Silvergate Capital has paused dividend payments on its preferred stock to conserve capital. This action affects the 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. Consequently, prior market trading saw Common shares of the La Jolla-based business fall by around 10%.
The crypto-focused bank declared that the choice was due to their “emphasis on keeping an extremely liquid balance sheet with a sound capital position as it faces recent turbulence in the digital asset sector.” Silvergate presented a dire set of results earlier this month, disclosing they had experienced a loss of $1 billion in the fourth quarter, resulting in an overall annual decline of $949 million.
Silvergate was heavily impacted by the wave of crypto company insolvencies that crested with FTX’s collapse in November, resulting in its stock price dropping around 90% through 2022 and declining further another 18% this January—leaving shareholders stunned.
