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Signature Bank Reports 2018 Third Quarter Results – Ladies Want More
Thursday , January 24 2019
Home / Family / Signature Bank Reports 2018 Third Quarter Results

Signature Bank Reports 2018 Third Quarter Results

NEW YORK–(BUSINESS WIRE)–Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial
bank, today announced results for its third quarter ended September 30,
2018. Net income for the 2018 third quarter was $155.4 million, or $2.84
diluted earnings per share, versus $124.5 million, or $2.29 diluted
earnings per share, for the 2017 third quarter. The increase in net
income for the 2018 third quarter, versus the comparable quarter last
year, is primarily due to an increase in net interest income and a
decrease in the provision for loan losses and income tax expense.

Net interest income for the 2018 third quarter reached $324.8 million,
up $16.0 million, or 5.2 percent, when compared with the 2017 third
quarter. This increase is primarily due to growth in average
interest-earning assets. Total assets reached $45.87 billion at
September 30, 2018, an increase of $4.54 billion, or 11.0 percent, from
$41.33 billion at September 30, 2017. Average assets for the 2018 third
quarter reached $45.48 billion, an increase of $4.60 billion, or 11.3
percent, compared with the 2017 third quarter.

Deposits for the 2018 third quarter rose $1.10 billion, or 3.1 percent,
to $36.09 billion at September 30, 2018. When compared with deposits at
September 30, 2017, overall deposit growth for the last twelve months
was 7.2 percent, or $2.41 billion. Average deposits for the 2018 third
quarter reached $35.78 billion, an increase of $1.27 billion, or 3.7
percent.

“During the past few quarters, Signature Bank has executed several
growth initiatives paving the way for the future direction of this
institution. These strategies include taking our successful
single-point-of-contact model outside of the metro-New York area —
where we spent 17 years building the foundation of our business — and
bringing it to San Francisco after we identified a glaring need. In the
2018 first quarter, we appointed a digital asset banking team because we
want to be nimble and ready to change as the market evolves. Just
recently, we hired a nine-person team focusing on capital call and
subscription finance for private equity firms. And lastly, we have been
heavily investing in our infrastructure with the implementation of new
systems for loan operations (now in place), credit approvals and foreign
exchange as well as an enhanced payments platform,” explained Joseph J.
DePaolo, President and Chief Executive Officer.

“Our success since our founding in 2001 is predicated on our ability to
attract seasoned bankers who serve as client contacts for all banking
ne. This client-centric philosophy is at the crux of all we do. The
advancements we are making are all accomplished with client satisfaction
at their core. At the same time, we are expanding our reach in new
business activities, geography and capabilities. We must take measured
risks to fuel future growth, but they are far less than the long-range
risks of comfortable inaction. We believe the initiatives upon which we
are embarking today will set the stage for the Signature Bank of
tomorrow,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, said: “Signature Bank has grown
into the 40th largest bank in the U.S., without performing any mergers
or acquisitions. Instead, we built our business methodically and
organically — banker by banker — partnering with those individuals who
attract, build and nurture an expansive portfolio of loyal banking
clients. We are proud that even after 17+ years in operation, we are
still the bank of choice amongst veteran bankers who are passionate
about delivering best-in-class service to clients. Every team we attract
brings along an unwavering commitment to catering to clients.”

“While we recognize the maxim that ‘what got you here, won’t get you
there,’ we are constantly on the lookout for new ideas adjacent to our
business strategy, including those we can thoughtfully expand upon and
which allow us to continue to execute on our service hallmark. This is
evidenced by our recent San Francisco expansion. We also recognize that
banking and payment technologies are rapidly advancing, and are focused
on incorporating evolving technologies relevant to our clients’ ne.
While the banking landscape always seems to be increasingly more
competitive and challenging, Signature Bank remains stable and at the
forefront of both thought- and action-based leadership that positively
influences the success of clients,” Shay stated.

Capital

The Bank’s Tier 1 leverage, common equity Tier 1 risk-based, Tier 1
risk-based, and total risk-based capital ratios were approximately 9.67
percent, 12.13 percent, 12.13 percent, and 13.44 percent, respectively,
as of September 30, 2018. Each of these ratios is well in excess of
regulatory requirements. The Bank’s strong risk-based capital ratios
reflect the relatively low risk profile of the Bank’s balance sheet. The
Bank’s tangible common equity ratio remains strong at 9.15 percent. The
Bank defines tangible common equity ratio as the ratio of total tangible
common shareholders’ equity to total tangible assets.

