: New York Community Bancorp says FDIC will sell shares held by Signature Bank’s replacement bank


Flagstar Bank parent New York Community Bancorp Inc. NYCB, -1.26% on Tuesday said that the FDIC had agreed to sell 39 million company shares currently owned by the institution that the agency set up in place of the recently-failed Signature Bank. That financial institution, Signature Bridge Bank N.A., which the FDIC created in March to handle the failed bank’s operations, will get all the proceeds from the offering. The offering comes after Flagstar, a regional bank, scooped up billions of the Signature successor bank’s deposits, loans and cash from from the FDIC in March. Before the proposed offering, Signature Bridge Bank owned the 39 million shares via an “Equity Appreciation Instrument” — issued to it by New York Community Bancorp as part of the asset purchase in March — initially intended to allow the FDIC to participate in NYCB stock gains. Under the terms of that instrument, Signature Bridge Bank “agreed to use all reasonable efforts to sell the shares it owns by no later than June 8, 2023 and the Company agreed to use reasonable efforts to facilitate such a sale.” Flagstar Bank runs 435 bank branches in the Northeast and Midwest, as well as in the Southeast and the West Coast. Shares of New York Community Bancorp rose 1.9% after hours.

This article was originally published by Marketwatch.com. Read the original article here.

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