FDIC Announces P&A Agreement Between Signature Bridge Bank and Flagstar, Announces Extended Bid Window for Silicon Valley Bridge Bank
March 20, 2023
On March 19, the FDIC announced that Flagstar Bank, a subsidiary of New York Community Bancorp, Inc., had entered into a purchase and assumption (P&A) agreement for assets and certain liabilities of Signature Bridge Bank (SBB).
The OCC gave conditional approval for the acquisition, subject to conditions including requirements that Flagstar allocate appropriate resources to the assets and liabilities acquired, and receive supervisory non-objection prior to paying a dividend to shareholders.
Flagstar’s purchase includes certain loan portfolios totaling $12 billion, and the assumption of $34 billion in deposits. Flagstar’s bid did not include the approximately $4 billion of deposits related to the digital-assets banking business. The FDIC stated that it would provide the deposits associated with SBB’s digital-assets banking business “directly to customers whose accounts are associated with the digital-asset banking businesses.”
The forty former branches of Signature Bank will now operate under Flagstar Bank and depositors of SBB, other than cash depositors related to the digital-asset banking businesses, will automatically become depositors of Flagstar.
The FDIC estimated the cost to the DIF at $2.5 billion.
Separately, on March 20, the FDIC announced that it was extending the bid window for Silicon Valley Bridge Bank (SVBB). Parties will now be permitted to submit separate bids for SVBB and its subsidiary Silicon Valley Private Bank. Qualified bidders will be able to submit whole-bank bids or bids on the deposits or assets of the institutions. Bank and non-bank financial firms can bid on asset portfolios. Bids on Silicon Valley Private Bank are due by 8:00 P.M. EDT on Wednesday, March 22, 2023, and bids on SVBB are due by 8:00 P.M. EDT on Friday, March 24, 2023.
For additional information, please see:
- FDIC Press Release on Extension of SVBB Bid Window (link)
- FDIC Press Release on Sale of SBB (link)
- OCC Press Release on Sale of SBB (link)
- OCC Conditional Approval for Flagstar’s Acquisition of SBB (link)
Clients with questions should reach out to any of their regular contacts at Cleary Gottlieb or any of the partners or counsel listed on our website under Banking and Financial Institutions or Bankruptcy and Restructuring.
Additional Cleary Gottlieb content regarding SVB and related developments can be found here.
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