Silvergate suspension of preferred dividends ‘surprising,’ says Wedbush

Despite acknowledging the challenging environment Silvergate is facing, Wedbush analyst David Chiaverini said the firm was "still nonetheless surprised" to see Silvergate suspend dividend payments on its 5.375% Series A noncumulative perpetual preferred stock. While this move could shore up Silvergate’s near-term capital position, it could raise Silvergate’s cost of capital down the road as any new fixed income or preferred issuance going forward will likely require a higher coupon, said the firm, which keeps a Neutral rating and $13 price target on Silvergate shares.