A New York Community Bancorp (NYSE:NYCB) subsidiary has reached a deal with regulators to buy deposits and loans from Signature Bank, sending the company’s shares soaring.
The deal would see the subsidiary, Flagstar Bank, take on nearly all of New York-based Signature Bank’s deposits, a portion of its loan portfolios and all 40 of its former branches, according to the Federal Deposit Insurance Corporation (FDIC).
Shares of NYCB jumped more than 35% to $8.84 Monday afternoon.
Specifically, Flagstar will buy $12.9 billion worth of loans at a discount of $2.7 billion. The FDIC estimated the deal would cost its Deposit Insurance Fund about $2.5 billion. The fund had held $128.2 billion at the end of 2022, according to previous reports.
After the deal, roughly $60 billion of Signature Bank's loans and $4 billion of its deposits would remain with it in receivership, the agency said.
Signature Bank was closed by state authorities on Sunday March 12, two days after the collapse of Silicon Valley Bank kicked off a crisis.
The latest FDIC statement did not provide an update on SVB, which had $209 billion in assets compared to Signature’s $110.36 billion. Earlier, the agency announced that it would extend the window for bidding on SVB’s former assets.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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