Silvergate Capital (SI) Tops Q1 EPS by 5c

Silvergate Capital (NYSE: SI) reported Q1 EPS of $0.23, $0.05 better than the analyst estimate of $0.18.

First Quarter 2020 Financial Highlights

• Net income for the quarter was $4.4 million, or $0.23 per diluted share, compared to net income of $3.6 million, or $0.19 per diluted share, for the fourth quarter of 2019, and net income of $9.4 million, or $0.52 per diluted share, for the first quarter of 2019
• Digital currency customers grew to 850 at March 31, 2020 compared to 804 at December 31, 2019, and 617 at March 31, 2019
• The Silvergate Exchange Network (“SEN”) handled 31,405 transactions in the first quarter, compared to 14,400 transactions in the fourth quarter of 2019, and 7,097 transactions in the first quarter of 2019
• The SEN handled $17.4 billion of U.S. dollar transfers in the first quarter, compared to $9.6 billion in the fourth quarter of 2019, and $4.1 billion in the first quarter of 2019
• Digital currency customer related fee income for the quarter was $1.7 million, compared to $1.4 million for the fourth quarter of 2019, and $0.9 million for the first quarter of 2019
• Book value per share was $13.11 at March 31, 2020, compared to $12.38 at December 31, 2019, and $11.29 at March 31, 2019
• Total risk-based capital ratio was 26.05% at March 31, 2020, compared to 26.90% at December 31, 2019 and 30.10% at March 31, 2019
• Weighted average loan-to-values at March 31, 2020 were 53.1% for commercial and multi-family real estate loans and 54.1% for single-family residential real estate loans

Alan Lane, president and chief executive officer of Silvergate, commented, “As we work together as a nation to fight the spread of COVID-19, our first priority has been to ensure the safety and health of our employees and customers. Our strong risk management culture has encompassed not only a robust pandemic continuity plan but also a dynamic hedging program to protect our Company against an economic downturn and declining interest rates. This enabled our team to quickly transition our employees to a work at home environment while seamlessly maintaining our operations and mitigating the recent precipitous decline in interest rates.”

Mr. Lane continued, “We have also positioned Silvergate to succeed in a digital world as we have quickly become the leading provider of digital currency infrastructure through the development and growth of our global payments platform, known worldwide as the Silvergate Exchange Network or ‘SEN’. Our first quarter results demonstrate our continued success expanding the SEN network as we grew our net customer count to 850 from 804, at year end, while maintaining a pipeline of more than 200 potential customers. Additionally, we experienced transaction growth in excess of 100% as a result of the increased volume of bitcoin trades combined with the strong network effect of the SEN. We will continue to expand our product offerings to further enhance the value of the SEN and are very encouraged with our SEN Leverage pilot program which we rolled out in the first quarter.”

For earnings history and earnings-related data on Silvergate Capital (SI) click here.

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