Shares of Silvergate Capital Corp. SI rallied 1.9% in premarket trading Tuesday, even after the cryptocurrency bank swung to a net loss of $1.0 billion, more than expected, citing a “transformational shift” in the digital asset industry due to significant over-leverage. The bank said it decided to “substantively reduce its workforce” to account for the “economic realities facing its business and the digital asset industry today.” The net loss, which on a per-share basis was $33.16, compared with net income of $18.4 million, or 66 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 48 cents was below the FactSet consensus of 66 cents. Net interest income increased 33.6% to $53.7 million, but missed the FactSet consensus of $57.8 million, while net interest margin of $1.54% was below expectations of 1.85%. Average digital asset customer deposits during Q4 were $7.3 billion, down from $13.3 billion a year ago, and the Silvergate Exchange Network (SEN) handled $117.1 billion of U.S. dollar transfers in the quarter, down 47% from last year. The stock had closed Jan. 9 at a the lowest price since April 2020, amid fears of a run on the bank. It has plummeted 81.4% over the past three months through Friday, while bitcoin BTCUSD has gained 8.3% and the S&P 500 SPX has advanced 8.7%.
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