Silvergate Bank, based out of La Jolla, CA, is preparing to go public with a price target of $50 million, according to the documents filed and submitted to the securities regulators. It would be listed in the New York Stock Exchange (NYSE) under the ticker “SI”. The bank is a part of the holding company, Silvergate Capital.
Traditional Bank to Crypto-Finance
The bank was a traditional business bank just a few years back. Now it is one of the most preferred financial institutions for digital currency companies.
According to the company prospectus, they seek the required funds to further organic growth of the company and for corporate purposes. These include paying off long-term debt and acquisitions in the future. However, there are no plans of current acquisitions, clarified people familiar with the matter.
In 2013, Silvergate CEO Alan Lana got intrigued by the new technologies, which marked the bank’s move towards the risky cryptocurrency business. The company identified a service gap in the industry – companies operating in digital currencies would require financial services like the traditional system. It was a bold move in light of the wild swings in the value of various digital currencies.
In 2014, Silvergate signed its first customer in the segment, the Digital Currencies Group. As of September 30 this year, Silvergate had 483 digital currency customers. The number was at 114 last year. The total amount of non-interest bearing deposits from these customers was up to $1.76 billion in September, from $609 million last year. The net income generated has more than doubled from $5.7 million to $14.3 million.
Silvergate recently conducted a private stock placement for strategic investors, of which DCG was a part,