Signature Bank (SBNY): History, Ownership, Mission, How It Works & Makes Money

How did a bank that grew to hold over $110.4 billion in total assets by late 2022, pioneering digital asset banking, end up seized by regulators in a single weekend? Signature Bank's story isn't just about its rapid rise on the back of relationship banking and a focus on privately owned businesses; it's a critical case study in near-term risk, where an estimated $2.5 billion failure cost to the Deposit Insurance Fund still echoes in the financial system as of late 2025.

You need to understand the mechanics of that collapse-how its unique structure and reliance on uninsured deposits made it vulnerable to a digital bank run-plus, what happened to the $38.4 billion in assets Flagstar Bank ultimately acquired. We'll defintely map out the business model that drove its growth and the precise financial missteps that led to its downfall, so you can spot similar red flags in the market today.

Signature Bank (SBNY) History

Given Company's Founding Timeline

Year established

Signature Bank was established on May 1, 2001.

Original location

The bank was founded in New York City, New York, opening six branches simultaneously across the New York City area.

Founding team members

The core founding team included former executives from Republic National Bank of New York, which had recently been acquired by HSBC. They were:

• Scott A. Shay (Chairman)
• Joseph J. DePaolo (President and CEO)
• John Tamberlane (Vice Chairman and Director)

Initial capital/funding

The initial capital raised was approximately $140 million, with over $60 million of that capital provided by the Israeli bank, Bank Hapoalim. This funding allowed them to start with a focus on high-net-worth individuals and middle-market business owners, targeting clients with at least $250,000 in assets.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The bank's trajectory was shaped by a few critical, high-stakes decisions. The most transformative was the unwavering focus on a decentralized, relationship-based model, which was a huge success until it wasn't.

Honestly, the biggest pivot was their aggressive move into the digital asset space. By 2021, deposits from cryptocurrency businesses represented about 30% of the bank's total deposits. This put them on the map, but it also introduced a concentration risk that ultimately became a fatal flaw when the crypto market faced volatility and a bank run began in early 2023. They tried to reduce this exposure in 2022, but by then, the die was cast.

The final, definitive moment was the regulatory closure in March 2023. This wasn't a slow-motion decline; it was a sudden failure due to systemic risk after another bank collapse. The FDIC was appointed as receiver, and the bulk of the assets and deposits were acquired by Flagstar Bank, a subsidiary of New York Community Bancorp, operating under the Flagstar Bank name as of April 2025.

What this estimate hides is the sheer scale of the loss: the failure cost the Deposit Insurance Fund (DIF) an estimated $2.4 billion. Today, the original Signature Bank entity is non-operational, with its stock (SBNY) trading on the OTC Pink Sheets with a modest market capitalization of about $72.42 million as of early 2025, a stark reminder of its demise. If you want to dive deeper into the original ethos that drove this growth and risk, you can read the Mission Statement, Vision, & Core Values of Signature Bank (SBNY).

Here's the quick math on the pre-closure strength: before its failure, the bank had reported a revenue growth of 14.00% and a return on equity (ROE) of 16.87%, showing a defintely strong operational performance that was quickly overshadowed by its liquidity and concentration issues.

Signature Bank (SBNY) Ownership Structure

You need to know who is calling the shots, especially after a major bank failure. The short answer is that the original Signature Bank (SBNY) is a defunct entity in receivership, but its stock still trades, and its core business is now owned by New York Community Bancorp (NYCB). The ownership structure you see for the ticker SBNY reflects the residual equity of the failed holding company, not the operating bank, which is now fully integrated into Flagstar Bank, N.A.

This situation creates a split reality: the old stock is largely held by retail investors speculating on the receivership's outcome, while the actual, functioning commercial bank assets are governed by Flagstar Bank's executive team and board.

Given Company's Current Status

The original Signature Bank, N.A., was closed by regulators in March 2023. It is not a public operating company in the traditional sense; it is an entity in receivership under the Federal Deposit Insurance Corporation (FDIC). The common stock, ticker SBNY, is delisted from Nasdaq and trades on the Expert Market (OTCPK:SBNY), representing the equity claim on the defunct holding company. This is a critical distinction for any investor: you are buying a liquidation claim, not a piece of a going concern.

The vast majority of the bank's deposits, loans, and 40 branches were acquired by Flagstar Bank, N.A., a subsidiary of New York Community Bancorp, Inc., in a deal that transferred roughly $38 billion in assets and assumed $34 billion in deposits. This transaction did not include the former bank's digital asset banking business or about $60 billion in loans, which remain in FDIC receivership for later disposition. The operating business is now a commercial banking division within Flagstar Bank. Exploring Signature Bank (SBNY) Investor Profile: Who's Buying and Why?

