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, 2013.
Net income for the 2013 third quarter reached a record $60.2 million, or $1.25 diluted earnings per share, versus $47.7 million, or $1.00 diluted earnings per share, for the 2012 third quarter. The record net income for the 2013 third quarter, versus the comparable quarter last year, is primarily due to an increase in net interest income, fueled by strong deposit and record loan growth. These factors were partially offset by an increase in non-interest expenses.
Net interest income for the 2013 third quarter reached $167.4 million, up $25.7 million, or 18.2 percent, when compared with the 2012 third quarter. This increase is primarily due to growth in average interest-earning assets and an increase of $2.4 million in loan prepayment penalty income. Total assets reached $21.0 billion at September 30, 2013, an increase of $4.55 billion, or 27.6 percent, from $16.46 billion at September 30, 2012. Average assets for the 2013 third quarter reached $20.39 billion, an increase of $4.29 billion, or 26.6 percent, compared with the 2012 third quarter.
Deposits for the 2013 third quarter rose $774.9 million, or 5.1 percent, to $16.05 billion at September 30, 2013. When compared with deposits at December 31, 2012, overall deposit growth for the first nine months of 2013 was 14.0 percent, or $1.96 billion. Excluding short-term escrow deposits and brokered deposits of $871.2 million and $312.3 million at September 30, 2013, and $842.4 million and $148.2 million at June 30, 2013, respectively, core deposits increased $582.1 million for the quarter. Average deposits for the 2013 third quarter reached $15.94 billion, an increase of $829.6 million, or 5.5 percent.
“This marks another quarter of top-line revenue growth, driven by strong core deposit and record loan growth, culminating in the Bank’s 16th consecutive quarter of record earnings. We believe our unwavering commitment to our client-centric model and single-point-of-contact approach is the key driver to our success. While remaining dedicated to our deposit-focused philosophy, we continue to advance earnings by increasing loans as a percentage of our well capitalized balance sheet with a further quarter of record loan growth. This emphasis has helped mitigate the effects from the prolonged low-interest rate environment on our net interest margin,” explained Joseph J. DePaolo, President and Chief Executive Officer.
“Moreover, while delivering record earnings -- quarter after quarter -- we remain focused on our long-term strategy of adding seasoned private client banking teams as well as diversifying our services offerings, where relevant. This is evidenced by the further expansion of our specialty finance subsidiary, Signature Financial, and the recently announced addition of an asset-based lending team. The ABL team that just joined brings decades of related industry experience and further enhances our product offerings within the business community,” DePaolo noted.
Scott A. Shay, Chairman of the Board, added: “Our results this quarter demonstrate the strength, balance, diversity and potential of our proven business model. Our deposit growth once again reflects both the desire and interest exhibited by New York-area businesses to align with a bank that offers unparalleled service and dedicated client attention, like Signature Bank. We continue to attract clients by demonstrating that service is a part of our business composition, not merely just a widely used industry slogan. Service is also key to our consistent loan growth, as clients know we can quickly close transactions in a seamless manner. This commitment, coupled with our pledge to maintain depositor safety, permeates all that we do and results in the strong and lasting relationships we have forged with our clients.”
Capital
The Bank’s Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios were approximately 8.74 percent, 14.61 percent and 15.66 percent, respectively, as of September 30, 2013. 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 8.38 percent. The Bank defines tangible common equity ratio as the ratio of tangible common equity to adjusted tangible assets and calculates this ratio by dividing total consolidated common shareholders’ equity by consolidated total assets.
Net Interest Income
Net interest income for the 2013 third quarter was $167.4 million, an increase of $25.7 million, or 18.2 percent, versus the same period last year, primarily due to growth in average interest-earning assets and an increase of $2.4 million in loan prepayment penalty income. Average interest-earning assets of $19.98 billion for the 2013 third quarter represent an increase of $4.16 billion, or 26.3 percent, from the 2012 third quarter. Yield on interest-earning assets for the 2013 third quarter decreased 38 basis points, to 3.87 percent, compared with the 2012 third quarter. This decrease was primarily attributable to prolonged low interest rates.
