Signature Bank CEO Joe DePaolo Will Be Replaced by COO Eric Howell Following Transition Period

Joe DePaolo is stepping down as president of crypto-friendly Signature Bank (SBNY) and will be succeeded by Chief Operating Officer Eric Howell as of March 1.

After DePaolo completes his transition into an advisory role, Howell will also be named as CEO, the bank said. Until then, DePaolo retains the CEO role and his seat on the board. It is unclear how long the transitionary period will last. Signature Bank did not immediately respond to CoinDesk's request for further comment.

DePaolo’s departure comes as Signature Bank continues to grapple with the fallout of crypto exchange FTX, which the bank was involved with, but likely not linked to the resignation, according to Wells Fargo analyst Jared Shaw.

“This is not a surprise at all, it was in process for a while,” Shaw told CoinDesk. “I feel very confident this has nothing to do with any issue or concern.”

While the new CEO Howell isn’t particularly known to push the bank’s crypto strategy forward, his replacement isn't a sign that Signature is stepping away from the industry, Shaw said.

“He’s probably not been the driving force behind crypto [...] I don't think that anyone should read into that that they're not committed to staying in crypto,” he said. “I think it is still a commitment but as we saw this past quarter, they don't want to have a concentration risk with it from the deposit side.”

Under DePaolo's leadership, Signature's Nasdaq-listed shares soared as high as $344.89 a year ago amid the last crypto bull market. By the end of 2022, following the collapse in cryptocurrency valuations and the onset of the crypto winter, the stock had lost 66% of its value, closing 2022 around $113. This year, they've gained about 18%, rising alongside the crypto market. At the time of writing, SBNY shares are down 3.6% to $130 in pre-market trading.

The bank has been attempting to reduce its involvement in digital assets following the market downturn that started last year and came to a head with the collapse of crypto exchange FTX in November.

Signature said it would be shrinking its deposits tied to cryptocurrencies by $8 billion to $10 billion in December. Last month, Binance said Signature would no longer handle transactions of less than $100,000 for crypto exchange customers.

Read more: Signature Bank Downgraded at Jefferies Due to Shrinking Crypto Business

UPDATE (Feb. 16, 2023, 12:35 UTC): Updates headline, adds further details and background.

UPDATE (Feb. 16, 2023, 12:15 UTC): Adds additional details.

UPDATE (Feb. 16, 2023, 14:15 UTC): Adds info on SBNY share price movements

UPDATE (Feb. 16, 2023, 18:33 UTC): Adds comment by Wells Fargo analyst Jared Shaw.