Deposits

The New York bank reported a 17% drop-off in deposits during the fourth quarter as it sought to reduce its concentration in the digital currency realm. It expects its balance sheet to stabilize in the second half of 2023.

Further interest-rate hikes by the Federal Reserve will force Bank of America to continue repricing deposits, which fell 6.5% in the fourth quarter compared with a year earlier, executives said.

When U.S. banks fell like dominoes during the Great Depression, the cause was often a classic run: Depositors withdrew cash en masse amid fears that lenders were amassing huge losses on bad loans and investments. The cryptocurrency era just put a new twist on that.

At the start of 2022, banks sat atop a flood of deposits. But as the year progressed, they faced greater pressure to pay higher rates, and the trends that drove the rapid shift show no signs of abating.

The agency is needlessly raising banks' costs at a time of severe economic uncertainty.

While Silvergate said this month it has "a resilient balance sheet and ample liquidity," and analysts call its financials sound, the bank is today contending with a question as difficult as the one that led it to crypto in the first place: whether the experiment was worth it.

After focusing its de novo branching plans on the Carolinas in recent years, the Cincinnati-based bank is ready to shift its attention to Florida and — eventually — to Nashville and Atlanta.

The Connecticut bank plans to add interLINK to its diverse stable of deposit-gathering businesses. A community bank in Texas had previously reached a deal to purchase the platform, but that transaction fell apart in September.