San Diego Business Journal

Silvergate Reports Profit, Eyes Escondido Expansion

Monday, May 2, 2011

Silvergate Capital Corp., parent of Silvergate Bank in La Jolla, reported first-quarter net income of $635,000, up 35 percent from the like quarter of 2010 in a report released April 27.

The bank itself had net earnings of $733,000, compared to $632,000 for the first quarter of 2010.

Silvergate said total assets declined by about $15 million to $345.4 million, while total loans declined by nearly $7 million to $240.8 million. Deposits rose by nearly $3 million to $247.3 million.

Though the bank’s interest income fell, it made up for it in higher fee income and from the gains on securities sales. It also benefited from a $500,000 decline in the bank’s provision for loan losses.

A big driver of profit has been the bank’s warehouse lending division catering to small mortgage lenders. The division funded 700 loans for $199 million in the first quarter, and since its launch in 2009 did about $1.7 billion in originations.

The bank, which plans to open a fifth office in Escondido next month, said it obtained a commitment from an unnamed private equity group to invest $4 million, including $1.25 million already received. That capital enhanced already strong capital levels. Total risk-based ratio at March 31 was 17.95 percent, nearly twice the amount needed to be considered well-capitalized.

— Mike Allen