- Net Income for the 2018 Fourth
Quarter Was $160.8 Million, or $2.94 Diluted Earnings Per Share,
Versus $114.9 Million, or $2.11 Diluted Earnings Per Share Reported
in the 2017 Fourth Quarter
- Net Income for 2018 Was $505.3
Million, or $9.23 Diluted Earnings Per Share, Compared with $387.2
Million or $7.12 Diluted Earnings Per Share in 2017, an Increase of
$118.1 Million, or 30.5 Percent
- The Bank Declared a Cash Dividend of
$0.56 Per Share, Payable on or After February 15, 2019 to Common
Stockholders of Record at the Close of Business on February 1,
2019
- During the 2018 Fourth Quarter, the
Bank Repurchased 358,492 Shares of Common Stock For a Total of
$41.8 Million
- Total Deposits in the 2018 Fourth
Quarter Increased $287.5 Million to $36.38 Billion, While Average
Deposits Increased $540.6 Million, or 1.5 Percent
- Total Deposits Grew $2.94 Billion,
or 8.8 Percent, in 2018. Average Deposits for 2018 at $35.14
Billion, Representing an Increase of $1.98 Billion, or 6.0 Percent,
Versus $33.16 Billion in 2017
- Loans Increased $1.30 Billion, or
3.7 Percent, to $36.42 Billion in the 2018 Fourth Quarter. Since
Year-end 2017, Loans Increased $3.81 Billion, or 11.7
Percent
- Non-Accrual Loans Were $108.6
Million, or 0.30 Percent of Total Loans, at December 31, 2018,
Versus $134.2 Million, or 0.38 Percent of Total Loans, at the End
of the 2018 Third Quarter. Non-Accrual Loans at Year-end 2017 were
$326.9 Million, or 1.0 Percent of Total Loans. Excluding Taxi
Medallion Loans, Which Were All Placed on Non-Accrual in the 2017
Second Quarter, Non-Accrual Loans Were $20.1 Million, or Six Basis
Points of Total Loans
- Net Interest Margin on a
Tax-Equivalent Basis Was 2.90 Percent for the 2018 Fourth Quarter,
Compared with 2.88 Percent for the 2018 Third Quarter and 3.07
Percent for the 2017 Fourth Quarter
- Core Net Interest Margin on a
Tax-Equivalent Basis, Which Excludes Loan Prepayment Penalty
Income, Decreased Five Basis Points to 2.80 Percent for the 2018
Fourth Quarter, Compared with 2.85 Percent for the 2018 Third
Quarter
- Tier 1 Leverage, Common Equity Tier
1 Risk-Based, Tier 1 Risk-Based and Total Risk-Based Capital Ratios
were 9.70 Percent, 12.09 Percent, 12.09 Percent and 13.39 Percent,
Respectively, at December 31, 2018. Signature Bank Remains
Significantly Above FDIC “Well-Capitalized” Standards. Tangible
Common Equity Ratio was 9.21 Percent
- For 2018, Eight Private Client
Banking Teams Joined Including the Fund Banking Division. Thus Far
in 2019, One Private Client Banking Team Joined
Signature Bank (Nasdaq: SBNY), a New York-based full-service
commercial bank, today announced results for its fourth quarter and
year ended December 31, 2018.
Net income for the 2018 fourth quarter was $160.8 million, or
$2.94 diluted earnings per share, compared with $114.9 million, or
$2.11 diluted earnings per share, for the 2017 fourth quarter. The
increase in net income for the 2018 fourth quarter, when compared
with the same period last year, is primarily the result of an
increase in net interest income, fueled by strong average deposit
and loan growth as well as an increase in prepayment penalty
income, and a decrease in the provision for loan losses
attributable to taxi medallion loan write-downs. These factors were
partially offset by an increase in non-interest expenses.
