Signature Bank Reports 2014 Third Quarter Results

  • Net Income for the 2014 Third Quarter Reached a Record $76.8 Million, or $1.52 Diluted Earnings Per Share, an Increase of $16.6 Million, or 27.7 Percent, from $60.2 Million, or $1.25 Diluted Earnings Per Share, Reported in the 2013 Third Quarter. Excluding a Pre-Tax $1.8 Million Gain on Sale of an SBA Interest-Only Strip Security, 2013 Third Quarter Net Income Was $59.1 Million, or $1.23 Diluted Earnings Per Share
  • Total Deposits in the Third Quarter Grew a Record $1.56 Billion, or 7.9 Percent, to $21.32 Billion, Including Record Core Deposit Growth of $1.22 Billion; Total Deposits For the First Nine Months of 2014 Have Grown $4.26 Billion, or 25.0 Percent, and Total Deposits for the Past 12 Months Increased $5.27 Billion, or 32.9 Percent. Average Deposits Increased a Record $1.57 Billion, or 8.2 Percent, in the 2014 Third Quarter
  • For the 2014 Third Quarter, Loans Increased $1.12 Billion, or 7.3 Percent, to $16.55 Billion. Loans Grew $3.03 Billion, or 22.4 Percent, in the First Nine Months of 2014
  • Non-Accrual Loans were $24.4 Million, or 0.15 Percent of Total Loans, at September 30, 2014, Versus $32.7 Million, or 0.21 Percent, at the End of the 2014 Second Quarter and $40.2 Million, or 0.33 Percent, at the End of the 2013 Third Quarter
  • 2014 Third Quarter Net Interest Margin Decreased Six Basis Points to 3.25 Percent, Compared with 3.31 Percent for the 2014 Second Quarter and 3.32 Percent for the 2013 Third Quarter. All of The Linked-Quarter Decrease Was Due to an Increase in Average Cash of $444.0 Million Resulting From the Bank’s Capital Raise in the Late 2014 Second Quarter and Continued Record Deposit Growth Which Affected the Margin by Seven Basis Points
  • Core Net Interest Margin Excluding Loan Prepayment Penalty Income Decreased Eight Basis Points to 3.14 Percent, Compared with 3.22 Percent for the 2014 Second Quarter. Again, Seven Basis Points of the Linked-Quarter Decrease Was Due to an Increase in Average Cash of $444.0 Million
  • Tier 1 Leverage, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 9.45 Percent, 15.49 Percent and 16.51 Percent, Respectively, at September 30, 2014. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 9.25 Percent
  • Expanded Signature Financial With the Addition of Two New Business Lines – National Franchise Finance and Commercial Marine Finance. Additionally, Three Private Client Group Directors Were Added to Teams

NEW YORK--()--Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its third quarter ended September 30, 2014.

Net income for the 2014 third quarter reached a record $76.8 million, or $1.52 diluted earnings per share, versus $60.2 million, or $1.25 diluted earnings per share, for the 2013 third quarter. The record net income for the 2014 third quarter, versus the comparable quarter last year, is primarily due to an increase in net interest income, fueled by strong deposit and loan growth. These factors were partially offset by an increase in non-interest expenses.

Net interest income for the 2014 third quarter reached $205.3 million, up $37.9 million, or 22.6 percent, when compared with the 2013 third quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $25.95 billion at September 30, 2014, an increase of $4.94 billion, or 23.5 percent, from $21.00 billion at September 30, 2013. Average assets for the 2014 third quarter reached $25.37 billion, an increase of $4.99 billion, or 24.4 percent, compared with the 2013 third quarter.

Deposits for the 2014 third quarter rose a record $1.56 billion, or 7.9 percent, to $21.32 billion at September 30, 2014. When compared with deposits at December 31, 2013, overall deposit growth for the first nine months of 2014 was 25.0 percent, or $4.26 billion. Excluding short-term escrow and brokered deposits of $2.79 billion at September 30, 2014, and $2.45 billion at June 30, 2014, core deposits increased a record $1.22 billion for the quarter. Average deposits for the 2014 third quarter reached $20.66 billion, an increase of $1.57 billion, or 8.2 percent.

“This marks our 20th consecutive quarter where we reported record earnings. Signature Bank has consistently delivered strong financial results, and we are well recognized in the marketplace for our disciplined approach to private client banking, our client-centric single-point-of-contact delivery model and the careful attention to and management of our balance sheet. Once again, this quarter, we have demonstrated that by remaining focused on our founding philosophies, we have continually delivered record results across the key metrics we deem most critical to the success of our institution – earnings, deposits and loans,” said Joseph J. DePaolo, President and Chief Executive Officer.

