FDIC sells Signature Bank deposits to Flagstar, crypto not included
Mar 19. 2023
By Brayden Lindrea
The 40 branches of Signature Bank will officially reopen and operate as Flagstar Bank on March 20.
Only a week after its collapse, Signature Bank’s deposits and loans are set to be sold to Flagstar Bank, a subsidiary of New York Community Bancorp — crypto-related deposits however, will not be part of the deal.
The United States Federal Deposit Insurance Corporation (FDIC) announced the agreement on March 19, which will see $38.4 billion worth of non-cryptocurrency-related deposits and $12.9 billion in loans taken over by the Michigan-based bank under a “purchase and assumption agreement."
From March 20, Signature’s Bank 40 branches will begin operating as Flagstar Bank, where all deposits assumed by Flagstar Bank will continue to be insured up until the $250,000 insurance limit.
The takeover deal from Flagstar Bank did not include approximately $4 billion of deposits held by Signature Bank's digital assets business. Instead, the FDIC confirmed that it would transfer these deposits directly to customers who opened a digital banking account, stating:
“The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business.”
The $4 billion figure amounts to 4.5% of the total $88.6 billion deposits that Signature Bank had as of Dec. 31.
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