Silvergate Capital shares tumble after third-quarter earnings hurt buy in reduced network usage (NYSE:SI)

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Silvergate Capital (NYSE:IF) shares fell 9.6% on Tuesday ahead of market after the digital asset-focused bank’s third-quarter earnings disappointment as usage of its real-time payments network declined in the quarter and the cost of its deposits rose.

Q3 GAAP EPS of $1.28, behind analysts’ average estimate of $1.41, rose $1.13 in the second quarter and $0.68 in the year-ago quarter.

Silvergate Exchange Network, which enables US dollar transfers between participating Silvergate account holders, processed $112.6 billion in US dollar transfers in the third quarter, compared to $191.3 billion in the second quarter.

Third quarter digital asset commission revenue fell to $7.9 million from $8.8 million in the second quarter and $8.1 million in the third quarter of 2021.

SEN leverage commitments of $1.5 billion as of September 30 increased from $1.4 billion as of June 30.

Net interest margin improved to 2.31% from 1.96% in Q2 and 1.26% in Q3 2021.

Digital currency customers grew to 1,677 as of September 30 from 1,585 as of June 30.

Q3 deposits slipped to $13.2 billion from $13.5 billion at the end of the second quarter of 2022. Loans of $1.39 billion fell from $1.47 billion in the second quarter.

The cost of deposits, annualized, was 0.16% in Q3, compared to 0.0% in Q2 and Q3 2021; the cost of funds, at 0.28%, jumped 0.03% in Q2 and 0.01% in Q3 2021.

The average common stock return was 12.99% in Q3 versus 10.99% in Q2.

Book value per share of $35.94 as of September 30, 2022 fell from $38.86 as of June 30.

Conference call at 11:00 a.m. ET.

Earlier, Silvergate Capital (SI) GAAP EPS $1.28 misses $0.09, revenue of $89.34M misses $11M

Sallie R. Loera