By Liz Moyer
Investing.com -- Silvergate Capital Corp (NYSE:SI) shares were surging after the crypto bank reported a $1 billion loss for the fourth quarter after last year’s failure of the crypto exchange FTX.
The stock was up 1.3% in afternoon trading but had been higher earlier.
Silvergate is caught up in the crypto storm, acknowledging last year’s “transformational shift” in the industry after several high-profile blowups. Silvergate said this led to a crisis of confidence in the crypto world, and it saw “significant” deposit outflows.
The company said in a statement on Tuesday that it is taking action because it expects a sustained period of lower deposits. These actions are focused on costs and evaluating its product portfolio and customer relationships, it said. It recorded a $134 million impairment charge in the quarter related to securities it intends to sell.
It also made heavy job cuts, around 40%, “to account for the economic realities facing its business and the digital asset industry today.”
Alan Lane, chief executive officer of Silvergate, 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.”
The company had pre-announced results a couple of weeks ago. Goldman Sachs said "SI’s results were largely in line with our expectations following the company’s pre-announcement in early January, with the company posting significant losses as a result of recognizing large securities losses."