Finance
After Signature Bank Deal, FDIC Is Left With $11 Billion in ‘Toxic Waste’ Loans
- NYCB leaves behind loans on rent-regulated apartment buildings
- Portfolio has higher leverage than peers, one analysis shows
An ATM at a Signature Bank branch in New York.
Photographer: Angus Mordant/BloombergThis article is for subscribers only.
Signature Bank’s partial takeover by a competitor is notable for what it doesn’t include: $11 billion of loans against a class of New York City apartments whose values have tumbled in recent years.
In a deal with the Federal Deposit Insurance Corp., New York Community Bancorp Inc. is buying more than $34 billion in Signature’s deposits, as well as $13 billion in loans and 40 bank branches. Left behind is the commercial real estate debt portfolio, weighted heavily toward multifamily buildings bound by a law that restricts landlords’ ability to raise rents.