New York Community Bank will buy a major portion of Signature Bank, a large lender for tristate businesses, in a $2.7 billion deal after the latter failed a week ago.
The Federal Deposit Insurance Corp. on Sunday announced the deal in which New York Community Bank agreed to purchase $38.4 billion Signature Bank’s assets — about a third of its total $110 billion in assets when it failed last week.
The remaining $60 billion in Signature Bank’s loans will stay in receivership until they are eventually sold off, the FDIC said.
The Manhattan-based bank failed just 48 hours after Silicon Valley Bank collapsed and sent shock waves through the stock market. Like Silicon Valley Bank, Signature Bank had recently expanded into the cryptocurrency industry. After the California bank fell apart, depositors worried about the status of Signature Bank due to its reliance on crypto and its high amount of uninsured deposits.
Signature became the third-largest bank failure in US history when regulators shuttered it last week over a “similar systemic risk exception,” according to a joint statement from the heads of the US Treasury, Federal Reserve and Federal Deposit Insurance Corp released last Sunday. Silicon Valley was the second-largest.
Signature’s collapse is expected to cost the deposit insurance fund, which is paid for by bank assessments, $2.5 billion.
The 40 branches of Signature Bank will become Flagstar Bank — a subsidiary of New York Community Bank — beginning Monday.
Gov. Kathy Hochul has tried to assure New Yorkers that the state’s banking system is secure following Signature’s demise last week.
“The main message I want to deliver is New Yorkers should have confidence that their money is secure,” Hochul told reporters in Manhattan last Monday. “Wherever they’ve chosen to bank, that is protected.”
With Post wires
[Written in collaboration with other media outlets with information from the following sources]