Net interest income for the 2018 fourth quarter rose $15.3
million, or 4.8 percent, to $335.0 million, compared with the
fourth quarter of 2017. This increase is primarily due to growth in
average interest-earning assets and an increase in prepayment
penalty income. Total assets reached $47.36 billion at December 31,
2018, expanding $4.24 billion, or 9.8 percent, from $43.12 billion
at December 31, 2017. Average assets for the 2018 fourth quarter
reached $46.60 billion, an increase of $4.45 billion, or 10.6
percent, versus the comparable period a year ago.
Deposits for the 2018 fourth quarter increased $287.5 million,
or 0.8 percent, to $36.38 billion at December 31, 2018, while
non-interest bearing deposits decreased $142.5 million and
represent 33.0 percent of total deposits. Overall deposit growth in
2018 was 8.8 percent, or $2.94 billion, when compared with deposits
at the end of 2017. Average total deposits for 2018 were $35.14
billion, growing $1.98 billion, or 6.0 percent, versus average
total deposits of $33.16 billion for 2017.
“Throughout 2018, Signature Bank continued to execute its core
strategy. We expanded our network with the addition of eight
Private Client Banking teams while growing across all key metrics,
including core deposits, loans and earnings. We bolstered our West
Coast operations and added a Funds Banking Division catering to
private equity firms, which are heavily emphasized on both coasts.
This will allow us to further transform the balance sheet to
increase floating rate assets. Additionally, we continued to
reinvest in our infrastructure with the implementation of a new
loan operating system, buildouts of a new loan approval system and
foreign exchange platform as well as the reorganization of our Cash
Management and Product Management groups. Lastly, on January 1,
2019, we innovated when we launched SignetTM, a new proprietary,
blockchain-based digital payments platform, allowing our commercial
clients to interact in a real-time and transparent manner,”
explained Joseph J. DePaolo, President and Chief Executive
Officer.
“This past year has been a volatile time for the banking
industry, driven by a variety of external factors. However, we
continued to perform by keeping with our founding mission and
sustaining our leadership position in serving privately held
businesses. Our focus, initiatives and proven capabilities should
differentiate us from the pack, and we are prepared to address any
challenges that may lie ahead,” DePaolo concluded.
Scott A. Shay, Chairman of the Board, said: “We are ever-mindful
of the fact that technology is reshaping banking. We could not have
founded Signature Bank in 2001 as a full-service commercial bank
with a new single point of contact model without the technological
advancements of the 1990s. We continuously examine the needs of our
business clients to set our technology agenda, and strive to save
them money and keep it safe, while allowing them to focus on their
own business -- and not banking. It is from this fundamental
perspective Signet was born. By launching Signet, we are empowering
our clients to make instantaneous USD payments in real time
(24/7/365) at no cost per transaction. With Signet, we are playing
a key role in the revolutionizing of commercial digital
payments.
“The client response to Signet has been uniformly positive.
Clients are already evaluating their business practices to
determine how they might bring their ecosystems onto the Signet
platform. There are no other platforms that offer transparency and
convenience commercially at this time. We are working with clients
across specific industries to tailor the system as we strive for
continuous improvement. We recognize banking will be vastly
different five years from now, and we aim to be among the
leaders.”
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 9.70 percent, 12.09 percent, 12.09 percent and 13.39
percent, respectively, as of December 31, 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 9.21 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 February 15, 2019 to common stockholders of record at the
close of business on February 1, 2019. In the fourth 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 November 1,
2018. Additionally, during the 2018 fourth quarter, the Bank
repurchased 358,492 shares of common stock for a total of $41.8
million.
Net Interest Income
Net interest income for the 2018 fourth quarter was $335.0
million, up $15.3 million, or 4.8 percent, when compared with the
same period last year, primarily due to growth in average
interest-earning assets. Average interest-earning assets of $45.94
billion for the 2018 fourth quarter represent an increase of $4.40
billion, or 10.6 percent, from the 2017 fourth quarter. The yield
on interest-earning assets for the 2018 fourth quarter rose 28
basis points to 3.99 percent, compared to the fourth quarter of
last year.
Average cost of deposits and average cost of funds for the 2018
fourth quarter increased by 40 and 48 basis points, to 0.98 percent
and 1.19 percent, respectively, versus the comparable period a year
ago.
