Silvergate Capital downgraded to Neutral from Outperform at Wedbush

Wedbush analyst David Chiaverini downgraded Silvergate Capital to Neutral from Outperform with a price target of $9, down from $15. The potential for the company to take a valuation allowance against its deferred tax assets could lower its book value further and reduce its earnings power, Chiaverini tells investors in a research note. The analyst says his prior estimate of tangible book value of $18 per share didn’t include the potential for a valuation allowance against its deferred tax assets as he previously believed Silvergate would be able to apply future income to fully utilize its tax loss carryforward. Chiaverini now forecasts the company’s tangible book value could be $9 per share, which represents downside of 25% from Friday’s closing price. "Old-fashioned interest rate risk is the culprit to SI‘s downfall rather than crypto-related credit losses," writes Chiaverini.