But it was too late for Signature, which was seized March 12 by the New York State Department of Financial Services, as officials said they had a “crisis of confidence in the bank’s leadership.” Frank, the author of the bill written in response to the 2008 financial crisis, found himself at the center of a new one.
But not everyone has that option. That’s why smaller studios and independents often turn to specialist bankers as they seek financing for their projects. And even if a bank run has been prevented, the threat facing independent Hollywood’s preferred banking partners are real and may get more acute as time goes on. As SVB’s failure showed, businesses that rely on regional bank partners for payroll or daily expenses cannot necessarily count on that money being there.
The end result may be that businesses move more deposits out of some regional or specialist banks and toward perceived safe havens. “If I had $1 at a regional bank, I’d be pulling it out and bringing it to a ‘too big to fail’ bank,” says Matthew Tuttle, the CEO of Tuttle Capital Management.
Even with the new federal guarantees, Broadway clients are still concerned about the ultimate fate of Signature and whether it will find a buyer. Producers also have to consider their fiduciary duty to investors. “Now, I think they’re going to rein in a lot of that,” he adds. “A lot of industries, the smaller, more speculative types of things that regional banks were more willing to lend on, I think those guys are going to suffer. And so, for the [entertainment industry], this is not a good thing.”
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