Average cost of deposits and average cost of funds for the third quarter of 2013 decreased by 11 and 17 basis points, respectively, versus the 2012 third quarter to 0.51 percent and 0.58 percent. These decreases were predominantly due to prolonged low interest rates.
Net interest margin for the 2013 third quarter was 3.32 percent versus 3.56 percent reported in the same period a year ago. On a linked quarter basis, net interest margin decreased four basis points. Excluding loan prepayment penalties in both quarters, linked quarter core margin declined five basis points to 3.16 percent. The linked quarter decreases in overall and core margin are predominantly due to the reinvestment of cash flows from investments and commercial mortgages, including refinance activity, into lower yielding investments and loans.
Provision for Loan Losses
The Bank’s provision for loan losses for the third quarter of 2013 was $11.0 million, an increase of $933,000, or 9.3 percent, compared with the 2012 third quarter. The increase was largely driven by an increase in loan growth.
Net charge-offs for the 2013 third quarter were $3.1 million, or 0.11 percent of average loans on an annualized basis, versus $3.5 million, or 0.13 percent, for the 2013 second quarter and $4.6 million, or 0.22 percent, for the 2012 third quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2013 third quarter was $7.9 million, down $485,000 when compared with $8.3 million reported in the 2012 third quarter. The decrease was mostly due to a $1.7 million decline in net gains on sales of loans and a $966,000 increase in write-downs on other than temporary impairment of securities. These declines were partially offset by an increase of $2.2 million in net gains on sales of securities. Included in this amount is a pre-tax $1.8 million gain on sale of an SBA interest-only strip security.
Non-interest expense for the third quarter of 2013 was $62.3 million, an increase of $7.4 million, or 13.5 percent, versus $54.9 million reported in the 2012 third quarter. The increase was primarily a result of new private client banking teams joining, the addition of an asset based lending team and our continued investment in the growth of Signature Financial.
The Bank’s efficiency ratio improved to 35.6 percent for the 2013 third quarter versus 36.6 percent for the comparable period last year. The improvement was primarily due to growth in net interest income coupled with expense containment.
Loans
Loans, excluding loans held for sale, grew a record $1.04 billion, or 9.4 percent, during the third quarter of 2013 to $12.11 billion, compared with $11.07 billion at June 30, 2013. At September 30, 2013, loans accounted for 57.6 percent of total assets, versus 56.1 percent at the end of the 2013 second quarter and 53.2 percent at the end of 2012 third quarter. Average loans, excluding loans held for sale, reached $11.55 billion in the 2013 third quarter, growing $814.9 million, or 7.6 percent, from the 2013 second quarter and $3.18 billion, or 37.9 percent, from the 2012 third quarter. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans, as well as specialty finance.
At September 30, 2013, non-accrual loans were $40.2 million, representing 0.33 percent of total loans and 0.19 percent of total assets, compared with non-accrual loans of $35.9 million, or 0.32 percent of total loans, at June 30, 2013 and $28.0 million, or 0.32 percent of total loans, at September 30, 2012. At September 30, 2013, the ratio of allowance for loan and lease losses to total loans was 1.05 percent, versus 1.08 percent at June 30, 2013 and 1.18 percent at September 30, 2012. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 316 percent for the 2013 third quarter versus 332 percent for the second quarter of 2013 and 367 percent for the 2012 third quarter.
Conference Call
Signature Bank’s management will host a conference call to review results of the 2013 third quarter on Tuesday, October 22, 2013, 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 # 76521684. 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 the "Investor Relations" tab, then select "Company News," followed by "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 # 76521684. The replay will be available from approximately 1:00 PM ET on Tuesday, October 22, 2013 through 11:59 PM ET on Friday, October 25, 2013.
About Signature Bank
Signature Bank, member FDIC, is a New York-based full-service commercial bank with 27 private client offices throughout the New York metropolitan area. The Bank’s growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers. Signature Bank offers a wide variety of business and personal banking products and services. The Bank operates Signature Financial, LLC, a specialty finance subsidiary focused on equipment finance and leasing, transportation financing and taxi medallion financing. Investment, brokerage, asset management and insurance products and services are offered through the Bank’s subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC.
