- Net Income for the 2019 Second Quarter Was $147.9 Million,
or $2.72 Diluted Earnings Per Share, Versus $154.6 Million, or
$2.83 Diluted Earnings Per Share, Reported in the 2018 Second
Quarter
- The Bank Declared a Cash Dividend of $0.56 Per Share,
Payable on or After August 15, 2019 to Common Stockholders of
Record at the Close of Business on August 1, 2019
- During the 2019 Second Quarter, the Bank Repurchased 412,977
Shares of Common Stock For a Total of $50.0 Million. Thus Far, the
Bank Has Repurchased $114.7 Million of Common Stock From Its $500
Million Authorization
- Total Deposits in the Second Quarter Grew $917.9 Million to
$37.54 Billion; Total Deposits Have Grown $2.55 Billion, or 7.3
Percent, Since the End of the 2018 Second Quarter. Average Deposits
Increased $456.0 Million in the 2019 Second Quarter
- For the 2019 Second Quarter, Loans Increased $466.5 Million,
or 1.2 Percent, to $37.93 Billion. Since the End of the 2018 Second
Quarter, Loans Have Increased 11.1 Percent, or $3.78 Billion.
During the 2019 Second Quarter, the Bank Sold $46.4 Million of Taxi
Medallion Loans and Sold a $91.8 Million Portfolio of Signature
Financial Equipment Loans. Excluding These Sales, Loans Would Have
Increased $604.7 Million
- Non-Accrual Loans Were $41.3 Million, or 0.11 Percent of
Total Loans, at June 30, 2019, Versus $94.7 Million, or 0.25
Percent, at the End of the 2019 First Quarter and $158.1 Million,
or 0.46 Percent, at the End of the 2018 Second Quarter. Excluding
Taxi Medallion Loans, Non-Accrual Loans Were $22.5 Million, or Six
Basis Points of Total Loans
- Net Interest Margin on a Tax-Equivalent Basis was 2.74
Percent, Compared with 2.75 Percent for the 2019 First Quarter and
2.94 Percent for the 2018 Second Quarter. Core Net Interest Margin
on a Tax-Equivalent Basis Excluding Loan Prepayment Penalty Income
Decreased Two Basis Points to 2.71 Percent, Compared with 2.73
Percent for the 2019 First Quarter
- Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1
Risk-Based, and Total Risk-Based Capital Ratios were 9.70 Percent,
11.59 Percent, 11.59 Percent, and 12.82 Percent, Respectively, at
June 30, 2019. Signature Bank Remains Significantly Above FDIC
“Well Capitalized” Standards. Tangible Common Equity Ratio was 9.46
Percent
- In the 2019 Second Quarter, the Bank Appointed Two Private
Client Banking Teams. Thus Far in 2019, Four Teams have Joined the
Bank, Including the 28 Person Venture Banking Group and the Eight
Person Kanno-Wood Team Which Specializes in Banking to Mortgage
Servicing Clients
Signature Bank (Nasdaq: SBNY), a New York-based full service
commercial bank, today announced results for its second quarter
ended June 30, 2019.
Net income for the 2019 second quarter was $147.9 million, or
$2.72 diluted earnings per share, versus $154.6 million, or $2.83
diluted earnings per share, for the 2018 second quarter. The
decrease in net income for the 2019 second quarter, versus the
comparable quarter last year, is due to an increase of $19.3
million in non-interest expenses mostly due to the significant
hiring of private client banking teams, including nearly 50
employees added for the Fund Banking Division, Venture Banking
Group and the Kanno-Wood Team.
Net interest income for the 2019 second quarter reached $326.3
million, up $5.3 million, or 1.6 percent, when compared with the
2018 second quarter. This increase is primarily due to growth in
average interest-earning assets. Total assets reached $48.88
billion at June 30, 2019, an increase of $3.66 billion, or 8.1
percent, from $45.22 billion at June 30, 2018. Average assets for
the 2019 second quarter reached $48.78 billion, an increase of
$4.20 billion, or 9.4 percent, compared with the 2018 second
quarter.
