FDIC Sells Failed Signature Bank to New York Community Bank Subsidiary
The Federal Deposit Insurance Corporation (FDIC) announced it has sold most deposits and certain loan portfolios from Signature Bank (now Signature Bridge Bank), whose collapse earlier this month marked the third largest bank failure in US history, to Michigan-based Flagstar Bank, a subsidiary of New York Community Bank.
The value of Signature Bridge Bank’s assets purchased by Flagstar Bank is $38.4 billion. Flagstar will buy $12.9 billion of loans at a discount of $2.7 billion. The FDIC estimated the deal would cost its Deposit Insurance Fund approximately $2.5 billion; however, that figure may change as the regulator sells off assets.
The 40 branches belonging to the former Signature Bank will now operate under Flagstar Bank beginning Monday.
About $60 billion in other assets were not included in the sale, including $4 billion related to the former Signature Bank’s digital assets business, which remain in the FDIC’s receivership.
Signature, based in New York, was a large commercial lender in the tri-state area, but had in recent years gotten into cryptocurrencies as a potential growth business.
As of last year, Signature had $88.6 billion in deposits and $110.4 billion in total assets.