The FDIC plans to sell Signature Bank's deposits to Flagstar Bank, excluding those in its digital banking business, some loans, and Signature's 40 branches
A subsidiary of New York Community Bancorp (NYCB.N) has entered into an agreement with U.S. regulators to purchase deposits and loans …
ReutersPete Schroeder
Context & Ripple Effects
Signature entered FDIC resolution after New York closed it under a systemic-risk exception, with regulators committing to protect depositors. This agreement is an early step in moving parts of the failed bank into a new operating home rather than leaving the entire franchise with the receiver.
The carve-outs are consequential: later coverage specified that crypto clients faced an account-closure deadline after Flagstar’s bid omitted crypto-related deposits. That makes the division between acquired conventional banking assets and excluded digital-banking business central to the deal’s impact.
First-order effects
Flagstar, a New York Community Bancorp subsidiary, takes on the agreed Signature deposits and loans, while the FDIC retains responsibility for the excluded digital-banking deposits, certain loans, and branches described in the report.
Customers and borrowers tied to the transferred portfolio shift to a new bank relationship; customers in excluded businesses remain dependent on the FDIC’s separate disposition process.
Second-order effects
The split forces the FDIC to find separate solutions for the excluded assets and deposit base, rather than resolving Signature through one whole-bank sale.
Digital-banking and crypto-linked customers face greater continuity risk than customers whose accounts transfer, as acquiring banks can choose conventional deposits and loans without taking every specialized business line.
Third-order effects
If resolutions continue to be structured around sellable core-bank assets and separately managed specialized deposits, failed-bank transactions may leave niche customer segments with fewer successor-bank options.
The episode points to a more selective market for bank franchises: buyers may value deposits and lending relationships while avoiding businesses whose operational or regulatory profile they do not want to absorb.
The trend: Bank-failure resolutions are increasingly testing whether regulators can preserve core banking services while carving out specialized digital and crypto-linked businesses for separate treatment.
Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://www.fdic.gov/.... https://twitter.com/...
SIGNATURE BANK ACQUIRED BY FLAGSTAR: - $4 billion in digital asset deposits NOT included; will be dispersed directly by FDIC - FDIC anticipates losses on insurance fund of up to $2.5 BILLION Suggests SBNY was NOT solvent at time of shutdown... https://www.fdic.gov/...
Signature Bank acquired by Flagstar: - $4b in digital asset deposits will be returned to customers and not assumed by Flagstar - Will cost the DIF $2.5b (suggests SBNY was not solvent at shutdown) https://www.fdic.gov/...
The FDIC has found a buyer for Signature Bank—Flagstar Bank will be taking over for most depositors. Flagstar did not assume about $4B in deposits related to Signature's crypto business. Signature had ~17.6B in crypto-related deposits in January, most of which already left. https…
When they say “not including the digital banking business” is that a fancy way to say crypto got kicked out? Or are clients who bank digitally w/no branch side you second class clients? https://www.fdic.gov/...
“The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion. The exact cost will be determined when the FDIC terminates the receivership.” That's not great, but not terrible either. https://twitter.com/...
Part or all of Signature's digital banking business will not be sold... we should find out why. We are also learning some financial details, FDIC has yet to find a buyer for their $60b loan book and expects their failure to cost the FDIC $2.5b. https://www.fdic.gov/...... https:/…
Hearing from a few of their clients that “digital banking” does indeed mean their crypto operations. So the Signature bank takeover will leave any of their crypto clients unbanked. https://www.fdic.gov/...
NYCB (Flagstar) has taken on virtually all #SignatureBank's deposits but only a third of the assets. It won't touch the rest with a barge pole - including the Signet network. Too toxic for it.
Recently failed Signature Bank was just bought by Flagstar Bank from the FDIC, which is interesting because Flagstar was actually smaller than Signature at the start of this year. As of December 31st Flagstar had assets of $90B and Signature had assets of $110B! https://twitter.c…
“Flagstar Bank's bid did not include approximately $4 billion of deposits related to the former Signature Bank's digital banking business. The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business.”
The FDIC entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank by Flagstar bank, a wholly owned subsidiary of New York Community Bancorp, Inc. $NYCB https://www.fdic.gov/...
@CaitlinLong_ So “loans of $12.9 billion purchased at a discount of $2.7 billion” is where @FDICGov created large enough arbitrary emergency liquidation loss to hit the target narrative “FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be …
NY Community Bancorp taking over Signature and *will not* be servicing any depositors related to its “digital banking business.” FDIC will be directly returning $4B+ of deposits related to “digital banking” to the depositors. Looks like that's settled. https://twitter.com/...