Deposits for the 2019 second quarter rose $917.9 million to
$37.54 billion at June 30, 2019. When compared with deposits at
June 30, 2018, overall deposit growth for the last twelve months
was 7.3 percent, or $2.55 billion. Average deposits for the 2019
second quarter reached $36.93 billion, an increase of $456.0
million.
“During the past several years, and particularly over the last
twelve months, Signature Bank has been focused on expanding our
franchise and securing a larger presence throughout the national
banking landscape. To reflect, we began diversifying our revenue
streams with the launch of Signature Financial, our specialty
finance subsidiary. We continued the diversification and expansion
of the Bank with the addition of the Digital Banking Team and the
Fund Banking Division, which have both already made meaningful
contributions. Moreover, we recently added the Venture Banking
Group as well as the Kanno-Wood team, which will provide treasury
management products and services to residential and commercial
mortgage servicers. We also launched Signet, our 24/7 payments
platform, which today continues to be the only such platform
offered by an FDIC-insured institution. All these banking teams,
which are national in scope, have raised Signature Bank’s profile
and offerings and are contributing to a more diversified credit and
asset liability position over the short and long term,” explained
Joseph J. DePaolo, President and Chief Executive Officer.
“Signature Bank is establishing a banking presence across the
country. We have always grown this institution prudently and
methodically, utilizing our strong reputation and solid capital
position to attract the best bankers available in their industry
and keeping the needs of our clients and their depositor safety at
the forefront of all we do,” DePaolo concluded.
“In spite of a challenging deposit environment, we once again
delivered solid deposit and loan growth leading to strong earnings.
Also, we further reduced our risk in the Taxi Medallion portfolio
with the sale of $46.4 million in NYC taxi loans on 375 medallions.
Additionally, we have put in place several major new initiatives,
which will provide significant benefit to our institution over the
coming years. Personally, I have never been more positive on our
future growth prospects. Our model of doing business remains
robust, and we will continue to build value for our long-term
investors,” explained Scott A. Shay, Chairman of the Board.
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, 11.59 percent, 11.59 percent, and 12.82
percent, respectively, as of June 30, 2019. 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 9.46 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.
The Bank declared a cash dividend for the second quarter of
$0.56 per share, payable on or after August 15, 2019 to common
stockholders of record at the close of business on August 1, 2019.
In the second quarter of 2019, the Bank paid the first quarter’s
cash dividend of $0.56 per share to common stockholders of record
at the close of business on May 1, 2019. Additionally, during the
2019 second quarter, the Bank repurchased 412,977 shares of common
stock for a total of $50.0 million. Since the 2018 fourth quarter,
the Bank has repurchased $114.7 million of common stock from its
$500 million authorization.
Net Interest Income
Net interest income for the 2019 second quarter was $326.3
million, an increase of $5.3 million, or 1.6 percent, versus the
same period last year, primarily due to growth in average
interest-earning assets. Average interest-earning assets of $47.94
billion for the 2019 second quarter represent an increase of $4.05
billion, or 9.2 percent, from the 2018 second quarter. Yield on
interest-earning assets for the 2019 second quarter increased 21
basis points to 4.03 percent, compared to the second quarter of
last year.
Average cost of deposits and average cost of funds for the
second quarter of 2019 increased by 43 and 46 basis points, to 1.19
percent and 1.42 percent, respectively, versus the comparable
period a year ago.
Net interest margin on a tax-equivalent basis for the 2019
second quarter was 2.74 percent versus 2.94 percent reported in the
2018 second quarter and 2.75 percent in the 2019 first quarter.
Excluding loan prepayment penalties in both quarters, linked
quarter core net interest margin on a tax-equivalent basis
decreased two basis points to 2.71 percent.
