Executive Summary

Strong quarter despite crypto volatility: net income available to common rose to a record $35.9M and diluted EPS reached $1.13, up from $0.79 in Q1 and $0.80 in Q2’21, while NIM expanded to 1.96% on higher yields across securities and loans .
Network activity rebounded: SEN dollar transfers increased 34% QoQ to $191.3B (down 20% YoY), and SEN Leverage commitments climbed to $1.4B with “no losses or forced liquidations,” supporting volume-led engagement despite industry stress .
Fees held steady QoQ but remain below 2021 peak: digital currency customer fee income was $8.8M (vs $8.9M in Q1; $11.3M in Q2’21), reflecting lower cash management fees year over year; efficiency ratio improved to 38.3% as operating leverage increased .
Stock reaction catalysts: continued rate-driven NII tailwinds (55% of securities and 88% of loans floating-rate) and durable client activity on SEN; risks include deposit variability tied to crypto volumes and lower fee intensity vs last year .

What Went Well and What Went Wrong

What Went Well
- Record profitability and operating leverage: net income available to common $35.9M, EPS $1.13; efficiency ratio improved to 38.3% as NII rose faster than opex .
- Rate sensitivity and asset mix support NIM: NIM rose to 1.96% (from 1.36% in Q1) with higher yields on adjustable-rate securities/loans; 55% of securities and 88% of loans (HFI) were floating-rate in Q2 .
- SEN engagement and risk management: SEN transfers up 34% QoQ to $191.3B; SEN Leverage commitments increased to $1.4B with “no losses or forced liquidations” (management quote) .
What Went Wrong
- Fee softness YoY: digital currency customer-related fee income was $8.8M vs $11.3M in Q2’21 on lower cash management fees; other noninterest income modest .
- Deposit averages dipped QoQ and remained variable: average digital currency deposits were $13.8B vs $14.7B in Q1, with daily highs/lows ranging $17.6B/$12.6B, highlighting industry-driven volatility .
- Equity book value pressure and higher opex: book value per share declined to $38.86 (from $42.77 in Q1) while noninterest expense increased 9% QoQ and 42% YoY as the company invested in growth and absorbed professional services costs .

Financial Results

Metric	Q2 2021	Q4 2021	Q1 2022	Q2 2022
Revenue (NII + Noninterest Income) ($M)	$42.5 = $30.383 + $12.069	$49.3 = $38.206 + $11.055	$59.9	$79.8
Net Income Available to Common ($M)	$20.9	$18.4	$24.7	$35.9
Diluted EPS ($)	$0.80	$0.66	$0.79	$1.13
Net Interest Margin (tax-equivalent)	1.16%	1.11%	1.36%	1.96%
Noninterest Expense ($M)	$21.5	$25.7	$28.0	$30.6
Tier 1 Leverage Ratio	7.91%	11.07%	9.68%	10.10%

Notes: Revenue is defined by the company as Net Interest Income + Noninterest Income . Totals rounded.

KPIs and Operating Drivers

Digital Currency Customer Fee Income ($M): Q2’21: $11.3; Q1’22: $8.9; Q2’22: $8.8 .
SEN U.S. Dollar Transfers ($B): Q2’21: $239.6; Q1’22: $142.3; Q2’22: $191.3 .
SEN Leverage Commitments ($M): Q2’21: $258.5; Q1’22: $1,070.1; Q2’22: $1,400.0 .
Digital Currency Customers (count): Q2’21: 1,224; Q1’22: 1,503; Q2’22: 1,585 .
Average Digital Currency Deposits ($B): Q2’21: $11.2; Q1’22: $14.7; Q2’22: $13.8 .
Deposit High/Low in Quarter ($B): Q1’22: $16.2/$13.2; Q2’22: $17.6/$12.6 .

Noninterest Income Breakdown ($M)

Component	Q2 2021	Q1 2022	Q2 2022
Deposit related fees	$11.308	$8.968	$8.808
Mortgage warehouse fee income	$0.753	$0.651	$0.555
(Loss) gain on sale of securities, net	—	$(0.605)	$(0.199)
Other income	$0.008	$0.436	$0.050
Total noninterest income	$12.069	$9.450	$9.214

