• Silvergate, a crypto-friendly bank, has suspended dividend payment on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A.
• The move is to help preserve capital following the effects of recent turbulence across the crypto ecosystem.
• Silvergate shares fell more than 11% pre-market after the announcement.
Silvergate, a crypto-friendly bank, has recently announced its suspension of dividend payment on its series A preferred stock. The move was made in an effort to help preserve capital amidst the turbulence seen across the crypto industry in recent times. As a result of the news, the parent company’s shares fell more than 11% pre-market.
In the fourth quarter of last year, Silvergate reported a loss of 1 billion dollars and also cut its staff by 20% due to the crypto bear market and the impact of the collapse of FTX. With the recent announcement, the firm has now suspended the payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A.
In a press release, Silvergate stated that the decision to suspend the dividend payments was made to focus on maintaining a highly liquid balance sheet with a strong capital position in order to navigate the recent volatility in the digital asset industry. The Board of Directors will also re-examine the company’s payment of quarterly dividends at a later date, depending on how the market conditions evolve.
Following the news, the shares of Silvergate’s parent company (NYSE:SI) fell more than 11% in early morning trading, hitting lows of $12.55. The firm had been doing relatively well in the months leading up to the announcement, however it appears that the turbulence across the crypto industry has had a negative impact on the company.
It remains to be seen how the suspension of dividend payments will affect Silvergate and the wider crypto industry in the coming months. The company’s Board of Directors will re-evaluate the situation in the future and decide if the payments will be resumed or not.