New York Community Bancor subsidiary Flagstar Bancorp, NA will hold non-crypto related deposits from Signature Bank, according to a press release from the Federal Deposit Insurance Corporation (FDIC) on Sunday.
Signature Bridge Bank, the current company replacing Signature Bank, will become immediate depositors of Flagstar and receive FDIC insurance up to $250,000 USD.
The statement read: “As of December 31, 2022, the former Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion. Today’s transaction included the purchase of about $38.4 billion of Signature Bridge Bank, N.A.’s assets, including loans of $12.9 billion purchased at a discount of $2.7 billion.
It explained further: “Approximately $60 billion in loans will remain in the receivership for later disposition by the FDIC. In addition, the FDIC received equity appreciation rights in New York Community Bancorp, Inc., common stock with a potential value of up to $300 million.”
Reports added that bids submitted by Flagstar Bank did not include the $4 billion in deposits linked to Signature Bank’s digital banking wing. According to FDIC estimates, Signature Bank’s collapse will cost the Deposit Insurance Fund around $2.5 billion USD.
The news comes after Signature Bank collapsed due to a massive liquidity crunch due to its ties to the now-defunct cryptocurrency exchange FTX. New York authorities shuttered the bank, citing the need to protect investors.
