Silvergate suspends dividends to preserve highly liquid balance sheet

January has been a rough month for Silvergate, with the dividend halts coming just a few weeks after it announced a Q4 2022 loss of $1 billion and laid off 200 employees. 1769 Total views 23 Total shares Listen to article 0:00 News Own this piece of history

Collect this article as an NFT California-based crypto bank Silvergate has suspended dividend payouts to preserve its highly liquid balance sheet.

In a Jan. 27 announcement, the firm stated that it is halting the payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, in order to preserve capital.

The company outlined that it made the decision to weather the storm of crypto winterbut stressed that it still maintains a cash position in excess of its digital asset customer-related deposits.This decision reflects the Companys focus on maintaining a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry.

The Companys Board of Directors will re-evaluate the payment of quarterly dividends as market conditions evolve, the firm added.

The announcement comes just 11 days after the company posted a hefty $1 billion net loss in its Q4 2022 report on Jan. 17. Silvergate attributed its poor performance to the overall sour market sentiment, which has seen investors opt for a risk-off approach over the past year.

In the Q4 report, Silvegate CEO Alan Lane also used similar language to the latest announcement, noting that the company is still bullish on the crypto sector but is working to maintain a highly liquid balance sheet with a strong capital position.

The news of suspended dividends on Friday was met with notable losses in both its preferred (SI-PA) and common (SI) stock prices.

According to data from Yahoo Finance, the price of SI-PA dropped by 22.71% to $8.85, while SI declined by 3.76% to sit at $13.58 by market close.

Zooming out also paints a grim picture for SI-PA and SI, with the share prices declining by 60% and 87.46% over the past 12 months.

Related: U.S. home-loan banks lent billions of dollars to crypto banks: Report

This is not the only action the firm has taken to shore up its coffers this month, after it announced on Jan. 5 that it hadlaid off 200 employees representing 40% of its headcount in a bid to keep afloat. #Business #Banking #Banks #Report #Stocks Related News What is total value locked (TVL) in crypto and why does it matter? Opinion: Barry Silbert keeps quiet as Genesis goes down in flames New York-based bank exits crypto after tumultuous year Silvergate reports $1B net loss in the fourth quarter of 2022 Coinbase cut costs and bolstered rep, but profits remain challenged: Analysts