Silvergate Capital price target lowered to $30 from $45 at Wedbush

Wedbush analyst David Chiaverini lowered the firm’s price target on Silvergate Capital to $30 from $45 and keeps an Outperform rating on the shares after hosting an advisor call with Steve Gannon, former general counsel of Citizens Financial Group, for an update on Silvergate’s risk of potential liability, damages, and/or enforcement action related to its dealings with FTX and Alameda Research. There were both positive and negative takeaways from the call. On the positive side, the speaker noted that because Silvergate is heavily regulated, it’s likely that it has a robust compliance function and our speaker believes that an enforcement action or legal penalty, if any, stemming from this situation would be manageable and not crippling. On the negative side, the speaker noted it’s unlikely Silvergate would be an acquisition target in the near-term until the issue of potential legal liability receives closure; and if regulators determine that Silvergate’s compliance function was lacking, it could potentially lead to millions of increased expenses to further build out Silvergate’s compliance infrastructure, Chiaverini writes.