Financial Performance - For the three months ended March 31, 2022, net income was $27.4 million, an increase from $21.4 million for the same period in 2021, representing a 28.5% year-over-year growth [126]. - Net interest income for the three months ended March 31, 2022, was $50.5 million, up from $38.2 million in the previous year, reflecting a 32.5% increase [126]. - Noninterest income was $9.5 million for the three months ended March 31, 2022, compared to $11.1 million in the same period of 2021, showing a decline of 14.5% [126]. - Basic earnings per common share increased to $0.79 for the three months ended March 31, 2022, compared to $0.67 for the same period in 2021, a growth of 17.9% [126]. - Net income for the three months ended March 31, 2022, was $27.4 million, an increase of 28.0% from $21.4 million for the three months ended December 31, 2021 [132]. - Net interest income increased by $12.3 million, contributing to the overall net income growth [132]. Asset and Liability Management - Total assets decreased to $15.8 billion as of March 31, 2022, from $16.0 billion as of December 31, 2021 [128]. - Total deposits decreased to $13.4 billion from $14.3 billion [128]. - The Tier 1 leverage ratio decreased to 9.68% from 11.07% [128]. - Total interest earning assets increased to $16,133,249 thousand with an income of $54,343 thousand, yielding 1.37% [137]. - Total assets increased to $16,633,548 thousand, demonstrating growth in the company's financial base [137]. - Interest bearing liabilities totaled $163,620 thousand, with a net interest spread of 0.52% [139]. Loan Portfolio and Quality - The loan portfolio totaled $745,340 million, with commercial and industrial loans comprising 58.3% of the total, up from 37.6% in December 2021 [162]. - Total net loans held-for-investment decreased to $739,014 million from $887,304 million, indicating a significant reduction in the loan portfolio [162]. - The company reported an allowance for loan losses of $4,442 million as of March 31, 2022, down from $6,916 million in the previous period [162]. - Nonaccrual loans decreased to $3.6 million, or 0.49% of total loans, as of March 31, 2022, compared to $4.0 million, or 0.45% of total loans, at December 31, 2021 [170]. - The company maintains a disciplined lending approach to manage nonperforming assets, which has resulted in sound asset quality [167]. Deposits and Funding - Noninterest bearing deposits totaled $13.3 billion, representing approximately 99.5% of total deposits at March 31, 2022 [182]. - Average total digital currency deposits during the three months ended March 31, 2022 amounted to $14.7 billion, compared to an average of $10.2 billion during the three months ended December 31, 2021 [184]. - The Bank's 10 largest depositors accounted for $6.5 billion in deposits, or approximately 48.2% of total deposits at March 31, 2022 [184]. - As of March 31, 2022, the Company had $800 million of outstanding FHLB advances and an additional $1.2 billion in available borrowing capacity from the FHLB [186]. Interest Rate Risk Management - The Company is managing interest rate risk through interest rate floors and caps, aiming to mitigate exposure in a declining rate environment [195]. - The Asset Liability Committee regularly reviews the sensitivity of assets and liabilities to interest rate changes, ensuring compliance with policy limits [195]. - Interest rate risk is assessed using quarterly simulations to evaluate the impact of changing interest rates on net interest income [198]. - The bank employs interest rate floors and caps to hedge against interest rate risk, managing exposure through its Asset Liability Committee [195]. Operational Efficiency - The efficiency ratio improved to 46.74% for the three months ended March 31, 2022, down from 52.08% in the same period of 2021, indicating better operational efficiency [126]. - Noninterest expense increased by $2.4 million or 9.2% for the three months ended March 31, 2022, compared to the previous quarter, primarily due to increases in salaries and employee benefits, communications and data processing, and other general and administrative expenses [151]. - Salaries and employee benefits rose by $1.7 million or 12.5% due to a 10.9% increase in average full-time equivalent employees, from 265 to 294 [151].
Silvergate Capital(SICP) - 2022 Q1 - Quarterly Report