Moody's downgrades Silvergate Bank's long-term deposit rating

Moody's Investor Service downgraded Silvergate Capital Corp's long-term deposit rating to Ba1 from Baa2, following the bank's announcement on Thursday that customers had pulled out $8 billion of deposits in the fourth quarter.

Several brokerages downgraded or cut their price targets on the bank's stock after a preliminary earnings report in which crypto-focused Silvergate Bank also said it would cut its workforce by 40%, or about 200 employees, as it tries to rein in costs amid a deepening industry downturn.

"These events highlight Silvergate Bank's significant operating challenges, in particular the profitability, funding, and liquidity risk associated with amplified deposit volatility," said Sadia Nabi, a senior analyst in the financial institutions group at Moody's.