Flagstar Bank Acquires Signature Bank’s Assets and Branches, Excluding Cryptocurrency Operations

On Monday, astir a week aft the illness of Signature Bank, the Federal Deposit Insurance Corporation (FDIC) announced that Flagstar Bank, a wholly owned subsidiary of New York Community Bancorp, acquired 40 erstwhile branches of Signature and its assets. Flagstar assumed astir each of Signature’s deposits, but for $4 cardinal of deposits related to the bank’s crypto banking business.

FDIC Expects $2.5 Billion Loss from Signature Bank Failure, Extends Bid Window for Silicon Valley Bank

The FDIC has announced that Flagstar Bank, a subsidiary of New York Community Bancorp, has acquired the assets and slope branches of Signature Bank arsenic of March 20, 2023. The branches volition proceed to run during regular concern hours. With the objection of depositors related to the integer banking business, depositors of Signature Bank volition automatically go depositors of Flagstar Bank.

I truly anticipation we volition recognize however Signature Bank was selectively stripped of its integer assets concern earlier being acquired.

— David Marcus (@davidmarcus) March 20, 2023

Despite statements from the FDIC to the contrary, Flagstar purchased Signature Bank without acquiring its cryptocurrency operations. Sources acquainted with the merchantability had suggested that divestment of crypto activities was required, but the FDIC insisted past week that it would not beryllium necessary. The New York State Department of Financial Services besides stated publicly that Signature’s shutdown was unrelated to cryptocurrency, anterior to the FDIC’s announcement. Former person Barney Frank speculated that the closure of Signature was intended to convey an “anti-crypto” message.

The FDIC’s property merchandise connected Monday stated that Flagstar Bank volition not presume immoderate of Signature Bank’s cryptocurrency depositors oregon clients. “Flagstar Bank’s bid did not see astir $4 cardinal of deposits related to the erstwhile Signature Bank’s integer banking business,” the FDIC announced. The bureau besides said that it volition supply the deposits straight to customers associated with the integer banking business.

The FDIC’s announcement connected Monday sparked a treatment connected societal media, with immoderate speculating that a conspiracy mentation had been proven true. Caitlin Long, laminitis and CEO of Custodia Bank, tweeted astir the news: “They so kept retired the crypto deposits. Investigation time.” In summation to Flagstar not assuming Signature Bank’s cryptocurrency deposits, the FDIC besides noted that the authorities anticipates losses.

The FDIC estimated the outgo of Signature Bank’s nonaccomplishment to its Deposit Insurance Fund to beryllium astir $2.5 billion, according to the agency’s announcement. “The nonstop outgo volition beryllium determined erstwhile the FDIC terminates the receivership.” In addition, the FDIC extended the bid window for Silicon Valley Bank (SVB) connected Monday. Bids for SVB’s backstage slope are owed connected March 22, 2023, and bids for the span bank, Silicon Valley Bridge Bank, N.A., volition beryllium owed 2 days later.

What are your thoughts connected the FDIC’s determination not to see Signature Bank’s cryptocurrency deposits successful the acquisition by Flagstar Bank? Share your sentiment successful the comments conception below.

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