The Bank declared a cash dividend of $0.56 per share, payable on or
after November 15, 2018 to common stockholders of record at the close of
business on November 1, 2018. In the third quarter of 2018, the Bank
paid a cash dividend of $0.56 per share to common stockholders of record
at the close of business on August 1, 2018.

Net Interest Income

Net interest income for the 2018 third quarter was $324.8 million, an
increase of $16.0 million, or 5.2 percent, versus the same period last
year, primarily due to growth in average interest-earning assets.
Average interest-earning assets of $44.86 billion for the 2018 third
quarter represent an increase of $4.56 billion, or 11.3 percent, from
the 2017 third quarter. Yield on interest-earning assets for the 2018
third quarter increased 19 basis points, to 3.85 percent, compared with
the 2017 third quarter.

Average cost of deposits and average cost of funds for the third quarter
of 2018 increased by 33 and 39 basis points, to 0.88 percent and 1.06
percent, respectively versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2018 third quarter
was 2.88 percent versus 3.05 percent reported in the same period a year
ago. On a linked quarter basis, net interest margin on a tax-equivalent
basis decreased six basis points. Excluding loan prepayment penalties in
both quarters, linked quarter core net interest margin on a
tax-equivalent basis decreased four basis points to 2.85 percent.

Provision for Loan Losses

The Bank’s provision for loan losses for the third quarter of 2018 was
$7.4 million, compared with $8.0 million for the 2018 second quarter and
$14.3 million for the 2017 third quarter.

Net charge-offs for the 2018 third quarter were $11,000, or less than
one basis point of average loans on an annualized basis, versus $3.0
million, or 0.04 percent, for the 2018 second quarter and $3.8 million,
or 0.05 percent, for the 2017 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2018 third quarter was $4.5 million, down
$3.6 million when compared with $8.1 million reported in the 2017 third
quarter. The decrease was primarily due to a $4.0 million increase in
tax credit investment amortization. These investments positively impact
our effective tax rate.

Non-interest expense for the third quarter of 2018 was $117.2 million,
an increase of $11.6 million, or 11.0 percent, versus $105.6 million
reported in the 2017 third quarter. The increase was primarily a result
of the addition of new private client banking teams, as well as an
increase in costs in our risk management and compliance related
activities.

The Bank’s efficiency ratio was 35.6 percent for the 2018 third quarter
versus 33.3 percent for the comparable period last year and 34.5 percent
for the 2018 second quarter.

Loans

Loans, excluding loans held for sale, grew $979.7 million, or 2.9
percent, during the third quarter of 2018 to $35.13 billion, compared
with $34.15 billion at June 30, 2018. At September 30, 2018, loans
accounted for 76.6 percent of total assets, versus 75.5 percent at the
end of both the 2018 second quarter and the 2017 third quarter. Average
loans, excluding loans held for sale, reached $34.53 billion in the 2018
third quarter, growing $854.4 million, or 2.5 percent, from the 2018
second quarter and $3.84 billion, or 12.5 percent, from the 2017 third
quarter. The increase in loans for the quarter was primarily driven by
growth in specialty finance, commercial real estate and multi-family
loans.

At September 30, 2018, non-accrual loans were $134.2 million,
representing 0.38 percent of total loans and 0.29 percent of total
assets, compared with non-accrual loans of $158.1 million, or 0.46
percent of total loans, at June 30, 2018 and $376.9 million, or 1.21
percent of total loans, at September 30, 2017. Excluding non-accruing
loans secured by taxi medallions of $111.7 million, non-accrual loans
for the remainder of the entire portfolio are $22.5 million, or six
basis points of total loans. At September 30, 2018, the ratio of
allowance for loan and lease losses to total loans was 0.63 percent,
versus 0.62 percent for June 30, 2018 and September 30, 2017.
Additionally, the ratio of allowance for loan and lease losses to
non-accrual loans, or the coverage ratio, was 164 percent for the 2018
third quarter versus 135 percent for the second quarter of 2018 and 51
percent for the 2017 third quarter.

