In a recent development in the banking industry, the Federal Deposit Insurance Corporation (FDIC) has entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association, by Flagstar Bank, National Association, a wholly owned subsidiary of New York Community Bancorp, Inc.

This acquisition was completed on Monday, March 20, 2023, with the 40 former branches of Signature Bank set to operate under New York Community Bancorp’s Flagstar Bank, N.A.

Depositors of Signature Bridge Bank, N.A., other than cash depositors related to the digital-asset banking businesses, will automatically become depositors of the assuming institution. All deposits assumed by Flagstar Bank, N.A., will continue to be insured by the FDIC up to the insurance limit. The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion. The exact cost will be determined when the FDIC terminates the receivership.

This acquisition was necessitated by the closure of Signature Bank, New York, New York, by the New York State Department of Financial Services. Signature Bridge Bank, N.A. was created by the FDIC on March 12, 2023, to take over the operations of Signature Bank.

As of December 31, 2022, the former Signature Bank had total deposits of $88.6 billion and total assets of $110.4 billion. Today’s transaction included the purchase of about $38.4 billion of Signature Bridge Bank, N.A.’s assets, including loans of $12.9 billion purchased at a discount of $2.7 billion. Approximately $60 billion in loans will remain in the receivership for later disposition by the FDIC.

The acquisition by Flagstar Bank, N.A. did not include approximately $4 billion of deposits related to the former Signature Bank’s digital-assets banking business. The FDIC will provide these deposits directly to customers whose accounts are associated with the digital-asset banking businesses. Questions may be directed to (866) 744-5463.

As part of the agreement, the FDIC received equity appreciation rights in New York Community Bancorp, Inc. common stock with a potential value of up to $300 million. This acquisition has put the FDIC in a better position to manage the receivership of Signature Bank and recover some of the costs incurred by the failure of the bank.

The acquiring institution, Flagstar Bank, N.A., has assured customers of Signature Bridge Bank, N.A. that their banking services will not be disrupted and that they should continue to use their current branch until they receive notice from the assuming institution that full-service banking is available at branches of Flagstar Bank, N.A. This acquisition has put the FDIC in a better position to manage the receivership of Signature Bank and recover some of the costs incurred by the failure of the bank.

#FDIC #SignatureBank #Flagstar #SVB #azcoinnews

This article was republished from azcoinnews.com

Hey everyone, it’s Firoz and I’m here to break down the massive announcement by the #Fed and US policymakers that just happened today.

You know I’m all about giving you the real value and cutting through the noise, so let me tell you what this means for you and your business.

The Fed just stepped in and rescued two major banks, #SVB and #SignatureBank , from going bankrupt. These banks were in trouble because they had a lot of bad loans and deposits that they couldn’t pay back.

The Fed did two things:

They made sure that all the depositors of these banks got their money back. That means if you had an account with SVB or Signature Bank, you don’t have to worry about losing your cash. You can access it starting Monday, March 13.

They created a new facility called Bank Funding Term Program (BFTP) to provide liquidity to banks under stress. That means if other banks face similar problems in the future, they can borrow money from the Fed by posting their bonds as collateral.

This is huge, because it prevents a domino effect of bank failures that could have crashed the whole financial system. #buildtogether

But here’s the catch:

The shareholders and certain unsecured debtholders of these banks will not be protected. That means if you invested in these banks’ stocks or bonds, you’re out of luck. You just lost your money. Sorry equity investors, do your homework.

The bonds that the banks post as collateral will be valued at par. That means the Fed will ignore the market value of these bonds, which could be much lower than their face value. This is a sweet deal for the banks, because they can get rid of their junk bonds and get cash in return.

The funding that the banks get from the Fed will be at 1-year OIS plus 10 bps spread on top. That means the banks will pay a very low interest rate to borrow money from the Fed, based on the market expectation of the Fed Funds rate plus a small premium. This is also a great deal for the banks, because they can get cheap funding for a long time.

So what does this mean for you?

Well, it depends on how you look at it.

On one hand, this is good news for the economy and the stability of the banking system. It shows that the Fed is willing and able to act swiftly and decisively to prevent a financial crisis. It also shows that the Fed is supportive of innovation and entrepreneurship, because SVB and Signature Bank are known for serving tech startups and crypto companies.

On the other hand, this is bad news for the moral hazard and the fairness of the market. It shows that the Fed is bailing out some banks that made bad decisions and took excessive risks. It also shows that the Fed is favoring some banks over others, by giving them preferential treatment and access to cheap funding.

So how do you feel about this?

Are you happy that your money is safe and that the economy is stable?

Or are you angry that some banks got away with their mistakes and that the market is rigged?

Let me know in the comments below.

And remember, this is not financial advice. This is just my opinion based on what I read and what I think. #crypto2023

If you liked this article, please share it with your friends and follow me.

#ElonMusk the CEO of Tesla, offered his opinions on the continuing crisis brought on by bank collapses. This occurs amid intense criticism of the way regulators handle banks. The value of bank equities fell dramatically throughout markets as a result of the failure of #SiliconValley Bank and #SignatureBank in the United States as well as the most recent emergency merger agreement between #CreditSuisse and UBS Group. In the meantime, the cryptocurrency market exhibited inverse behavior to the macro trend driven by the news of bank crises.

