Silvergate Bank added 46 crypto customers in the first quarter and saw fee income and deposits increase from those customers because of “Black Thursday,” according to its earnings report released before market open on Wednesday.

“The increase in total deposits from the prior quarter was driven by an increase in deposit levels from our digital currency customers who maintained excess capital with Silvergate as a result of the dislocation taking place in the digital currency markets during March,” the bank wrote in its earnings release.

The publicly traded La Jolla, Calif.-based bank is one of the few U.S. banks willing to serve crypto-related businesses and has most of its deposits from the crypto sector. 

The bank went public on the New York Stock Exchange under the trading symbol SI in November. With $2.3 billion in total assets, it’s less than 1% the size of JPMorgan Chase’s $3.1 trillion in assets.

The bank now has 850 digital currency customers including 61 exchanges, 541 institutional investors and 248 other customers. The largest customer segment increase was in institutional investors, which increased by 32. The bank also claims to have more than 200 prospective clients in its pipeline. 

Fee income from digital currency customers increased by $300,000 and deposits from those customers increased by 35% to around $1.7 billion, making up the majority of the bank’s total $2 billion in deposits. 

The bank’s Silvergate Exchange Network (SEN) handled 31,405 transactions in the first quarter compared to 14,400 transactions in the fourth quarter of 2019. This was more than triple the number of transactions on SEN one year ago.

SEN’s volume increased by $7.8 billion to $17.4 billion total in the first quarter. The network allows commercial customers to instantly move U.S. dollars between different crypto exchanges and remains open on nights and weekends, unlike traditional markets. 

The bank plans to add more products to the SEN in the future, including a bitcoin-on-margin lending feature called SEN Leverage, which is currently in pilot mode. 

The bank also kept a high risk-based capital ratio – total capital to risk-based assets – in the first quarter, staying around 26% where other banks are normally around 12% to 14%, said Mike Perito, a bank stock analyst at investment firm Keefe, Bruyette & Woods.

The bank also established a referral partnership with Seacoast Commerce Bank in National City, Calif., for customers seeking assistance under the U.S. government’s Paycheck Protection Program.

Neither Silvergate nor Seacoast broke out how many, if any, of Silvergate’s crypto clients applied for PPP loans. 

Silvergate also increased its provision for loan losses to $400,000, compared to no provision for the fourth quarter of 2019. While the bank serves the crypto industry on the deposit side, it turns those deposits into interest-bearing deposits at other banks, investment securities and loans. 

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