Failed Signature Bank Finds a Buyer

New York Community Bank will buy $38.4B in bank's assets
By Newser Editors and Wire Services
Posted Mar 20, 2023 2:40 AM CDT
Failed Signature Bank Finds a Buyer
A sign is displayed at a branch of Signature Bank in New York, Monday, March 13, 2023.   (AP Photo/Seth Wenig, File)

New York Community Bank has agreed to buy a significant chunk of the failed Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday. The 40 branches of Signature Bank will become Flagstar Bank, starting Monday, the AP reports. Flagstar is one of New York Community Bank's subsidiaries. The deal will include the purchase of $38.4 billion in Signature Bank's assets, a little more than a third of Signature's total when the bank failed a week ago. The FDIC said $60 billion in Signature Bank's loans will remain in receivership and are expected to be sold off in time.

Signature Bank was the second bank to fail in this banking crisis, roughly 48 hours after the collapse of Silicon Valley Bank. Signature, based in New York, was a large commercial lender in the tristate area, but had in recent years gotten into cryptocurrencies as a potential growth business. Meanwhile, First Citizens Bank has emerged as a possible buyer for Silicon Valley Bank, according to Bloomberg.

The news comes as the struggling-but-not-yet-failed Credit Suisse was taken over by UBS in a deal driven by Swiss regulators, and the Wall Street Journal reports that after that sale, the issue of struggling US-based First Republic Bank "looms large" for US regulators. Withdrawals stabilized Friday after First Republic got a $30 billion lifeline from a group of big banks, but NBC News reports that the bank's credit ratings were downgraded "deeper into junk status" Sunday when S&P Global Ratings cut its credit rating for the second time in a week, saying the $30 billion may not be enough to solve the bank's liquidity issues. (The Fed and other central banks on Sunday announced a move to "keep dollars flowing.")

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