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Deposits and loans of Signature Bank, the recently collapsed NYC-based lender, are getting picked up by Flagstar Bank, a subsidiary of New York Community Bancorp (NYSE:NYCB), the Federal Deposit Insurance Corporation (FDIC) said on Sunday.
Under the terms of the agreement, Flagstar would acquire $12.9B of Signature Bank’s loans at a discount of $2.7B, substantially all of its deposits, as well as 40 former SBNY branches, soon-to-be rebranded as Flagstar.
The deal excludes Signet, Signature’s crypto-focused subsidiary, as well as ~$60B of loans and $4 billion of deposits – as the agency still seeks buyers and considers alternatives for these.
The Sunday FDIC announcement made no mention of the other major bank in distress – the now infamous Silicon Valley Bank (SVB), keeping its stakeholders in limbo. Earlier on Sunday Reuters reported the FDIC now plans to try auctioning off parts of SVB assets, after it failed to find buyers for the whole bank.
Shortly before their widely publicized collapses over a week ago, Signature had assets of $110.3B, while SVB had $209B.
Shares of NYCB are gaining over 20% premarket following the announcement. The company has received at least two Wall Street upgrades following the move. KBW and Wedbush both upgraded shares of NYCB to Outperform.