“The way we differentiate ourselves in client care does not go unnoticed. For example, this quarter, the Bank was ranked the best business bank by the New York Law Journal’s readers. Law firms comprise a meaningful part of our client mix, and this is a testament to the fact that we truly stand out amongst professional services organizations, such as law firms. While some of the other rankings we have recently achieved signify the strength and quality of the Bank, this, perhaps most importantly, is a direct result of the opinions of our clients about the service and commitment we pride ourselves on delivering. This is ultimately reflected in our financial performance, just as it was this quarter and has been since our inception,” DePaolo explained.

Scott A. Shay, Chairman of the Board, added: “As Signature Bank’s reputation grows, we are continuously gaining traction throughout the New York banking marketplace. Both current as well as potential clients crave the type of exceptional and unrivaled personalized service we deliver. They also recognize the value in the safety of our balance sheet, which today, stands out in the industry. It has become known across the metro-New York banking arena that when it matters most, when clients have needs to address that are vital to their businesses or when a quick decision and rapid turnaround is needed, clients receive service at Signature Bank that makes a difference to the success of their businesses. Clients are also aware that when markets are volatile or the next financial fad is introduced in the marketplace, the Bank will not be distracted or tempted to lose sight of its primary mission of depositor safety first and foremost. We keep our clients' interests top of mind when it comes to our balance sheet as well as our service model, and have shown this time and again.”

Capital

The Bank’s Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios were approximately 9.45 percent, 15.49 percent and 16.51 percent, respectively, as of September 30, 2014. 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 9.25 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 2014 third quarter was $205.3 million, an increase of $37.9 million, or 22.6 percent, versus the same period last year, primarily due to growth in average interest-earning assets. The increase, however, was partially offset by a decrease of $1.4 million in loan prepayment penalty income. Average interest-earning assets of $25.02 billion for the 2014 third quarter represent an increase of $5.04 billion, or 25.2 percent, from the 2013 third quarter. Yield on interest-earning assets for the 2014 third quarter decreased 12 basis points, to 3.75 percent, compared with the 2013 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 2014 decreased by five and four basis points, respectively, versus the 2013 third quarter to 0.46 percent and 0.54 percent. These decreases were predominantly due to prolonged low interest rates.

Net interest margin for the 2014 third quarter was 3.25 percent versus 3.32 percent reported in the same period a year ago. On a linked quarter basis, net interest margin decreased six basis points. Excluding loan prepayment penalties in both quarters, linked quarter core margin declined eight basis points to 3.14 percent. Seven basis points of the linked quarter decreases in overall and core margin are due to an increase in average cash of $444.0 million resulting from the Bank’s capital raise in the late 2014 second quarter and continued record deposit growth coupled with a difficult market for securities reinvestment.

Provision for Loan Losses

The Bank’s provision for loan losses for the third quarter of 2014 was $7.7 million, a decrease of $3.3 million, or 30.3 percent, compared with the 2013 third quarter. The decline was largely driven by a decrease of $1.6 million in charge-offs.

Net charge-offs for the 2014 third quarter were $1.5 million, or 0.04 percent of average loans on an annualized basis, versus $718,000, or 0.02 percent, for the 2014 second quarter and $3.1 million, or 0.11 percent, for the 2013 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2014 third quarter was $8.1 million, up $200,000 when compared with $7.9 million reported in the 2013 third quarter. The increase was mostly due to a rise in commissions, fees and service charges and net gains on sales of loans along with a decline in write-downs on other than temporary impairment of securities. These improvements were offset by a decrease in net gains on sales of securities.

Non-interest expense for the third quarter of 2014 was $74.3 million, an increase of $11.9 million, or 19.1 percent, versus $62.3 million reported in the 2013 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, as well as an increase in costs in our risk management and compliance related activities.

