Money back: The Signature Bank headquarters at 565 Fifth Avenue in New York. The Federal Deposit Insurance Corp is to act as receiver and a bridge successor bank will enable customers to access their funds. — Bloomberg
NEW YORK: State regulators are closing New York-based Signature Bank and it comes after California authorities shuttered Silicon Valley Bank, in a collapse that roiled global markets and stranded billions of dollars in deposits.
The US Treasury Department and other bank regulators said in a joint statement on Sunday that all depositors of Signature Bank will be made whole and “no losses will be borne by the taxpayer”.
Signature Bank’s failure is the third-largest in US history.
New York banking regulators appointed the Federal Deposit Insurance Corp (FDIC) as receiver for the later disposition of the bank’s assets.
Signature Bank reported deposit balances totalling US$89.17bil (RM402.9bil) as of March 8. As of Dec 31, it had approximately US$110.36bil (RM498.5bil) in assets, according to New York state’s Department of Financial Services.
Representatives for Signature Bank did not immediately respond to a request for comment.
The FDIC on Sunday established a “bridge” successor bank to Signature Bank, which will enable customers to access their funds. Signature Bank’s depositors and borrowers will automatically become customers of the bridge bank, the FDIC said.
The bank’s failure followed Silicon Valley Bank’s shutdown last Friday, the largest failure since Washington Mutual went bust in 2008 during the financial crisis. Washington Mutual still ranks as the largest bank failure in US history.
US officials on Sunday said Silicon Valley Bank customers will have access to their deposits.
The federal government also announced plans to shore up deposits and stem any broader financial fallout from the collapse of the tech startup-focused lender.
Signature Bank, a commercial bank with private client offices in New York, Connecticut, California, Nevada and North Carolina, had nine national business lines, including commercial real estate and digital asset banking.
As of September, almost a quarter of Signature’s deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by US$8bil (RM36.1bil).
Signature Bank announced in February that its chief executive officer (CEO), Joseph DePaolo, would transition into a senior adviser role in 2023 and would be succeeded by the bank’s chief operating officer, Eric Howell.
DePaolo has served as president and CEO since Signature’s inception in 2001.
The bank had had a long-standing relationship with former President Donald Trump and his family, providing Trump and his businesses with checking accounts and financing several of the family’s ventures. Signature Bank cut ties with Trump in 2021 following the deadly Jan 6 riots on Capitol Hill and urged Trump to resign.
Officials on Sunday said shareholders and certain unsecured debtholders of Signature Bank, as well as those of Silicon Valley Bank, would not be protected, and that senior management of both banks had been removed.
Any losses to the FDIC’s Deposit Insurance Fund used to support uninsured depositors will be recovered by a special assessment on banks, as required by law, officials said. — Reuters
