Silvergate Capital Corporation, the parent firm of the crypto-focused bank Silvergate Bank, has attributed the $1 billion loss it incurred in the fourth quarter of 2022 to the confidence crisis that permeates the entire crypto ecosystem. While Silvergate has taken steps to help it navigate the current environment, according to the CEO Alan Lane, the firm remains “focused on providing value-added services for [its] core institutional customers.”
Less than a month after Silvergate Bank reported a massive drop in customer deposits, the crypto-focused financial institution’s parent firm, Silvergate Capital Corporation, said on Jan. 17 that a “transformational shift” seen in the fourth quarter (Q4) had helped to “create a crisis of confidence across the ecosystem.” This, in turn, sparked the shift to a “risk off position across digital asset trading platforms,” the parent firm said.
As a consequence of this changed environment, Silvergate said the group incurred a Q4 net loss of $1.0 billion or a $33.16 loss per common share. The Q4 performance is in contrast to the net income of $40.6 million, or $1.28 per diluted share realized in Q3 of 2022.
Due to the massive losses incurred in Q4, Silvergate Capital’s latest financial results show that in the whole of 2022, the group incurred an overall loss of $948.7 million or $30.07 loss per common share.
As reported by Bitcoin.com News in early January, Silvergate Bank’s stock took a heavy knock after it was revealed that customers at the crypto-focused bank had withdrawn more than $8 billion in deposits in Q4 alone.
Silvergate Still Committed to Keeping a ‘Highly Liquid Balance Sheet’
Consequently, due to this, as well as the bearish conditions that have prevailed in the crypto market since May 2022, Silvergate said it was forced to sell debt securities at a loss of about $718 million. In addition, the bank said it would “take an impairment charge of $196 million” on the blockchain-based payment solution it acquired from Diem.
Commenting on the group’s latest financial results, Silvergate CEO Alan Lane said:
“While we are taking decisive actions to navigate the current environment, our mission has not changed. We believe in the digital asset industry, and we remain focused on providing value-added services for our core institutional customers. To that end, we are committed to maintaining a highly liquid balance sheet with a strong capital position.”
What are your thoughts on this story? Let us know what you think in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Go to Source
Author: Terence Zimwara