Silvergate Bank's Stocks Plunge 31% After Delays In Filing Annual Report

Silvergate Bank, which mostly deals in crypto transactions, announced Wednesday that it would delay the filing of its annual 10-K report, resulting in its stock price plunging over 30% in after-hours trading.

The bank said it would require more than an additional two weeks to complete the filing of its annual 10-K report for the fiscal year 2022. In its notification of late filing, the bank said it is "analyzing certain regulatory and other inquiries and investigations that are pending with respect to the Company."

Sought by the Securities and Exchange Commission (SEC), a 10-K report is a document providing a detailed overview of a company's business and financial situation, according to Yahoo Finance.

Silvergate added in the notification that it sold additional debt securities in January and February and is expecting more losses in the coming months.

"These additional losses will negatively impact the regulatory capital ratios of the Company and the Company's wholly owned subsidiary, Silvergate Bank, and could result in the Company and the Bank being less than well-capitalized," the bank said.

The company also noted it is assessing the effect of the ongoing turn of events on its ability to continue following the issuance of its financial statements. The firm reported a $1 billion loss for the fourth quarter, adding that the figure could surge in the coming months.

"The company is evaluating the impact that these subsequent events have on its ability to continue as a going concern," it explained.

It is, meanwhile, conducting additional procedures and providing relevant documentation, as demanded by its independent registered public accounting firm, to fulfill the necessary audits.

Silvergate cited a number of factors that could affect the financial health of the firm in the near future, including high-profile bankruptcies in 2022, substantial market volatility the company experienced in Q4 2022 and stringent regulatory oversight on banks offering digital asset services, Cointelegraph reported.

The crypto-friendly firm also raised concerns about customer retention as a potential issue in addition to any liabilities or restrictions that may be brought about by litigation.

"There are or will be important factors that could cause the Company's actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to ... restrictions on the company's business, resulting from various litigation (including private litigation) and regulatory and other inquiries and investigations against or with respect to the company, investigations from our banking regulators, congressional inquiries and investigations from the U.S. Department of Justice," Silvergate said further its notice.