The shares of Silvergate Capital went down to 11.76 US Dollars, by 46 %. As per the report of the U.S. Securities and Exchange Commission (SEC), the bank has laid off about 200 of its employees which is about 40% of the workforce.
The crypto bank has also hinted at a temporary pause in its previous plan to establish a digital currency and has written off 196 million US Dollars in relation to its acquisition of assets and technology of Diem Association from META (Meta platforms), the parent company of Facebook.
Diem was an attempt by Facebook as a stablecoin and was previously called as Libra. The stablecoin was supposed to be estimated as a cryptocurrency pegged to the US Dollar or any other stale asset.
The new reduction in the workforce comes in contrast to the employee headcount that was increased by the company back in 2022. It had recruited more employees in order to serve the growing competitive business and its clients.
The now-reversed decision could only be viewed as a measure to combat the economic crises of the day.
By letting go of 40% of employees the company would be able to continue to offer a tailored customer experience and manage the expenses of the trouble-filled macro environment by adopting a more future-oriented approach.
The employees were notified about their job loss on January 4, 2023, and it was reassured that each one of them would be provided with severance packages and job placement resources. To cover all these costs the company would have to spend 8 million US Dollars.
Silvergate Capital: Bio
Silvergate Capital Corporation is Silvergate Bank’s parent company.
When it was founded in 1988 it functioned under the category of an industrial loan company. The company had a milestone achievement in 2013 with the advent of the digital currency initiative.
The company has been able to maintain a profitable profile status for the foreseeable past of more than 20 years. As of the Q3 (3rd Quarter) of the year 2021 the company has above 1,300 digital currency and fintech clients.
Silvergate Bank is a platform that provides banking services and products to individual and business clients in the United States. The deposit products accepted by the company are interest and non-interest bearing demand accounts, savings, and money market accounts, and certificates for deposit accounts.
The company has loan products in a wide range of consumer loans, multi-family real estate loans, one-to-four family real estate loans, construction loans, commercial real estate loans, industrial and commercial loans, mortgage warehouse loans, reverse mortgage loans, and loans that are secured by personal property.
The company also has services of cash management for businesses related to digital currency.
Silvergate Capital: Origin And History
Silvergate Capital Corporation was founded in 1988. The Corp company is headquartered in La Jolla, California.
Silvergate Bank is a member bank of the Federal Reserve and has an image of a promising presence in the day-by-day developing industry of digital currency, and is also a specialist giant in finance-related innovative infrastructure solutions.
The company has also introduced a platform to serve customers in the digital assets industry.
The company advertises itself as a tech platform that leverages the management team’s expertise to develop solutions for many of the largest fintech and digital currency companies and investors around the world.
The company has solutions built on years of experience and promises deep-rooted commitment and a proprietary approach to regulatory compliance.
Silvergate Capital: Key People
Mr. Alan J. Lane is the Chief Executive Officer (CEO) and the Director of the company. He is also the Chief Executive Officer of Silvergate Bank. Mr. Benjamin C. Reynolds is the President.
Ms. Kathleen M. Fraher is the Executive Vice President and Chief Risk Officer. Mr. Antonio R. Martino is the Chief Financial Officer (CFO). Hunter Stenback is the Head of Investor Relations.
Mr. John M. Bonino is the Chief Legal Officer. Mr. Son-Jai Paik is the Chief HR Officer. Ms. Elaine Batlis is the Executive Vice President and the Manager of the Warehouse Lending Division. Mr. Alaric Eby is the Chief Product Development Officer and Ms. Judith M. Knowles is the Secretary.
Silvergate Capital: Corporate Governance
The ISS Governance Quality Score of Silvergate Capital as of January 1, 2023, is 5.
The pillar scores are listed as 7 for Audit, 4 for Board, 6 for Shareholder Rights, and 6 for Compensation.
Corporate governance quality scores are authorized by the Institutional Shareholder Services (ISS). The ISS scores are an indication of the decile rank in relation to the region or index.
On a scale from 1 to 10, 10 is an indication of higher governance risk while 1 is an indication of lower governance risk. Silvergate Capital Corporation is publicly traded on the NYSE (New York Stock Exchange).
Silvergate Capital: Silvergate Exchange Network (SEN)
The Silvergate Exchange Network (SEN) is the real-time payment platform of the company. It has a customer-centered tailored suite of payments. The platform provides functions of lending and funding of solutions that serve digital asset companies and investors globally.
The SEN has an operational time of 24 hours and 7 days. The daily volume on average totals up to 1.3 billion US Dollars during the fourth quarter of 2022. This is in comparison to the average daily volume of 1.2 billion US Dollars in the third quarter of 2022.
The SEN Leverage commitments declined to 1.1 billion US Dollars on December 31, 2022. It was 1.5 billion US Dollars on September 30, 2022.
The SEN Leverage loans in 2022 had an average outstanding balance of 328 million US Dollars in the fourth quarter. In the third quarter of 2022, this was 308 million US Dollars.
All of the loans under the SEN Leverage continued performance of zero losses and no forced liquidations matching the expectations.