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The Federal Deposit Insurance Corporation said it had transferred all deposits and substantial assets of Signature Bank SBNY to Signature Bridge Bank, N.A., a full-service bank that the agency will operate as it markets the institution to potential bidders.
Signature Bank became the third financial institution to be shuttered recently after the collapse of Silvergate Capital Corp SI and Silicon Valley Bank SIVB.
According to the FDIC, a bridge bank is a chartered national bank that operates under a board appointed by the FDIC and assumes the deposits and certain other liabilities and purchases certain assets of a failed bank.
The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilize the institution and implement an orderly resolution, it explained.
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Depositors and borrowers will automatically become customers of Signature Bridge Bank, N.A. and will continue to have uninterrupted customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before, FDIC clarified adding that Signature Bank’s official checks will continue to clear.
“Loan customers should continue making loan payments as usual,” it said.
FDIC noted that all depositors of the institution will be made whole and no losses will be borne by the taxpayers but added that shareholders and certain unsecured debt holders will not be protected.
Greg D. Carmichael has been appointed the CEO of Signature Bridge Bank, N.A. He recently served as president and CEO of Fifth Third Bancorp.
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Image and article originally from www.benzinga.com. Read the original article here.