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Silvergate stock crashes after company delays annual report, reveals new losses


Shares of troubled lender Silvergate (SI) fell by as much as 35% on Thursday morning after the company said late on Wednesday it will miss the March 16 annual report submission deadline, which has already been delayed.

The bank said its team “needs additional time to perform analysis, record log entries relevant to subsequent events, and to complete management’s review of internal control over the financial statements.” financial statements.”

“The Company is currently analyzing a number of regulations and other pending inquiries and investigations against the Company,” the company added.

Silvergate’s stock has crashed last year due to the company’s entanglement with several crypto companies — including bankrupt exchange FTX, among others — lead to reduced deposit more than two-thirds in the fourth quarter of last year. In January, the company laid off 40% of its employees. The company subsequently suspended a dividends on preferred shares as it seeks to raise cash.

Over the past year, the bank’s stock has lost more than 90%.

A spokesperson for Silvergate told Yahoo Finance: “Silvergate is working hard to file a 10-K as soon as possible and has no further comment at this time.”

In Wednesday’s announcement, the bank said it sold additional debt securities beyond what was previously anticipated in January and February and expected to record additional losses compared to what was previously anticipated. previously disclosed. In January, the company disclosure suffered a non-profit loss of $887 million in the fourth quarter.

Silvergate said the sales were primarily to repay “unpaid advances” it received from the Federal Home Loan Bank in San Francisco. The bank also needed more time to complete an “assessment of the effectiveness of internal control over the financial statements” by a third-party accounting firm.

Citing business and regulatory challenges, the company is weighing how these changes might affect its “ability to continue operations for 12 months following the release of these financial statements.” , according to records.

At the end of January, a bipartisan group of US senators pressed the company to provide answers on whether it knew its FTX customers were misusing customer funds. a Reuters report in February said a Silvergate account controlled by Binance.US transferred millions of dollars to a company controlled by Binance CEO Changpeng Zhao.

Slivergate CEO Alan Lane, second from right, is applauded as he rings the opening bell of the New York Stock Exchange before his bank's IPO begins trading, Thursday, Nov. 2019. (AP photo/Richard Drew)

Slivergate CEO Alan Lane, second from right, is applauded as he rings the opening bell of the New York Stock Exchange before his bank’s IPO begins trading, Thursday, Nov. 2019. (AP photo/Richard Drew)

Last week in a joint declare With the Federal Deposit and Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), the Federal Reserve has taken a stance that emphasizes the high liquidity risk for banks that receive loans. crypto-related customers.

At its own risk, Silvergate cited “regulatory scrutiny of banking institutions that provide products and services to the digital asset industry,” the lawsuit said. private sector and investigations from congressional, banking regulators and the Department of Justice investigations.

Analysts at JPMorgan downgraded the stock to Weighted from Neutral and withdrew their price target in a note on Thursday, calling the situation “highly unusual” and adding: “The ‘ run’ at Silvergate seems to be driven by a combination of (1) confidence in the entire system being shaken by the demise of previously trusted players (such as FTX) and (2 ) short sellers expressed concern (mainly on Twitter).

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