Signature Bank collapse: Signature Bank's deposits and some of its loans will be taken over by a subsidiary of New York Community Bancorp, according to recent reports. The move is expected to calm some of the turmoil that has engulfed US regional banks in the recent times.
Here is what we know so far:
1. The Federal Deposit Insurance Corp (FDIC) said that NYCB's subsidiary Flagstar Bank will acquire substantially all of Signature Bank's deposits, some of its loan portfolios and all 40 of its former branches.
2. Signature Bank's 40 branches will operate as Flagstar Bank, starting from Monday.
3. The deal will include the purchase of $38.4 billion in Signature Bank’s assets, a little more than a third of Signature’s total when the bank failed a week ago, AP reported.
4. The FDIC also said that roughly $60 billion in Signature Bank’s loans and $4 billion of its deposits will remain in receivership.
5. Signature Bank was the second bank to fail in the recent banking crisis, about two days after the collapse of the Silicon Valley Bank.
6. Signature, based in New York, had $110.36 billion in assets, whereas SVB had $209 billion.
7. Earlier on Sunday, Reuters reported that the FDIC would relaunch its auction for SVB's assets after failing to attract buyers for the whole bank.
8. Under the arrangement for Signature Bank assets, Flagstar will buy $12.9 billion of loans at a discount of $2.7 billion.
9. The FDIC says it expects Signature Bank’s failure to cost the deposit insurance fund $2.5 billion, but that figure may change as the regulator sells off assets.
10. Signature was a large commercial lender in the tristate area, but had in recent years gotten into cryptocurrencies as a potential growth business.
(With agency inputs)
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