New York Community Bank to buy failed Signature Bank in $2.7 bn deal

New York Community Bank has agreed to buy a significant chunk of the failed Signature Bank in a USD 2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday.

The 40 branches of Signature Bank will become Flagstar Bank, starting Monday. Flagstar is one of New York Community Bank's subsidiaries.

The deal will include the purchase of USD 38.4 billion in Signature Bank's assets.

The FDIC said USD 60 billion in Signature Bank's loans will remain in receivership and are expected to be sold off in time.

The FDIC says it expects Signature Bank's failure to cost the deposit insurance fund USD 2.5 billion, but that figure may change as the regulator sells off assets. The deposit insurance fund is paid for by assessments on banks and taxpayers do not bear the direct cost when a bank fails.