• Silvergate Bank’s stock price fell by more than 30% after the announcement of a delay in releasing its 10-K report.
• The bank suffered a $1 billion net loss and a $14 billion fall in customer deposits in the fourth quarter of 2022.
• Silvergate is currently re-evaluating its businesses and strategies due to business and regulatory challenges.
Silvergate Stocks Tumble
Silvergate Bank’s stock tumbled by more than 30%, after hours, following its announcement of a delay in releasing its annual 10-K report. The Securities and Exchange Commission (SEC) requires this report to provide an extensive review of a company’s financial situation and operations.
Losses Impact Regulatory Ratios
The cryptocurrency bank reported that these additional losses will have a negative impact on the regulatory capital ratios of both itself and its subsidiary, Silvergate Bank, potentially leading to them being less than well-capitalized.
Fourth Quarter Troubles
In the fourth quarter of 2022, Silvergate announced a staggering $1 billion net loss as well as a $14 billion drop in customer deposits due to market turmoil and an intended reduction in digital asset banking deposits. This lead the bank to take out a loan from Federal Home Loan Bank (FHLB) for $4.3 billion in January.
Re-Evaluating Business Strategies
Silvergate is now re-evaluating its businesses and strategies considering the current business and regulatory challenges it faces. Furthermore, it has started going through extra steps and submitting paperwork to fulfill certain audits requested by their independent certified public accounting firm.
Going Concern Assessment
The company is assessing how subsequently occurring events affect their ability to continue as a going concern for the twelve months subsequent to publishing their financial statements.