Provision for Loan Losses
The Bank’s provision for loan losses for the second quarter of
2019 was $5.4 million, compared with $6.3 million for the 2019
first quarter and $8.0 million for the 2018 second quarter.
Net recoveries for the 2019 second quarter were $3.7 million, or
0.04 percent of average loans, on an annualized basis, versus net
charge offs of $879,000, or 0.01 percent, for the 2019 first
quarter and net charge offs of $3.0 million, or 0.04 percent, for
the 2018 second quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2019 second quarter was $8.6
million, up $3.0 million when compared with $5.6 million reported
in the 2018 second quarter. The increase was driven by a $3.0
million increase in net gains on sales of loans, mostly due to a
portfolio sale of Signature Financial equipment loans.
Non-interest expense for the second quarter of 2019 was $131.9
million, an increase of $19.3 million, or 17.1 percent, versus
$112.6 million reported in the 2018 second quarter. The increase
was predominantly due to an increase of $8.7 million in salaries
and benefits from the significant hiring of private client banking
teams, including nearly 50 employees added for the Fund Banking
Division, the Venture Banking Group and the Kanno-Wood Team.
The Bank’s efficiency ratio was 39.4 percent for the 2019 second
quarter versus 34.5 percent for the comparable period last year.
The Bank’s efficiency ratio was negatively impacted by the decline
in net interest margin as well as an increase in salaries and
benefits predominantly due to the aforementioned hiring of private
client banking teams.
Loans
Loans, excluding loans held for sale, grew $466.5 million, or
1.2 percent, during the second quarter of 2019 to $37.93 billion,
compared with $37.47 billion at March 31, 2019. Average loans,
excluding loans held for sale, reached $37.82 billion in the 2019
second quarter, growing $950.9 million, or 2.6 percent, from the
2019 first quarter and $4.15 billion, or 12.3 percent, from the
2018 second quarter. For the third consecutive quarter, the
increase in loans for the second quarter was primarily driven by
growth in commercial and industrial loans.
In the 2019 second quarter, the Bank sold $46.4 million of its
non-performing New York City taxi medallion loans. The Bank now has
$18.8 million in non-performing taxi medallion loans and $43.8
million in repossessed taxi medallions remaining. Additionally,
capitalizing on the interest rate environment and as part of our
ongoing management of credit exposures to our clients, Signature
Financial’s Capital Markets Desk sold a $91.8 million portfolio of
performing equipment loans for a gain of $2.4 million.
At June 30, 2019, non-accrual loans were $41.3 million,
representing 0.11 percent of total loans and 0.08 percent of total
assets, compared with non-accrual loans of $94.7 million, or 0.25
percent of total loans, at March 31, 2019 and $158.1 million, or
0.46 percent of total loans, at June 30, 2018. Excluding
non-accruing loans secured by taxi medallions of $18.8 million,
non-accrual loans for the remainder of the portfolio are $22.5
million, or six basis points of total loans. The ratio of allowance
for loan and lease losses to total loans at June 30, 2019 was 0.64
percent, up one basis point from March 31, 2019 and June 30, 2018.
Additionally, the ratio of allowance for loan and lease losses to
non-accrual loans, or the coverage ratio, was 593 percent for the
2019 second quarter versus 249 percent for the first quarter of
2019 and 135 percent for the 2018 second quarter.
Conference Call
Signature Bank’s management will host a conference call to
review results of the 2019 second quarter on Thursday, July 18,
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 #6935767. 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 #6935767. The replay will be available from approximately 1:00
PM ET on Thursday, July 18, 2019 through 11:59 PM ET on Monday,
July 22, 2019.
About Signature Bank
Signature Bank, member FDIC, is a New York-based full-service
commercial bank with 31 private client offices throughout the New
York metropolitan area and Connecticut as well as 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’s specialty finance subsidiary, Signature
Financial, LLC, provides equipment finance and leasing. Signature
Securities Group Corporation, a wholly owned Bank subsidiary, is a
licensed broker-dealer, investment adviser and member FINRA/SIPC,
offering investment, brokerage, asset management and insurance
products and services.