Signature Bank's 27 offices are located: In Manhattan (9) - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South; 1020 Madison Avenue; 50 West 57th Street and 2 Penn Plaza. Brooklyn (3) - 26 Court Street; 84 Broadway and 6321 New Utrecht Avenue. Westchester (2) - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island (7) - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 68 South Service Road, Melville; 923 Broadway, Woodmere; 40 Cuttermill Road, Great Neck; 100 Jericho Quadrangle, Jericho and 360 Motor Parkway, Hauppauge. Queens (3) – 36-36 33rd Street, Long Island City; 78-27 37th Avenue, Jackson Heights and 8936 Sutphin Blvd., Jamaica. Bronx (1) - 421 Hunts Point Avenue, Bronx. Staten Island (2) - 2066 Hylan Blvd. and 1688 Victory Blvd.
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 team 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. 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. As you read and consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions and can change as a result of many possible events or factors, not all of which are known to us or in our control. 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 OPERATIONS | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
| Loans held for sale | $ | 1,637 | 951 | 3,309 | 2,481 | |||||||||||||||
| Loans and leases, net | 132,439 | 109,154 | 374,820 | 301,052 | ||||||||||||||||
| Securities available-for-sale | 44,886 | 53,354 | 138,489 | 167,288 | ||||||||||||||||
| Securities held-to-maturity | 14,610 | 5,135 | 29,581 | 14,740 | ||||||||||||||||
| Other short-term investments | 1,067 | 508 | 2,357 | 1,512 | ||||||||||||||||
| Total interest income | 194,639 | 169,102 | 548,556 | 487,073 | ||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Deposits | 20,390 | 20,982 | 59,147 | 63,927 | ||||||||||||||||
| Federal funds purchased and securities sold under | ||||||||||||||||||||
| agreements to repurchase | 4,717 | 5,366 | 14,572 | 17,155 | ||||||||||||||||
| Federal Home Loan Bank advances | 2,137 | 1,083 | 4,803 | 3,328 | ||||||||||||||||
| Total interest expense | 27,244 | 27,431 | 78,522 | 84,410 | ||||||||||||||||
| Net interest income before provision for loan and lease losses | 167,395 | 141,671 | 470,034 | 402,663 | ||||||||||||||||
| Provision for loan and lease losses | 11,005 | 10,072 | 30,600 | 31,039 | ||||||||||||||||
| Net interest income after provision for loan and lease losses | 156,390 | 131,599 | 439,434 | 371,624 | ||||||||||||||||
| NON-INTEREST INCOME | ||||||||||||||||||||
| Commissions | 2,249 | 1,841 | 6,893 | 6,275 | ||||||||||||||||
| Fees and service charges | 4,316 | 4,029 | 12,707 | 11,552 | ||||||||||||||||
| Net gains on sales of securities | 2,544 | 345 | 4,970 | 5,913 | ||||||||||||||||
| Net gains on sales of loans | 823 | 2,474 | 5,605 | 6,663 | ||||||||||||||||
| Other-than-temporary impairment losses on securities: | ||||||||||||||||||||
| Total impairment losses on securities | (3,896 | ) | (98 | ) | (6,624 | ) | (9,478 | ) | ||||||||||||
| Portion recognized in other comprehensive income (before taxes) | 2,496 | (336 | ) | 3,059 | 6,929 | |||||||||||||||
| Net impairment losses on securities recognized in earnings | (1,400 | ) | (434 | ) | (3,565 | ) | (2,549 | ) | ||||||||||||
| Net trading income | 277 | 203 | 1,258 | 560 | ||||||||||||||||
| Other loss | (954 | ) | (118 | ) | (1,891 | ) | (1,074 | ) | ||||||||||||
| Total non-interest income | 7,855 | 8,340 | 25,977 | 27,340 | ||||||||||||||||
