Silvergate Capital’s 3Q net income rose 12% to $23.5 million, or 88 cents a share, topping the FactSet estimate of 71 cents.
Average digital currency deposits grew to $11.2 billion from $9.9 billion in the second quarter.
The increase was accompanied by a growth in digital currency customers to 1,305, compared with 1,224 at the end of Q2 and 928 a year ago, according to an earnings report published Tuesday.
Silvergate’s total deposits as of Sept. 30 stood at $11.6 billion, an increase of $9.4 billion, or more than 400%, from a year previously.
Net interest income (on a taxable equivalent basis) was $39 million against the FactSet estimate of $34.3 million. Net interest margin widened to 1.26% from 1.16% in the year-earlier quarter.
The bank has attributed the growth to an increase in deposits from digital currency exchanges and institutional investors in digital assets. Silvergate continues to benefit as it’s one of the few banks targeting the cryptocurrency industry.
Late last month Morgan Stanley initiated coverage of the stock with an overweight rating and a $158 price target, indicating a 52% upside from the price of the stock at the time. The shares, which closed last night around $158, are down about 1% in premarket trading.
“Silvergate had another great quarter, underscored by record quarterly pre-tax income, continued platform growth, and an expanding balance sheet. In the third quarter we grew average digital currency deposits to $11.2 billion, the highest in our history, added new digital currency customers to the SEN, and further increased SEN Leverage commitments and balances,” CEO Alan Lane said in the statement.