Silvergate Warehouse Funds $419 Million Mortgages

Mortgage & Real Estate

Silvergate Bank, La Jolla, Calif., said its warehouse lending division funded 1,570 loans totaling $419 million in the first quarter.

Since the unit, which just celebrated its third birthday, was formed, it has cumulative fundings of $3.3 billion. For the full year 2011, the warehouse lending division funded $1.4 billion of mortgages.

Silvergate also created a reverse mortgage lending division in late 2011 to purchase Federal Housing Administration-insured Home Equity Conversion Mortgages. In the first quarter, it purchased $53.5 million of these loans, after buying $15.6 million of them in December last year.

The bank says HECMs, being adjustable-rate loans and government guaranteed, strengthen its asset quality and improve its liquidity position.

Silvergate said in 1Q12 it had the second highest quarterly earnings in its history, at $1 million, up from $773,000 for the same period last year.

Noninterest income at the company was up 51% on a year-over-year basis (after excluding a nonrecurring gain on sale in 1Q11) because of increased warehouse lending fees and gains on sales of reverse mortgages and Small Business Administration loans.

Increased balances in held-for-sale reverse mortgage loans led to an increase in assets of $65 million during the quarter to $535 million.

 

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