Net interest margin on a tax-equivalent basis for the 2018
fourth quarter was 2.90 percent versus 3.07 percent reported in the
2017 fourth quarter and 2.88 percent in the 2018 third quarter.
Excluding loan prepayment penalty income in both quarters, linked
quarter core net interest margin on a tax-equivalent basis
decreased five basis points to 2.80 percent.
Provision for Loan Losses
The Bank’s provision for loan losses for the fourth quarter of
2018 was $6.4 million, a decrease of $35.3 million, or 84.6
percent, versus the 2017 fourth quarter. The decrease was primarily
due to a decline in charge-offs for taxi medallion loans.
Net recoveries for the 2018 fourth quarter were $2.9 million, or
0.03 percent of average loans on an annualized basis, versus net
charge-offs of $11,000, or less than one basis point of average
loans on an annualized basis, for the 2018 third quarter and $38.8
million, or 0.48 percent, for the 2017 fourth quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2018 fourth quarter was $5.9
million, down $2.6 million from $8.5 million reported in the fourth
quarter of last year. The decrease was driven by a $4.2 million
increase in tax credit investment amortization. These investments
positively impact our effective tax rate.
Non-interest expense for the 2018 fourth quarter was $119.2
million, an increase of $9.2 million, or 8.4 percent, versus $110.0
million reported in the 2017 fourth quarter. The increase was
primarily a result of new private client banking teams joining, as
well as an increase in costs in our risk management and compliance
related activities.
The Bank’s efficiency ratio was 34.94 percent for the fourth
quarter of 2018 compared with 33.50 percent for the same period a
year ago, and 35.59 percent for the third quarter of 2018.
Loans
Loans, excluding loans held for sale, expanded $1.30 billion, or
3.7 percent, during the 2018 fourth quarter to $36.42 billion,
versus $35.13 billion at September 30, 2018. At December 31, 2018,
loans accounted for 76.9 percent of total assets, compared with
76.6 percent at the end of the 2018 third quarter and 75.6 percent
at the end of 2017. Average loans, excluding loans held for sale,
reached $35.64 billion in the 2018 fourth quarter, growing $1.12
billion, or 3.2 percent, from the 2018 third quarter and $3.86
billion, or 12.2 percent, from the fourth quarter of 2017. The
increase in loans for the quarter was primarily driven by growth in
commercial and industrial loans, including specialty finance.
At December 31, 2018, non-accrual loans were $108.6 million,
representing 0.30 percent of total loans and 0.23 percent of total
assets, versus non-accrual loans of $134.2 million, or 0.38 percent
of total loans, at September 30, 2018 and $326.9 million, or 1.00
percent of total loans, at December 31, 2017. Excluding
non-accruing loans secured by taxi medallions of $88.5 million,
non-accrual loans for the remainder of the portfolio are $20.1
million, or six basis points of total loans. At December 31, 2018,
the ratio of allowance for loan and lease losses to total loans was
0.63 percent, versus 0.63 percent at September 30, 2018 and 0.60
percent at December 31, 2017. Additionally, the ratio of allowance
for loan and lease losses to non-accrual loans, or the coverage
ratio, was 212 percent for the 2018 fourth quarter versus 164
percent for the 2018 third quarter and 60 percent for the 2017
fourth quarter.
Conference Call
Signature Bank’s management will host a conference call to
review results of the 2018 fourth quarter and year-end on Thursday,
January 17, 2019, 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 #3184218. 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 #3184218. The replay will be available from approximately 1:00
PM ET on Thursday, January 17, 2019 through 11:59 PM ET on Monday,
January 21, 2019.
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 needs of privately owned
businesses, their owners and senior managers.
