Amid the disappearance of Silvergate Bank and the problems facing Silicon Valley Bank (SVB), Wells Fargo equity analyst Jared Shaw says Signature Bank (SBNY) is considered “the last game in crypto town” and may be a buy, market analysts believe. With the liquidation of Silvergate, SBNY’s stock sank on Friday, falling more than 13% as the day’s trading began on Wall Street.
Piper Sandler and Wells Fargo analysts suggest Signature Bank may be a buy
The crypto market experienced a tumultuous week after Silvergate Bank’s failure was revealed on March 8, 2023. The cryptocurrency-friendly bank informed the public that it was winding down its operations and liquidating its assets.
Silicon Valley Bank (SVB) is also in trouble after being forced to sell $21 billion in bonds at a loss of $1.8 billion; SVB’s stock, SIVB, was halted on March 10, 2023, after falling over 60% the day before. On Friday, regulators closed Silicon Valley Bank and the Federal Deposit Insurance Corporation (FDIC)took over as receiverand created the “Deposit Insurance National Santa Clara Bank.” This new entity now holds FDIC-insured deposits from SVB.
On Friday, Signature Bank (Nasdaq: SBNY) traded down more than 13%, but by 11:30 p.m. (ET), losses were down to 8.55%. Piper Sandler market analysts Mark Fitzgibbon and Gregory Zingonsaid on Thursdaythat “the two banks were frequently mentioned together because Signature Bank’s Signet platform also had numerous cryptocurrency customersAs a result, we are confident that Signature’s stock price will continue to come under some pressure in the short term.”
In addition, Piper Sandler analysts observed that Signature’s balance sheet is considerably larger than Silvergate’s and that SBNY has “many other deposit verticals to rely on.”
Wells Fargo equity analyst Jared Shaw, writingabout Signature Bank,suggested that the stock might be an opportunity.” Signature (is) the last game in crypto town,” Shaw said. “It is the only large bank that still has a functional on-ramp for institutional investors, which could provide some additional pricing power, although SBNY has limited exposure to this area.” The Wells Fargo analyst added:
In addition, SBNY may use this as an opportunity to move away from physical deposits for services to a fee-for-service model that may be more regulatory and capital friendly.
Shaw’s investor note suggests that SBNY’s strategy may be superior to Silvergate’s and that providing banking services to cryptocurrency companies is not the primary reason for Silvergate’s financial difficulties. However, Wells Fargo analysts also highlight the magnitude of SBNY’s exposure.
