Silvergate Bank announced $1.46 million in earnings today, citing second quarter highlights including the acquisition of nearly $50 million in reverse mortgages guaranteed by the Federal Housing Administration. In addition to purchasing reverse mortgages to be held-for-sale, the bank also announced it sold several loans during the quarter.
“In addition to continued growth in its commercial banking platform, Silvergate Bank’s second quarter performance highlights included funding $467 million in residential mortgage loans through its warehouse lending division, acquiring $49.1 million in reverse mortgage loans guaranteed by the U.S. Federal Housing Administration, and completing several sales of reverse mortgage loans,” the company stated in a press release.
The results are the highest in the bank’s 24-year history, representing a 89% increase in year-over-year second-quarter earnings and a 61% increase in six-month net income.
“We are pleased to report that net income for the second quarter and first half of 2012 significantly outperformed the preceding quarter and the comparable periods in 2011, and represented the highest quarterly and semi-annual earnings in Silvergate Bank history,” said Alan J. Lane, the Bank’s president and chief executive officer. “Our well capitalized position ensures our ability to provide clients with innovative services and products to meet their needs today and well into the future.”
The La Jolla, San Diego-based bank said the largest factor in its asset growth was significantly increased balances in held-for-sale reverse mortgages, with more modest increases in other categories of loans held for investment.
The Bank’s capacity to accumulate and hold these loans on its balance sheet allows it to maximize its opportunities for gains on loan sales while enjoying increased interest income during the period these loans are held for sale, it said.
Written by Elizabeth Ecker