Signature Bank recently introduced its revolutionary,
blockchain-based digital payments platform, Signet™, enabling
real-time payments for its commercial clients. The Signet Platform
allows the Bank’s commercial clients to make payments in U.S.
dollars, 24/7/365, safely and securely, without transaction fees.
Signature Bank is the first FDIC-insured bank to launch a
blockchain-based digital payments platform, and Signet is the first
such platform to be approved for use by the NYS Department of
Financial Services.
Signature Bank is one of the top 40 largest banks in the U.S.,
based on deposits (S&P Global Market Intelligence). The Bank
recently earned several third-party recognitions, including:
appeared on Forbes' Best Banks in America list for the ninth
consecutive year in 2019; 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). The Bank also ranked second
nationally in the Best Business Bank, Best Private Bank and Best
Attorney Escrow Services categories of the National Law Journal’s
2019 “Best of” survey.
For more information, please visit www.signatureny.com.
This press release and oral statements made from time to time by
our representatives contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties. You should not place
undue reliance on those statements because they are subject to
numerous risks and uncertainties relating to our operations and
business environment, all of which are difficult to predict and may
be beyond our control. Forward-looking statements include
information concerning our future results, interest rates and the
interest rate environment, loan and deposit growth, loan
performance, operations, new private client teams and other hires,
new office openings and business strategy. These statements often
include words such as "may," "believe," "expect," "anticipate,"
"intend," “potential,” “opportunity,” “could,” “project,” “seek,”
“should,” “will,” “would,” "plan," "estimate" or other similar
expressions. As you consider forward-looking statements, you should
understand that these statements are not guarantees of performance
or results. They involve risks, uncertainties and assumptions that
could cause actual results to differ materially from those in the
forward-looking statements and can change as a result of many
possible events or factors, not all of which are known to us or in
our control. These factors include but are not limited to: (i)
prevailing economic conditions; (ii) changes in interest rates,
loan demand, real estate values and competition, any of which can
materially affect origination levels and gain on sale results in
our business, as well as other aspects of our financial
performance, including earnings on interest-bearing assets; (iii)
the level of defaults, losses and prepayments on loans made by us,
whether held in portfolio or sold in the whole loan secondary
markets, which can materially affect charge-off levels and required
credit loss reserve levels; (iv) changes in monetary and fiscal
policies of the U.S. Government, including policies of the U.S.
Treasury and the Board of Governors of the Federal Reserve System;
(v) changes in the banking and other financial services regulatory
environment and (vi) competition for qualified personnel and
desirable office locations. Although we believe that these
forward-looking statements are based on reasonable assumptions,
beliefs and expectations, if a change occurs or our beliefs,
assumptions and expectations were incorrect, our business,
financial condition, liquidity or results of operations may vary
materially from those expressed in our forward-looking statements.
Additional risks are described in our quarterly and annual reports
filed with the FDIC. You should keep in mind that any
forward-looking statements made by Signature Bank speak only as of
the date on which they were made. New risks and uncertainties come
up from time to time, and we cannot predict these events or how
they may affect the Bank. Signature Bank has no duty to, and does
not intend to, update or revise the forward-looking statements
after the date on which they are made. In light of these risks and
uncertainties, you should keep in mind that any forward-looking
statement made in this release or elsewhere might not reflect
actual results.
