Regulators have hit Silvergate Bank in La Jolla, Calif., with a cease-and-desist order that requires it to make a slew of sweeping changes, including overhauling its management, improving Bank Secrecy Act compliance, and hiking loss reserves.
Since the Dec. 18 order by the Federal Deposit Insurance Corp. and the California Department of Financial Institutions, the $346 million-asset industrial loan bank has hired a new chief financial officer and a BSA compliance officer.
Dennis Frank will remain the chairman but he said Thursday that Silvergate has hired someone to replace him as the chief executive, but he would not say who.
After earning more than $1 million in each year from 1998 to 2004, Silvergate made just $411,000 in 2005 and was on pace to earn even less last year, according to FDIC data. It had an agreement last year to sell to the $3.7 billion-asset Wescom Credit Union in Pasadena, but the deal fell through in July after regulators put a moratorium on all pending ILC applications.
