Silvergate Capital ( NYSE: SI ) stock jumped 11.4% in Monday premarket trading as Wedbush analyst David Chiaverini, who views the digital asset-focused bank as an Outperformer, highlighted that Silvergate is not at risk of suffering credit losses related with collapsed cryptocurrency exchange FTX. That means Silvegate's ( SI ) tangible book value should not be materially impacted," Chiaverini wrote in a note to clients. His remarks came after the lender's CEO noted at the end of last week that Silvergate's ( SI ) exposure to FTX were less than 10% of its total digital asset deposits totaling $11.9B, and its relationship with FTX was limited solely to deposits. Recall on Friday when FTX filed for Chapter 11 bankruptcy following a week of wild events. The bad news, however, "is that FTX could represent nearly 10% of SI's core deposits if we assume the top end of SI's disclosure, and the loss of these deposits should put downward pressure on earning assets which reduces SI's earnings power," the analyst warned. In turn, Chiaverini lowered his 2022 EPS estimate to $4.30 from $4.50, compared with the $4.59 consensus, mostly due to lower average earning asset assumptions. Nevertheless, he reckoned Silvergate ( SI ) has a solid liquidity base to "fund a potentially material level of deposit outflows related to FTX and other crypto market participant." See why Seeking Alpha contributor Bram de Haas justified Silvergate stock with a Sell rating .
