The Signature Bank spot deposits dropped by $1.64 billion. This was because $4.27 billion left the bank through digital asset banking.
Wedbush, a broker, said in a research report on Tuesday that the most important thing to learn from Signature Bank (SBNY) mid-quarter update is that spot deposits fell by $1.64 billion. This was caused by $4.27 billion in outflows in digital asset banking.
Wedbush kept the stock’s outperform rating but lowered the company’s price target from $240 to $225. On Wednesday, the price of SBNY shares went up by 1% to $170.
The “silver lining” is that core business deposits, which don’t include digital assets, have gone up by $2.64 billion since the beginning of the quarter. Wedbush said that this is good news for investors who may have been worried about bigger overall outflows because of how volatile the cryptocurrency market has been lately.
The report said that the relative value of Signature should already show a lot of the expected drop in deposits. It also said that crypto prices have started to stabilize recently.
In a report released on Tuesday, Raymond James said that the $4.3 billion drop in crypto-related deposits was bigger than expected but didn’t come as a surprise.
The bank’s growth is not dependent on the “growth of the digital currency ecosystem,” the note said. It also said that the firm’s exposure to the cryptocurrency ecosystem remains a headwind, but that since the end of 2019, it has grown loans at an annualized rate of 25.4% and deposits (excluding digital assets) by 26.3%.