• Silvergate Bank’s stock price fell by more than 30% after hours due to their announcement of a delay in releasing its annual 10-K report.
• The SEC mandates a 10-K report, which provides an in-depth review of the company’s financial situation and commercial operations.
• Silvergate recently suffered a $1 billion net loss and a $14 billion fall in customer deposits due to market turmoil and the collapse of FTX.
Silvergate Stock Price Plummets
After hours, the stock price of Silvergate Bank plummeted by more than 30% as they announced a delay in releasing their annual 10-K report. This was mandated by the Securities and Exchange Commission (SEC) as it provides an in-depth review of the company’s financial situation and commercial operations.
The cryptocurrency bank recently reported a $1 billion net loss and a $14 billion decline in customer deposits due to turbulence within the market, as well as the collapse of FTX. As a result, Silvergate had to turn to the Federal Home Loan Bank for a loan of $4.3 billion during January 2021.
Further Audits Required
In addition, Silvergate are now undergoing further steps and submitting papers for certain audits that have been requested by their independent certified public accounting firm. They are currently assessing what impact this will have on their ability to continue operating as usual over the next twelve months from when they publish their financial statements.
The bank is also re-evaluating its business strategies given the current challenges they face with regards to regulations and laws. This could potentially lead to them being less than well capitalized if these losses negatively affect their regulatory capital ratios.
Overall, it appears that Silvergate Bank is facing some significant obstacles which may ultimately lead them into bankruptcy unless they can find solutions soon enough. Investors should tread carefully here given how quickly things can change with this stock price plummeting so drastically after just one announcement from the bank itself.