According to a recent Twitter post by the Fedral Deposits Insuarance Company (FDIC) Flagsta bank which is a Michigan-based bank that has one of the largest residential mortgage servicers in the United States has taken to announcement that it has entered in an agreement with the subsidiary of New York Community Bancorp, Inc inorderto purchase and assume deposits and assets out of Signature Bridge Bank.
In addition, Flagstar Bank will now oversee all 40 branches of Signature Bank. According to insiders familiar with the matter, the acquisition of the financial institution will begin on March 20th.
Signature Bridge Bank was established by the FDIC to assume the operations of Signature Bank, which had collapsed in its operations. The New York State Department of Financial Services subsequently appointed the FDIC as the receiver of Signature Bank’s assets.
According to a press release, the original Signature Bank had a total of $88.6 billion in deposits and $110.4 billion in assets. The recent transaction involves the purchase of approximately $38.4 billion worth of assets from Signature Bridge Bank, N.A., including loans worth $12.9 billion at a discounted price of $2.7 billion.
The FDIC will retain around $60 billion in loans for future disposal. As part of the deal, the FDIC has been granted equity appreciation rights in New York Community Bancorp, Inc.’s common stock, with the potential to reach a value of $300 million.
Signature Bank’s collapse ranks as the third-largest failure of a financial institution in the history of the United States, trailing behind the 2008 collapse of Washington Mutual.
However, the US has experienced numerous financial institution failures in recent years. Just this year, Silicon Valley Bank (SVB), one of the major financial institutions, also collapsed, negatively impacting the stablecoin market.