A subsidiary of New York Community Bancorp, Flagstar Bank, has reached an agreement with US regulators to buy deposits and loans from New York-based Signature Bank (SBNY.O), which was closed a week ago.
The Federal Deposit Insurance Corporation (FDIC) stated that the subsidiary, Flagstar Bank, will acquire essentially all of Signature Bank’s deposits, some of its loan portfolios, and all 40 of its former branches. Signature Bank’s loans were approximately $60 billion, whereas the deposits stood at $4 billion, according to the bureau.
The statement made no mention of the other, much larger bank, Silicon Valley Bank (SVB), which regulators took over two days before Signature.
Signature Bank had recorded assets at $110.36 billion and total deposits of around $88.6 billion in December 2022. At a $2.7 billion discount under the agreement, Flagstar will purchase $12.9 billion in debts from Signature Bank.
The FDIC believes that the loss to its Deposit Insurance Fund due to the demise of Signature Bank will be around $2.5 billion. After the FDIC ends the receivership, the exact cost will be determined.
Also read: Signature Bank Shut Down Intended to Pass Message to Crypto Space
