Flagstar Bank entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to acquire Signature Bridge Bank despite reports from the independent financial agency that the parent company—Signature Bank’s failure cost it $2.5 billion.
In a memo sent via its official web address on Sunday, FDIC said that the bank which is a wholly owned subsidiary of New York Community Bancorp, Inc., Westbury, New York has acquired the “Bridge Bank” total deposits of $88.6 billion and total assets of $110.4 billion.
The statement read, “The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association, by Flagstar Bank, National Association, Hicksville, New York, a wholly owned subsidiary of New York Community Bancorp, Inc., Westbury, New York.”
The FDIC said that all the 40 branches of the failed Signature Bank will operate under the Flagstar Bank as banking operations kicks off today (Monday).
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“The 40 former branches of Signature Bank will operate under New York Community Bancorp’s Flagstar Bank, N.A., on Monday, March 20, 2023. The branches will open during their normal business hours. Customers of Signature Bridge Bank, N.A., should continue to use their current branch until they receive notice from the assuming institution that full-service banking is available at branches of Flagstar Bank, N.A.
“Depositors of Signature Bridge Bank, N.A., other than depositors related to the digital banking business, will automatically become depositors of the assuming institution. All deposits assumed by Flagstar Bank, N.A., will continue to be insured by the FDIC up to the insurance limit. Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business.”
Added to the details provided, FDIC said that the “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. 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.”
