Silvergate Suspends Dividends To Preserve ‘Highly Liquid Balance Sheet’

January has been an Unpleasant month for Silvergate, with the Dividend halts coming only half a month after it reported a Q4 2022 loss of $1B and laid off 200 Employees.

Silvergate has Suspended dividends to preserve its liquid balance sheet.

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

The company outlined that it settled on the choice so that it can weather the storm of Crypto winter, however focused on that it still keeps a “cash position in overabundance of its digital asset customer-related deposits.”

“As it copes with recent volatility in the digital asset market, the Company’s decision reflects its focus on maintaining a highly liquid balance sheet with a solid capital position.”

“The Company’s Governing body will re-evaluate the payment of quarterly dividends as market conditions develop,” the firm added.

The declaration comes only 11 days after the Company posted a hefty $1 billion overal deficit in its Q4 2022 report on Jan. 17. Silvergate attributed its poor performance to the general sour market sentiment which has seen investors pick a “risk-off” move toward throughout the last year.

In the Q4 report, Silvegate CEO Alan Lane also used similar language to the latest declaration, taking note of that the company is still bullish on the Crypto sector however is working to keep “a highly liquid balance sheet with a strong capital position.”

The news of suspended dividends on Friday was met with striking losses in the two its preferred (SI-Dad) and common (SI) stock prices.

According to data from Yippee Finance, the price of SI-Dad dropped by 22.72% to $8.85, while SI declined by 3.76% to sit at $13.55 by market close.

Zooming out also lays out a dismal picture for SI-Dad and SI, with the share prices declining by 60% and 87.46% throughout recent months.

This isn’t the main action the firm has taken to shore up its coffers this month, after it reported on Jan. 5 that it had laid off 200 employees — representing 40% of its headcount — in a bid to keep afloat.