Silvergate Capital stock soars after second quarter beat consensus on SEN and customer growth (NYSE:SI)

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Silvergate Capital (NYSE:IF) stocks jump 10.7% Tuesday before market after the crypto bank’s second-quarter earnings beat Wall Street expectations, highlighted by growth in its Silvergate Exchange Network (“SEN”) as well as net interest margin.

Q2 Adjusted EPS of $1.13 beat analysts’ average estimate of $0.85 and increased $0.79 in Q1 and $0.80 in Q2 2021.

The SEN, which enables US dollar transfers between participating Silvergate account holders, processed $191.3 billion in US dollar transfers in the second quarter, down from $142.3 billion in the first quarter but down from to $239.6 billion in the second quarter of 2021.

Additionally, “we have seen continued demand for our SEN Leverage product, with no losses or forced liquidations,” said CEO and Chairman Alan Lane.

SEN leverage commitments of $1.4 billion as of June 30 compared to $1.1 billion as of March 31 and $258.5 million as of June 30, 2021.

Net interest margin was 1.96% in the second quarter, compared to 1.36% in the first quarter and 1.16% a year ago, mainly due to higher yields on securities and adjustable rate loans.

Its digital currency customers grew to 1,585 as of June 30, from 1,503 as of March 31 and 1,224 as of June 30, 2021.

Deposits in Q2 were $13.5B compared to $13.4B in Q1 and $11.4B in Q2 2021. Loans of $1.5B in Q2 were down from $1.7B in Q1 and were roughly equivalent to ~$1.5B a year ago.

The average common equity return was 10.99% in Q2, compared to 6.87% in Q1 and 10.40% in Q2 a year ago.

Q2 book value of $38.86 per share fell $42.77 in Q1 but increased $32.84 in Q2 2021.

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

Earlier, Silvergate Capital‘s revenue of $79.76 million beat consensus of $70.32 million.

Sallie R. Loera