Flagstar Bank — a subsidiary of New York Community Bancorp, Inc. — will acquire Signature Bank, as per a press release sent out by the Federal Deposit Insurance Corporation (FDIC) on March 19.
Signature was up for sale and being auctioned by the FDIC — with the caveat that any buyer would be forced to divest from crypto and digital banking services, according to a Reuters report.
That warning has proven to be true, as stated by the FDIC in its press release:
“Depositors of Signature Bridge Bank, N.A., other than depositors related to the digital banking business, will automatically become depositors of the assuming institution.”
The FDIC added that all deposits assumed by Signature’s new owners will continue to be insured by the FDIC up to the insurance limit, adding that:
“Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business.”
The $4 billion deposits not covered by Flagstar Bank’s bid will be provided by the FDIC “directly to customers whose accounts are associated with the digital banking business.”
According to public filings, Flagstar is owned and operated by the New York-based Community Bancorp, Inc. — which goes back to 1851 — established in Vermont as a growth-orientated bank that is now one of the largest regional banks in the country, with 395 locations.
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