| NON-INTEREST EXPENSE | ||||||||||||||||||||
| Salaries and benefits | 41,644 | 37,635 | 121,894 | 107,398 | ||||||||||||||||
| Occupancy and equipment | 5,022 | 4,045 | 14,521 | 12,704 | ||||||||||||||||
| Other general and administrative | 15,673 | 13,260 | 46,300 | 40,037 | ||||||||||||||||
| Total non-interest expense | 62,339 | 54,940 | 182,715 | 160,139 | ||||||||||||||||
| Income before income taxes | 101,906 | 84,999 | 282,696 | 238,825 | ||||||||||||||||
| Income tax expense | 41,738 | 37,301 | 118,293 | 103,476 | ||||||||||||||||
| Net income | $ | 60,168 | 47,698 | 164,403 | 135,349 | |||||||||||||||
| PER COMMON SHARE DATA | ||||||||||||||||||||
| Earnings per share – basic | $ | 1.27 | 1.02 | 3.48 | 2.91 | |||||||||||||||
| Earnings per share – diluted | $ | 1.25 | 1.00 | 3.43 | 2.86 | |||||||||||||||
| SIGNATURE BANK | ||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||
| September 30, | December 31, | |||||||||
| 2013 | 2012 | |||||||||
| (dollars in thousands, except per share amounts) | (unaudited) | |||||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ | 54,809 | 86,186 | |||||||
| Short-term investments | 12,798 | 7,779 | ||||||||
| Total cash and cash equivalents | 67,607 | 93,965 | ||||||||
| Securities available-for-sale (pledged $3,000,490 at September 30, 2013 | ||||||||||
| and $2,467,409 at December 31, 2012) | 5,784,080 | 6,130,356 | ||||||||
| Securities held-to-maturity (fair value $2,050,989 at September 30, 2013 | ||||||||||
| and $755,469 at December 31, 2012; pledged $1,688,032 at | ||||||||||
| September 30, 2013 and $543,351 at December 31, 2012) | 2,088,795 | 739,835 | ||||||||
| Federal Home Loan Bank stock | 108,960 | 50,012 | ||||||||
| Loans held for sale | 506,935 | 369,468 | ||||||||
| Loans and leases, net | 11,978,853 | 9,664,337 | ||||||||
| Premises and equipment, net | 36,351 | 32,192 | ||||||||
| Accrued interest and dividends receivable | 68,418 | 64,367 | ||||||||
| Other assets | 366,486 | 311,525 | ||||||||
| Total assets | $ | 21,006,485 | 17,456,057 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Deposits | ||||||||||
| Non-interest-bearing | 4,831,016 | 4,444,964 | ||||||||
| Interest-bearing | 11,216,360 | 9,637,688 | ||||||||
| Total deposits | 16,047,376 | 14,082,652 | ||||||||
| Federal funds purchased and securities sold under agreements | ||||||||||
| to repurchase | 1,224,000 | 995,000 | ||||||||
| Federal Home Loan Bank advances | 1,820,313 | 590,000 | ||||||||
| Accrued expenses and other liabilities | 154,200 | 138,078 | ||||||||
| Total liabilities | 19,245,889 | 15,805,730 | ||||||||
| Shareholders’ equity | ||||||||||
| Preferred stock, par value $.01 per share; 61,000,000 shares authorized; | ||||||||||
| none issued at September 30, 2013 and December 31, 2012 | - | - | ||||||||
| Treasury stock, at cost; 8,652 common shares at September 30, 2013 | ||||||||||
| and none at December 31, 2012 | (771 | ) | - | |||||||
| Common stock, par value $.01 per share; 64,000,000 shares authorized; | ||||||||||
| 47,288,564 shares issued and 47,279,912 shares outstanding at September 30, 2013; | ||||||||||
| 47,230,266 shares issued and outstanding at December 31, 2012 | 473 | 472 | ||||||||
| Additional paid-in capital | 1,008,994 | 997,517 | ||||||||
| Retained earnings | 772,914 | 608,511 | ||||||||
| Net unrealized (losses) gains on securities, net of tax | (21,014 | ) | 43,827 | |||||||
