Silvergate loses luster after KBW downgrade

Coastal Financial (EVERETT)

01/03/2023 17:07

** Shares in crypto bank Silvergate Capital  SI.N  down 2.9%
after Keefe, Bruyette & Woods downgraded to 'market perform'
from 'outperform' rating and cut price target to $16 from $25
    ** Stock last traded at $13.50 compared with median PT of
$14, according to Refinitiv, which shows 10 analyst ratings
    ** SI shares already down more than 94% from intraday record
high reached in November 2021, down 13% YTD after falling 88% in
2022 
    ** KBW analyst Michael Perito pins downgrade, PT cut on
'increasingly limited visibility' for SI which has been volatile
due to FTX bankruptcy fall-out, making fundamental valuation
models challenging looking at 12-month outlook
    ** With timeline of items like FTX legal proceedings
increasingly unclear, says neutral view makes sense although
still believes SI's "role within FTX is being misrepresented,
with SI still holding cash in excess of customer deposits"  
    ** Says 10-K quarterly report expected in coming days could
bring more information but adds that if it doesn't, investors
will likely have to wait until April for a financial update
    ** For investors seeking higher-growth digital bank exposure
Perito suggests more established banking-as-a-service
players like Coastal Financial Corp  CCB.O , which he sees
making more sense from a risk / reward standpoint. Still, CCB
shares were down 2.5%
    ** Crypto-bank rival Signature Bank  SBNY.O  down 2.3% 

 (Reporting By Sinéad Carew)
 ((sinead.carew@thomsonreuters.com;))