SIGNATURE BANK CONSOLIDATED STATEMENTS OF INCOME
(unaudited) Three months endedJune 30, Six months
endedJune 30, (dollars in thousands, except per share amounts)
2019
2018
2019
2018
INTEREST AND DIVIDEND INCOME Loans held for sale
$
646
3,499
2,369
5,763
Loans and leases, net
398,746
337,584
780,107
660,021
Securities available-for-sale
57,897
54,428
116,998
106,692
Securities held-to-maturity
15,441
14,510
31,054
29,043
Other investments
7,931
6,783
15,697
12,355
Total interest income
480,661
416,804
946,225
813,874
INTEREST EXPENSE Deposits
109,447
65,201
213,494
120,063
Federal funds purchased and securities sold under agreements to
repurchase
6,063
3,003
11,892
5,390
Federal Home Loan Bank borrowings
35,219
23,945
68,276
41,980
Subordinated debt
3,644
3,643
7,283
7,283
Total interest expense
154,373
95,792
300,945
174,716
Net interest income before provision for loan and lease losses
326,288
321,012
645,280
639,158
Provision for loan and lease losses
5,408
7,970
11,717
148,732
Net interest income after provision for loan and lease losses
320,880
313,042
633,563
490,426
NON-INTEREST INCOME Commissions
3,739
3,280
7,379
6,455
Fees and service charges
7,546
7,152
15,574
13,794
Net gains on sales of securities
361
357
914
798
Net gains on sales of loans
4,133
1,183
6,128
3,202
Other-than-temporary impairment losses on securities: Total
impairment losses on securities
-
-
-
(2
)
Portion recognized in other comprehensive income (before taxes)
-
-
-
(14
)
Net impairment losses on securities recognized in earnings
-
-
-
(16
)
Tax credit investment amortization
(9,439
)
(7,423
)
(18,592
)
(13,285
)
Other Income
2,255
1,066
3,279
1,870
Total non-interest income
8,595
5,615
14,682
12,818
NON-INTEREST EXPENSE Salaries and benefits
84,446
75,720
164,315
148,883
Occupancy and equipment
10,524
8,335
21,622
16,534
Information technology
8,968
6,291
17,454
12,578
FDIC assessment fees
3,164
7,447
6,347
14,434
Professional fees
3,731
3,503
6,619
6,778
Other general and administrative
21,055
11,297
40,594
50,718
Total non-interest expense
131,888
112,593
256,951
249,925
Income before income taxes
197,587
206,064
391,294
253,319
Income tax expense
49,676
51,479
99,318
64,261
Net income
$
147,911
154,585
291,976
189,058
PER COMMON SHARE DATA Earnings per share – basic
$
2.72
2.84
5.37
3.48
Earnings per share – diluted
$
2.72
2.83
5.36
3.47
Dividends per common share
$
0.56
-
1.12
-
SIGNATURE BANK CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION
June 30,
December 31,
2019
2018
(dollars in thousands, except shares and per share amounts)
(unaudited) ASSETS Cash and due from banks
$
204,863
269,204
Short-term investments
119,511
48,051
Total cash and cash equivalents
324,374
317,255
Securities available-for-sale
7,139,529
7,301,604
Securities held-to-maturity (fair value $2,016,610 at June 30, 2019
and $1,845,198 at December 31, 2018)
2,002,476
1,883,533
Federal Home Loan Bank stock
286,249
264,877
Loans held for sale
308,801
485,305
Loans and leases, net
37,687,653
36,193,122
Premises and equipment, net
56,854
59,051
Operating lease right-of-use assets (1)
222,473
-
Accrued interest and dividends receivable
145,583
141,829
Other assets
702,886
718,240
Total assets
$
48,876,878
47,364,816
LIABILITIES AND SHAREHOLDERS' EQUITY Deposits
Non-interest-bearing
$
12,265,712
12,016,197
Interest-bearing
25,274,744
24,362,576
Total deposits
37,540,456
36,378,773
Federal funds purchased and securities sold under agreements to
repurchase
254,000
820,000
Federal Home Loan Bank borrowings
5,362,364
4,970,000
Subordinated debt
258,568
258,174
Operating lease liabilities (1)
244,114
-
Accrued expenses and other liabilities
555,652
530,729
Total liabilities
44,215,154
42,957,676
Shareholders’ equity Preferred stock, par value $.01 per share;
61,000,000 shares authorized; none issued at June 30, 2019 and
December 31, 2018
-
-
Common stock, par value $.01 per share; 64,000,000 shares
authorized; 55,443,414 shares issued and 54,869,794 outstanding at
June 30, 2019; 55,405,531 shares issued and 55,039,433 outstanding
at December 31, 2018
554
554
Additional paid-in capital
1,847,042
1,862,896
Retained earnings
2,960,963
2,730,899
Treasury stock, 573,620 shares at June 30, 2019 and 366,098
sharesat December 31, 2018
(71,345
)
(42,680
)
Accumulated other comprehensive loss
(75,490
)
(144,529
)
Total shareholders' equity
4,661,724
4,407,140
Total liabilities and shareholders' equity
$
48,876,878
47,364,816
(1)
Effective January 1, 2019, we adopted ASU 2016-02, Leases (Topic
842) and elected not to restate comparative prior periods, a
transition option provided by ASU 2018-11, Leases- Targeted
Improvements (Topic 842).
