Silvergate Bank Reports 16th Consecutive Profitable Year

           Silvergate Bank Reports 16th Consecutive Profitable Year

PR Newswire

LA JOLLA, Calif., Feb. 5, 2014

LA JOLLA, Calif., Feb. 5, 2014 /PRNewswire/ --Silvergate Bank today announced
financial results for the fourth quarter and year ended December 31, 2013.
Full year net income of $5.40 million was the second highest in the Bank's
history, and 2013 was the Bank's sixteenth consecutive profitable year. Total
assets at the end of the year were $641.1 million, and the Bank's equity
capital was $70.3 million.

(Logo: http://photos.prnewswire.com/prnh/20120731/LA49618LOGO)

"We are pleased to report that in 2013 Silvergate Bank further extended its
record of consistently profitable performance," said Alan J. Lane, the Bank's
president and chief executive officer. "We also continued to maintain capital
and asset quality ratios superior to comparable averages for all FDIC insured
banks. These strengths are the foundation of our ability to provide clients
with the products and services they have come to expect from us to help
support and grow their business." 

At December 31, 2013, Silvergate Bank's Tier 1 Leverage Capital Ratio was
11.42% and Total Risk-Based Capital Ratio was 18.40%, both substantially
exceeding 'well capitalized' minimums of 5% and 10%. The Bank's ratios of
nonperforming loans to total loans and nonperforming assets to total assets
both remained low, declining to 0.69% and 1.14%, respectively. 

"Silvergate Bank is proud to have achieved its 16^th consecutive year of
profitability, with core banking activities and diversified revenue streams
continuing to generate income supporting our operations and ability to serve
our entire range of clients," said Dennis S. Frank, the Bank's chairman. 

Financial Performance

The Bank's net income for the fourth quarter was $1.27 million, compared to
$1.37 million for the prior quarter and $2.54 million for the fourth quarter
last year. Net income for the year was $5.40 million, compared to $7.39
million last year, with the decrease mainly due to reduced noninterest
income. Total assets were $641.1 million at December 31, 2013, down 6% from
the prior year-end. The Bank's equity capital was $70.3 million at December
31, 2013, compared to $70.0 million at year-end 2012, with the Bank's 2013
earnings covering its payment during the year of a $5 million dividend to its
parent firm, Silvergate Capital Corporation.

The Bank's net interest income for the quarter was $4.86 million, compared to
$6.91 million for the prior quarter and $6.00 million last year. These
quarterly and year-over-year decreases were due to the prior quarter's
recognition of $1.3 million in nonrecurring interest income on the payoff of a
loan acquired at a large discount, and 2012's fourth quarter representing the
highest income quarter in the Bank's history. Net interest margin for the
fourth quarter was 3.19%, compared to 4.39% for the prior quarter (which
included the nonrecurring income noted above – 3.53% excluding that income),
and 3.81% for the fourth quarter last year. Net interest income for 2013 was
$22.5 million, up slightly from last year's $22.2 million, and full year net
interest margin was 3.62% (3.36% excluding nonrecurring income), compared to
4.01% last year.

Benefiting from increased loan sales, noninterest income was $1.65 million for
the fourth quarter, compared to $0.45 million for the prior quarter, and $3.02
in last year's fourth quarter (which was among the Bank's best ever). Full
year noninterest income was $5.63 million, compared to $7.98 million last
year, with this decrease due to lower levels of loan sale gains and
securitization income in 2013. Noninterest expense was $4.73 million for the
quarter, compared to $5.03 million for the prior quarter and $4.66 million
last year; full year noninterest expense increased to $19.53 million this year
from $17.28 million last year, with the largest part of this increase being
higher employee-related costs.

Commercial Banking Platform

Commercial real estate loans totaled $180.8 million at December 31, 2013,
compared to $200.9 million at December 31, 2012; as a 15% increase in loan
originations for the year was exceeded by loan payoffs. Total deposits
declined by 8% for the year, comparable to the Bank's 6% reduction in total
assets, but noninterest bearing demand deposits continued to grow, increasing
by 9%. Despite the significant costs of opening two new branch offices and
relocating a third since mid-2011, the Bank's profitability has continued to
benefit from its core commercial lending operations and the expanded
residential lending activities added in recent years. 

Continued High Volumes of Residential Mortgage Loan Fundings, Acquisitions,
and Sales

The Bank's Mortgage Warehouse Lending Division, established in April 2009 to
meet the credit needs of mortgage bankers that originate single-family
residential mortgage loans, had another good year. The division funded $2.33
billion in loans in 2013, down only slightly from $2.36 billion in loans in
2012, even though nationwide mortgage loan originations decreased by
approximately 14% in 2013 according to the Mortgage Bankers Association of
America.

In late 2011 the Bank began to acquire Home Equity Conversion Mortgage
("HECM") loans insured by the U.S. Federal Housing Administration. In 2013
the Bank acquired and/or funded $210.1 million in HECM loans, and completed
HECM sales or securitizations totaling $137.2 million, which contributed
significantly to the Bank's noninterest income for the year.

Agreement Signed to Sell the Bank's Lancaster Branch Office

In December 2013 the Bank announced that it entered into an agreement for the
sale of its branch office in Lancaster, California, to Americas United Bank, a
community bank headquartered in Glendale, California. Assuming required
approvals from state and federal banking authorities are obtained and the sale
is completed in the first half of 2014, this transaction will allow the Bank
to reduce costs and better focus on its core geography in the greater San
Diego County area.

About Silvergate Bank
Silvergate Bank is a San Diego-based bank that specializes in meeting the
needs of small businesses through a comprehensive offering of lending products
and personalized banking services. Silvergate Bank opened in 1988 and is a
subsidiary of Silvergate Capital Corporation. Bank branches are located in
Carlsbad, Escondido, La Jolla, La Mesa, and Lancaster. Silvergate Bank's
headquarters office is located at 4275 Executive Square, Suite 800, La Jolla,
CA 92037. The Bank's website is www.silvergatebank.com.

