Silvergate suspends payment of dividend on preferred stock

• Crypto-friendly bank Silvergate announced its suspended payment of dividends on its series A preferred stock.
• The company’s shares fell more than 11% pre-market after the announcement.
• Silvergate reported a $1 billion loss in the fourth quarter and also cut its staff by 20% amid the crypto bear market and impact of FTX 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.

Specifially, the crypto bank says it is suspending payment of dividends on the its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. The US-based company is taking the move to help preserve capital following the effects of recent turbulence across 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.

At the time of writing, the shares were trading at around $12.93, still more than 8% down on the 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. 

The crypto bank also reported that customer digital assets deposits had fallen significantly as uncertainty swept through the crypto market.