Silvergate to sell 3.3 million of its common stock to raise $461M

Silvergate Bank is planning to sell 3.31 million shares. With this sale, the financial institution seeks to raise more than $461.3 million. The proceeds from this sale will increase the bank’s regulatory capital levels.

Silvergate is a chartered bank in California. The latest filing with the US Securities and Exchange Commission (SEC) states that the bank wants to sell 3.31 million of its common stock. The stock will be sold at the proposed maximum offering price of $145 per share.

Silvergate announces a public offering

The official filing with the SEC shows that Silvergate was giving underwriters 30 days, in which they were to buy back more than 496.6K additional shares of the bank’s common stock.

The financial institution also estimates that around $461M will be realized as net proceeds from this sale after taking note of underwriting discounts deductions and evaluating offering expenses. These are payable by Silvergate.

The proceeds raised from this sale would surpass $500 million, given that the underwriters have the option of buying additional shares.

As aforementioned, the financial institution seeks to use the funds raised from this sale to boost its regulatory capital levels. It will also use part of the net proceeds to handle other general corporate businesses.

Silvergate is expanding; thus, part of the funds could also aid in the institution’s expansion efforts and strategic acquisitions. The bank is also seeking to expand its offerings by launching products such as the SEN Leverage product and other services associated with digital assets.

Some of the managers included in making this sale include Goldman Sachs, JP Morgan Securities, Bruyette & Woods, A Stifel Company and Keefe.

Part of the filing notes that “This is a public offering of shares of Class A Common Stock, or common stock, of Silvergate Capital Corporation. We are offering all of the shares in the offering. Our common stock is listed on the New York Stock Exchange, or NYSE, under the ticker symbol “SI.”

Silvergate further notes that the common stock price was valued at $165.37 on December 6, 2021, at the NYSE.

Silvergate moves deeper into crypto

Silvergate has emerged as one of the most progressive financial institutions in digital asset adoption. The financial institution currently has a crypto-focused approach that has seen it make headlines. In September, the bank was involved in the rollout of El Salvador’s Chivo wallet.

Silvergate has also announced that it would partner with, one of the leading cryptocurrency exchange platforms. Silvergate seeks to launch USD deposits and withdrawals through this partnership, where institutional clients on can easily transfer their fiat currency to and from the exchange at zero costs.

The other bold move of Silvergate regarding the crypto space was when the institution stated that it would partner with Facebook’s Diem association in May this year. The bank was to work with Facebook’s Diem project to release a stablecoin whose value was pegged to the US dollar.

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