The Bank’s efficiency ratio improved to 34.8 percent for the 2014 third quarter versus 35.6 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 $1.12 billion, or 7.3 percent, during the third quarter of 2014 to $16.55 billion, compared with $15.43 billion at June 30, 2014. At September 30, 2014, loans accounted for 63.8 percent of total assets, versus 62.9 percent at the end of the 2014 second quarter and 57.6 percent at the end of 2013 third quarter. Average loans, excluding loans held for sale, reached $15.85 billion in the 2014 third quarter, growing $944.5 million, or 6.3 percent, from the 2014 second quarter and $4.29 billion, or 37.1 percent, from the 2013 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, 2014, non-accrual loans were $24.4 million, representing 0.15 percent of total loans and 0.09 percent of total assets, compared with non-accrual loans of $32.7 million, or 0.21 percent of total loans, at June 30, 2014 and $40.2 million, or 0.33 percent of total loans, at September 30, 2013. At September 30, 2014, the ratio of allowance for loan and lease losses to total loans was 0.95 percent, versus 0.98 percent at June 30, 2014 and 1.05 percent at September 30, 2013. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 642 percent for the 2014 third quarter versus 459 percent for the second quarter of 2014 and 316 percent for the 2013 third quarter.

Conference Call

Signature Bank’s management will host a conference call to review results of the 2014 third quarter on Tuesday, October 21, 2014, 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 #14109061. 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 #14109061. The replay will be available from approximately 1:00 PM ET on Tuesday, October 21, 2014 through 11:59 PM ET on Friday, October 24, 2014.

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; 97 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; 53 North Park Avenue, 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 89-36 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 INCOME
(unaudited)
 
 

Three months ended
September 30,

Nine months ended
September 30,

(dollars in thousands, except per share amounts)     2014     2013     2014     2013  
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 710 1,637 2,030 3,309
Loans and leases, net 168,382 132,439 473,354 374,820
Securities available-for-sale 48,433 44,886 144,548 138,489
Securities held-to-maturity 17,593 14,610 52,460 29,581
Other short-term investments     1,395     1,067     3,955     2,357  
Total interest income     236,513     194,639     676,347     548,556  
INTEREST EXPENSE
Deposits 23,980 20,390 68,420 59,147
Federal funds purchased and securities sold under
agreements to repurchase 4,170 4,717 12,956 14,572
Federal Home Loan Bank advances     3,097     2,137     9,522     4,803  
Total interest expense     31,247     27,244     90,898     78,522  
Net interest income before provision for loan and lease losses 205,266 167,395 585,449 470,034
Provision for loan and lease losses     7,672     11,005     23,497     30,600  
Net interest income after provision for loan and lease losses     197,594     156,390     561,952     439,434  
NON-INTEREST INCOME
Commissions 2,926 2,249 8,045 6,893
Fees and service charges 4,792 4,316 14,414 12,707
Net (losses) gains on sales of securities (40 ) 2,544 4,816 4,970
Net gains on sales of loans 1,401 823 3,304 5,605
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (387 ) (3,896 ) (3,624 ) (6,624 )
Portion recognized in other comprehensive income (before taxes)   127     2,496     2,310     3,059  
Net impairment losses on securities recognized in earnings (260 ) (1,400 ) (1,314 ) (3,565 )
Other (loss) income     (764 )   (677 )   (1,657 )   (633 )
Total non-interest income     8,055     7,855     27,608     25,977  
NON-INTEREST EXPENSE
Salaries and benefits 49,859 41,644 145,412 121,894
Occupancy and equipment 5,629 5,022 16,733 14,521
Other general and administrative     18,784     15,673     55,134     46,300  
Total non-interest expense     74,272     62,339     217,279     182,715  
Income before income taxes 131,377 101,906 372,281 282,696
Income tax expense     54,572     41,738     156,987     118,293  
Net income   $ 76,805     60,168     215,294     164,403  
PER COMMON SHARE DATA
Earnings per share – basic $ 1.54 1.27 4.44 3.48
Earnings per share – diluted $ 1.52 1.25 4.37 3.43
 
SIGNATURE BANK    
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
 
September 30, December 31,
2014 2013
(dollars in thousands, except per share amounts)   (unaudited)    
ASSETS
Cash and due from banks $ 292,410 119,479
Short-term investments     23,288   24,498
Total cash and cash equivalents     315,698   143,977
Securities available-for-sale 6,062,323 5,632,233
Securities held-to-maturity (fair value $2,214,657 at September 30, 2014
and $2,110,290 at December 31, 2013) 2,228,488 2,175,844
Federal Home Loan Bank stock 90,613 130,785
Loans held for sale 429,206 420,759
Loans and leases, net 16,391,910 13,384,400
Premises and equipment, net 39,752 36,331
Accrued interest and dividends receivable 75,424 71,668
Other assets     317,071   380,666
Total assets   $ 25,950,485   22,376,663
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing $ 6,260,063 5,391,483
Interest-bearing     15,060,377   11,665,614
Total deposits     21,320,440   17,057,097
Federal funds purchased and securities sold under agreements
to repurchase 645,000 1,065,000
Federal Home Loan Bank advances 1,430,163 2,305,313
Accrued expenses and other liabilities     153,415   149,314
Total liabilities     23,549,018   20,576,724
Shareholders’ equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized;
none issued at September 30, 2014 and December 31, 2013 - -
Common stock, par value $.01 per share; 64,000,000 shares authorized;
51,080,884 shares issued and 49,999,808 shares outstanding at September 30, 2014;
48,404,175 shares issued and 47,293,162 shares outstanding at December 31, 2013 503 473
Additional paid-in capital 1,340,773 1,013,900
Retained earnings 1,052,544 837,250
Net unrealized gains (losses) on securities, net of tax     7,647   (51,684)
Total shareholders' equity     2,401,467   1,799,939
Total liabilities and shareholders' equity   $ 25,950,485   22,376,663
 