Given Company's Ownership Breakdown

As of the 2025 fiscal year, the ownership breakdown for the residual, non-operating SBNY stock (OTCPK:SBNY) shows a highly fragmented shareholder base, which is typical for a shell company in this stage. The institutional presence is minimal compared to its former status as a top-50 U.S. bank.

Here's the quick math: with only 11.07% of the stock held by institutions, the price action is defintely driven by retail sentiment and legal developments related to the FDIC's receivership process.

Given Company's Leadership

The leadership that matters for the former Signature Bank's operations is the executive team at its successor, Flagstar Bank, N.A., and its parent, New York Community Bancorp. The original founders and executives are no longer in control of the operating bank business.

• Joseph M. Otting: Serves as Executive Chairman, President, and CEO of Flagstar Bank, N.A. He leads the strategic direction for the combined entity, which includes the acquired Signature Bank commercial lines.
• Lee Smith: Senior Executive Vice President and Chief Financial Officer of Flagstar Bank, N.A. He manages the financial reporting and capital structure, which now incorporates the approximately $38 billion in acquired Signature Bank assets.
• Richard Raffetto: Senior Executive Vice President and President of Commercial and Private Banking at Flagstar Bank, N.A. His role directly oversees the commercial and private banking teams that were integrated from the former Signature Bank, focusing on middle-market specialty finance and healthcare lending.

The key takeaway is that the strategic and operational decisions affecting the former Signature Bank's clients and business lines are now made in Flagstar Bank's executive suite, not by the former SBNY management, which is a shell in wind-down.

Signature Bank (SBNY) Mission and Values

Signature Bank's core purpose, though never formalized in a public mission statement, was to deliver highly personalized, relationship-based commercial banking to privately owned businesses and their leadership, a model that drove its rapid growth to over $110 billion in assets by the end of 2022. The bank's values centered on responsiveness and specialized service, which were the foundation of its unique banking franchise.

Given Company's Core Purpose

You're looking for the company's DNA, and for Signature Bank, it wasn't a glossy plaque on the wall. It was a business strategy: attract the best bankers, give them autonomy, and let them build deep, personal client relationships. This 'eat-what-you-kill' model in banking is defintely rare.

Official mission statement

Signature Bank did not publish a formal, publicly declared mission statement before its closure in March 2023. However, its operations clearly defined its implicit purpose: to serve an exclusive clientele with specialized financial products. Here's the practical mission, based on its actions:

• Provide specialized financial products and services to privately owned businesses, their owners, and senior managers.
• Focus on relationship-based banking, prioritizing speed, convenience, and responsiveness over a large branch network.
• Deliver exceptional value through experienced relationship managers and customized solutions, including its pioneering Signet™ digital payments platform.

For a deeper look at the numbers behind this mission, you should check out Breaking Down Signature Bank (SBNY) Financial Health: Key Insights for Investors.

Vision statement

The bank's strategic actions, which led to total assets of approximately $110.4 billion at the end of 2022, indicated a clear vision. They were not aiming to be just another regional bank.

• Become the leading bank for privately owned businesses in the metropolitan New York area and strategically expand into key national business lines like fund banking and digital asset banking.
• Maintain a reputation for excellence in client service and financial performance, achieving organic growth that surpassed the $100 billion asset mark.
• Innovate in payment solutions, like the Signet™ network, to offer commercial clients real-time, 24/7/365 fund transfers, positioning the bank at the forefront of digital asset banking, which accounted for 30% of deposits by 2021.

Honestly, their vision was to grow fast by being the anti-big-bank for the commercial sector.

Given Company slogan/tagline

Signature Bank did not have an official, widely promoted slogan or tagline. They relied on word-of-mouth and the reputation of their relationship managers instead of mass advertising campaigns. Still, given their client focus, an effective unofficial tagline would have been:

• The Private Business Bank.

Their focus was so tight, their brand was their service, not a catchy phrase. The bank's net income for 2022 was reported at approximately $1.337 billion, showing how effective this relationship-first strategy was before the systemic risk of early 2023. What this estimate hides is the high concentration of uninsured deposits, which reached 89.3% at the time of its closure.

Signature Bank (SBNY) How It Works

You're asking about Signature Bank, and honestly, you need to know the original entity, Signature Bank (SBNY), was closed by regulators in March 2023. The operating business lines-the part that actually makes money-were acquired by Flagstar Bank, a subsidiary of New York Community Bancorp, and that's what we need to analyze now. Flagstar Bank took over the relationship-driven commercial banking model, leveraging the former Signature Bank's Private Client Teams and their core deposit base, but they explicitly left the digital asset banking business behind.