Signature Bank offers a wide variety of business and personal
banking products and services. Its 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; and, 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, and new products, future
dividends and share repurchases. 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
December 31,
Twelve months ended
December 31,
(dollars in thousands, except per share amounts)
2018 2017 2018
2017 INTEREST AND DIVIDEND INCOME Loans
held for sale $ 2,658 1,179 10,863 4,334 Loans and leases, net
377,670 316,166 1,389,435 1,191,194 Securities available-for-sale
58,939 51,004 224,012 201,657 Securities held-to-maturity 14,492
14,509 57,930 58,855 Other investments 7,058
4,100 26,680
14,129 Total interest income
460,817 386,958
1,708,920 1,470,169
INTEREST
EXPENSE Deposits 89,985 50,057 289,248 171,829 Federal funds
purchased and securities sold under agreements to repurchase 5,575
2,367 13,484 9,695 Federal Home Loan Bank borrowings 26,580 11,118
92,628 36,524 Subordinated debt 3,645
3,645 14,573
14,535 Total interest expense
125,785 67,187
409,933 232,583 Net interest income
before provision for loan and lease losses 335,032 319,771
1,298,987 1,237,586 Provision for loan and lease losses
6,441 41,737
162,524 263,297 Net interest
income after provision for loan and lease losses
328,591 278,034
1,136,463 974,289
NON-INTEREST
INCOME Commissions 3,416 3,204 13,120 12,299 Fees and service
charges 7,845 5,431 28,553 23,557 Net gains on sales of securities
179 700 989 3,963 Net gains on sales of loans 1,605 2,561 6,738
9,218 Other-than-temporary impairment losses on securities: Total
impairment losses on securities - (21 ) (2 ) (654 ) Portion
recognized in other comprehensive income (before taxes) -
(11 ) (14 ) 21
Net impairment losses on securities recognized in earnings -
(32 ) (16 ) (633 ) Tax credit investment amortization (8,540 )
(4,298 ) (30,195 ) (15,821 ) Other Income
1,414 931 4,089
3,458 Total non-interest income
5,919 8,497
23,278 36,041
NON-INTEREST
EXPENSE Salaries and benefits 77,071 68,384 302,095 273,240
Occupancy and equipment 9,139 7,860 34,311 32,141 Information
technology 7,071 5,879 25,732 22,623 FDIC assessment fees 3,751
6,754 25,256 26,996 Professional fees 3,613 2,799 13,698 12,021
Other general and administrative 18,498
18,288 85,186
68,045 Total non-interest expense
119,143 109,964
486,278 435,066 Income before
income taxes 215,367 176,567 673,463 575,264 Income tax expense
54,527 61,701
168,121 188,055 Net
income $ 160,840 114,866
505,342 387,209
PER
COMMON SHARE DATA Earnings per share – basic $ 2.94 2.12 9.27
7.17 Earnings per share – diluted $ 2.94 2.11 9.23 7.12 Dividends
per common share $ 0.56 - 1.12 -
SIGNATURE BANK CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION December 31, December 31,
2018 2017 (dollars in thousands, except shares and
per share amounts)
(unaudited)
ASSETS Cash and due from banks $ 269,204 290,078
Short-term investments 48,051
45,388 Total cash and cash equivalents
317,255 335,466
Securities available-for-sale 7,301,604 6,953,719 Securities
held-to-maturity (fair value $1,845,198 at December 31, 2018 and
$1,983,087 at December 31, 2017) 1,883,533 1,996,376 Federal Home
Loan Bank stock 264,877 227,920 Loans held for sale 485,305 432,277
Loans and leases, net 36,193,122 32,416,580 Premises and equipment,
net 59,051 61,571 Accrued interest and dividends receivable 141,829
117,070 Other assets 718,240
576,741 Total assets $
47,364,816 43,117,720
LIABILITIES
AND SHAREHOLDERS' EQUITY Deposits Non-interest-bearing $
12,016,197 11,353,038 Interest-bearing
24,362,576 22,086,789 Total
