New York Community Bank has agreed a deal to purchase a sizable portion of the failed Signature Bank, whose collapse was announced on March 12th, in a $2.7 billion deal, the Federal Deposit Insurance Corporation confirmed on Sunday.
Starting from Monday, Signature Bank’s 40 branches will become Flagstar Bank, which is one of New York Community Bank’s subsidiaries.
The deal will include the purchase of $38.4 billion in Signature Bank’s assets, which is slightly more than a third of Signature’s total when the bank collapsed just over a week ago.
The FDIC also confirmed that the $60 billion in Signature Bank’s loans will remain in receivership and they anticipate it will be sold off over time.
‘Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank,’ the FDIC tweeted.
Signature Bank was the second bank to fail in the recent banking crisis, collapsing just two days after Silicon Valley Bank.
Signature Bank largely operated as a commercial lender in the New York tri state area, however it did branch out into cryptocurrency more recently.
Signature became the third-largest bank failure in US history after regulators stepped in following “similar systemic risk exception,” according to a joint statement from the heads of the US Treasury, Federal Reserve and Federal Deposit Insurance Corp released last Sunday.
Signature’s demise is expected to cost the deposit insurance fund, which is funded by the bank assessments, $2.5 billion.
Gov. Kathy Hochul has tried to assure New Yorkers that the state’s banking system remains secure following the collapse of Signature Bank.
“The main message I want to deliver is New Yorkers should have confidence that their money is secure,” Hochul told reporters in Manhattan last Monday. “Wherever they’ve chosen to bank, that is protected.”
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: LUKE MOCHERMAN
PHOTO CREDIT: NEW YORK POST
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