Signature Bank, a financial institution known for its favourable stance toward cryptocurrencies, has been acquired by Flagstar Bank, a subsidiary of New York Community Bancorp, just a week after it collapsed.
On March 19, 2023, the Federal Deposit Insurance Corporation (FDIC) revealed that a purchase and assumption agreement had been reached. According to this agreement, Flagstar bank will take over non-cryptocurrency-related deposits worth $38.4 billion and loans amounting to $12.9 billion.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh. pic.twitter.com/b9RBvYtGF7
— FDIC (@FDICgov) March 19, 2023
Flagstar Bank will begin operating in place of Signature Bank’s 40 branches starting March 20, 2023. Flagstar Bank will assume all deposits and continue to insure them up to the $250,000 limit.
The FDIC stated that the 40 branches would operate during regular business hours. According to the agency, Signature Bank, N.A. customers should continue using their current branch until they receive notification from Flagstar Bank, N.A., that full-service banking is available at their branches.
Deposits held by Signature Bank’s digital assets division totaling about $4 billion were excluded from the agreement with Flagstar Bank. The FDIC confirmed that it would transfer these deposits directly to customers who have opened a digital banking account.
Recall that the FDIC announced on March 16, 2023, that any investor who wants to buy Signature Bank must agree to stop all cryptocurrency-related activities conducted by the bank.
Meanwhile, on March 14, the FDIC announced its plan to re-attempt the sale of Silicon Valley Bank after a failed auction on March 12, 2023. The FDIC rejected the sole bid during the failed auction and cited no reasons for its decision. It is worth noting that no prominent US banks participated in the auction. It is currently unknown when the second auction will take place.
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