Signature Bank, which Collapsed last week On the eve of The failure of Silicon Valley Bank, will be taken over by New York Community Bancorp, the Federal Deposit Insurance Corporation (FDIC) announced Sunday. With $88.6 billion in deposits and more than $110 billion in assets at the end of 2022, the collapse of Signature Bank is considered the third largest bank failure in US history.
“The (FDIC) Flagstar Bank, National Association, Hicksville, New York, has entered into a purchase and assumption agreement for substantially all of the deposit and fixed loan portfolio of Signature Bridge Bank, National Association, a wholly owned subsidiary of New York Community Bancorp. Inc., Westbury. , New York,” the FDIC said in a statement. Signature Bridge Bank was created by the FDIC to take over the operations of Signature Bank, which was shut down by New York state regulators last week.
Today, we entered into an agreement with an affiliate of New York Community Bancorp, Inc. to purchase and assume deposits and assets from Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
— FDIC (@FDICgov) March 19, 2023
New York Community Bancorp will operate 40 former Signature Bank branches under the name Flagstar Bank — a subsidiary of the company — starting Monday, and the FDIC has assured depositors that the banks will operate as normal.
“Customers of Signature Bridge Bank, NA should continue to use their current branches until they receive notice from the assumed institution that full-service banking is available at Flagstar Bank, NA branches,” the FDIC said.
“Today’s transactions included the purchase of approximately $38.4 billion in assets of Signature Bridge Bank, NA, including $12.9 billion in loans purchased at a discount of $2.7 billion,” the FDIC continued. “Approximately $60 billion in loans will remain in receivership pending subsequent disposition by the FDIC.”
New York Community Bancorp acquired Flagstar in December of last year, making it the nation’s 24th largest regional bank at the time of the acquisition.
The back-to-back failures of both Signature Bank and Silicon Valley Bank have sparked fears of a nationwide domino effect of bank collapses, but the federal government has stepped in to try to refund depositors and broker sales of failed institutions to viable banks.
The FDIC estimates that the overall cost of Signature Bank’s failure in its deposit insurance fund will be approximately $2.5 billion, with exact costs to be determined when the FDIC’s receivership is formally terminated.
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