New York Community Bancorp Inc. (NYCB) announced that its bank subsidiary, Flagstar Bank, has acquired certain assets and assumed certain liabilities of Signature Bridge Bank from the Federal Deposit Insurance Corporation (FDIC). All regulatory approvals, including approval from the Office of the Comptroller of the Currency (OCC), have been obtained, and the transaction has closed. In the deal, Flagstar acquired only certain financially and strategically complementary parts of Signature Bridge Bank that are intended to enhance our future growth.
"I would like to first and foremost extend a warm welcome to all of our new employees joining us from Signature,” said NYCB President and CEO Thomas R. Cangemi. “Over the past 20 years, Signature and New York Community have operated in the same markets, and we have great respect and admiration for the employee base. Secondly, I would like to welcome our new customers and assure them that they are supported by an organization that has been a mainstay in its communities since 1859. We look forward to serving each of you and the new communities which we have entered."
Under terms of the Purchase and Assumption Agreement with the FDIC, the Bank:
- Purchased assets of approximately $38 billion, including cash totaling approximately $25 billion and approximately $13 billion in loans. Included in the $25 billion of cash is $2.7 billion arising from a discounted bid to net asset value.
- Assumed liabilities approximating $36 billion, including deposits of approximately $34 billion and other liabilities of approximately $2 billion.
- NYCB is working on an agreement to subservice the legacy Signature multi-family, commercial real estate, and other loans it did not acquire.
- Also included in the transaction is Signature Bank's wealth-management and broker-dealer business.
- The deal also includes all of legacy Signature's core bank deposit relationships, including both the New York and the West Coast Private Client teams, as well as the wealth management and broker-dealer business.
In connection with the transaction, Flagstar will take over all of Signature Bridge Bank's branches—including 30 branches in the New York City metro area and several branches on the West Coast.
Signature Bank was closed on March 12, 2023, by the New York State Department of Financial Services, which appointed the FDIC as receiver. After its appointment as receiver, the FDIC filed an application with the OCC to establish Signature Bridge Bank N.A., which was approved by the OCC later that day. The FDIC then transferred substantially all of the assets and liabilities of Signature Bank to Signature Bridge Bank N.A., operated by the FDIC, as it marketed such assets and deposits to potential bidders.
On the lending side, Flagstar is adding several new verticals, including middle market specialty finance, healthcare lending and SBA lending, while adding to its existing verticals in mortgage warehouse lending, as well as traditional commercial and industrial lending.
"This transaction continues our transformation from a predominantly multifamily lender to a diversified full-service commercial bank,” added Cangemi. “It builds upon and accelerates the transformation set in motion by the merger of New York Community and Flagstar, and we believe the financial metrics are extremely attractive. The deal is expected to significantly strengthen our deposit base, lower the loan-to-deposit ratio, provide the opportunity to pay down a substantial amount of our wholesale funding, and further diversify our loan portfolio away from CRE loans and more toward commercial loans. Financially, the deal is expected to be significantly accretive to both earnings per share and to tangible book value per share. The net interest margin expands due to lower funding costs, the additional deposits reduce the loan-to-deposit ratio to less than 90%, improves our profitability ratios, adds liquidity, and we maintain strong pro-forma capital ratios."