Signature Bank’s closure March 12 sent shockwaves throughout Broadway, since many productions banked with the New York-based institution. The U.S. Federal Deposit Insurance Corporation (FDIC) moved the deposits into a temporary bank, but many Broadway businesses are reportedly looking for a more permanent solution.
The 21-year-old Signature Bank was the preferred bank for many Broadway shows and the businesses that support them, serving half of Broadway productions, according to Broadway News. Because shows operate as individual businesses that circulate money back to investors, banking for Broadway is different than for other industries, with specialized needs Signature was able to meet. Signature reportedly employed a team dedicated to Broadway.
The bank’s shutdown followed a week of uncertainty for medium-sized banks. Many customers withdrew their funds from Signature leading up to its closure, after Silvergate Capital declared insolvency and the government seized Silicon Valley Bank. On March 10, Signature lost 20 percent of its deposits, according to Bloomberg. State regulators took control of the bank, which had $110 billion in assets and $88.6 billion in deposits as of December, after losing confidence in its leadership, representing the third-largest bank failure in U.S. history.
Broadway needs a new bank
Broadway shows earned a total of $845 million during the 2021-22 season, with a significant portion flowing through Signature. Bank deposits are only ensured up to $250,000 by the FDIC, which could have amounted to millions lost for each show. If the government hadn’t stepped in to fully ensure all deposits, employees might not have received pay and shows could have been put on pause.
The government moved the funds from Signature’s customers into a temporary bank called Signature Bridge Bank, but account holders will need to find a different long-term solution. This is good news for City National Bank, which has picked up some of the business, according to Broadway News.
Owned by the Royal Bank of Canada, City National provides services to the other half of Broadway’s productions and is a trusted institution among the Broadway community. It also has a specialty team working in the theater industry and has sponsored the Tony Awards since 2014.