Crypto Bank Signature Suffers Another Analyst Downgrade; Shares Fall

Signature Bank (SBNY) shares were downgraded to market perform from strong buy at Wall Street firm Raymond James on Wednesday after the bank said it was diversifying its business model away from cryptocurrencies.

The shares fell over 2% to $116.07 at time of publication. The bank said this week that it planned to shrink its deposits tied to cryptocurrencies by $8 billion to $10 billion. “We are not just a crypto bank and we want that to come across loud and clear,” the bank’s CEO, Joe DePaolo, said at an investor conference in New York on Tuesday.

Raymond James says it remains bullish on the firm’s long-term prospects to deliver higher loan growth, operating efficiency and credit metrics, but says the bank’s plan to diversify its business model will likely result in slower growth and net interest margin (NIM) compression.

Morgan Stanley (MS) downgraded the stock to equal weight from overweight on Monday. Signature Bank shares have fallen nearly 70% year to date.