- Net Income for the 2019 Third Quarter Was $148.7 Million, or
$2.75 Diluted Earnings Per Share, Versus $155.4 Million, or $2.84
Diluted Earnings Per Share, Reported in the 2018 Third
Quarter
- The Bank Declared a Cash Dividend of $0.56 Per Share,
Payable on or After November 15, 2019 to Common Stockholders of
Record at the Close of Business on November 1, 2019
- During the 2019 Third Quarter, the Bank Repurchased 629,503
Shares of Common Stock For a Total of $75.0 Million. Thus Far, the
Bank Has Repurchased $189.7 Million of Common Stock From Its $500
Million Authorization
- Total Deposits in the Third Quarter Grew $1.52 Billion to
$39.06 Billion; Total Deposits Have Grown $2.97 Billion, or 8.2
Percent, Since the End of the 2018 Third Quarter. Average Deposits
Increased a Record $1.75 Billion in the 2019 Third Quarter
- In Line with the Bank’s Strategy to Increase Floating Rate
Assets and Reduce Its Commercial Real Estate Concentration, the
Bank Decreased Commercial Real Estate Loans by $873.1 Million.
Conversely, Commercial & Industrial Loans Grew by $885.4
Million During the Quarter. Therefore, For the 2019 Third Quarter,
Loans Increased $4.9 Million to $37.94 Billion. Since the End of
the 2018 Third Quarter, Loans Have Increased 8.0 Percent, or $2.81
Billion.
- Non-Accrual Loans Were $32.5 Million, or 0.09 Percent of
Total Loans, at September 30, 2019, Versus $41.3 Million, or 0.11
Percent, at the End of the 2019 Second Quarter and $134.2 Million,
or 0.38 Percent, at the End of the 2018 Third Quarter. Excluding
Taxi Medallion Loans, Non-Accrual Loans Were $22.9 Million, or Six
Basis Points of Total Loans
- Net Interest Margin on a Tax-Equivalent Basis was 2.68
Percent, Compared with 2.74 Percent for the 2019 Second Quarter and
2.88 Percent for the 2018 Third Quarter. Core Net Interest Margin
on a Tax-Equivalent Basis Excluding Loan Prepayment Penalty Income
Decreased Five Basis Points to 2.66 Percent, Compared with 2.71
Percent for the 2019 Second Quarter. Excess Cash Balances From
Significant Deposit Flows Lead to Four Basis Points of the Core Net
Interest Margin Decline
- Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1
Risk-Based, and Total Risk-Based Capital Ratios were 9.66 Percent,
11.91 Percent, 11.91 Percent, and 13.16 Percent, Respectively, at
September 30, 2019. Signature Bank Remains Significantly Above FDIC
“Well Capitalized” Standards. Tangible Common Equity Ratio was 9.51
Percent
Signature Bank (Nasdaq: SBNY), a New York-based full service
commercial bank, today announced results for its third quarter
ended September 30, 2019.
Net income for the 2019 third quarter was $148.7 million, or
$2.75 diluted earnings per share, versus $155.4 million, or $2.84
diluted earnings per share, for the 2018 third quarter. The
decrease in net income for the 2019 third quarter, versus the
comparable quarter last year, is due to an increase of $17.1
million, or 14.6 percent, in non-interest expenses mostly due to
the significant hiring of private client banking teams, including
55 professionals added for the Fund Banking Division, Venture
Banking Group and the Specialized Mortgage Servicing Banking
Team.
Net interest income for the 2019 third quarter reached $328.0
million, up $3.2 million, or 1.0 percent, when compared with the
2018 third quarter. This increase is primarily due to growth in
average interest-earning assets. Total assets reached $49.41
billion at September 30, 2019, an increase of $3.54 billion, or 7.7
percent, from $45.87 billion at September 30, 2018. Average assets
for the 2019 third quarter reached $49.62 billion, an increase of
$4.14 billion, or 9.1 percent, compared with the 2018 third
quarter.
Deposits for the 2019 third quarter rose $1.52 billion to $39.06
billion at September 30, 2019. When compared with deposits at
September 30, 2018, overall deposit growth for the last twelve
months was 8.2 percent, or $2.97 billion. Average deposits for the
2019 third quarter reached $38.68 billion, a record increase of
$1.75 billion.