Statements concerning future performance, developments or events, expectations
for growth and income forecasts, and any other guidance on future periods,
constitute forward-looking statements that are subject to a number of risks
and uncertainties. Actual results may differ materially from stated
expectations. When used in this release, the words or phrases such as "will
continue," "is anticipated," "estimate," "expect," "projected," "believe,"
"seeking," or similar expressions, are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Readers should not place undue reliance on the forward-looking
statements, which reflect views only as of the date hereof. Neither
Silvergate Capital Corporation nor Silvergate Bank undertakes any obligation
to publicly revise these forward-looking statements to reflect subsequent
events or circumstances.

CONTACT: Sandra Grove
         Grove Media
         858-565-1905
         sgrove@grove-media.com



Silvergate Bank Selected Financial and Operating Data

(Dollars in Thousands - Unaudited)
                 Three Months Ended                       Twelve Months
                                                          Ended
                 December  September  December  Annual    December 31,       Annual
                 31,       30,        31,
INCOME           2013      2013       2012      Change    2013      2012     Change
STATEMENT
Interest         $      $      $      -18%      $      $26,896  3%
Income           6,022   8,141      7,351             27,583
Interest         1,167     1,230      1,342     -13%      5,057     4,722    7%
Expense
Net Interest     4,855     6,911      6,009     -19%      22,526    22,174   2%
Income
Provision for    -         -          50        -100%     8         300      -97%
Loan Losses
Total
Noninterest      1,646     446        3,016     -45%      5,627     7,979    -29%
Income
Total
Noninterest      4,726     5,025      4,655     2%        19,532    17,280   13%
Expense
Income Before    1,775     2,332      4,320     -59%      8,613     12,573   -31%
Taxes
Income Tax       506       965        1,778     -72%      3,217     5,183    -38%
Expense
 Net Income  $      $      $      -50%      $      $        -27%
                  1,269   1,367      2,542              5,396   7,390
Performance
Ratios
Net Interest     3.19%     4.39%      3.81%               3.62%     4.01%
Margin
Return on        0.83%     0.86%      1.59%               0.85%     1.31%
Average Assets
Return on        7.28%     7.41%      14.38%              7.52%     10.97%
Average Equity
Efficiency       72.70%    68.31%     51.58%              69.38%    57.31%
Ratio
Net Loan
Charge-Offs to   0.01%     0.03%      0.00%               0.02%     0.07%
Average Total
Loans
                 December  September  June 30,  March     December  Annual
                 31,       30,                  31,       31,
BALANCE SHEET    2013      2013       2013      2013      2012      Change
Cash and Due     $      $       $      $         $      -53%
from Banks       18,507    14,778    26,441    56,396   39,352
Investments      69,466    73,129     71,344    64,491    69,073    1%
 Total Cash  87,973    87,907     97,785    120,887   108,425   -19%
& Investments
Securitzed
Loans, at fair   27,918    27,172     26,870    26,146    23,838    n/m
value
Loans Held for
Investment       366,536   291,449    333,872   337,135   375,737   -2%
("HFI")
Allowance for    (3,927)   (3,938)    (3,975)   (4,011)   (4,016)   -2%
Loan Losses
 Loans HFI,  362,609   287,511    329,897   333,124   371,721   -2%
net
Loans Held for   150,739   201,723    176,827   148,549   170,931   -12%
Sale
Real Estate      3,559     3,511      3,511     -         276       1189%
Owned ("REO")
Other Assets     8,349     8,613      7,770     9,811     9,196     -9%
Total Assets     $       $        $       $638,517  $       -6%
                 641,147   616,437   642,660             684,387
Noninterest      $      $       $      $         $   
Bearing Demand   56,892    61,901    60,377    64,172   52,290    9%
Deposits
Interest
Bearing Demand   5,998     5,470      3,810     3,497     3,276     83%
Deposits
NOW, Money
Market, and      195,115   179,485    164,831   162,715   149,275   31%
Savings Accounts
Certificates of  195,729   221,459    254,551   259,457   285,703   -31%
Deposit
 Total       453,734   468,315    483,569   489,841   490,544   -8%
Deposits
FHLB Advances
and Other        85,000    49,128     58,136    50,144    96,151    -12%
Borrowings
Payables under   27,390    25,148     23,947    22,728    23,023    n/m
Securitizations
Other            4,736     4,913      4,420     4,416     4,645     2%
Liabilities
 Total        570,860   547,504    570,072   567,129   614,363   -7%
Liabilities
 Total
Shareholder's    70,287    68,933     72,588    71,388    70,024    0%
Equity
Total
Liabilities and  $       $        $       $638,517  $       -6%
Shareholder's    641,147   616,437   642,660             684,387
Equity
Asset Quality
Ratios
Nonperforming
Loans to Total   0.69%     0.86%      0.78%     1.26%     1.10%
Loans
Loss Allowance
to               105.10%   88.30%     94.73%    62.30%    63.80%
Nonperforming
Loans
Allowance for
Loan Losses to   1.08%     1.35%      1.19%     1.19%     1.07%
Loans HFI
Nonperforming
Assets to Total  1.14%     1.29%      1.20%     1.01%     0.96%
Assets
Capital Ratios
Tier I Leverage  11.42%    10.85%     11.49%    11.01%    10.92%
Capital Ratio
Total
Risk-Based       18.40%    19.26%     18.08%    17.74%    15.68%
Capital Ratio

SOURCE Silvergate Bank

Website: http://www.silvergatebank.com
 
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