Flagstar Bank Acquires Signature Bank, Excludes $4B in Digital Banking Deposits

• Flagstar Bank, a subsidiary of New York Community Bancorp, Inc., is set to acquire Signature Bank after the Federal Deposit Insurance Corporation (FDIC) announced the news.
• The FDIC has stated that all deposits assumed by Signature’s new owners will continue to be insured up to the insurance limit.
• However, Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business.

Flagstar Bank Acquires Signature Bank

The Federal Deposit Insurance Corporation (FDIC) announced on March 19th that Flagstar Bank — a subsidiary of New York Community Bancorp, Inc. — will acquire Signature Bank. All deposits assumed by Signature’s new owners will continue to be insured by the FDIC up to the insurance limit.

Digital Banking Business Excluded from Acquisition

However, Flagstar Bank’s bid did not include approximately $4 billion of deposits related to the former Signature Bank’s digital banking business. This was due to a condition imposed by the FDIC prior to its approval of any prospective buyer: that any acquiring bank must give up all crypto business and digital banking services.

New York Community Bancorp Background

Flagstar is owned and operated by New York-based Community Bancorp, Inc., which dates back to 1851 when it was established in Vermont as a growth-orientated bank. It has since become one of the largest regional banks in America with 395 locations across several states.

$4 Billion Deposits Transferred Directly To Customers

The $4 billion deposits not covered by Flagstar Bank’s bid will be provided directly to customers whose accounts are associated with the digital banking business, according to public filings released by the FDIC.

Conclusion

Signature finds its new home in Flagstar after weeks of auctioning at an uncertain future for its depositors and employees alike — with those associated with its digital banking services receiving $4 billion of compensation for their loss through direct deposit transfers from the FDIC itself.