- Key insight: Signature Bank in Rosemont, Illinois, had tracked an increase in trust-related queries from customers prior to launching Signature Trust last week.
- Supporting data: Some banks, including industry leaders like Huntington, Citi and BMO Harris, opted to offload their trust units in a bid to streamline operations.
- Expert quote: “I’ve seen the pull-back. Even some of the partners we used to refer trust business to are getting out because of the cost structure and compliance.” — Signature Chicago Wealth Management Managing Director Matt Ordway.
Signature Bank in Rosemont, Illinois, knew it needed a better solution to meeting the expanding trust needs of the family owned small businesses and law firms it banked.
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The $1.96 billion-asset Signature had been experiencing an uptick in planning requests and liquidity events among clients, but lacking trust capabilities, it was forced to refer clients’ trust needs to third parties — hardly an ideal solution, co-founder Bryan Duncan told American Banker.
“We lost a little bit of control of the relationship, and one of the things we pride ourselves on is delivering high-touch customer service,” Duncan said Friday in an interview.
At the same time, Signature lacked the scale and available capital to organize a standalone trust company and was reluctant to add another heaping serving of compliance burdens to the already-substantial regulatory requirements tied to running a community bank, Duncan said.
The solution, which the 20-year-old Signature unveiled Wednesday, was to launch a bank-branded trust unit in conjunction with an established trust-company, the $18 billion-asset Midwest Trust in Overland Park, Kansas, as partner.
Backed by Midwest Trust, the brand-new Signature Trust starts with enough capacity to handle clients’ trust needs. “It would have taken us years to get in a position where we could provide the same level of service we get from the partnership with Midwest Trust,” Duncan said.
Matthew Ordway, managing director of Signature Chicago Wealth Management, the bank’s wealth management unit, said he and his team would monitor partnership performance and serve as liaisons, but he added that Midwest would handle trust operations. While the arrangement doesn’t provide the full relationship control Signature prefers, Duncan said the bank is confident Midwest will treat its clients well.
“We were just so impressed by the breadth of offerings and how they operate,” Duncan said of Midwest Trust. “[Chairman and CEO] Brad Bergman treated us like we were the most important client,” Duncan said. “That’s exactly how we treat our clients. We treat everybody like they’re the best clients in the bank.”
“Midwest Trust’s first clients were Community Banks and they are vital to our continued success,” Bergman wrote Friday in an email to American Banker. “Banks are the lifeblood of their communities and we are eager to partner with institutions that provide such an important service.”
Signature Trust will offer an array of trust services, including personal trust administration, estate settlement and executor services, retirement and IRA trusts and investment management accounts.
Interestingly, Signature’s entry into trust comes as a number of banks are moving in the opposite direction, offloading trust assets in an effort to streamline operations. In June, for instance, the $225 billion-asset Huntington Bancshares agreed to sell a portion of its corporate trust and institutional trust business to Tampa, Florida-based Argent International Trust. Citi sold its global fiduciary and trust business to the U.K.-based JTC Group in a deal that closed in July. In January 2025, the $1.3 billion-asset Bank of Idaho in Boise sold its trust and wealth management division to Idaho Trust, also headquartered in Boise.
Midwest Trust has been a beneficiary of the trend. In December 2023, a sister company, Midwest Institutional Trust, acquired an institutional trust services business from BMO Bank.
Midwest Trust provides investment, operations or trust services to more than 50 banks nationwide, according to Bergman.
“You’re seeing more institutions pull back from offering these types of services,” Ordway said. “I’ve seen the pull-back. Even some of the partners we used to refer trust business to are getting out because of the cost structure and compliance.”
Even so, Ordway emerged as a prime advocate for adding a trust function at Signature, arguing it would align well with his wealth management group. “It gives us a better opportunity in front of clients to have a holistic conversation,” Ordway said. “Understanding what the client needs were, it was a no-brainer to push the thing forward and make sure we got it done.”
Signature’s agreement with Midwest Trust provides the bank with the flexibility to bring some or all of its trust business in-house over time, but Duncan said it has no plans to move in that direction.
“We’ve always outsourced to experts in areas that aren’t our core competency,” Duncan said. “Our core competency is commercial and retail banking. That strategy has served us extremely well.”