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Silvergate Capital (SI) was downgraded to “underweight” from “neutral” by JPMorgan after the crypto bank said that it was evaluating its ability to continue as a going concern and delayed the filing of its annual report on Wednesday.

The crypto bank said it needed to delay the filing of its annual 10-K for 2022 and will take an additional two weeks to complete it.

JPMorgan also withdrew its $14 price target for Silvergate's shares, which fell 47% to $7.18 in premarket trading.

Silvergate’s rating was downgraded to “hold” from “buy” by Canaccord Genuity. The broker cut its price target on the stock to $9 from $25.

JPMorgan notes that in the recent quarter Silvergate realized a $886 million loss from selling underwater securities, resulting in the bank's tangible book value being cut by more than half to $12.93 a share.

“With the company having sold additional securities (beyond what was guided) as a loss in January/February, this reflects that the company is facing continued liquidity challenges,” JPMorgan analysts led by Steven Alexopoulos wrote.

The fallout from the collapse of FTX has shaken the crypto market, with Silvergate directly affected as the bank had around $1 billion of deposits from the now-defunct exchange at the time of collapse, the report said.

In addition, the past few months has been a back-and-forth between short sellers and the company, with Silvergate responding publicly on multiple occasions in an attempt to maintain its business, the report added.

“Short sellers appear to have contributed to a bank run of sorts with Silvergate reporting a much greater level of deposit outflows than anticipated in the fourth quarter and this likely continuing so far in 1Q23,” the note said.

Read more: Silvergate Stock Plunges as Bank Says It May Face DOJ, Congressional and Bank Regulator Inquiries