The Federal Deposit Insurance Corp. will sell New York Community Bancorp Inc. shares it acquired as part of the lender’s purchase of Signature Bank from the regulator in March.
(Bloomberg) — The Federal Deposit Insurance Corp. will sell New York Community Bancorp Inc. shares it acquired as part of the lender’s purchase of Signature Bank from the regulator in March.
The FDIC will sell about 39 million shares of NYCB in an underwritten public offering, the lender said in a statement Tuesday. The company isn’t selling any shares, with all the proceeds from the offering going to the FDIC, NYCB said. The FDIC plans to sell its shares of the bank no later than June 8.
NYCB’s Flagstar Bank of Hicksville, New York, agreed to purchase $38 billion of Signature Bank assets, including $25 billion in cash and about $13 billion in loans, from the FDIC after the lender failed in March. As part of the deal, the FDIC got equity appreciation rights in New York Community Bancorp common stock valued at up to $300 million.
Read More: Signature’s Deposits, Loans Assumed by NY Community Bancorp
New York-based Signature was among three regional US banks seized by regulators in quick succession this year, preceded by the takeover of SVB Financial Group’s Silicon Valley Bank and followed by the failure of First Republic Bank.
Regional banks have been in turmoil after a run on deposits struck several lenders. Rising interest rates depressed the value of bonds that many regional lenders bought when rates were low, and a surge in customer withdrawals forced some of them to sell those assets at a loss.
Shares of NYCB rose 1.2% at 4:50 p.m. in late New York trading. The stock had gained 18% this year through the close of regular trading Tuesday.
Barclays Plc is acting as the sole bookrunning manager for the NYCB stock offering.
(Updates with background on takeover starting in fourth paragraph.)
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