Michigan-based Flagstar Bank has announced that it has acquired Signature Bank, a private New York-based lender, although it has excluded Signature’s cryptocurrency exchange business. The move allows Flagstar to enter the New York marketspace while also adhering to federal banking regulations regarding cryptocurrencies. The bank has stated that it plans to integrate Signature’s banking, business, and commercial lending operations while remaining committed to the preservation and protection of the bank’s customer relationships. The deal is expected to be completed in the fourth quarter of 2021.
Flagstar Bank Acquires Signature Bank After FDIC Placed it in Receivership
In a recent development, Flagstar Bank, a subsidiary of New York Community Bancorp, Inc., has acquired Signature Bank after the FDIC placed it in receivership following an unsuccessful first attempt to find a buyer. The acquisition included the purchase of $38.4 billion of Signature Bridge Bank’s assets, with approximately $60 billion in loans remaining in the receivership for later disposition by the FDIC.
Contrary to earlier reports, the FDIC did not require potential buyers to divest from the crypto industry but merely warned of the risks involved. However, Flagstar Bank has excluded cryptocurrency-related customers from the deposits it acquired, raising concerns about its divestment from the industry.
The move by Flagstar Bank to exclude crypto customers could have been coincidental, given that only a fraction of Signature Bank’s deposits and assets were acquired. Regardless, Flagstar’s divestment from the industry extends to operations as well, leaving the real-time payment network, Signet, under receivership at the FDIC.
Though it still appears operational, the sale of the payment network, along with other assets and deposits belonging to the now-defunct Signature Bank, will be done at a later date. Circle has already moved its operations to BNY Mellon in response to the uncertainty surrounding Signet’s future.
For now, all customers are directed to carry out their banking operations as usual until informed otherwise by Flagstar Bank. The acquisition also included equity appreciation right in the form of common stock in Flagstar’s parent company, worth approximately $300 million as part of the deal.
In conclusion, the acquisition of Signature Bank by Flagstar Bank has raised concerns within the crypto industry due to the latter’s exclusion of crypto-related customers. However, it remains uncertain how the acquisition will impact Signet’s future operations and the crypto industry as a whole.
1. Flagstar Bank’s Crypto Divestment Raises Concerns Following Signature Bank Acquisition
2. Signet Payment Network Left in Limbo Following Signature Bank Acquisition by Flagstar Bank