SIGNATURE BANK FINANCIAL
SUMMARY, CAPITAL RATIOS, ASSET QUALITY (unaudited)
Three months endedJune 30, Six months endedJune 30, (in
thousands, except ratios and per share amounts)
2019
2018
2019
2018
PER COMMON SHARE Net income - basic
$
2.72
$
2.84
$
5.37
$
3.48
Net income - diluted
$
2.72
$
2.83
$
5.36
$
3.47
Average shares outstanding - basic
54,213
54,527
54,189
54,336
Average shares outstanding - diluted
54,250
54,599
54,334
54,558
Book value
$
84.96
$
74.93
$
84.96
$
74.93
SELECTED FINANCIAL DATA Return on average total
assets
1.22
%
1.39
%
1.22
%
0.86
%
Return on average shareholders' equity
12.88
%
15.22
%
12.98
%
9.32
%
Efficiency ratio (1)
39.38
%
34.47
%
38.93
%
38.33
%
Yield on interest-earning assets
4.02
%
3.81
%
4.01
%
3.78
%
Yield on interest-earning assets, tax-equivalent basis (1)(2)
4.03
%
3.82
%
4.02
%
3.78
%
Cost of deposits and borrowings
1.42
%
0.96
%
1.41
%
0.89
%
Net interest margin
2.73
%
2.93
%
2.74
%
2.97
%
Net interest margin, tax-equivalent basis (2)(3)
2.74
%
2.94
%
2.75
%
2.97
%
(1)
See "Non-GAAP Financial Measures" for related calculation.
(2)
Based on the 21 percent U.S. federal statutory tax rate for the
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.
June 30,2019 March 31,2019 December 31,2018
June 30,2018 CAPITAL RATIOS Tangible common equity
(4)
9.46
%
9.29
%
9.21
%
9.10
%
Tier 1 leverage (5)
9.70
%
9.68
%
9.70
%
9.64
%
Common equity Tier 1 risk-based (5)
11.59
%
11.97
%
12.11
%
12.11
%
Tier 1 risk-based (5)
11.59
%
11.97
%
12.11
%
12.11
%
Total risk-based (5)
12.82
%
13.24
%
13.41
%
13.43
%
ASSET QUALITY Non-accrual loans
$
41,255
$
94,670
$
108,654
$
158,077
Allowance for loan and lease losses
$
244,517
$
235,435
$
230,005
$
213,367
Allowance for loan and lease losses to non-accrual loans
592.70
%
248.69
%
211.69
%
134.98
%
Allowance for loan and lease losses to total loans
0.64
%
0.63
%
0.63
%
0.62
%
Non-accrual loans to total loans
0.11
%
0.25
%
0.30
%
0.46
%
Quarterly net charge-offs (recoveries) to average loans, annualized
(0.04
)%
0.01
%
(0.03
)%
0.04
%
(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)
June 30, 2019 ratios are preliminary.
