Signature Bank’s 40 branches will become Flagstar Bank starting Monday, the FDIC said late Sunday.
New York Community Bank has agreed to buy a significant portion of failed Signature Bank in a $2.7 billion deal, Federal Deposit Insurance Corp. says.
Signature Bank’s 40 branches will become Flagstar Bank starting Monday, the FDIC said in a late Sunday announcement. Flagstar is one of the subsidiaries of New York Community Bank. The deal includes the purchase of $38.4 billion in Signature Bank assets, just over a third of Signature’s total when the bank went bankrupt a week ago.
The FDIC said $60 billion in Signature Bank loans will remain in receivership and expected to be sold on time.
Sunday’s announcement targets one of two bankrupt banks that the FDIC is holding in receivership.
The statement did not cover the other, Silicon Valley Bank (SVB), a much larger bank that regulators took over two days before signing.
Signature had $110.36 billion in assets, while SVB had $209 billion.
Based in New York, Signature was a major commercial lender in the Tri-State area, but had moved into cryptocurrencies in recent years as a potential growth company.
After the SVB failed, depositors became nervous about Signature Bank’s health due to its large number of uninsured deposits and exposure to crypto and other tech-focused loans. By the time it was shut down by regulators, Signature was the third largest bank failure in US history.
The FDIC says it expects Signature Bank’s failure to cost the deposit insurance fund $2.5 billion, but that figure could change if the regulator sells assets. The Deposit Insurance Fund is paid for by assessments against banks and the taxpayer does not bear the direct costs when a bank goes bankrupt.