deposits 36,378,773
33,439,827 Federal funds purchased and securities sold under
agreements to repurchase 820,000 790,000 Federal Home Loan Bank
borrowings 4,970,000 4,195,000 Subordinated debt 258,174 257,381
Accrued expenses and other liabilities 530,729
403,821 Total liabilities
42,957,676 39,086,029
Shareholders’ equity Preferred stock, par value $.01 per share;
61,000,000 shares authorized; none issued at December 31, 2018 and
December 31, 2017 - - Common stock, par value $.01 per share;
64,000,000 shares authorized; 55,405,531 shares issued and
55,039,433 outstanding at December 31, 2018; 54,979,213 shares
issued and 54,977,971 outstanding at December 31, 2017 554 550
Additional paid-in capital 1,862,896 1,809,642 Retained earnings
2,730,899 2,290,537 Treasury stock, 366,098 shares at December 31,
2018 and 1,242 shares at December 31, 2017 (42,680 ) (171 )
Accumulated other comprehensive loss (144,529
) (68,867 ) Total shareholders' equity
4,407,140 4,031,691
Total liabilities and shareholders' equity $
47,364,816 43,117,720
SIGNATURE
BANK FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited) Three months ended
December 31,
Twelve months ended
December 31,
(in thousands, except ratios and per share amounts)
2018 2017 2018
2017 PER COMMON SHARE Net income -
basic $ 2.94 $ 2.12 $ 9.27 $ 7.17 Net income - diluted $ 2.94 $
2.11 $ 9.23 $ 7.12 Average shares outstanding - basic 54,510 54,098
54,406 54,001 Average shares outstanding - diluted 54,631 54,377
54,666 54,418 Book value $ 80.07 $ 73.33 $ 80.07 $ 73.33
SELECTED FINANCIAL DATA Return on average total assets 1.37
% 1.08 % 1.12 % 0.95 % Return on average shareholders' equity 14.76
% 11.44 % 11.98 % 10.13 % Efficiency ratio (1) 34.94 % 33.50 %
36.78 % 34.16 % Yield on interest-earning assets 3.98 % 3.70 % 3.85
% 3.66 % Yield on interest-earning assets, tax-equivalent basis
(1)(2) 3.99 % 3.71 % 3.85 % 3.67 % Cost of deposits and borrowings
1.19 % 0.71 % 1.01 % 0.64 % Net interest margin 2.89 % 3.05 % 2.92
% 3.08 % Net interest margin, tax-equivalent basis (2)(3) 2.90 %
3.07 % 2.93 % 3.09 % (1) See "Non-GAAP Financial Measures"
for related calculation. (2) Based on the 21 percent U.S. federal
statutory tax rate for the 2018 periods presented, and the 35
percent rate for the 2017 periods presented. The tax-equivalent
basis is considered 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. This ratio
is a metric used by management to evaluate the impact of tax-exempt
assets on the Bank's yield on interest-earning assets and net
interest margin. (3) See "Net Interest Margin Analysis" for related
calculation.
December 31,
2018
September 30,
2018
December 31,
2017
CAPITAL RATIOS Tangible
common equity (4) 9.21 % 9.15 % 9.29 % Tier 1 leverage (5) 9.70 %
9.67 % 9.72 % Common equity Tier 1 risk-based (5) 12.09 % 12.16 %
11.99 % Tier 1 risk-based (5) 12.09 % 12.16 % 11.99 % Total
risk-based (5) 13.39 % 13.47 % 13.32 %
ASSET QUALITY
Non-accrual loans $ 108,654 $ 134,197 $ 326,918 Allowance for loan
and lease losses $ 230,005 $ 220,706 $ 195,959 Allowance for loan
and lease losses to non-accrual loans 211.69 % 164.46 % 59.94 %
Allowance for loan and lease losses to total loans 0.63 % 0.63 %
0.60 % Non-accrual loans to total loans 0.30 % 0.38 % 1.00 %
Quarterly net charge-offs (recoveries) to average loans, annualized
(0.03 )% 0.00 % 0.48 % (4) We define tangible common equity
as the ratio of total tangible common equity to total tangible
assets (the "TCE ratio"). 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. See "Non-GAAP Financial Measures" for related
calculation. (5) December 31, 2018 ratios are preliminary.
