Regulators seized New York regional bank Signature Bank (SBNY) two days after shutting down Silicon Valley Bank as overseers of the banking system try to restore calm before markets open Monday.

Signature becomes the third-largest bank to ever fail in the U.S., behind Silicon Valley Bank and Washington Mutual in 2008, if its assets haven't changed significantly since the end of 2022. Signature had $110 billion in assets as of Dec. 31, ranking 29th among U.S. banks. It had $88 billion in deposits as of that date, and approximately 89.7% were not insured by the Federal Deposit Insurance Corporation.

All of those deposit holders will get their money back, according to a joint statement from the Treasury Department Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and FDIC Chair Martin Gruenberg, who cited a "systemic risk exemption" that is also being applied to all Silicon Valley Bank deposit holders. Shareholders and certain unsecured debt holders will not be protected, they added, and senior management had been removed.

Any losses to the FDIC's Deposit Insurance Fund to support depositors who exceeded the $250,000-protected limit, they added, "will be recovered by a special assessment on banks, as required by law." The FDIC maintains its insurance fund with regular contributions from banks. The government officials did not disclose how many deposits or assets Signature was left with at the time of its seizure.

Signature served clients in the cryptocurrency world and had been trying to reduce its exposure. Like Silvergate Bank, another crypto-friendly bank that said last week it would voluntarily wind itself down, it suffered from a deposit outflow in the aftermath of the collapse of crypto exchange FTX. Deposits dropped 17% in the fourth quarter of 2022 as compared to the year-earlier period.

The value of some of its securities had also dropped in value due to a rapid rise in interest rates over the last year, a development that also created problems for Silicon Valley Bank once depositors at that California bank began withdrawing money.

Signature tried last week to restore confidence in its position as investors punished regional bank stocks, releasing a filing that stated it had "a strong, well-diversified financial position" and reiterating the company's intent to reduce its exposure to cryptocurrency customers. Its shares sold off more than 20% Friday, and were down 76% over the past year.

It acknowledged in its most recent annual report that "our depositor base is more heavily weighted to larger uninsured deposits than many other banks" and noted that "the loss of our deposit clients or substantial reduction of our deposit balances could force us to fund our business with more expensive and less stable funding sources."