Silvergate stock craters after crypto bank delays SEC filing; J.P. Morgan turns bearish

Silvergate Capital ( NYSE: SI ) shares tanked 44.1% in Thursday premarket trading after the troubled cryptocurrency-friendly bank said late Wednesday it will not be able to meet an extended March 16 deadline to file its annual report , in a move that drove sell-side analysts to downgrade the already-beaten down stock. The company also revealed new losses in connection with other-than-temporary impairment on its securities portfolio. The bank in turn could be less than well-capitalized, it said. Recall it had already posted a nearly $1B loss for Q4 as deposit withdrawals ramped up in the face of crypto exchange FTX's ( FTT-USD ) collapse. J.P. Morgan analyst Steven Alexopoulos downgraded SI to Underweight from Neutral as the bank evaluates the impact that these events have on its ability to continue as a going concern. With the company having sold additional securities (at a loss in late January and February) beyond what was anticipated, "this reflects that the company is facing continued liquidity challenges," he wrote in a note. Canaccord analyst Joseph Vafi also cut shares of Silvergate ( SI ) to Hold from from Buy in response to the bank's notice. SI noted it had paid down around $4.3B of short-term borrowings it had with the Federal Home Loan Bank, "which will reduce bank liquidity materially," according to a note written to clients. Seeking Alpha's Quant system had warned investors back in October 2022 that SI was at high risk of performing badly due to negative EPS revisions and decelerating momentum .