Conference Call

Signature Bank’s management will host a conference call to review
results of the 2018 third quarter on Thursday, October 18, 2018, at
10:00 AM ET. All participants should dial 866-359-8135 at least ten
minutes prior to the start of the call and reference conference ID
#1869699. International callers should dial 901-300-3484.

To hear a live web simulcast or to listen to the archived web cast
following completion of the call, please visit the Bank’s web site at www.signatureny.com,
click on “Investor Information,” then, under “Company News,” select
“Conference Calls” to access the link to the call. To listen to a
telephone replay of the conference call, please dial 800-585-8367 or
404-537-3406 and enter conference ID #1869699. The replay will be
available from approximately 1:00 PM ET on Thursday, October 18, 2018
through 11:59 PM ET on Monday, October 22, 2018.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial
bank with 30
private client offices throughout the New York metropolitan area,
including those in Manhattan, Brooklyn, Westchester, Long Island,
Queens, the Bronx, Staten Island and Connecticut. In 2018, the Bank
expanded its footprint on the West Coast with the opening of its first
full-service private client banking office in San Francisco. The Bank’s
growing network of private client banking teams serves the ne of
privately owned businesses, their owners and senior managers.

Signature Bank’s specialty finance subsidiary, Signature Financial, LLC,
provides equipment finance and leasing. Signature Securities Group
Corporation, a wholly owned Bank subsidiary, is a licensed
broker-dealer, investment adviser and member FINRA/SIPC, offering
investment, brokerage, asset management and insurance products and
services.

Signature Bank is ranked the 40th largest bank in the
U.S. from nearly 6,000, based on deposits (SNL Financial). The
Bank recently earned several third-party recognitions, including:
appeared on Forbes’
Best Banks in America list for the eighth consecutive year in 2018;
named Best Business Bank, Best Private Bank and Best Attorney Escrow
Services provider by the New
York Law Journal in the publication’s annual
“Best of” survey for 2018, earning it a place in the New York Law
Journal’s Hall of Fame, awarded to companies that have ranked in the
“Best of” Survey for at least three of the past four years.

For more information, please visit www.signatureny.com.

This press release and oral statements made from time to time by our
representatives contain “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995 that are subject
to risks and uncertainties. You should not place undue reliance on those
statements because they are subject to numerous risks and uncertainties
relating to our operations and business environment, all of which are
difficult to predict and may be beyond our control. Forward-looking
statements include information concerning our future results, interest
rates and the interest rate environment, loan and deposit growth, loan
performance, operations, new private client teams and other hires, new
office openings and business strategy. These statements often include
words such as “may,” “believe,” “expect,” “anticipate,” “intend,”
“potential,” “opportunity,” “could,” “project,” “seek,” “should,”
“will,” “would,” “plan,” “estimate” or other similar expressions. As you
consider forward-looking statements, you should understand that these
statements are not guarantees of performance or results. They involve
risks, uncertainties and assumptions that could cause actual results to
differ materially from those in the forward-looking statements and can
change as a result of many possible events or factors, not all of which
are known to us or in our control. These factors include but are not
limited to: (i) prevailing economic conditions; (ii) changes in interest
rates, loan demand, real estate values and competition, any of which can
materially affect origination levels and gain on sale results in our
business, as well as other aspects of our financial performance,
including earnings on interest-bearing assets; (iii) the level of
defaults, losses and prepayments on loans made by us, whether held in
portfolio or sold in the whole loan secondary markets, which can
materially affect charge-off levels and required credit loss reserve
levels; (iv) changes in monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Board of
Governors of the Federal Reserve System; (v) changes in the banking and
other financial services regulatory environment and (vi) competition for
qualified personnel and desirable office locations. Although we believe
that these forward-looking statements are based on reasonable
assumptions, beliefs and expectations, if a change occurs or our
beliefs, assumptions and expectations were incorrect, our business,
financial condition, liquidity or results of operations may vary
materially from those expressed in our forward-looking statements.
Additional risks are described in our quarterly and annual reports filed
with the FDIC. You should keep in mind that any forward-looking
statements made by Signature Bank speak only as of the date on which
they were made. New risks and uncertainties come up from time to time,
and we cannot predict these events or how they may affect the Bank. Signature
Bank has no duty to, and does not intend to, update or revise the
forward-looking statements after the date on which they are made. In
light of these risks and uncertainties, you should keep in mind that any
forward-looking statement made in this release or elsewhere might not
reflect actual results.