| Total shareholders' equity | 1,760,596 | 1,650,327 | ||||||||
| Total liabilities and shareholders' equity | $ | 21,006,485 | 17,456,057 | |||||||
|
SIGNATURE BANK FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY (unaudited) |
|||||||||||||||||||||||
|
Three months ended
September 30, |
Nine months ended
September 30, |
||||||||||||||||||||||
| (dollars in thousands, except ratios and per share amounts) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| PER COMMON SHARE | |||||||||||||||||||||||
| Net income - basic | $ | 1.27 | $ | 1.02 | $ | 3.48 | $ | 2.91 | |||||||||||||||
| Net income - diluted | $ | 1.25 | $ | 1.00 | $ | 3.43 | $ | 2.86 | |||||||||||||||
| Average shares outstanding - basic | 47,271 | 46,792 | 47,260 | 46,516 | |||||||||||||||||||
| Average shares outstanding - diluted | 48,048 | 47,529 | 47,970 | 47,333 | |||||||||||||||||||
| Book value | $ | 37.23 | $ | 33.80 | $ | 37.23 | $ | 33.80 | |||||||||||||||
| SELECTED FINANCIAL DATA | |||||||||||||||||||||||
| Return on average total assets | 1.17 | % | 1.18 | % | 1.16 | % | 1.17 | % | |||||||||||||||
| Return on average shareholders' equity | 13.77 | % | 12.24 | % | 12.89 | % | 12.08 | % | |||||||||||||||
| Efficiency ratio (1) | 35.57 | % | 36.62 | % | 36.84 | % | 37.24 | % | |||||||||||||||
|
Efficiency ratio excluding net gains on sales of securities |
35.81 | % | 36.60 | % | 36.94 | % | 37.54 | % | |||||||||||||||
| Yield on interest-earning assets | 3.87 | % | 4.25 | % | 3.93 | % | 4.28 | % | |||||||||||||||
| Cost of deposits and borrowings | 0.58 | % | 0.75 | % | 0.61 | % | 0.81 | % | |||||||||||||||
| Net interest margin | 3.32 | % | 3.56 | % | 3.37 | % | 3.54 | % | |||||||||||||||
| (1) | The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income before provision for loan and lease losses and non-interest income. |
|
September 30,
2013 |
June 30,
2013 |
December 31,
2012 |
September 30,
2012 |
|||||||||||||||||
| CAPITAL RATIOS | ||||||||||||||||||||
| Tangible common equity (2) | 8.38% | 8.65% | 9.45% | 9.63% | ||||||||||||||||
| Tier 1 leverage | 8.74% | 9.14% | 9.51% | 9.60% | ||||||||||||||||
| Tier 1 risk-based | 14.61% | 14.90% | 15.32% | 16.15% | ||||||||||||||||
| Total risk-based | 15.66% | 15.94% | 16.35% | 17.23% | ||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Non-accrual loans | $ | 40,182 | $ | 35,866 | $ | 27,190 | $ | 28,026 | ||||||||||||
| Allowance for loan and lease losses | $ | 126,867 | $ | 118,971 | $ | 107,433 | $ | 102,910 | ||||||||||||
| Allowance for loan and lease losses to non-accrual loans | 315.73% | 331.71% | 395.12% | 367.19% | ||||||||||||||||
| Allowance for loan and lease losses to total loans | 1.05% | 1.08% | 1.10% | 1.18% | ||||||||||||||||
| Non-accrual loans to total loans | 0.33% | 0.32% | 0.28% | 0.32% | ||||||||||||||||
| Quarterly net charge-offs to average loans (annualized) | 0.11% | 0.13% | 0.25% | 0.22% | ||||||||||||||||
| (2) | We define tangible common equity as the ratio of tangible common equity to adjusted tangible assets (the "TCE ratio") and calculate this ratio by dividing total consolidated common shareholders' equity by consolidated total assets (we had no intangible assets at any of the dates presented above). Tangible common equity is considered to be a non-GAAP financial measure and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The TCE ratio is a metric used by management to evaluate the adequacy of our capital levels. In addition to tangible common equity, management uses other metrics, such as Tier 1 capital related ratios, to evaluate capital levels. | |
