New York Community Bank to absorb Signature’s assets

A subsidiary of New York Community Bank will assume all non-crypto deposits of Signature Bank, as well as a portion of its loan portfolio and all 40 bank branches of the shuttered bank, the Federal Deposit Insurance Corporation announced Sunday.

The New York State Department of Financial Services closed Signature Bank, a major multifamily lender in New York, last week and appointed the FDIC as receiver. 

The transaction with NYCB subsidiary Flagstar, announced by the FDIC Sunday, includes the purchase of $38.4 billion of Signature Bridge Bank’s assets, “including loans of $12.9 billion purchased at a discount of $2.7 billion.” About $60 billion in loans remain in receivership, the FDIC said. 

“The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion,” it said. “The exact cost will be determined when the FDIC terminates the receivership.”

New York-based Signature had total assets of $110 billion and total deposits of $89 billion — much of it landlords’ money — as of Dec. 31. Its $35.7 billion worth of real estate loans accounted for just under half the bank’s total lending business, according to its most recent regulatory filings. But fallout from the cryptocurrency crash left the bank scrambling to reassure investors that its exposure to crypto was not a threat.

The bid by the NYCB subsidiary did not include the $4 billion in Signature’s deposits related to its division focused on the crypto industry. 

The announcement after a tumultuous nine days that saw the collapse of Silicon Valley Bank and Signature Bank — the second- and third-largest bank failures in U.S. history — as well as UBS’s acquisition of European lending giant Credit Suisse for about $2 billion.