 

SIGNATURE BANK

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

(dollars in thousands, except per share amounts)

 

 

2018

 

 

2017

 

 

2018

 

 

2017

INTEREST AND DIVIDEND INCOME

 

 

 

 

Loans held for sale

$

2,442

911

8,205

3,155

Loans and leases, net

351,743

301,561

1,011,765

875,028

Securities available-for-sale

58,381

49,986

165,073

150,653

Securities held-to-maturity

14,394

14,549

43,437

44,346

Other investments

 

 

 

7,268

 

 

 

3,662

 

 

 

19,623

 

 

 

10,030

 

Total interest income

 

 

 

434,228

 

 

 

370,669

 

 

 

1,248,103

 

 

 

1,083,212

 

INTEREST EXPENSE

Deposits

79,200

46,659

199,264

121,772

Federal funds purchased and securities sold under agreements to
repurchase

2,519

1,913

7,909

7,329

Federal Home Loan Bank borrowings

24,068

9,634

66,048

25,407

Subordinated debt

 

 

 

3,645

 

 

 

3,645

 

 

 

10,928

 

 

 

10,890

 

Total interest expense

 

 

 

109,432

 

 

 

61,851

 

 

 

284,149

 

 

 

165,398

 

Net interest income before provision for loan and lease losses

324,796

308,818

963,954

917,814

Provision for loan and lease losses

 

 

 

7,351

 

 

 

14,340

 

 

 

156,083

 

 

 

221,560

 

Net interest income after provision for loan and lease losses

 

 

 

317,445

 

 

 

294,478

 

 

 

807,871

 

 

 

696,254

 

NON-INTEREST INCOME

Commissions

3,249

3,036

9,704

9,094

Fees and service charges

6,914

6,112

20,708

18,127

Net gains on sales of securities

12

735

810

3,263

Net gains on sales of loans

1,931

2,204

5,133

6,657

Other-than-temporary impairment losses on securities:

Total impairment losses on securities

(361

)

(2

)

(634

)

Portion recognized in other comprehensive income (before taxes)

 

 

 

 

 

 

 

(14

)

 

 

32

 

Net impairment losses on securities recognized in earnings

(361

)

(16

)

(602

)

Tax credit investment amortization

(8,369

)

(4,388

)

(21,654

)

(11,523

)

Other Income

 

 

 

806

 

 

 

781

 

 

 

2,675

 

 

 

2,527

 

Total non-interest income

 

 

 

4,543

 

 

 

8,119

 

 

 

17,360

 

 

 

27,543

 

NON-INTEREST EXPENSE

Salaries and benefits

76,140

70,112

225,023

204,856

Occupancy and equipment

8,638

8,210

25,172

24,280

Information technology

6,083

5,970

18,661

16,743

FDIC assessment fees

7,070

7,260

21,504

20,242

Professional fees

3,307

3,181

10,086

9,222

Other general and administrative

 

 

 

15,970

 

 

 

10,895

 

 

 

66,689

 

 

 

49,756

 

Total non-interest expense

 

 

 

117,208

 

 

 

105,628

 

 

 

367,135

 

 

 

325,099

 

Income before income taxes

204,780

196,969

458,096

398,698

Income tax expense

 

 

 

49,334

 

 

 

72,498

 

 

 

113,594

 

 

 

126,354

 

Net income

 

 

$

155,446

 

 

 

124,471

 

 

 

344,502

 

 

 

272,344

 

PER COMMON SHARE DATA

Earnings per share – basic

$

2.84

2.30

6.32

5.05

Earnings per share – diluted

$

2.84

2.29

6.30

5.01

Dividends per common share

$

0.56

0.56

 

 

SIGNATURE BANK

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

September 30,

 

 

December 31,

2018

2017

(dollars in thousands, except shares and per share amounts)

 

 

(unaudited)

 

 

 

ASSETS

Cash and due from banks

$

155,791

290,078

Short-term investments

 

 

 

39,613

 