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS (unaudited) Three
months ended Three months ended June 30, 2019 June 30, 2018
(dollars in thousands)
AverageBalance
InterestIncome/Expense AverageYield/ Rate
AverageBalance InterestIncome/Expense
AverageYield/ Rate INTEREST-EARNING ASSETS Short-term
investments
$
518,445
3,284
2.54
%
443,433
1,979
1.79
%
Investment securities
9,530,829
77,985
3.27
%
9,301,617
73,742
3.17
%
Commercial loans, mortgages and leases (1)(2)
37,605,138
397,570
4.24
%
33,437,782
336,005
4.03
%
Residential mortgages and consumer loans
214,799
2,470
4.61
%
233,213
2,464
4.24
%
Loans held for sale
75,684
646
3.42
%
477,407
3,499
2.94
%
Total interest-earning assets
47,944,895
481,955
4.03
%
43,893,452
417,689
3.82
%
Non-interest-earning assets
837,082
688,126
Total assets
$
48,781,977
44,581,578
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand
$
3,953,047
20,086
2.04
%
3,539,748
11,892
1.35
%
Money market
18,215,523
73,287
1.61
%
17,691,714
47,565
1.08
%
Time deposits
2,688,912
16,074
2.40
%
1,392,458
5,744
1.65
%
Non-interest-bearing demand deposits
12,073,427
-
-
11,831,308
-
-
Total deposits
36,930,909
109,447
1.19
%
34,455,228
65,201
0.76
%
Subordinated debt
258,438
3,643
5.64
%
257,645
3,643
5.66
%
Other borrowings
6,307,221
41,283
2.63
%
5,394,121
26,948
2.00
%
Total deposits and borrowings
43,496,568
154,373
1.42
%
40,106,994
95,792
0.96
%
Other non-interest-bearing liabilities and shareholders' equity
5,285,409
4,474,584
Total liabilities and shareholders' equity
$
48,781,977
44,581,578
OTHER DATA Net interest income / interest rate spread (1)
327,582
2.61
%
321,897
2.86
%
Tax-equivalent adjustment
(1,294
)
(885
)
Net interest income, as reported
326,288
321,012
Net interest margin
2.73
%
2.93
%
Tax-equivalent effect
0.01
%
0.01
%
Net interest margin on a tax-equivalent basis (1)(2)
2.74
%
2.94
%
Ratio of average interest-earning assets to average
interest-bearing liabilities
110.23
%
109.44
%
(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 or the periods presented. (2) See "Non-GAAP
Financial Measures" for related calculation.
SIGNATURE
BANK NET INTEREST MARGIN ANALYSIS (unaudited)
Six months ended Six months ended June 30, 2019 June 30,
2018 (dollars in thousands)
AverageBalance
InterestIncome/Expense AverageYield/ Rate
AverageBalance
Interest Income/
Expense
AverageYield/ Rate INTEREST-EARNING ASSETS Short-term
investments
$
491,909
6,199
2.54
%
454,902
3,721
1.65
%
Investment securities
9,568,049
157,550
3.29
%
9,275,523
144,369
3.11
%
Commercial loans, mortgages and leases (1)(2)
37,130,680
777,615
4.22
%
33,067,533
656,893
4.01
%
Residential mortgages and consumer loans
216,418
4,946
4.61
%
239,130
4,862
4.10
%
Loans held for sale
150,698
2,369
3.17
%
417,029
5,763
2.79
%
Total interest-earning assets
47,557,754
948,679
4.02
%
43,454,117
815,608
3.78
%
Non-interest-earning assets
765,458
675,674
Total assets
$
48,323,212
44,129,791
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand
$
4,083,775
41,375
2.04
%
3,691,222
22,721
1.24
%
Money market
18,344,116
143,648
1.58
%
17,465,933
86,283
1.00
%
Time deposits
2,441,635
28,471
2.35
%
1,461,716
11,059
1.53
%
Non-interest-bearing demand deposits
11,834,648
-
-
11,718,727
-
-
Total deposits
36,704,174
213,494
1.17
%
34,337,598
120,063
0.71
%
Subordinated debt
258,340
