Benzinga - Shares of crypto-focused bank Silvergate Capital Corp (NYSE: SI) plummeted by more than 47% on Thursday, after the bank released preliminary fourth-quarter results that showed a significant drop in customer deposits.
What Happened: Digital asset deposits decreased from $11.9 billion at the end of the third quarter to $3.8 billion, representing a decline of approximately 68%.
The decrease in deposits coincided with the collapse of crypto exchange FTX (CRYPTO: FTT), a Silvergate customer, which raised concerns about the stability of the digital asset industry.
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Silvergate CEO Alan Lane stated there was a "crisis of confidence across the ecosystem."
As of Dec. 31, $150 million of the bank's deposits were held by customers who had filed for bankruptcy protection.
To increase cash, Silvergate sold $5.2 billion worth of debt securities, resulting in a loss of $718 million.
The bank reported a total of $4.6 billion in cash and cash equivalents at the end of December.
Why It Matters: In response to the changes in the digital asset industry, Silvergate also announced it was laying off 200 employees, or around 40% of its workforce, and exiting the mortgage warehouse lending business.
The stock's decline on Thursday wiped out the 27% gain made the previous day.
Silvergate's stock reached a high of $222 per share in November 2021, around the same time as the peak price of Bitcoin.
By the end of 2022, Silvergate shares had fallen more than 90% from their all-time high, ending at $17.40.
SI Price Action: On Thursday morning, Silvergate Capital shares are at $11.65, close to its 52-week low of $11.32; the high is $162.65.
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