Balance Sheet/Asset Mix Highlights

Securities ($B), % Floating: $11.8B; 55% floating-rate in Q2’22 (high-quality, 97% AA- or better) .
Loans HFI mix (Q2’22): SEN Leverage 20.6%; Mortgage warehouse 68.8% (88% of loans floating-rate) .
Deposits (Q2’22): $13.5B total; ~99.5% noninterest-bearing .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Noninterest Expense (ex-intangibles)	FY 2022	~$130–140M (as of Q1’22)	~$130–140M (reiterated)	Maintained
NII Sensitivity to +25 bps (12-mo, static)	Forward	~$23M (Q1’22 balance sheet)	~$16M (Q2’22 balance sheet)	Lower (mix/yield changes)
Series A Preferred Dividend	Q3 2022 pay date	Recurring quarterly	$0.336 per depositary share; pay 8/15/22; total $2.7M	Declared

Note: The company does not provide revenue/EPS guidance. Sensitivity reflects modelled NII impact, not formal guidance .

Earnings Call Themes & Trends

Note: The Q2’22 earnings call transcript could not be retrieved due to a document retrieval error, so Q&A specifics are unavailable. Themes below reflect press release and furnished presentation.

Topic	Previous Mentions (Q4’21, Q1’22)	Current Period (Q2’22)	Trend
Crypto market volatility and activity	4Q21: SEN transfers +35% QoQ; strong customer growth • 1Q22: industry volumes fell; SEN -35% QoQ	SEN transfers +34% QoQ to $191.3B; customers 1,585	Activity rebounded QoQ; YoY lower
Rate tailwinds/NIM	4Q21–1Q22: NIM 1.11%→1.36%; large floating-rate exposure	NIM up to 1.96%; floating-rate exposure maintained	Improving NIM
SEN Leverage growth/risk	4Q21–1Q22: commitments $570.5M→$1,070.1M	Commitments $1.4B; “no losses or forced liquidations”	Expanding; resilient risk outcomes
Stablecoin infrastructure	1Q22: acquired select Diem assets; building capability	Continued investment in strategic initiatives (no new range)	Ongoing buildout
Deposit variability	4Q21–1Q22: average and high/low balances volatile	Average $13.8B; high/low $17.6B/$12.6B	Persisting volatility

Management Commentary

“Silvergate had another strong quarter… we achieved record net income available to common shareholders of $35.9 million and saw some of the highest daily dollar transfer volumes ever on the SEN… continued demand for our SEN Leverage product, with no losses or forced liquidations.” – Alan Lane, CEO .
“Our platform was built to support our clients… during periods of high volumes, market volatility and transformation, and performed as designed throughout the quarter… balance sheet is optimized for client liquidity and risk management… I remain confident in our trajectory throughout the second half of 2022.” – Alan Lane, CEO .

Q&A Highlights

Not available. The Q2’22 earnings call transcript could not be retrieved due to a document database inconsistency; as a result, specific Q&A details and any clarifications from management are unavailable.

Estimates Context

S&P Global/Capital IQ consensus for Q2’22 EPS and revenue was unavailable due to a data mapping error; we attempted to pull “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q2 2022 but the SPGI endpoint returned no mapping for this ticker. As such, estimate comparisons are not provided (unavailable) and no beat/miss can be assessed.

Key Takeaways for Investors

Rate leverage is driving earnings: NIM expansion to 1.96% with large floating-rate asset mix underpins rising NII amid Fed hikes .
Core network engagement resilient: SEN transfers rebounded 34% QoQ to $191.3B despite industry turbulence; customer count rose to 1,585 .
Fee income stable QoQ but below 2021 levels: $8.8M vs $11.3M in Q2’21—investors should model lower FX/cash management fees vs last year’s peak .
Operating discipline improving: efficiency ratio improved to 38.3% as revenue scaled faster than expenses; FY22 opex guide reiterated at ~$130–140M (ex-intangibles) .
SEN Leverage growth with clean credit outcomes: commitments up to $1.4B, with no losses/forced liquidations reported—a key risk monitor given crypto collateral dynamics .
Deposit volatility remains the swing factor: average digital currency deposits declined QoQ and showed wide intra-quarter ranges; liquidity and capital ratios are strong, but funding remains linked to crypto activity .
Watch for NII sensitivity recalibration: modeled +$16M NII for each +25 bps over 12 months (down from ~$23M in Q1), reflecting balance sheet evolution; still a material earnings lever in a rising-rate path .

Supporting Data Appendix

Additional operating and financial detail including net interest income, noninterest income components, and full statements of operations/financial condition are provided in the Q2’22 8-K exhibits .

Silvergate Capital Corp (SICP)·Q2 2022 Earnings Summary