In the meantime, Silicon Valley Bank, which is already functioning as a nationally chartered bank, is being acquired by the Federal Deposit Insurance Corp (FDIC), which is improving the bidding process for the acquisition. On Monday, the news of the Credit Suisse UBS merger caused a decline in bank and bond shares since investors in the riskier Credit Suisse bonds suffered significant losses because the agreement essentially caused the $17 billion worth of Credit Suisse notes to be written off.

Musk recently compared the bankrupt cryptocurrency exchange #FTX to Lehman Brothers, Credit Suisse, and Silicon Valley Bank in a tweet. This expresses his opinion on the devastating impact the failure of the Sam Bankman-Fried corporation had. The millionaire is well-known in the cryptocurrency community not just for his connections to memecoin Dogecoin (DOGE), but also for his strong relationships with CZ, CEO of Binance.

Announcing the acquisition of the assets of Signature Bank, including its $36 billion in debt and subprime lending activities, is New York Community Bancorp. One of the largest purchases in the #banking industry in recent years, the deal is projected to be worth $38 billion.

New York Community Bancorp said in a statement that it will put a lot of effort into servicing subprime loans for clients of Signature Bank. The action is intended to boost the bank's position in the market for subprime loans, which has been expanding quickly in recent years.

The acquisition is anticipated to have a beneficial economic impact on New York City since it will increase local employment possibilities. The #FDIC has also said that, with the exception of digital bank accounts, #SignatureBank deposits would be accepted by subsidiaries of New York Community Bank.

John Smith, the CEO of New York Community Bank, expressed his joy about the purchase and said that it marks a significant turning point for the bank. He said,

“we are thrilled to announce the acquisition of Signature Bank’s assets, which will help us strengthen our position in the subprime lending market and expand our customer base.”

Customers of Signature Bank will gain from the purchase as they now have access to a greater choice of financial goods and services. The action is a component of New York Community Bancorp's plan to expand its operations and gain market share in the banking industry.

The transaction, which has received board approval from both New York Community Bancorp and Signature Bank, is anticipated to close before the end of the year. The two banks have guaranteed their clients that there won't be any interruptions in financial services throughout the transfer.

The #SVB and #SignatureBank bid deadline has been set by the #FDIC on March 17. Buyers must discontinue any cryptocurrency-related business.

Financial institutions interested in purchasing Silicon Valley Bank and Signature Bank before they go out of business have until Friday, March 17, according to FDIC officials.

Selling Silicon Valley Bank and Signature Bank completely is the aim. Consider selling some of the shares of the two banks if you can't sell it all.

To provide donors an advantage over private equity firms, only bidders with active bank charters are permitted to review banks' financials before submitting their offers.

According to rumors, the buyer of Signature Bank will have to consent to giving up all of the bank's cryptocurrency operations.

Regulators have highlighted that Signature Bank's closure is due to a crisis of confidence in its management, not connection with #cryptocurrency startups, despite the bank's reputation as one of two crypto-friendly banks. Its leadership nevertheless views it as a campaign to stop banks from working with cryptocurrency service providers.

Silicon Valley Bank, Signature Bank, and Piper Sandler, the company in charge of the auction, all promptly reacted to demands for comment, but the FDIC declined to speak on its behalf.

After authorities took over Silicon Valley Bank (SVB) on Friday and Signature Bank (SBNY.O) on Sunday, in a turbulent weekend that rippled throughout the whole global financial system, the latest auctions demonstrate how the FDIC is working in tandem to return lenders to the private sector.

#Flagstar Bank has agreed to buy #SignatureBank in a deal that does not include the bank's #cryptocurrency deposits. Several pundits have accused the US government of advancing an anti-crypto agenda as a result of the decision.

The Federal Deposit Insurance Corporation (FDIC) announced a purchase deal with Flagstar Bank, a subsidiary of New York Community Bancorp, Inc. The Signature bank's "essentially all deposits and some loan portfolios" are included in the transaction.

Nevertheless, the acquisition excludes $4 billion in deposits from Signature Bank's crypto-related businesses. Instead, the FDIC stated that the deposits would be returned to clients immediately.

FDIC Receivership Signet

Together with Web3 business deposits, the agreement excludes Signature Bank's payment network, Signet. It was used by many Web3 businesses, including Circle, the creator of the stablecoin USDC.

An FDIC representative confirmed to Bloomberg that Signet will stay under the agency's authority and "will be subject to later arrangement."

Reuters report that the regulators requested the bidders to "give up all the #crypto operations" at the Signature bank. The FDIC later stated that this was false. Now, venture capitalist Nic Carter believes that the FDIC lied and that Reuters was correct. Carter is also certain that regulators have launched Operation Choke Point 2.0 in order to restrict crypto companies' access to banking.

The Signature Bank Has Reopened

Flagstar took over ownership of 40 Signature Bank locations on Monday. A subsidiary of New York Community Bancorp purchased $38.4 billion in assets and $12.9 billion in loans at a $2.7 billion discount. The agreement also excludes around $60 billion in debts that are still under #FDIC receivership. The FDIC acquired common shares with a potential value of up to $300 million as part of the arrangement.

The Federal Reserve liquidated the Signature bank on March 12 to "defend the US economy," however some believe the closure was for political purposes because the bank was solvent.