Silvergate Bank 3Q19 Update: IPO terms proposed; deposits decline 11%

Silvergate Bank, one of the few crypto-friendly banks in the U.S., announced proposed terms for its upcoming Initial Public Offering (IPO) of its Class A common stock earlier this week. Along with this announcement, the company filed an updated S-1 with preliminary financial results for 3Q19. Despite a lower interest rate environment putting a strain on bank profitability, Silvergate managed to obtain a 29% sequential increase in net income to $6.7 million thanks to a more aggressive asset allocation coupled with increased noninterest income from increased SEN-related fees. Deposit growth, however, proved to be a challenge as its crypto-related deposits declined 11% caused by declining balances from cryptocurrency exchanges and crypto funds.

Silvergate aims to raise $52 million through the offering 0f 3.7 million shares of its Class A common stock. This includes 770,000 shares offered by the company as well as 3.0 million shares offered by selling shareholders. Selling shareholders have also granted the underwriters a 30-day option to purchase up to an additional 561,645 shares of Class A common stock from selling shareholders.