Silvergate Capital Corporation

• US
• Silvergate Capital Corporation
• Finance

SI

Silvergate Capital Corporation is the holding company for our wholly-owned subsidiary, Silvergate Bank, which we believe is the leading provider of innovative financial infrastructure solutions and services to participants in the nascent and expanding digital currency industry. As a result of this leadership position, the majority of our funding comes from noninterest bearing deposits associated with clients in the digital currency industry.

This unique source of funding is a distinctive advantage over most traditional financial institutions and allows us to generate revenue from a conservative portfolio of investments in cash, short term securities and certain types of loans that we believe generate attractive risk-adjusted returns. In addition, we believe that fee income may represent a valuable source of additional future revenue as we develop and deploy fee-based solutions in connection with our digital currency initiative. 

Our leadership position in the digital currency industry has enabled us to establish a significant balance of noninterest bearing deposits from our digital currency customers. While the financial services provided by the Bank have historically included commercial banking, business lending, commercial and residential real estate lending and mortgage warehouse lending, all funded primarily by interest bearing deposits and borrowings, we began pursuing digital currency customers in 2013 and since that time, we believe we have effectively leveraged our traditional commercial bank platform to become the leader in the industry.

We intend to continue focusing on our digital currency initiative as the core of our future strategy and direction. We believe we will further transition from a traditional asset based bank model focused on loan generation to a deposit based model focused on increasing noninterest bearing deposits. This emphasis on noninterest bearing deposits, primarily associated with our digital currency initiative, will likely result in a continued shift in our asset composition with a greater percentage consisting of liquid assets such as interest earning deposits in other banks and investment securities, and a corresponding decrease in the percentage of loans. 

We leverage our technology platform and our management team’s expertise in the digital currency industry to develop, implement and maintain critical financial infrastructure solutions and services for many of the largest U.S. digital currency exchanges and global investors. Our proprietary technology platform is a central element of the operations of our digital currency related customers, which enables us to grow with our existing customers and to attract new customers who can benefit from our innovative solutions and services. We believe that our management team’s vision and our advanced approach to compliance complement this technology platform and empower us to extend our leadership position in the industry by developing additional infrastructure solutions and services that will facilitate growth in our business. 

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