| SIGNATURE BANK | |||||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| Three months ended | Three months ended | ||||||||||||||||||||
| September 30, 2013 | September 30, 2012 | ||||||||||||||||||||
|
(dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||||
| Short-term investments | $ | 135,164 | 122 | 0.36% | 100,108 | 87 | 0.35% | ||||||||||||||
| Investment securities | 7,802,630 | 60,441 | 3.10% | 7,079,719 | 58,910 | 3.33% | |||||||||||||||
| Commercial loans, mortgages and leases | 11,184,860 | 129,007 | 4.58% | 7,990,214 | 105,179 | 5.24% | |||||||||||||||
| Residential mortgages and consumer loans | 369,992 | 3,432 | 3.68% | 389,170 | 3,975 | 4.06% | |||||||||||||||
| Loans held for sale | 486,317 | 1,637 | 1.34% | 258,929 | 951 | 1.46% | |||||||||||||||
| Total interest-earning assets | 19,978,963 | 194,639 | 3.87% | 15,818,140 | 169,102 | 4.25% | |||||||||||||||
| Non-interest-earning assets | 410,894 | 284,815 | |||||||||||||||||||
|
Total assets |
$ | 20,389,857 | 16,102,955 | ||||||||||||||||||
| INTEREST-BEARING LIABILITIES | |||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||
| NOW and interest-bearing demand | 822,571 | 771 | 0.37% | 720,411 | 801 | 0.44% | |||||||||||||||
| Money market | 9,174,460 | 16,356 | 0.71% | 8,074,961 | 16,596 | 0.82% | |||||||||||||||
| Time deposits | 1,101,123 | 3,263 | 1.18% | 945,912 | 3,585 | 1.51% | |||||||||||||||
| Non-interest-bearing demand deposits | 4,841,033 | - | - | 3,626,662 | - | - | |||||||||||||||
| Total deposits | 15,939,187 | 20,390 | 0.51% | 13,367,946 | 20,982 | 0.62% | |||||||||||||||
| Borrowings | 2,564,801 | 6,854 | 1.06% | 1,098,667 | 6,449 | 2.34% | |||||||||||||||
| Total deposits and borrowings | 18,503,988 | 27,244 | 0.58% | 14,466,613 | 27,431 | 0.75% | |||||||||||||||
| Other non-interest-bearing liabilities | |||||||||||||||||||||
| and shareholders' equity | 1,885,869 | 1,636,342 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 20,389,857 | 16,102,955 | ||||||||||||||||||
| OTHER DATA | |||||||||||||||||||||
| Net interest income / interest rate spread | 167,395 | 3.29% | 141,671 | 3.50% | |||||||||||||||||
| Net interest margin | 3.32% | 3.56% | |||||||||||||||||||
| Ratio of average interest-earning assets | |||||||||||||||||||||
| to average interest-bearing liabilities | 107.97% | 109.34% | |||||||||||||||||||
| SIGNATURE BANK | |||||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| Nine months ended | Nine months ended | ||||||||||||||||||||
| September 30, 2013 | September 30, 2012 | ||||||||||||||||||||
| (dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||||
| Short-term investments | $ | 125,338 | 332 | 0.35% | 90,288 | 230 | 0.34% | ||||||||||||||
| Investment securities | 7,382,285 | 170,095 | 3.07% | 7,160,982 | 183,310 | 3.41% | |||||||||||||||
| Commercial loans, mortgages and leases | 10,409,173 | 364,090 | 4.68% | 7,331,863 | 289,272 | 5.27% | |||||||||||||||
| Residential mortgages and consumer loans | 379,696 | 10,730 | 3.78% | 381,259 | 11,780 | 4.13% | |||||||||||||||
| Loans held for sale | 361,765 | 3,309 | 1.22% | 248,546 | 2,481 | 1.33% | |||||||||||||||
| Total interest-earning assets | 18,658,257 | 548,556 | 3.93% | 15,212,938 | 487,073 | 4.28% | |||||||||||||||
| Non-interest-earning assets | 358,703 | 285,078 | |||||||||||||||||||