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)     2014       2013       2014       2013  
PER COMMON SHARE
Net income - basic $ 1.54 $ 1.27 $ 4.44 $ 3.48
Net income - diluted $ 1.52 $ 1.25 $ 4.37 $ 3.43
Average shares outstanding - basic 50,000 47,271 48,539 47,260
Average shares outstanding - diluted 50,529 48,048 49,307 47,970
Book value $ 48.03 $ 37.23 $ 48.03 $ 37.23
 
SELECTED FINANCIAL DATA
Return on average total assets 1.20 % 1.17 % 1.20 % 1.16 %
Return on average shareholders' equity 12.99 % 13.77 % 13.70 % 12.89 %
Efficiency ratio (1) 34.82 % 35.57 % 35.44 % 36.84 %

Efficiency ratio excluding net gains on sales of securities
 and net impairment losses on securities recognized
 in earnings (1)

34.77 % 35.81 % 35.65 % 36.94 %
Yield on interest-earning assets 3.75 % 3.87 % 3.83 % 3.93 %
Cost of deposits and borrowings 0.54 % 0.58 % 0.56 % 0.61 %
Net interest margin 3.25 % 3.32 % 3.31 % 3.37 %
 

(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,
2014

 

June 30,
2014

 

December 31,
2013

 

September 30,
2013

CAPITAL RATIOS
Tangible common equity (2) 9.25 % 9.34 % 8.04 % 8.38 %
Tier 1 leverage 9.45 % 9.55 % 8.54 % 8.74 %
Tier 1 risk-based 15.49 % 15.65 % 14.07 % 14.61 %
Total risk-based 16.51 % 16.69 % 15.10 % 15.66 %
 
ASSET QUALITY
Non-accrual loans $ 24,394 $ 32,749 $ 31,342 $ 40,182
Allowance for loan and lease losses $ 156,598 $ 150,422 $ 135,071 $ 126,867
Allowance for loan and lease losses to non-accrual loans 641.95 % 459.32 % 430.96 % 315.73 %
Allowance for loan and lease losses to total loans 0.95 % 0.98 % 1.00 % 1.05 %
Non-accrual loans to total loans 0.15 % 0.21 % 0.23 % 0.33 %
Quarterly net charge-offs to average loans, annualized 0.04 % 0.02 % 0.09 % 0.11 %
 
(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, 2014 September 30, 2013
(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 $ 605,583 365 0.24 % 135,164 122 0.36 %
Investment securities 8,254,260 67,056 3.25 % 7,802,630 60,441 3.10 %
Commercial loans, mortgages and leases 15,502,799 165,011 4.22 % 11,184,860 129,007 4.58 %
Residential mortgages and consumer loans 344,217 3,371 3.89 % 369,992 3,432 3.68 %
Loans held for sale     312,307   710   0.90 %   486,317   1,637   1.34 %
Total interest-earning assets     25,019,166   236,513   3.75 %   19,978,963   194,639   3.87 %
Non-interest-earning assets     355,720           410,894        
Total assets   $ 25,374,886           20,389,857        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 1,362,643 1,326 0.39 % 822,571 771 0.37 %
Money market 12,137,541 19,485 0.64 % 9,174,460 16,356 0.71 %
Time deposits 1,133,656 3,169 1.11 % 1,101,123 3,263 1.18 %
Non-interest-bearing demand deposits     6,025,238   -   -     4,841,033   -   -  
Total deposits     20,659,078   23,980   0.46 %   15,939,187   20,390   0.51 %
Borrowings     2,184,716   7,267   1.32 %   2,564,801   6,854   1.06 %
Total deposits and borrowings     22,843,794   31,247   0.54 %   18,503,988   27,244   0.58 %
Other non-interest-bearing liabilities
and shareholders' equity     2,531,092           1,885,869        
Total liabilities and shareholders' equity   $ 25,374,886           20,389,857        
OTHER DATA
Net interest income / interest rate spread 205,266 3.21 % 167,395 3.29 %
Net interest margin 3.25 % 3.32 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 109.52 % 107.97 %
 
