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.
“It’s toxic waste,” said Christopher Whalen, ...
