The Federal Deposit Insurance Corp. (FDIC) said late Sunday, that New York Community Bank has agreed to buy a substantial segment of the failed Signature Bank.
Signature’s Bank failure came following the collapse of Silicon Valley Bank with about two days. The $2.7bn deal will include the purchase of $38.4 billion in Signature Bank’s assets.
The current assets worth represents around the third of Signature’s total when the bank failed a week ago.
Signature’s depositors were anxious following the recent collapse of Silicon Valley Bank. Concerns were also fuelled by the bank’s high amount of uninsured deposits; in addition to tech-focused lending policies such as cryptocurrencies.
FDIC expects Signature’s failure to cost the deposit insurance fund $2.5bn. The figure may change upon selling the bank’s assets, however. Signature Bank branches will hold the name of Flagstar Bank, one of New York Community Bank’s subsidiaries.
