A subsidiary of New York Community Bancorp has entered into an agreement with U.S. regulators to purchase deposits and loans from New York-based Signature Bank, which was closed a week ago.
The Federal Deposit Insurance Corporation said the deal would see the subsidiary, Flagstar Bank, assume substantially all of Signature Bank’s deposits, some of its loan portfolios and all 40 of its former branches. Roughly $60 billion of Signature Bank’s loans and $4 billion of its deposits would remain with it in receivership, the agency said.
The Sunday announcement addresses one of two failed banks the FDIC is holding under receivership.
The statement did not refer to the other, Silicon Valley Bank, a much larger bank that regulators took over two days before Signature.
Signature had $110.36 billion in assets, whereas SVB had $209 billion.
Reuters reported earlier on Sunday that the FDIC would relaunch its auction for SVB’s assets after failing to attract buyers for the whole bank.
Under the arrangement for Signature Bank assets, Flagstar will buy $12.9 billion of loans at a discount of $2.7 billion.
The FDIC estimated the deal would cost its Deposit Insurance Fund approximately $2.5 billion. The agency previously reported that the fund had held $128.2 billion at the end of 2022.
