to 3.04 percent of total assets, compared with 1.72 percent as of the end of 2010.

Silvergate, which opened a branch last year in Escondido, said it plans to open two more this year in La Mesa and Carlsbad.

— Mike Allen