Signature Bank says its financial position is ‘strong’ but stock falls anyway


Signature Bank issued fresh comments Thursday about its financial strength as its stock price got caught up in steeper losses by two other financial firms.

Signature Bank stock
a component of the S&P 500
dropped 8.4%, as investors reacted to its digital currency exposure, which is being reduced.

New York-based Signature Bank said it’s maintaining a “strong, well-diversified financial position and limited digital-asset related deposit balances in the wake of industry developments.”

Those industry developments include a move by Silvergate Capital
to wind down its crypto banking unit as it works to keep its business afloat. Silvergate stock dropped nearly 23%.

Meanwhile, SVB Financial stock
fell 46% toward the biggest one-day loss since the dotcom bust, after the Santa Clara, Calif.-based parent of Silicon Valley Bank disclosed a $1.8 billion loss and  set plans to sell $2.25 billion worth of equity securities to bolster its financial position.

As a traditional commercial bank that serves business customers. Signature Bank is able to provide deposit services for its clients’ digital assets, but it is not a crypto bank.

It does not invest in, does not trade, does not hold on its own balance sheet or provide custody of digital assets, and does not lend against or make loans collateralized by such assets, the company said.

“We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses,” Signature Bank CEO and Joseph J. DePaolo said.

The company disclosed deposit balances of $89.2 billion, up $576 million since Dec. 31, including a “deliberate” reduction in digital-asset related securities of $1.3 billion.

The company currently holds $16.5 billion in digital asset-related deposits as well as $4.54 billion in cash.

More than 80% of its deposits are from middle -market companies. The bank also bought back $55 million so far in the first quarter.

Jefferies analyst Casey Haire reiterated a hold rating on Signature Bank and said the update “reveals stable trends despite a volatile crypto backdrop.”

So far in the quarter, Signature Bank has grown its deposits by $600 million.

The statement comes just a week after Signature Bank provided a mid-quarter update of its “orderly crypto unwind.”

Also Read: Odeon downgrades Bank of America on outlook for weaker consumer spending




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