“In order to thrive, one must consistently think about
transforming. The key element to success is when to act upon said
transformation. Well, we’ve begun the process and energized our
colleagues and we’re pleased with the initial outcome. The results
we are seeing include reduced borrowings, an increase in floating
rate commercial and industrial loans led by the Fund Banking
Division, a decrease in fixed rate commercial real estate loan
concentration and funding with record average deposit growth,”
explained Joseph J. DePaolo, President and Chief Executive
Officer.
“We’ve added three transformational groups to our institution in
the past year and also introduced an innovative new commercial
payments platform (Signet). The Fund Banking Division made
significant contributions to our results this quarter, as did our
Venture Banking Group, which just officially opened for business.
We look forward to the continued efforts of these teams as well as
those of our new Specialized Mortgage Servicing Banking Team, which
has now built out the necessary infrastructure to support their
clients’ needs. As always, our traditional banking teams also
fueled our ongoing growth. We continue to adapt and transform to
benefit the success of our clients,” DePaolo concluded.
“Signature Bank’s clients continue to reference the unusually
confusing economic times we are currently experiencing. With
uncertainty surrounding international trade issues, profound
political differences across the major parties, threats to our
country’s technological leadership, the need for massive daily
liquidity intervention by the Fed, and a yield curve that is
sending a signal of economic caution, it can be difficult to know
what to expect. Signature Bank always set a goal to be the
sleep-at-night bank for our clients, especially during tumultuous
times. During the 2008-2010 financial crisis, the bank was a safe
haven for our depositor clients and flourished throughout the
upheaval,” explained Scott A. Shay, Chairman of the Board.
“However, we take nothing for granted and remain ever vigilant.
We continue to emphasize future growth and diversification, as
evidenced by the addition of major new teams in the Private Equity,
Venture Capital and Mortgage Banking arenas, the opening of our
first West Coast office and the recent introduction of Signet, our
blockchain-based real-time payments platform. These are among the
reasons we continue to believe the best of times are yet to come
for Signature Bank,” Shay said.
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 9.66 percent, 11.91 percent, 11.91 percent, and 13.16
percent, respectively, as of September 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 9.51 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 third quarter of $0.56
per share, payable on or after November 15, 2019 to common
stockholders of record at the close of business on November 1,
2019. In the third quarter of 2019, the Bank paid the second
quarter’s cash dividend of $0.56 per share to common stockholders
of record at the close of business on August 1, 2019. Additionally,
during the 2019 third quarter, the Bank repurchased 629,503 shares
of common stock for a total of $75.0 million. Since the 2018 fourth
quarter, the Bank has repurchased $189.7 million of common stock
from its $500 million authorization.
Net Interest Income
Net interest income for the 2019 third quarter was $328.0
million, an increase of $3.2 million, or 1.0 percent, versus the
same period last year, primarily due to growth in average
interest-earning assets. Average interest-earning assets of $48.83
billion for the 2019 third quarter represent an increase of $3.97
billion, or 8.9 percent, from the 2018 third quarter. Yield on
interest-earning assets for the 2019 third quarter increased nine
basis points to 3.94 percent, compared to the third quarter of last
year.
Average cost of deposits and average cost of funds for the third
quarter of 2019 increased by 33 and 34 basis points, to 1.21
percent and 1.40 percent, respectively, versus the comparable
period a year ago.
Net interest margin on a tax-equivalent basis for the 2019 third
quarter was 2.68 percent versus 2.88 percent reported in the 2018
third quarter and 2.74 percent in the 2019 second quarter.
Excluding loan prepayment penalties in both quarters, linked
quarter core net interest margin on a tax-equivalent basis
decreased five basis points to 2.66 percent. Four basis points of
the decline in core margin in the quarter was driven by excess cash
balances from strong deposit growth.
Provision for Loan Losses
The Bank’s provision for loan losses for the third quarter of
2019 was $1.2 million, compared with $5.4 million for the 2019
second quarter and $7.4 million for the 2018 third quarter.
Net charge offs for the 2019 third quarter were $2.9 million, or
0.03 percent of average loans, on an annualized basis, versus net
recoveries of $3.7 million, or 0.04 percent, for the 2019 second
quarter and net charge offs of $11,000, or less than one basis
point, for the 2018 third quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2019 third quarter was $6.0 million,
up $1.5 million when compared with $4.5 million reported in the
2018 third quarter. The increase was driven by a $1.3 million
increase in fees and services charges.
