San Diego's largest locally based commercial bank said Feb. 26 it raised $114 million in a private placement of 9.5 million shares of its common stock.
The La Jolla-based Silvergate Bank, which has $1.9 billion in total assets, said most of the funds will go toward its fintech deposit initiative and its business banking and residential lending activities. About $11.4 million, or 10 percent of the capital raised, will be used for a stock buyback.
Silvergate is one of a handful of banks nationwide that provide deposit services to cryptocurrency exchanges and to institutional investors involved in the cryptocurrencies markets.
The bank said that program played a significant role in the growth in its noninterest-bearing demand deposits in 2017, which rose 770 percent to $1.5 billion.
President and CEO Alan Lane said the bank plans to increase its headcount from about 160 employees to more than 200 by year's end, with about half of the new employees joining the fintech group.
Dennis Frank, Silvergate's chairman, called the stock sale a major milestone in the bank's history, and said it increased the bank's equity capital by more than 120 percent.
In addition to its La Jolla headquarters, Silvergate has banking centers in Carlsbad, Escondido and La Mesa and a loan production office in Orange County. The bank's parent company is Silvergate Capital Corp.
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