So, the old Signature Bank's value creation engine now operates as a specialized commercial and private banking arm within Flagstar Bank, generating revenue primarily through Commercial and Industrial (C&I) loans and fee-based services for mid-sized businesses and high-net-worth clients. As of March 31, 2025, Flagstar Bank reported total assets of $97.6 billion, with deposits standing at $73.9 billion, showing the scale of the combined entity. That's the real story.

Given Company's Product/Service Portfolio

The core of the value proposition remains the same: a high-touch, single-point-of-contact banking model for commercial clients, just now under the Flagstar Bank umbrella. They focus on commercial lending and treasury management, which is where the reliable cash flow comes from.

Given Company's Operational Framework

The operational framework is built on a 'team-based' approach, which is what the original Signature Bank perfected. This model is highly efficient for gathering sticky, low-cost deposits and then deploying that capital into profitable commercial loans.

• Relationship-Driven Deposit Gathering: Private Client Teams, consisting of experienced bankers, serve as a single point of contact for all client needs, which is defintely a huge draw. This personal touch secures high-value, non-interest-bearing (NIB) deposits.
• Capital Deployment: The acquired loan portfolio was approximately $13 billion in Commercial and Industrial (C&I) loans, which are generally higher-yielding and shorter-duration than the multi-family loans that were not part of the deal.
• Digital Integration: The business lines are now running on the new Q2 digital banking platform, which Flagstar Bank's Treasury Management team transitioned to in 2024. This enhances customer experience and provides solutions for fraud monitoring.
• Branch Network Consolidation: Flagstar Bank took over all of the former Signature Bank's branches-about 40 locations-and integrated them into its existing network of approximately 400 locations across nine states, accelerating its transformation into a commercial bank.

Here's the quick math: The acquisition brought in roughly $34 billion in deposits, a substantial portion of which were the coveted low-cost NIB deposits, immediately strengthening Flagstar Bank's funding base and reducing its reliance on more expensive wholesale borrowings. That's a massive liquidity boost.

Given Company's Strategic Advantages

The competitive edge of the legacy Signature Bank business lines, now part of Flagstar Bank, comes from its specialized focus and the quality of the relationships it maintained, even after the collapse.

• Specialized Industry Focus: The bank's expansion into 12 distinct industry verticals, including Technology Media & Communications, Power & Renewables, and Healthcare Finance, builds on the former Signature Bank's C&I expertise. This specialization allows for tailored financial solutions and deeper market penetration.
• Sticky, Low-Cost Deposits: The Private Client Team model is the key to attracting and retaining high-quality, non-interest-bearing deposits, which are the cheapest form of funding for a bank. This provides a structural cost advantage over competitors.
• Geographic Footprint: The acquisition immediately gave Flagstar Bank a stronger presence in the New York City metro area and on the West Coast, leveraging the former Signature Bank's established regional client base.

What this estimate hides is the ongoing challenge of retaining all of the former Signature Bank's clients and talent, but the underlying business model-high-touch, specialized commercial banking-is still a powerful one. You can read more about the market's perspective here: Exploring Signature Bank (SBNY) Investor Profile: Who's Buying and Why?

Signature Bank (SBNY) How It Makes Money

The core of the former Signature Bank's business model-now operating as a specialized segment within Flagstar Bank, N.A.-is generating income from the spread between what it earns on loans and securities and what it pays for deposits, known as Net Interest Income (NII). The second, smaller revenue engine comes from non-interest activities like wealth management and fee-based services, a crucial area for diversification as the bank executes its turnaround strategy.

Signature Bank's Revenue Breakdown

Based on the performance of the acquired operations within Flagstar Bank, N.A. for the first nine months of the 2025 fiscal year, the revenue mix remains heavily weighted toward traditional lending, though non-interest income is showing strong quarter-over-quarter growth. Analyst estimates project the full-year 2025 revenue for the combined entity to be approximately $1.798 billion.

Here's the quick math: For the first nine months of 2025, the combined entity generated approximately $1.254 billion in Net Interest Income and $251 million in Non-Interest Income, totaling $1.505 billion in revenue.

Business Economics

The financial health of the bank's acquired operations hinges on improving its Net Interest Margin (NIM) and successfully re-weighting its loan portfolio. The current strategy is a clear pivot away from the legacy structure that caused trouble.

