Signature Bank's Assets Sold To New York Community Bancorp's Flagstar Bank

Most of Signature Bank's (SBNY) deposits and certain loans of the failed bank will be acquired by New York Community Bancorp's (NYCB) Flagstar Bank, the Federal Deposit Insurance Corporation (FDIC) said Sunday.

Flagstar will assume all of Signature's deposits, except $4 billion of deposits related to its digital banking business. Almost $60 billion of loans pertaining to its digital banking business will also remain in receivership with the FDIC.

Almost 90% of Signature Bank’s $88.6 billion in deposits were uninsured and it had more than $110 billion in assets at the end of last year. Of that, Flagstar purchased $38.4 billion in assets, including $12.9 billion in loans that were sold at a discount.

To sweeten the deal, the FDIC also received "equity appreciation rights" in common stock of New York Community Bancorp. worth up to $300 million.

The FDIC had asked prospective buyers of Signature to submit bids by Friday, March 17. A Reuters report had also said that acquirers would have to agree to ditch the bank's crypto business. However, an FDIC spokesperson later refuted that claim.

Just a few days after the collapse of Silicon Valley Bank, withdrawals by nervous depositors created a run of Signature Bank. On March 12, New York regulators shut the bank down and FDIC took over in what would be the third-largest bank failure in U.S. history. The FDIC estimates the cost of Signature failure at $2.5 billion, though a final number can only be determined at the end of the receivership.

Signature Bank was seen as crypto-friendly with 19% of its deposits coming from the sector, according to data from Wedbush Securities.