The Bank Slate


New York Community buys Signature deposits, some loans

New York Community Bancorp in Hicksville has acquired “substantially all deposits and certain loan portfolios” tied to Signature Bridge Bank in New York.

The Federal Deposit Insurance Corp. said in a press release that the $90 billion-asset New York Community unit Flagstar Bank had entered into a purchase and assumption agreement.

Regulators closed the $110 billion-asset Signature on March 12, setting up a bridge bank.

New York Community will gain 40 former Signature branches in New York, California, Connecticut, North Carolina and Nevada. It bought $12.9 billion of loans at a $2.7 billion discount.

New York Community said in a separate release that it gained $25 billion of cash and $34 billion of deposits, including “meaningful” noninterest deposits. New York Community said it plans to use excess liquidity to pay down a substantial amount of wholesale borrowings.

The loans included health care Small Business Administration loans, representing new verticals for New York Community. The deal did not include fund banking, commercial real estate and multifamily loan portfolios. It excluded crypto deposits and Signature’s credit card business.

New York Community said the deal should be 20% accretive to its earnings per share and immediately accretive to its tangible book value.

Flagstar’s bid did not include about $4 billion of deposits tied to Signature’s digital banking business. The FDIC said will provide these deposits directly to customers whose accounts are associated with the digital banking business.

About $60 billion of Signature’s loans will remain in the receivership for later disposition.

The FDIC said it received equity appreciation rights in New York Community Bancorp’s common stock with a potential value of up to $300 million. The agency estimated that Signature’s failure will cost the Deposit Insurance Fund about $2.5 billion.

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