Flagstar Bank, a subsidiary of New York Community Bancorp, has signed a takeover agreement with U.S. regulators for some of Signature Bank’s assets and loans. Earlier this month, after Silicon Valley Bank’s customers all tried to withdraw their funds at the same time, Signature Bank was the second victim of a bank run.

Both banks were shut down by regulators. The Federal Deposit Insurance Corporation (FDIC) then established bridge banks so that depositors could access their funds as quickly as possible. Over the past few days, the FDIC has been trying to sell the assets and find potential buyers.

“The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association, by Flagstar Bank,” the FDIC said in a statement this weekend.

Signature Bank was a smaller financial institution than Silicon Valley Bank. As of December 31, 2022, Signature Bank had $110.4 billion in total assets and total deposits of $82.6 billion. The bank mostly served corporate clients, such as real estate companies, law firms and cryptocurrency companies.

So what is Flagstar Bank getting? “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,” the FDIC said. In the coming days, the 40 branches of Signature Bank will be rebranded as Flagstar Bank branches as well.

The FDIC is keeping a significant portion of Signature Bank’s assets — approximately $60 billion in loans, bonds and other assets. If the agency can’t find any buyer, it will just hold those assets for the time being.

Flagstar Bank also confirmed that the transaction doesn’t include any digital assets, crypto-related assets or deposits. In particular, many crypto firms relied on Signet, a payments system that worked 24/7 and was used by crypto companies for on-ramps and off-ramps. Signet isn’t part of the deal.

That part of Signature Bank was likely the most unstable part of the financial firm. While the FDIC managed to find a buyer for many of Signature Bank’s activities, Bloomberg says that crypto-related deposits will be returned to customers directly. Other crypto assets are still up for sale.

Flagstar Bank to buy some Signature Bank assets, but not crypto operations by Romain Dillet originally published on TechCrunch