| Total assets | $ | 19,016,960 | 15,498,016 | ||||||||||||||||||
| INTEREST-BEARING LIABILITIES | |||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||
| NOW and interest-bearing demand | 805,203 | 2,288 | 0.38% | 679,946 | 2,328 | 0.46% | |||||||||||||||
| Money market | 8,772,544 | 47,111 | 0.72% | 7,784,412 | 50,756 | 0.87% | |||||||||||||||
| Time deposits | 1,020,909 | 9,748 | 1.28% | 918,455 | 10,843 | 1.58% | |||||||||||||||
| Non-interest-bearing demand deposits | 4,617,157 | - | - | 3,389,576 | - | - | |||||||||||||||
| Total deposits | 15,215,813 | 59,147 | 0.52% | 12,772,389 | 63,927 | 0.67% | |||||||||||||||
| Borrowings | 1,959,658 | 19,375 | 1.32% | 1,157,344 | 20,483 | 2.36% | |||||||||||||||
| Total deposits and borrowings | 17,175,471 | 78,522 | 0.61% | 13,929,733 | 84,410 | 0.81% | |||||||||||||||
| Other non-interest-bearing liabilities | |||||||||||||||||||||
| and shareholders' equity | 1,841,489 | 1,568,283 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 19,016,960 | 15,498,016 | ||||||||||||||||||
| OTHER DATA | |||||||||||||||||||||
| Net interest income / interest rate spread | 470,034 | 3.32% | 402,663 | 3.47% | |||||||||||||||||
| Net interest margin | 3.37% | 3.54% | |||||||||||||||||||
| Ratio of average interest-earning assets | |||||||||||||||||||||
| to average interest-bearing liabilities | 108.63% | 109.21% | |||||||||||||||||||
| SIGNATURE BANK | ||
| NON-GAAP FINANCIAL MEASURES | ||
| (unaudited) | ||
|
Management believes that the presentation of certain non-GAAP financial measures assists 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) net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities and (iii) core net interest margin 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 a reconciliation of net income and diluted earnings per share (as reported) to net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities: | ||
|
Three months ended
September 30, |
Nine months ended
September 30, |
||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Net income (as reported) | $ | 60,168 | 47,698 | 164,403 | 135,349 | ||||||||||||||
| Gains on sales of SBA interest-only strip securities | (1,811 | ) | - | (1,811 | ) | (2,664 | ) | ||||||||||||
| Tax effect | 742 | - | 742 | 1,136 | |||||||||||||||
| Net income - excluding after-tax effect of gains on sales of SBA | |||||||||||||||||||
| interest-only strip securities | $ | 59,099 | 47,698 | 163,334 | 133,821 | ||||||||||||||
| Diluted earnings per share (as reported) | $ | 1.25 | 1.00 | 3.43 | 2.86 | ||||||||||||||
| Gains on sales of SBA interest-only strip securities | (0.04 | ) | - | (0.04 | ) | (0.05 | ) | ||||||||||||
| Tax effect | 0.02 | - | 0.02 | 0.02 | |||||||||||||||
| Diluted earnings per share - excluding after-tax effect of gains on sales of | |||||||||||||||||||
| SBA interest-only strip securities | $ | 1.23 | 1.00 | 3.41 | 2.83 | ||||||||||||||
| The following table reconciles net interest margin (as reported) to core net interest margin excluding loan prepayment penalty income: |
|
Three months ended
September 30, |
Nine months ended
September 30, |
|||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||
| Net interest margin (as reported) | 3.32% | 3.56% | 3.37% | 3.54% | ||||||||||
| Margin contribution from loan prepayment penalty income | (0.16)% | (0.15)% | (0.15)% | (0.11)% | ||||||||||
| Core net interest margin - excluding loan prepayment penalty income | 3.16% | 3.41% | 3.22% | 3.43% | ||||||||||
