Shares of Silvergate Capital plummeted Thursday after the bank delayed the filing of its annual 10-K report as it evaluates events that have happened since the end of 2022.
The company, which provides banking services to crypto businesses, was last lower by 45%, after falling as much as 48.8% earlier in the day. The move pulled its year-to-date loss to 57%.
Silvergate said in a filling Wednesday that it needs additional time for its accounting firm to complete certain audit procedures and that it’s “currently analyzing certain regulatory and other inquiries and investigations.”
Specifically, it cited the “sale of additional investment securities beyond what was previously anticipated” and the “impact that these subsequent events have on its ability to continue as a going concern.”
“The losses from the securities sales appear large enough to result in Silvergate calling out that it may now be less than well capitalized on its regulatory capital ratios,” JPMorgan analyst Steven Alexopoulos said in a note Thursday. “Given significant regulatory challenges (including the pending investigations from regulators) and business challenges (including the exacerbating liquidity challenges amid a crisis of confidence from digital asset customers), the company is reevaluating its businesses and strategies.”
JPMorgan downgraded Silvergate shares Thursday along with other Wall Street analysts.
Silvergate noted that its preliminary, unaudited financial results for 2022, filed Jan. 17, included a net loss attributable to common shareholders of $948.7 million, compared with net income of $75.5 million in 2021.
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