The Federal Deposit Insurance Corporation (FDIC) announced that Flagstar Bank, a subsidiary of New York Community Bancorp (NYCB), will purchase the majority of the deposits and some loans of collapsed Signature Bank.
The corporation estimates that the deal will cost its Deposit Insurance Fund about $2.5 billion, but that figure may change as the regulator sells off assets.
According to the new deal, $4 billion worth of cryptocurrency deposits at Signature Bank will be returned directly to customers rather than being controlled by NYCB’s Flagstar unit.
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The deal also excludes $60 billion of loans related to Signature’s digital banking business.
Some of Signature’s loans were acquired by Flagstar at a discount.
FDIC got equity appreciation rights in NYCB’s stock valued at approximately $300 million.
The FDIC had requested that potential buyers of Signature submit bids by Friday, March 17. According to Reuters, acquirers would also have to agree to divest the bank’s crypto business. An FDIC spokesperson later denied that claim.
The 40 locations of Signature Bank will start operating as Flagstar Bank on Monday. Signature clientele won’t need to make any adjustments to their banking.
The statement made no mention of the other bank, Silicon Valley Bank, which collapsed two days before Signature.
Signature had $110.36 billion in assets, while Silicon Valley had $209 billion.
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