WASHINGTON, D.C. – In a move to ensure financial stability and depositor protection, the Federal Deposit Insurance Corporation (FDIC) announced a purchase and assumption agreement wherein Flagstar Bank, National Association, a subsidiary of New York Community Bancorp, Inc., will acquire substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association. This announcement, made on March 20, 2023, signifies a smooth transition for the vast majority of Signature Bank’s customers following the bank’s closure.
Effective Monday, March 20, 2023, the 40 former branches of Signature Bank will operate under the Flagstar Bank, N.A., banner. Customers can expect branches to be open during their regular business hours. Signature Bridge Bank, N.A., customers are advised to continue utilizing their existing branches until Flagstar Bank, N.A., provides further notification regarding full-service banking availability at Flagstar Bank locations.
For depositors of Signature Bridge Bank, N.A., excluding those with cash deposits linked to the digital-asset banking sector, the transition will be seamless. They will automatically become depositors of Flagstar Bank, N.A., with all deposits maintaining FDIC insurance coverage up to the legal limits. It’s important to note that Flagstar Bank’s acquisition bid specifically excluded approximately $4 billion in deposits associated with Signature Bank’s digital-assets banking business. The FDIC will directly manage the return of these particular deposits to customers with related accounts. For any inquiries, affected customers can contact (866) 744-5463 for assistance.
Signature Bridge Bank, N.A., was established by the FDIC on March 12, 2023, as a temporary entity to manage the operations of Signature Bank, New York, New York. This followed the closure of Signature Bank by the New York State Department of Financial Services, which subsequently appointed the FDIC as receiver.
At the close of 2022, Signature Bank held total deposits of $88.6 billion and assets totaling $110.4 billion. The current transaction involves Flagstar Bank purchasing approximately $38.4 billion of Signature Bridge Bank, N.A.’s assets, which includes $12.9 billion in loans acquired at a $2.7 billion discount. The remaining approximately $60 billion in loans will be managed by the FDIC receivership for future disposition. Furthermore, the FDIC is set to receive equity appreciation rights in New York Community Bancorp, Inc., common stock, potentially valued at up to $300 million.
The FDIC estimates the failure of Signature Bank will cost its Deposit Insurance Fund roughly $2.5 billion. The precise final cost will be determined upon the FDIC’s termination of the receivership.
Customers seeking more detailed information about this transaction are encouraged to visit the FDIC’s official website: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/signature-ny.html.
