Silvergate Bank announced financial results for the quarter ended March 31, with net income of $1.2 million. The bank’s total assets increased to $953.1 million from $864.8 million at year end 2014 and equity grew to $76.7 million from $75.6 million over the same time period.
“We continued to see strong growth in our residential lending activities, as both home purchase and refinance activity picked up in the first quarter,” said Alan Lane, the bank’s chief executive officer. “We’re investing the revenue generated by these activities to further expand our business banking market share and provide innovative, valued services to our core client base,” he added. “Serving our client’s unique needs remains our top priority, and we’re making significant investments to create additional value for them.”
The bank’s net income for the quarter was $1.2 million, compared to $1.7 million for the prior quarter and $943 thousand for the first quarter last year. Total assets at the end of the quarter increased $88.4 million, reflecting higher quarter end balances in mortgage warehouse and other residential loans.
The bank’s net interest income for the first quarter of 2015 was $6.9 million, compared to $7.6 million for the prior quarter and $4.7 million in the first quarter of last year. The bank’s net interest margin for the first quarter was 3.33%, compared to 3.80% for the prior quarter, and 3.12% for the first quarter last year. The decline in the net interest margin from the prior quarter was due to significant loan prepayment activity that occurred in the prior quarter. Adjusting for this activity results in a normalized net interest margin of 3.38% for the fourth quarter of 2014, much more consistent with the current quarter results. The improvement from last year represents growth in higher-yielding loans over the prior year.
Non-interest income was $446,000 for the quarter ended March 31, compared to $792,000 for the prior quarter. The decrease in non-interest income resulted from a decrease in the gain on sale of loans during the quarter, as the company did not engage in any significant loan sales during the current quarter. Non-interest income totaling $1.6 million in last year’s first quarter consisted primarily of gains on the sale of investments and loans. Non-interest expense was $5.1 million for the first quarter of 2015, compared to $4.9 million for the prior quarter and $4.8 million for the same quarter last year, due to an increase in general and administrative costs related to expanding the company’s business banking activities.
“Our client focus, adaptive business model and financial strength are creating new opportunities for us,” noted Derek Eisele, the bank’s president, “as existing clients expand and new clients join us. As a result, our core earnings and underlying financial strength continue to grow.”
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