Bank of America analyst Brandon Berman on Thursday has reiterated his Buy rating on crypto bank Silvergate Capital (NYSE:SI), citing prospects for "relatively stable" digital currency deposits on a Q/Q basis. Shares of SI are rising 1.2% in premarket trading, as bitcoin (BTC-USD) +1.5% drifts up to $20.4K. Deposit inflows/outflows at Silvergate (SI) generally depend on customer behavior from a variety of crypto market factors such as price, volatility and regulation, Berman wrote in a note to clients. Specifically, average digital currency deposits are 93% correlated to a combination of "1) QoQ change in price of bitcoin; 2) avg. bitcoin price volatility; and 3) QoQ change in total volume traded," according to the note. That relationship implies average deposit growth between +10% and -10% in the second quarter, Berman noted. Taking into account that Silvergate's earnings are "highly sensitive" to changes in the size of its deposit portfolio, Berman is expecting Q2 EPS of $0.82, or 6% below consensus. The Quant Rating, meanwhile, screens Silvergate (SI) shares as a Sell with the poorest mark in momentum, while the Average Wall Street Analyst views the stock as a Strong Buy (7 Strong Buy, 3 Buy, 1 Hold). See why SA contributor Kolomeets Investments is bullish on Silvergate Capital.
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