 

 

45,388

 

Total cash and cash equivalents

 

 

 

195,404

 

 

 

335,466

 

Securities available-for-sale

7,220,219

6,953,719

Securities held-to-maturity (fair value $1,829,462 at September
30, 2018 and $1,983,087 at December 31, 2017)

1,903,343

1,996,376

Federal Home Loan Bank stock

230,677

227,920

Loans held for sale

502,915

432,277

Loans and leases, net

34,906,505

32,416,580

Premises and equipment, net

69,062

61,571

Accrued interest and dividends receivable

133,527

117,070

Other assets

 

 

 

709,058

 

 

 

576,741

 

Total assets

 

 

$

45,870,710

 

 

 

43,117,720

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Deposits

Non-interest-bearing

$

12,158,738

11,353,038

Interest-bearing

 

 

 

23,932,487

 

 

 

22,086,789

 

Total deposits

 

 

 

36,091,225

 

 

 

33,439,827

 

Federal funds purchased and securities sold under agreements to
repurchase

575,000

790,000

Federal Home Loan Bank borrowings

4,210,000

4,195,000

Subordinated debt

257,974

257,381

Accrued expenses and other liabilities

 

 

 

498,514

 

 

 

403,821

 

Total liabilities

 

 

 

41,632,713

 

 

 

39,086,029

 

Shareholders’ equity

Preferred stock, par value $.01 per share; 61,000,000 shares
authorized;

none issued at September 30, 2018 and December 31, 2017

Common stock, par value $.01 per share; 64,000,000 shares authorized;

55,384,378 shares issued and 55,383,361 outstanding at September 30,
2018;

54,979,213 shares issued and 54,977,971 outstanding at December 31,
2017

554

550

Additional paid-in capital

1,848,624

1,809,642

Retained earnings

2,601,073

2,290,537

Treasury stock, 1,017 shares at September 30, 2018 and 1,242 shares
at December 31, 2017

(113

)

(171

)

Accumulated other comprehensive loss

 

 

 

(212,141

)

 

 

(68,867

)

Total shareholders’ equity

 

 

 

4,237,997

 

 

 

4,031,691

 

Total liabilities and shareholders’ equity

 

 

$

45,870,710

 

 

 

43,117,720

 

 

 

SIGNATURE BANK

FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY

(unaudited)

 

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

(in thousands, except ratios and per share amounts)

 

 

2018

 

 

2017

 

 

2018

 

 

2017

PER COMMON SHARE

 

 

 

 

Net income – basic

$

2.84

$

2.30

$

6.32

$

5.05

Net income – diluted

$

2.84

$

2.29

$

6.30

$

5.01

Average shares outstanding – basic

54,544

54,098

54,406

53,968

Average shares outstanding – diluted

54,610

54,300

54,646

54,349

Book value

$

76.52

$

71.52

$

76.52

$

71.52

 

SELECTED FINANCIAL DATA

Return on average total assets

1.36

%

1.21

%

1.03

%

0.90

%

Return on average shareholders’ equity

14.71

%

12.78

%

11.14

%

9.65

%

Efficiency ratio (1)

35.59

%

33.33

%

37.41

%

34.39

%

Yield on interest-earning assets

3.84

%

3.65

%

3.80

%

3.65

%

Yield on interest-earning assets, tax-equivalent basis (1)(2)

3.85

%

3.66

%

3.81

%

3.66

%

Cost of deposits and borrowings

1.06

%

0.67

%

0.95

%

0.61

%

Net interest margin

2.87

%

3.04

%

2.93

%

3.09

%

Net interest margin, tax-equivalent basis (2)(3)

2.88

%

3.05

%

2.94

%

3.10

%

 

 

 

September 30,
2018

 

 

June 30,
2018

 

 

December 31,
2017

 

 

September 30,
2017

CAPITAL RATIOS

 

 

 

 

 

 

 

 

Tangible common equity (4)

9.15

%

9.10

%

9.29

%

9.44

%

Tier 1 leverage (5)

9.67

%

9.64

%

9.72

%

9.72

%

Common equity Tier 1 risk-based (5)

12.13

%

12.10

%

11.99

%

11.96

%

Tier 1 risk-based (5)