SIGNATURE BANK NET INTEREST MARGIN
ANALYSIS (unaudited) Three months ended Three
months ended December 31, 2018 December 31, 2017 (dollars in
thousands)
AverageBalance
InterestIncome/Expense
AverageYield/Rate
AverageBalance
InterestIncome/Expense
AverageYield/Rate
INTEREST-EARNING ASSETS Short-term investments $ 459,354
2,715 2.34 % 436,240 1,420 1.29 % Investment securities 9,489,265
77,774 3.28 % 9,120,767 68,193 2.99 % Commercial loans, mortgages
and leases (1)(2) 35,423,810 376,280 4.21 % 31,524,498 315,158 3.97
% Residential mortgages and consumer loans 220,994 2,464 4.42 %
257,324 2,296 3.54 % Loans held for sale
345,053 2,658 3.06 %
195,823 1,179 2.39 %
Total interest-earning assets 45,938,476
461,891 3.99 %
41,534,652 388,246 3.71 %
Non-interest-earning assets 664,475
617,240
Total assets $
46,602,951
42,151,892
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand $ 3,611,831 15,583 1.71 % 3,952,056
9,412 0.94 % Money market 18,478,235 64,610 1.39 % 17,331,981
35,587 0.81 % Time deposits 1,898,217 9,792 2.05 % 1,598,735 5,058
1.26 % Non-interest-bearing demand deposits
12,276,668 - -
11,138,285 - -
Total deposits 36,264,951 89,985
0.98 % 34,021,057
50,057 0.58 % Subordinated debt 258,043 3,645
5.65 % 257,251 3,645 5.67 % Other borrowings
5,286,978 32,155 2.41 %
3,480,120 13,485 1.54 %
Total deposits and borrowings 41,809,972
125,785 1.19 %
37,758,428 67,187 0.71 % Other
non-interest-bearing liabilities and shareholders' equity
4,792,979
4,393,464
Total liabilities and shareholders' equity $
46,602,951
42,151,892
OTHER
DATA Net interest income / interest rate spread (1) 336,106
2.80 % 321,059 3.00 % Tax-equivalent adjustment (1,074 ) (1,288 )
Net interest income, as reported 335,032 319,771 Net
interest margin 2.89 % 3.05 % Tax-equivalent effect 0.01 % 0.02 %
Net interest margin on a tax-equivalent basis (1)(2) 2.90 % 3.07 %
Ratio of average interest-earning assets to average
interest-bearing liabilities 109.87 % 110.00 %
(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
December 31, 2018 and 35 percent for the period ended December 31,
2017.
(2)
See "Non-GAAP Financial Measures" for
related calculation.
SIGNATURE BANK NET INTEREST
MARGIN ANALYSIS (unaudited) Twelve months ended
Twelve months ended December 31, 2018 December 31, 2017 (dollars in
thousands)
AverageBalance
InterestIncome/Expense
AverageYield/Rate
AverageBalance
InterestIncome/Expense
AverageYield/Rate
INTEREST-EARNING ASSETS Short-term investments $ 463,799
8,925 1.92 % 462,351 5,017 1.09 % Investment securities 9,392,563
299,697 3.19 % 8,948,973 269,624 3.01 % Commercial loans, mortgages
and leases (1)(2) 33,972,459 1,383,531 4.07 % 30,299,144 1,184,911
3.91 % Residential mortgages and consumer loans 230,727 9,719 4.21
% 267,757 10,147 3.79 % Loans held for sale
374,610 10,863 2.90 %
196,585 4,334 2.20 %
Total interest-earning assets 44,434,158
1,712,735 3.85 %
40,174,810 1,474,033 3.67 %
Non-interest-earning assets 611,430
578,233
Total assets $
45,045,588
40,753,043
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand $ 3,661,849 52,426 1.43 % 3,864,932
29,915 0.77 % Money market 17,878,509 207,690 1.16 % 17,086,353
125,014 0.73 % Time deposits 1,648,433 29,132 1.77 % 1,504,887
16,900 1.12 % Non-interest-bearing demand deposits
11,954,403 - -
10,702,062 - -
Total deposits 35,143,194
289,248 0.82 % 33,158,234
171,829 0.52 % Subordinated debt
257,748 14,573 5.65 % 256,953 14,535 5.66 % Other borrowings