SIGNATURE BANK            
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Nine months ended Nine months ended
September 30, 2014 September 30, 2013
(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 $ 314,798 554 0.24 % 125,338 332 0.35 %
Investment securities 8,123,208 200,409 3.29 % 7,382,285 170,095 3.07 %
Commercial loans, mortgages and leases 14,513,826 463,328 4.27 % 10,409,173 364,090 4.68 %
Residential mortgages and consumer loans 345,812 10,026 3.88 % 379,696 10,730 3.78 %
Loans held for sale     314,768   2,030   0.86 %   361,765   3,309   1.22 %
Total interest-earning assets     23,612,412   676,347   3.83 %   18,658,257   548,556   3.93 %
Non-interest-earning assets     361,775           358,703        
Total assets   $ 23,974,187           19,016,960        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 1,163,036 3,348 0.38 % 805,203 2,288 0.38 %
Money market 11,194,327 55,501 0.66 % 8,772,544 47,111 0.72 %
Time deposits 1,186,684 9,571 1.08 % 1,020,909 9,748 1.28 %
Non-interest-bearing demand deposits     5,640,917   -   -     4,617,157   -   -  
Total deposits     19,184,964   68,420   0.48 %   15,215,813   59,147   0.52 %
Borrowings     2,566,474   22,478   1.17 %   1,959,658   19,375   1.32 %
Total deposits and borrowings     21,751,438   90,898   0.56 %   17,175,471   78,522   0.61 %
Other non-interest-bearing liabilities
and shareholders' equity     2,222,749           1,841,489        
Total liabilities and shareholders' equity   $ 23,974,187           19,016,960        
OTHER DATA
Net interest income / interest rate spread 585,449 3.27 % 470,034 3.32 %
Net interest margin 3.31 % 3.37 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 108.56 % 108.63 %
 
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) net income and diluted earnings per share excluding the after tax effect of net gains on sales of securities and net impairment losses on securities recognized in earnings, (ii) tangible common equity ratio, (iii) efficiency ratio excluding net gains on sales of securities and net impairment losses on securities recognized in earnings, and (iv) 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 securities and net impairment losses on securities recognized in earnings:
       
Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands, except per share amounts)     2014     2013     2014     2013  
Net income (as reported) $ 76,805 60,168 215,294 164,403
Net gains on sales of securities 40 (2,544 ) (4,816 ) (4,970 )
Net impairment losses on securities recognized in earnings 260 1,400 1,314 3,565
Tax effect     (125 )   468     1,480     579  
Net income - excluding after tax effect of net gains on sales of securities
and net impairment losses on securities recognized in earnings   $ 76,980     59,492     213,272     163,577  
 
Diluted earnings per share (as reported) $ 1.52 1.25 4.37 3.43
Net gains on sales of securities - (0.05 ) (0.10 ) (0.10 )
Net impairment losses on securities recognized in earnings 0.01 0.03 0.03 0.07
Tax effect     -     0.01     0.03     0.01  
Diluted earnings per share - excluding after tax effect of net gains on sales of securities
and net impairment losses on securities recognized in earnings   $ 1.53     1.24     4.33     3.41  
 
 
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,

      2014     2013     2014     2013  
Net interest margin (as reported) 3.25 % 3.32 % 3.31 % 3.37 %
Margin contribution from loan prepayment penalty income     (0.11 )%   (0.16 )%   (0.12 )%   (0.15 )%
Core net interest margin - excluding loan prepayment penalty income     3.14 %   3.16 %   3.19 %   3.22 %
 

Contacts

Signature Bank
Investor Contact:
Eric R. Howell, 646-822-1402
Executive Vice President – Corporate and Business Development
ehowell@signatureny.com
or
Media Contact:
Susan J. Lewis, 646-822-1825
slewis@signatureny.com

Release Summary

SIGNATURE BANK REPORTS 2014 THIRD QUARTER RESULTS

Contacts

Signature Bank
Investor Contact:
Eric R. Howell, 646-822-1402
Executive Vice President – Corporate and Business Development
ehowell@signatureny.com
or
Media Contact:
Susan J. Lewis, 646-822-1825
slewis@signatureny.com