KBRA Withdraws Ratings for Silvergate Capital Corporation

2 Jun 2023   |   New York


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


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