Signature Bank will sell deposits and loans to Flagstar Bank, a subsidiary of New York Community Bancorp.
The Federal Deposit Insurance Corporation (FDIC) announced the deal on Sunday after the agency took control of Signature on March 12.
- Flagstar
Bank will take over Signature's 40 former branches, substantially all
of the bank's deposits, and $12.9B of its loan portfolios.
- About $60B of Signature's loans and $4B of its deposits will remain in the bank's FDIC-controlled receivership.
- The FDIC said the deal will cost its Deposit Insurance Fund about $2.5B. The fund reportedly held $128B in assets at the end of last year.
- The agency's Sunday announcement did not address Silicon Valley Bank (SVB), which it also holds under receivership.
- The FDIC failed to attract a buyer willing to take over SVB and plans to relaunch an auction for the bank's assets.
- Bank runs forced U.S. federal regulators to take control of Silicon Valley Bank (SVB) and Signature Bank earlier this month.
- SVB collapsed after its parent company was forced to sell $21B of securities at a loss of $1.8B to cover expenses.
- Signature failed after customers rushed to take out deposits worth over $10B.
- The bank run occurred amid market anxieties relating to Signature's high levels of uninsured deposits, its exposure to crypto and the tech industry, and the recent collapse of SVB.
