New York Community Bancorp subsidiary to buy assets of failed Signature Bank

A subsidiary of New York Community Bancorp Inc. entered into an agreement to purchase substantially all the deposits and certain loan portfolios of Signature Bridge Bank NA, the Federal Deposit Insurance Corp. said in a March 19 news release.

The transaction included the purchase of about $38.4 billion of Signature Bridge Bank's assets, including loans of $12.9 billion purchased at a discount of $2.7 billion, the regulator said. About $60 billion in loans will remain in the receivership for later disposition by the FDIC, it added. The FDIC said the cost of the failure of Signature Bank to its Deposit Insurance Fund will be about $2.5 billion.

The FDIC received equity appreciation rights in New York Community Bancorp's common stock with a potential value of up to $300 million.

The 40 former branches of the Signature Bank will now operate under New York Community Bancorp subsidiary Flagstar Bank NA. Signature Bridge Bank's depositors — excluding those related to the digital banking business — automatically became depositors of the buyer, the FDIC said.

Flagstar Bank's bid did not include approximately $4 billion of deposits related to the former Signature Bank's digital banking business, and the FDIC will provide those deposits directly to customers. All deposits assumed by Flagstar Bank, will continue to be insured up to the FDIC insurance limit.

On March 12, the New York Department of Financial Services announced that it took possession of New York-based Signature Bank to protect depositors and appointed the Federal Deposit Insurance Corp. as the receiver of Signature Bank. The bank had total assets of roughly $110.36 billion and total deposits of roughly $88.59 billion as of Dec. 31, 2022.

The FDIC said it established the bridge bank to operate as a full-service bank as the agency marketed it to potential buyers.

Jefferies LLC and Morgan Stanley & Co. LLC were financial advisers to New York Community in connection with the transaction, while Sullivan & Cromwell LLP acted as its legal adviser, according to a regulatory filing.

Piper Sandler served as financial adviser to FDIC on the deal, according to an email from the investment bank.

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