Signature Bank CRE portfolio left behind in partial takeover

 

Signature Bank's partial takeover by New York Community Bancorp Inc. (NYCB) will not include the former's commercial real estate portfolio.  NYCB entered a deal to assume Signature Bank's $34B in deposits, $13B in loans, and 40 branches.  According to Maverick Real Estate Partners, Signature owned over $11B in loans against rent-stabilized apartments.  The loans carry higher debt-to-value ratios in comparison to other banks, such as JPMorgan and NYCB itself.  The Chairman of Whalen Global Advisors described the commercial real estate portfolio as toxic waste and referred to them as dead assets from an investor's perspective.  Herman Chan, an analyst at Bloomberg Intelligence, added that NYCB is leaving behind the apartment debt to reduce its loan-to-debt ratio and align it with regional banking peers.