12.13

%

12.10

%

11.99

%

11.96

%

Total risk-based (5)

13.44

%

13.42

%

13.32

%

13.32

%

 

ASSET QUALITY

Non-accrual loans

$

134,197

$

158,077

$

326,918

$

376,867

Allowance for loan and lease losses

$

220,706

$

213,367

$

195,959

$

193,040

Allowance for loan and lease losses to non-accrual loans

164.46

%

134.98

%

59.94

%

51.22

%

Allowance for loan and lease losses to total loans

0.63

%

0.62

%

0.60

%

0.62

%

Non-accrual loans to total loans

0.38

%

0.46

%

1.00

%

1.21

%

Quarterly net charge-offs to average loans, annualized

0.00

%

0.04

%

0.48

%

0.05

%

SIGNATURE BANK

 

 

NET INTEREST MARGIN ANALYSIS

(unaudited)

 

Three months ended

 

 

Three months ended

September 30, 2018

September 30, 2017

(dollars in thousands)

 

 

Average
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

 

Average
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

INTEREST-EARNING ASSETS

 

 

 

 

 

 

 

 

Short-term investments

$

485,749

2,488

2.03

%

470,171

1,455

1.23

%

Investment securities

9,526,123

77,555

3.26

%

8,987,262

66,742

2.97

%

Commercial loans, mortgages and leases (1)(2)

34,301,452

350,358

4.05

%

30,419,546

299,974

3.91

%

Residential mortgages and consumer loans

223,929

2,393

4.24

%

265,083

2,649

3.96

%

Loans held for sale

 

 

 

320,712

 

 

2,442

 

 

 

3.02

%

 

 

153,042

 

 

911

 

 

 

2.36

%

Total interest-earning assets

 

 

 

44,857,965

 

 

435,236

 

 

 

3.85

%

 

 

40,295,104

 

 

371,731

 

 

 

3.66

%

Non-interest-earning assets

 

 

 

624,664

 

 

 

 

 

 

 

 

587,209

 

 

 

 

 

 

Total assets

 

 

$

45,482,629

 

 

 

 

 

 

 

 

40,882,313

 

 

 

 

 

 

INTEREST-BEARING LIABILITIES

Interest-bearing deposits

NOW and interest-bearing demand

$

3,654,079

14,122

1.53

%

3,919,003

8,627

0.87

%

Money market

18,090,481

56,798

1.25

%

17,260,584

33,523

0.77

%

Time deposits

1,765,996

8,280

1.86

%

1,516,042

4,509

1.18

%

Non-interest-bearing demand deposits

 

 

 

12,213,759

 

 

 

 

 

 

 

 

10,678,696

 

 

 

 

 

 

Total deposits

 

 

 

35,724,315

 

 

79,200

 

 

 

0.88

%

 

 

33,374,325

 

 

46,659

 

 

 

0.55

%

Subordinated debt

257,843

3,645

5.65

%

257,050

3,645

5.67

%

Other borrowings

 

 

 

4,850,924

 

 

26,587

 

 

 

2.17

%

 

 

3,085,542

 

 

11,547

 

 

 

1.48

%

Total deposits and borrowings

 

 

 

40,833,082

 

 

109,432

 

 

 

1.06

%

 

 

36,716,917

 

 

61,851

 

 

 

0.67

%

Other non-interest-bearing liabilities and shareholders’ equity

 

 

 

4,649,547

 

 

 

 

 

 

 

 

4,165,396

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

$

45,482,629

 

 

 

 

 

 

 

 

40,882,313

 

 

 

 

 

 

OTHER DATA

Net interest income / interest rate spread (1)

325,804

2.79

%

309,880

2.99

%

Tax-equivalent adjustment

(1,008

)

(1,062

)

Net interest income, as reported

324,796

 

308,818

 

Net interest margin

2.87

%

3.04

%

Tax-equivalent effect

0.01

%

0.01

%

Net interest margin on a tax-equivalent basis (1)(2)

2.88

%

3.05

%

Ratio of average interest-earning assets to average
interest-bearing liabilities

109.86

%

109.75

%

(1)

 

Presented on a tax-equivalent, non-GAAP basis for municipal
leasing and financing transactions using the U.S. federal
statutory tax rate of 21 percent for the period ended September
30, 2018 and 35 percent for the period ended September 30, 2017.

