Signature Bank fails, less than a few days after Silicon Valley Bank, Newport Beach operations closed

The Newport Beach location of Signature Bank was closed over the weekend, following the New York-based bank’s overall closure by the New York State Department of Financial Services on Sunday.

The commercial bank had about 40 branches, including the one in Newport Beach, and about $110.4 billion in assets and $88.6 billion in deposits as of December 2022, according to the Federal Deposit Insurance Corp.

All deposits and assets of Signature Bank were transferred to Signature Bridge Bank, N.A., which will functionally operate as a full-service bank under the FDIC as it markets the institution to potential bidders.

Service is expected to remain uninterrupted and customers should be able to continue to access their funds and make loan payments as needed, the federal officials stated.

The transfers were completed under a “systemic risk exemption,” which allows for regulators to backstop deposits too large to qualify for federal insurance.

No phone number was listed for the Newport Beach operations of Signature Bank on Bayview Circle on the company’s website and other attempts to call lines associated with that location were disconnected as of Tuesday afternoon.

On the Signature Bank website this week there was an announcement of the opening of a bridge bank and new chief executive officer Greg Carmichael, noting that no deposits were at risk due federal intervention, saying, “We want you to know that you are a valued client, we appreciate your business, and look forward to continue serving you.”

According to a joint statement issued Sunday by the Federal Reserve, FDIC and Secretary of the Treasury Janet Yellen, officials said, “We are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”

In that statement, federal officials acknowledged the closure of Signature Bank by the state department, adding that it would be completing resolution on Silicon Valley Bank, another commercial bank based in Santa Clara, on the recommendation of the FDIC and Federal Reserve boards. SVB’s collapse is considered the biggest bank failure since 2008.

All depositors will be made whole, according to the department, and no losses will be borne of the taxpayers for either bank.

“The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry,” the joint statement said. “Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”

President Joe Biden offered remarks on the matter Monday, remarking that the closures of both banks did not promise the arrival, or rather return, of the 2008 recession, and blamed the bank collapses on actions taken by former President Donald Trump’s administration to loosen banking rules.

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