Signature Bank’s (SBNY) management’s decision to shrink its digital asset deposits business is understandable given the recent turmoil in the cryptocurrency industry, but the negative impact on net interest margin (NIM) and and net interest income (NII) is being underappreciated, Jefferies' Ken Usdin said in a report Monday.

Usdin downgraded SBNY to hold from buy, and slashed its price target to $124 from $185. The rating and price target cuts come after the stock’s 67% tumble from year-ago levels. Shares are down marginally to $116 in early action on Monday.

Shrinking crypto deposits by $8 billion to $10 billion and replacing them with wholesale borrowings costing around 4.25% will drive a significant reset in net interest margin in the coming quarters, said Usdin. While management plans to pay down some borrowings with core deposit growth, it will take some time for the bank’s other businesses to generate that growth, according to his report.