5,073,852 106,112
2.09 % 3,143,218 46,219
1.47 % Total deposits and borrowings
40,474,794 409,933 1.01 %
36,558,405 232,583 0.64 %
Other non-interest-bearing liabilities and shareholders' equity
4,570,794
4,194,638
Total liabilities and shareholders' equity $
45,045,588
40,753,043
OTHER
DATA Net interest income / interest rate spread (1) 1,302,802
2.84 % 1,241,450 3.03 % Tax-equivalent adjustment (3,815 ) (3,864 )
Net interest income, as reported 1,298,987 1,237,586
Net interest margin 2.92 % 3.08 % Tax-equivalent effect 0.01 % 0.01
% Net interest margin on a tax-equivalent basis (1)(2) 2.93 % 3.09
% Ratio of average interest-earning assets to average
interest-bearing liabilities 109.78 % 109.89 %
(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 December 31,
2018 and 35 percent for the period ended December 31, 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)
December 31,
2018
September 30,
2018
December 31,
2017
Consolidated common shareholders' equity $ 4,407,140 4,237,997
4,031,691 Intangible assets 50,020
43,372 28,643 Consolidated tangible common
shareholders' equity (TCE) $ 4,357,120
4,194,625 4,003,048
Consolidated total
assets $ 47,364,816 45,870,710 43,117,720 Intangible assets
50,020 43,372 28,643
Consolidated tangible total assets (TTA) $ 47,314,796
45,827,338 43,089,077 Tangible common
equity ratio (TCE/TTA) 9.21% 9.15%
9.29% The following table presents the
efficiency ratio calculation: Three
months ended
December 31,
Twelve months ended
December 31,
(dollars in thousands)
2018
2017 2018 2017
Non-interest expense (NIE) $ 119,143
109,964 486,278
435,066 Net interest income before provision for loan and
lease losses 335,032 319,771 1,298,987
1,237,586 Other non-interest income 5,919
8,497 23,278
36,041 Total income (TI) $
340,951 328,268 1,322,265
1,273,627 Efficiency ratio (NIE/TI)
34.94 % 33.50 %
36.78 % 34.16 % The following table reconciles
yield on interest-earning assets to the yield on interest-earning
assets on a tax-equivalent basis:
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017
2018 2017 Interest income
(as reported) $ 460,817 386,958 1,708,920 1,470,169 Tax-equivalent
adjustment 1,074 1,288
3,815 3,864
Interest income, tax-equivalent basis $ 461,891
388,246 1,712,735
1,474,033 Interest-earnings assets
$ 45,938,476 41,534,652
44,434,158 40,174,810
Yield on interest-earning assets 3.98 % 3.70 % 3.85 % 3.66 %
Tax-equivalent effect 0.01 %
0.01 % 0.00 % 0.01 % Yield on
interest-earning assets, tax-equivalent basis
3.99 % 3.71 % 3.85 % 3.67
% 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
December 31,
Three months ended
September 30,
Twelve months ended
December 31,
2018 2017
2018 2017
2018 2017 Net interest margin (as
reported) 2.89 % 3.05 % 2.87 % 3.04 %
2.92 % 3.08 % Tax-equivalent adjustment 0.01 % 0.02 %
0.01 % 0.01 % 0.01 % 0.01 % Margin contribution from loan
prepayment penalty income (0.10 )%
(0.09 )% (0.03 )% (0.06 )%
(0.06 )% (0.07 )% Core net interest margin,
tax-equivalent basis excluding loan prepayment penalty income
2.80 % 2.98 % 2.85 %
2.99 % 2.87 % 3.02 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190117005096/en/
Signature BankInvestor Contact:Eric R.
Howell, 646-822-1402Executive Vice President – Corporate &
Business Developmentehowell@signatureny.comorMedia
Contact:Susan J. Lewis,
646-822-1825slewis@signatureny.com
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