- Silvergate, a crypto-friendly bank, announced that it has suspended dividend payments on its preferred series A stock.
- The company’s shares fell more than 11% pre-market after the announcement.
- Silvergate reported a $1B loss in its fourth quarter. The company also had to reduce its staff by 20% because of the crypto bear markets and the effects of FTX’s collapse.
Silvergate, a crypto-friendly bank that’s lately hit a rough stretch following the collapse of crypto exchange FTX, has suspended dividend payment on its preferred stock.
The crypto bank announced it was suspending dividend payments on Series A, its Fixed Rate Non-Cumulative Permanent Preferred Stock at 5.375%. The move is being made by the US-based bank to help preserve capital after recent turmoil in the crypto ecosystem.
“This decision reflects the company’s focus on maintaining a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry,” the firm said in a press release.
According to the news release, the Board of Directors will re-examine the company’s payment of quarterly dividends at a later date, with this dependent on how “market conditions evolve.”
Silvergate shares fall sharply
Following Friday’s news, shares of parent company Silvergate Capital (NYSE:SI) fell more than 11% in early morning trading, hitting lows of $12.55.
Despite a decent run for crypto in the last few weeks, where Bitcoin broke above $23k, Silvergate’s shares have struggled amid negative sentiment.
The shares traded at $12.93 at the time of writing. This is still more than 8 percent less than the previous day. The company’s stock is down nearly 27% year-to-date, with the losses coming on the back of a brutal bear market for the broader cryptocurrency industry.
As previously highlighted, Silvergate reported a $1 billion loss during the fourth quarter and moved to slash its workforce by 20% as the negative impact of FTX’s implosion hit the company.
Also, the crypto bank reported that deposits of customer digital assets had declined significantly in light of uncertainty in the crypto market.