The Federal Deposit Insurance Corporation (FDIC) announced it’s entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank to Flagstar Bank, a wholly owned subsidiary of New York Community Bancorp.
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. 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.
The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion. The exact cost will be determined when the FDIC terminates the receivership.
In a separate release, the FDIC said it has extended the bidding process for Silicon Valley Bridge Bank. There has been substantial interest from multiple parties, and the FDIC and the bidders need more time to explore all options in order to maximize value and achieve an optimal outcome.