KBRA Withdraws Ratings for Silvergate Capital Corporation

2 Jun 2023   |   New York

Contacts

KBRA simultaneously resolves the Watch Developing status and withdraws all ratings for Silvergate Capital Corporation (“Silvergate” or “the company”) and its subsidiary, Silvergate Bank (“the bank”). The withdrawal of ratings is primarily driven by the lack of information on the company’s operations and ongoing financial disposition following several additional market notifications since our prior rating action on March 3, 2023. These notifications include the March 8, 2023 announcement of Silvergate’s intent to wind down operations and voluntarily liquidate the bank in an orderly manner, as well as additional NT filings and the subsequent amicable dismissal of the company’s auditing firm, culminating in a lack of current audited financial information. The Federal Reserve Board and the California Department of Financial Protection and Innovation also issued a consent order effective May 23, 2023 which ensures the company and the bank will implement its previously announced plan for winding down the bank's operations in a manner that protects the bank's depositors and the Deposit Insurance Fund ("DIF"). That said, the company has filed Call and FR Y-9 reports with financial regulators through March 31, 2023, with preliminary indications that the bank will liquidate to a positive equity position and thus pose minimal risk to the DIF. However, the lack of current audited financial filings and other operational information, together with pending outstanding litigation, provide for low visibility into the company and heightened uncertainty surrounding the outcome for various other stakeholders.

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Related Publications

KBRA Downgrades Ratings for Silvergate Capital Corporation - March 3, 2023

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

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Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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