Flagstar Bank buys Signature Bank, crypto business not included

ambcrypto.com:

New York Community Bancorp-owned Flagstar Bank has offered to buy Signature Bank, the crypto-friendly financial institution that was seized by the U.S. Federal Deposit Insurance Corp (FDIC) last week.

Flagstar will assume the majority of Signature bank’s deposits and over one-third of its assets.

According to a press release by the FDIC, it has entered a purchase and assumption agreement for “substantially all deposits” and certain loan portfolios of Signature Bank with Flagstar Bank. As per the agreement, the 40 former branches of Signature Bank will operate under new ownership. 

The press release added:

“All deposits assumed by Flagstar Bank, N.A., will continue to be insured by the FDIC up to the insurance limit.”

It continued:

“The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business.”

The FDIC revealed that as of December 31, 2022, Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion.

The deal with Michigan-based Flagstar included the purchase of about $38.4 billion of Signature Bridge Bank, N.A.’s assets. Flagstar purchased loans of $12.9 billion at a discount of $2.7 billion. 

Additionally, $60 billion in loans will remain in the receivership for later disposition by the FDIC. The FDIC received equity appreciation rights in New York Community Bancorp common stock with a potential value of up to $300 million.

According to the press release:

“The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion. The exact cost will be determined when the FDIC terminates the receivership.” 

Interestingly, the deal did not include the bank’s crypto related business. The