7,283
5.64
%
257,547
7,283
5.66
%
Other borrowings
6,207,286
80,168
2.60
%
5,078,834
47,370
1.88
%
Total deposits and borrowings
43,169,800
300,945
1.41
%
39,673,979
174,716
0.89
%
Other non-interest-bearing liabilities and shareholders' equity
5,153,412
4,455,812
Total liabilities and shareholders' equity
$
48,323,212
44,129,791
OTHER DATA Net interest income / interest rate spread (1)
647,734
2.61
%
640,892
2.89
%
Tax-equivalent adjustment
(2,454
)
(1,734
)
Net interest income, as reported
645,280
639,158
Net interest margin
2.74
%
2.97
%
Tax-equivalent effect
0.01
-
Net interest margin on a tax-equivalent basis (1)(2)
2.75
%
2.97
%
Ratio of average interest-earning assets to average
interest-bearing liabilities
110.16
%
109.53
%
(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 periods presented. (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)
June 30,2019
March 31,2019 December 31,2018 June 30,2018
Consolidated common shareholders' equity
$
4,661,724
4,552,043
4,407,140
4,147,623
Intangible assets
44,148
46,716
50,020
34,261
Consolidated tangible common shareholders' equity (TCE)
$
4,617,576
4,505,327
4,357,120
4,113,362
Consolidated total assets
$
48,876,878
48,546,454
47,364,816
45,215,484
Intangible assets
44,148
46,716
50,020
34,261
Consolidated tangible total assets (TTA)
$
48,832,730
48,499,738
47,314,796
45,181,223
Tangible common equity ratio (TCE/TTA)
9.46
%
9.29
%
9.21
%
9.10
%
The following table presents the efficiency ratio
calculation: Three months endedJune 30, Six months endedJune 30,
(dollars in thousands)
2019
2018
2019
2018
Non-interest expense (NIE)
$
131,888
112,593
256,951
249,925
Net interest income before provision for loan and lease losses
326,288
321,012
645,280
639,158
Other non-interest income
8,595
5,615
14,682
12,818
Total income (TI)
$
334,883
326,627
659,962
651,976
Efficiency ratio (NIE/TI)
39.38
%
34.47
%
38.93
%
38.33
%
The following table reconciles yield on
interest-earning assets to the yield on interest-earning assets on
a tax-equivalent basis: Three months endedJune 30, Six
months endedJune 30, (dollars in thousands)
2019
2018
2019
2018
Interest income (as reported)
$
480,661
416,804
946,225
813,874
Tax-equivalent adjustment
1,294
885
2,454
1,734
Interest income, tax-equivalent basis
$
481,955
417,689
948,679
815,608
Interest-earnings assets
$
47,944,895
43,893,452
47,557,754
43,454,117
Yield on interest-earning assets
4.02
%
3.81
%
4.01
%
3.78
%
Tax-equivalent effect
0.01
%
0.01
%
0.01
%
0.00
%
Yield on interest-earning assets, tax-equivalent basis
4.03
%
3.82
%
4.02
%
3.78
%
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
endedJune 30, Six months endedJune 30,
2019
2018
2019
2018
Net interest margin (as reported)
2.73
%
2.93
%
2.74
%
2.97
%
Tax-equivalent adjustment
0.01
%
0.01
%
0.01
%
-
Margin contribution from loan prepayment penalty income
(0.03
)%
(0.05
)%
(0.03
)%
(0.06
)%
Core net interest margin, tax-equivalent basis excluding loan
prepayment penalty income
2.71
%
2.89
%
2.72
%
2.91
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190718005164/en/
Investor Contact: Eric R. Howell,
Executive Vice President – Corporate & Business Development
646-822-1402, ehowell@signatureny.com Media
Contact: Susan J. Lewis, 646-822-1825
slewis@signatureny.com
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