Signature Bank co-founder, CEO and President Joseph DePaolo will transition into a senior adviser role this year, with Chief Operating Officer Eric Howell succeeding him as president March 1.
Once DePaolo completes his transition into the newly created advisory role, Howell will take the reins as CEO, the bank said Thursday.
DePaolo co-founded Signature Bank in 2001 alongside Scott Shay and John Tamberlane — who serve as Signature’s board chair and vice chair, respectively. Since Signature’s inception, DePaolo shaped and executed a single-point-of-contact banking model and grew the bank to, become the nation’s 31st-largest bank, as of September, according to the Federal Reserve.
Howell joined Signature as the bank’s controller when it was founded, and has since held several key roles, including as senior executive vice president and COO for the past two years. In a previous role in corporate and business development, Howell launched several business lines and expanded the bank’s footprint to the West Coast.
Shay said the bank’s board has “for the past several years … been deeply involved in guiding this transition.”
“During his distinguished 22-year career at the helm of Signature Bank, I believe Joe has accomplished what no other bank CEO has,” Shay said. “He managed the growth of Signature Bank from a startup entity with $50 million in assets to an institution exceeding $100 billion in assets.”
The C-suite transition comes, however, at a time of upheaval in the crypto space where Signature is heavily invested.
Signature found itself in hot water in November in connection to the collapse of crypto exchange FTX.
Soon after FTX’s collapse due to alleged fraud, Signature tried to quell customer worries by claiming that just 0.1% of deposits were linked to FTX. It then tried to distance itself from crypto by offloading $8 billion to $10 billion in digital assets, bringing its digital assets to less than 15% of its total assets.
“We’re not just a crypto bank, and we want that to come across loud and clear,” Howell said at a December conference.
Signature was hit with a lawsuit last week over its ties to FTX. Algorithmic trading firm Statistica Capital and Statistica Ltd. sued the bank in the U.S. District Court for the Southern District of New York, alleging Signatue “had actual knowledge of and substantially facilitated the now-infamous FTX fraud.”
“In particular, Signature knew of and permitted the commingling of FTX customer funds within its proprietary, blockchain-based payments network, Signet,” the lawsuit asserted.
Statistica allegedly told Signature its funds were meant for FTX, but that the bank allowed transfers to accounts controlled by crypto hedge fund Alameda Research.
A representative for Signature did not return a request for further comment by press time.