 

(2)

 

See “Non-GAAP Financial Measures” for related calculation.

 

 

SIGNATURE BANK

NET INTEREST MARGIN ANALYSIS

(unaudited)

 

 

 

Nine months ended

 

 

Nine months ended

September 30, 2018

September 30, 2017

(dollars in thousands)

 

 

Average
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

 

 

Average
Balance

 

 

Interest
Income/
Expense

 

 

Average
Yield/
Rate

INTEREST-EARNING ASSETS

 

 

 

 

 

 

 

 

Short-term investments

$

465,298

6,209

1.78

%

471,151

3,598

1.02

%

Investment securities

9,359,974

221,924

3.16

%

8,891,079

201,431

3.02

%

Commercial loans, mortgages and leases (1)(2)

33,483,359

1,007,006

4.02

%

29,886,204

869,752

3.89

%

Residential mortgages and consumer loans

234,007

7,255

4.15

%

271,273

7,850

3.87

%

Loans held for sale

 

 

 

384,571

 

 

8,205

 

 

 

2.85

%

 

 

196,842

 

 

3,155

 

 

 

2.14

%

Total interest-earning assets

 

 

 

43,927,209

 

 

1,250,599

 

 

 

3.81

%

 

 

39,716,549

 

 

1,085,786

 

 

 

3.66

%

Non-interest-earning assets

 

 

 

593,551

 

 

 

 

 

 

 

 

565,087

 

 

 

 

 

 

Total assets

 

 

$

44,520,760

 

 

 

 

 

 

 

 

40,281,636

 

 

 

 

 

 

INTEREST-BEARING LIABILITIES

Interest-bearing deposits

NOW and interest-bearing demand

$

3,678,705

36,843

1.34

%

3,835,571

20,502

0.71

%

Money market

17,676,403

143,082

1.08

%

17,003,578

89,427

0.70

%

Time deposits

1,564,257

19,339

1.65

%

1,473,261

11,843

1.07

%

Non-interest-bearing demand deposits

 

 

 

11,845,801

 

 

 

 

 

 

 

 

10,555,056

 

 

 

 

 

 

Total deposits

 

 

 

34,765,166

 

 

199,264

 

 

 

0.77

%

 

 

32,867,466

 

 

121,772

 

 

 

0.50

%

Subordinated debt

257,647

10,928

5.66

%

256,853

10,890

5.65

%

Other borrowings

 

 

 

5,002,029

 

 

73,957

 

 

 

1.98

%

 

 

3,029,683

 

 

32,736

 

 

 

1.44

%

Total deposits and borrowings

 

 

 

40,024,842

 

 

284,149

 

 

 

0.95

%

 

 

36,154,002

 

 

165,398

 

 

 

0.61

%

Other non-interest-bearing liabilities and shareholders’ equity

 

 

 

4,495,918

 

 

 

 

 

 

 

 

4,127,634

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

$

44,520,760

 

 

 

 

 

 

 

 

40,281,636

 

 

 

 

 

 

OTHER DATA

Net interest income / interest rate spread (1)

966,450

2.86

%

920,388

3.05

%

Tax-equivalent adjustment

(2,742

)

(2,574

)

Net interest income, as reported

963,708

 

917,814

 

Net interest margin

2.93

%

3.09

%

Tax-equivalent effect

0.01

 

0.01

 

Net interest margin on a tax-equivalent basis (1)(2)

2.94

%

3.10

%

Ratio of average interest-earning assets to average
interest-bearing liabilities

109.75

%

109.85

%

(1)

 

Presented on a tax-equivalent, non-GAAP basis for municipal
leasing and financing transactions using the U.S. federal
statutory tax rate of 21 percent for the period ended September
30, 2018 and 35 percent for the period ended September 30, 2017.

 

(2)

 

See “Non-GAAP Financial Measures” for related calculation.

