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

On Monday, a few week after the collapse of Signature Bank, the Federal Deposit Insurance Corporation (FDIC) introduced that Flagstar Bank, a completely owned subsidiary of New York Community Bancorp, acquired 40 former branches of Signature and its property. Flagstar assumed almost all of Signature’s deposits, aside from $4 billion of deposits associated to the financial institution’s crypto banking enterprise.

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 property and financial institution branches of Signature Bank as of March 20, 2023. The branches will proceed to function throughout common enterprise hours. With the exception of depositors associated to the digital banking enterprise, depositors of Signature Bank will robotically turn into depositors of Flagstar Bank.

I actually hope we are going to perceive how Signature Bank was selectively stripped of its digital property enterprise earlier than being acquired.

— David Marcus (@davidmarcus) March 20, 2023

Despite statements from the FDIC on the contrary, Flagstar bought Signature Bank with out buying its cryptocurrency operations. Sources accustomed to the sale had suggested that divestment of crypto actions was required, however the FDIC insisted final week that it will not be crucial. The New York State Department of Financial Services additionally stated publicly that Signature’s shutdown was unrelated to cryptocurrency, previous to the FDIC’s announcement. Former politician Barney Frank speculated that the closure of Signature was meant to convey an “anti-crypto” message.

The FDIC’s press launch on Monday said that Flagstar Bank won’t assume any of Signature Bank’s cryptocurrency depositors or purchasers. “Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business,” the FDIC introduced. The company additionally mentioned that it’ll present the deposits on to clients related to the digital banking enterprise.

The FDIC’s announcement on Monday sparked a dialogue on social media, with some speculating {that a} conspiracy idea had been confirmed true. Caitlin Long, founder and CEO of Custodia Bank, tweeted in regards to the information: “They indeed kept out the crypto deposits. Investigation time.” In addition to Flagstar not assuming Signature Bank’s cryptocurrency deposits, the FDIC additionally famous that the federal government anticipates losses.

The FDIC estimated the price of Signature Bank’s failure to its Deposit Insurance Fund to be round $2.5 billion, based on the company’s announcement. “The exact cost will be determined when the FDIC terminates the receivership.” In addition, the FDIC extended the bid window for Silicon Valley Bank (SVB) on Monday. Bids for SVB’s non-public financial institution are due on March 22, 2023, and bids for the bridge financial institution, Silicon Valley Bridge Bank, N.A., will probably be due two days later.

What are your ideas on the FDIC’s choice to not embody Signature Bank’s cryptocurrency deposits within the acquisition by Flagstar Bank? Share your opinion within the feedback part under.