New York Community Bank has agreed to purchase a significant portion of Signature Bank, a prominent lender for businesses in the tristate area, in a $2.7 billion deal after the latter experienced a failure last week. The Federal Deposit Insurance Corp. announced on Sunday that New York Community Bank would acquire $38.4 billion worth of Signature Bank's assets, which amounts to approximately one-third of the bank's total $110 billion in assets at the time of its failure. The remaining $60 billion in loans will remain in receivership until they are sold off at a later date.
Signature Bank's collapse occurred only two days after Silicon Valley Bank's collapse, which caused concern among depositors due to Signature Bank's recent expansion into the cryptocurrency industry. The bank became the third-largest bank failure in US history, according to a joint statement from the US Treasury, Federal Reserve, and Federal Deposit Insurance Corp. issued last Sunday.
The 40 branches of Signature Bank will be rebranded as Flagstar Bank, a subsidiary of New York Community Bank, starting Monday. Governor Kathy Hochul has attempted to reassure New Yorkers that the state's banking system is secure after Signature Bank's demise, stating that "New Yorkers should have confidence that their money is secure, wherever they've chosen to bank." The collapse of Signature Bank is expected to cost the deposit insurance fund $2.5 billion, which is funded by bank assessments.