Silvergate Bank, based in University City, reported 2013 fourth quarter net profit of $1.27 million, down from a net profit of $2.54 million for the like quarter of 2012.

For the full year, Silvergate reported net income of $5.4 million, compared with $7.39 million in 2012.

The bank said the decreases were caused by the loss of interest income from a large loan that paid off last year, and 2012’s fourth quarter being the highest in the bank’s history.

Chairman Dennis Frank said the bank was proud to achieve its 16th consecutive year of profitability.

Total assets fell 6 percent to $641 million, down from $684 million at the end of 2012. Loans held for investment stood at $366.5 million, down 2 percent from the prior year.

Silvergate said while loan originations increased 15 percent last year, loan payoffs were greater, causing the decline in the portfolio. Total deposits also declined 8 percent in the past year to $453.7 million.

Capital ratios all exceeded minimum levels to be well-capitalized with total risk-based capital at 18.4 percent, compared with 15.68 percent in December 2012.

Silvergate said it expects to complete the sale of its Lancaster branch to Americas United Bank by the first half of this year. The deal, which requires regulatory approvals, will allow the bank to reduce costs and concentrate on its core geography in San Diego County, the bank said. The transaction will leave Silvergate with four branches.