• Net Interest Margin (NIM) Expansion: The NIM, which is the core measure of lending profitability, was 1.91% in the third quarter of 2025, an increase of 12 basis points year-over-year. The management team is forecasting a significant expansion, expecting NIM to reach 2.80% to 2.90% by 2027.
• Loan Portfolio Restructuring: The bank is actively shedding its exposure to Commercial Real Estate (CRE), particularly in the multi-family sector. Multi-family loan exposure was reduced to $30.0 billion as of June 30, 2025. This reduction is a deliberate move to de-risk the balance sheet.
• Commercial and Industrial (C&I) Growth: The new engine for loan growth is C&I lending, which typically carries higher yields and shorter durations. New C&I loan originations grew 41% in Q3 2025, with the total C&I portfolio increasing by $448 million from the prior quarter.
• Fee Income Focus: The Non-Interest Income stream, which includes fees from the acquired wealth management and broker-dealer business, is critical for stabilizing revenue. The 22% quarter-over-quarter jump in this segment shows the value of these fee-based services.

The entire economic model is currently in a transition phase, so you're seeing a mix of shrinking legacy assets and aggressive growth in new, higher-quality loan categories. That's the defintely the right move.

Signature Bank's Financial Performance

The financial performance in 2025 reflects the costs of a major corporate turnaround and integration, but the underlying operational metrics are showing positive momentum, aligning with the goal of returning to profitability.

• Profitability Challenge: The bank reported a GAAP net loss of $45 million in the third quarter of 2025, which was an improvement from earlier quarters in the year. Management is publicly targeting a return to GAAP profitability by the fourth quarter of 2025.
• Credit Quality Improvement: Net charge-offs-loans the bank doesn't expect to collect-totaled $73 million in Q3 2025, a 38% decrease from the second quarter. This trend shows an improving picture of the loan book quality.
• Capital Strength: The Common Equity Tier 1 (CET1) ratio, a key measure of a bank's capital strength, increased to 12.3% as of June 30, 2025. This places the bank in a strong position relative to its peers and provides a solid buffer against future credit losses.
• Strategic Cost Savings: The completion of the holding company reorganization in October 2025 is expected to simplify the corporate structure and generate approximately $10 million to $15 million in annual operating expense savings.

For a deeper dive into the bank's long-term strategic direction, you should review the Mission Statement, Vision, & Core Values of Signature Bank (SBNY).

Signature Bank (SBNY) Market Position & Future Outlook

The original Signature Bank (SBNY) is no longer an operating entity, having been closed by regulators in March 2023 and placed into Federal Deposit Insurance Corporation (FDIC) receivership, so its future is now a complex liquidation process and the performance of its acquired assets.

The immediate outlook is defined by the FDIC's management of a massive retained loan portfolio and the integration of the acquired deposits and commercial loans into Flagstar Bank, a subsidiary of New York Community Bancorp (NYCB).

Competitive Landscape

The competitive analysis of Signature Bank's former business lines must be split between the liquidation of its legacy Commercial Real Estate (CRE) portfolio and the new market position of the assets acquired by Flagstar Bank.

The FDIC retains an estimated $60 billion in loans, primarily CRE, and approximately $4 billion in deposits related to the former digital asset business.

Flagstar Bank, by acquiring $38 billion in assets (including $13 billion in commercial and industrial loans and $25 billion in cash) and assuming $34 billion in deposits, immediately solidified its position as a major regional player, though the integration has been challenging.

Opportunities & Challenges

The future for the former business lines is a sharp contrast: the opportunity for the acquiring entity lies in diversification, while the risk for the receivership is tied to a distressed asset class.

Industry Position

The original Signature Bank was a top-tier regional bank in New York, known for its personalized, relationship-driven commercial banking model and its early adoption of digital asset banking with the Signet platform.

The legacy of Signature Bank now exists in two forms:

• The FDIC Receivership holds the bulk of the problematic Commercial Real Estate (CRE) loans, which are being liquidated, and the Signet platform, whose future is uncertain as of November 2025.
• Flagstar Bank absorbed the relationship-banking model, the New York branch network, and a substantial, low-cost deposit base of $34 billion, which is helping to transform its parent company, NYCB, into a more diversified commercial bank.

Honestley, the biggest takeaway for the industry is the regulatory message: the model of high-growth, high-concentration regional banks, especially those with large uninsured deposit bases from volatile sectors like digital assets, is now under intense scrutiny.

The core values that drove the bank's initial success are still relevant for any new entity looking to fill the void left by its closure. You can read more about what the bank stood for in its Mission Statement, Vision, & Core Values of Signature Bank (SBNY).

Finance: Track the disposition progress of the FDIC's retained $60 billion loan portfolio and monitor NYCB's Q4 2024 and Q1 2025 earnings for signs of stabilization in the acquired assets.