HomeTop U.S. NewsNew York Community Bank Acquires Most of Signature Bank

New York Community Bank Acquires Most of Signature Bank

New York Community Bank (NYCB) has made a deal with Federal Deposit Insurance Corporation (FDIC) to acquire most of the recently-collapsed Signature Bank. According to the terms of the deal, NYCB will complete the acquisition through its subsidiary Flagstar Bank. The news comes after last week’s rumors that Bank of America might be interested in buying Signature Bank.

As part of the deal, NYCB will acquire 40 Signature Bank branches that will start operating as Flagstar Bank moving forward. The previous Signature account holders won’t be required to make any changes in order to continue using bank services.

Also, NYCB will take on all of Signature Bank’s deposits alongside $38.4 billion in assets and a portion of Signature’s loans, which the buyer got at a major discount. NYCB will pay just $2.7 billion for a piece of a loan portfolio worth $12.9 billion.

FDIC revealed that it kept $60 billion of Signature Bank’s loans in its receivership alongside $4 billion in deposits from the bank’s digital banking business. It intends to continue fielding offers for these assets and expects to sell them at a rate that will come with a $2.5 billion cost for the government.

Silicon Valley Bank, which collapsed several days prior to Signature Bank, failed to get any interest as FDIC tried to sell the bank as a whole. The government agency will now rethink its approach and try to find buyers for particular assets.

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