Flagstar Bank, a subsidiary of New York Community Bankcorp Inc., on Sunday agreed to assume most of Signature Bank’s deposits and some of its loans.
New York-based Signature Bank was closed by regulators last week, following the failures of Silicon Valley Bank and Silvergate Bank.
In a statement Sunday, the Federal Deposit Insurance Corp. said Flagstar will take over Signature’s 40 former branches effective Monday, and they will operate as normal.
Signature Bank depositors will automatically become Flagstar depositors, the FDIC said, with all deposits insured up to their limits. About $4 billion in deposits related to Signature’s digital banking business is not included in the deal, and the FDIC will provide those deposits directly to customers.
Sunday’s deal includes the purchase of about $38.4 billion in assets from the former Signature Bank, including loans of $12.9 billion purchased at a discount of $2.7 billion.
About $60 billion in Signature’s loans will remain in receivership for later disposition by the FDIC. The FDIC also received equity appreciation rights in New York Community Bancorp NYCB, -4.66% common stock with a potential value of up to $300 million.
The FDIC estimated that the cost of the failure of Signature Bank to its Deposit Insurance Fund will be about $2.5 billion.
This article was originally published by Marketwatch.com. Read the original article here.