 

 

SIGNATURE BANK
NON-GAAP FINANCIAL MEASURES
(unaudited)

Management believes that the presentation of certain non-GAAP financial
measures assist investors when comparing results period-to-period in a
more consistent manner and provides a better measure of Signature Bank’s
results. These non-GAAP measures include the Bank’s (i) tangible common
equity ratio, (ii) efficiency ratio, (iii) yield on interest-earning
assets, tax-equivalent basis, and (iv) core net interest margin,
tax-equivalent basis excluding loan prepayment penalty income. These
non-GAAP measures should not be considered a substitute for GAAP-basis
measures and results. We strongly encourage investors to review our
consolidated financial statements in their entirety and not to rely on
any single financial measure. Because non-GAAP financial measures are
not standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures having the
same or similar names.

The following table presents the tangible common equity ratio
calculation:

 

(dollars in thousands)

 

 

September 30,
2018

 

 

June 30,
2018

 

 

December 31,
2017

 

 

September 30,
2017

Consolidated common shareholders’ equity

 

 

$

4,237,997

 

 

4,147,623

 

 

4,031,691

 

 

3,931,953

Intangible assets

 

 

 

43,372

 

 

 

34,261

 

 

 

28,643

 

 

 

32,741

 

Consolidated tangible common shareholders’ equity (TCE)

 

 

$

4,194,625

 

 

 

4,113,362

 

 

 

4,003,048

 

 

 

3,899,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated total assets

$

45,870,710

45,215,484

43,117,720

41,326,924

Intangible assets

 

 

 

43,372

 

 

 

34,261

 

 

 

28,643

 

 

 

32,741

 

Consolidated tangible total assets (TTA)

 

 

$

45,827,338

 

 

 

45,181,223

 

 

 

43,089,077

 

 

 

41,294,183

 

Tangible common equity ratio (TCE/TTA)

 

 

 

9.15

%

 

 

9.10

%

 

 

9.29

%

 

 

9.44

%

 

 

The following table presents the efficiency ratio calculation:

 

Three months ended
September 30,

Nine months ended
September 30,

(dollars in thousands)

 

 

2018

 

 

2017

 

 

2018

 

 

2017

Non-interest expense (NIE)

 

 

$

117,208

 

 

 

105,628

 

 

 

367,135

 

 

 

325,099

 

Net interest income before provision for loan and lease losses

324,796

308,818

963,954

917,814

Other non-interest income

 

 

 

4,543

 

 

 

8,119

 

 

 

17,360

 

 

 

27,543

 

Total income (TI)

 

 

$

329,339

 

 

 

316,937

 

 

 

981,314

 

 

 

945,357

 

Efficiency ratio (NIE/TI)

 

 

 

35.59

%

 

 

33.33

%

 

 

37.41

%

 

 

34.39

%

 

 

The following table reconciles yield on interest-earning assets to
the yield on interest-earning assets on a tax-equivalent basis:

 

Three months ended
September 30,

Nine months ended
September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

Interest income (as reported)

$

434,228

370,669

1,248,103

1,083,212

Tax-equivalent adjustment

 

 

 

1,008

 

 

 

1,062

 

 

 

2,742

 

 

 

2,574

 

Interest income, tax-equivalent basis

 

 

$

435,236

 

 

 

371,731

 

 

 

1,250,845

 

 

 

1,085,786

 

Interest-earnings assets

 

 

$

44,857,965

 

 

 

40,295,104

 

 

 

43,927,209

 

 

 

39,716,549

 

 

Yield on interest-earning assets

3.84

%

3.65

%

3.80

%

3.65

%

Tax-equivalent effect

 

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

 

 

0.01

%

Yield on interest-earning assets, tax-equivalent basis

 

 

 

3.85

%

 

 

3.66

%

 

 

3.81

%

 

 

3.66

%

 

 

The following table reconciles net interest margin (as reported) to
core net interest margin on a tax-equivalent basis excluding loan
prepayment penalty income:

 

Three months ended

September 30,

Nine months ended

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

Net interest margin (as reported)

2.87

%

3.04

%

2.93

%

3.09

%

Tax-equivalent adjustment

0.01

%

0.01

%

0.01

%

0.01

%

Margin contribution from loan prepayment penalty income

 

 

 

(0.03

)%

 

 

(0.06

)%

 

 

(0.05

)%

 

 

(0.06

)%

Core net interest margin, tax-equivalent basis excluding loan
prepayment penalty income

 

 

 

2.85

%

 

 

2.99

%

 

 

2.89

%

 

 

3.04

%

Selected News


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