Non-interest expense for the third quarter of 2019 was $134.3
million, an increase of $17.1 million, or 14.6 percent, versus
$117.2 million reported in the 2018 third quarter. The increase was
predominantly due to an increase of $10.3 million in salaries and
benefits from the significant hiring of private client banking
teams, including 55 professionals added for the Fund Banking
Division, the Venture Banking Group and the Specialized Mortgage
Servicing Banking Team.
The Bank’s efficiency ratio was 40.2 percent for the 2019 third
quarter versus 35.6 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 a meaningful increase in salaries
and benefits predominantly due to the aforementioned hiring of
private client banking teams.
Loans
Loans, excluding loans held for sale, grew $4.9 million during
the third quarter of 2019 to $37.94 billion, compared with $37.93
billion at June 30, 2019. Average loans, excluding loans held for
sale, reached $37.84 billion in the 2019 third quarter, growing
$15.1 million from the 2019 second quarter and $3.31 billion, or
9.6 percent, from the 2018 third quarter. For the fourth
consecutive quarter, the increase in loans for the third quarter
was primarily driven by growth in commercial and industrial
loans.
At September 30, 2019, non-accrual loans were $32.5 million,
representing 0.09 percent of total loans and 0.07 percent of total
assets, compared with non-accrual loans of $41.3 million, or 0.11
percent of total loans, at June 30, 2019 and $134.2 million, or
0.38 percent of total loans, at September 30, 2018. The ratio of
allowance for loan and lease losses to total loans at September 30,
2019 was 0.64 percent, stable from June 30, 2019 and up one basis
point from September 30, 2018. Additionally, the ratio of allowance
for loan and lease losses to non-accrual loans, or the coverage
ratio, was 746 percent for the 2019 third quarter versus 593
percent for the second quarter of 2019 and 164 percent for the 2018
third quarter.
Conference Call
Signature Bank’s management will host a conference call to
review results of the 2019 third quarter on Thursday, October 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 #8188917. 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 #8188917. The replay will be available from approximately 1:00
PM ET on Thursday, October 17, 2019 through 11:59 PM ET on Monday,
October 21, 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 number one in the Business
Bank, Private Bank and Attorney Escrow Services categories by the
New York Law Journal in the publication’s annual “Best of” survey
for 2019, 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 Business Bank, Private Banking Services
and Attorney Escrow Service 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 ended September
30,
Nine months ended September
30,
(dollars in thousands, except per share amounts)
2019
2018
2019
2018
INTEREST AND DIVIDEND INCOME Loans held for sale
$
1,284
2,442
3,653
8,205
Loans and leases, net
399,552
351,743
1,179,659
1,011,765
Securities available-for-sale
56,534
58,381
173,532
165,073
Securities held-to-maturity
15,238
14,394
46,292
43,437
Other investments
11,447
7,268
27,144
19,623
Total interest income
484,055
434,228
1,430,280
1,248,103
INTEREST EXPENSE Deposits
118,308
79,200
331,802
199,264
Federal funds purchased and securities sold under agreements to
repurchase
1,154
2,519
13,437
7,909
Federal Home Loan Bank borrowings
32,929
24,068
100,814
66,048
Subordinated debt
3,645
3,645
10,928
10,928
Total interest expense
156,036
109,432
456,981
284,149
Net interest income before provision for loan and lease losses
328,019
324,796
973,299
963,954
Provision for loan and lease losses
1,164
7,351
12,881
156,083
Net interest income after provision for loan and lease losses
326,855
317,445
960,418
807,871
NON-INTEREST INCOME Commissions
3,452
3,249
10,831
9,704
Fees and service charges
8,178
6,914
23,752
20,708
Net gains on sales of securities
120
12
1,034
810
Net gains on sales of loans
2,752
1,931
8,880
5,133
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
(9,747
)
(8,369
)
(28,339
)
(21,654
)
Other Income
1,222
806
4,502
2,675
Total non-interest income
5,977
4,543
20,660
17,360
NON-INTEREST EXPENSE Salaries and benefits
86,438
76,140
250,753
225,023
Occupancy and equipment
10,854
8,638
32,476
25,172
Information technology
10,098
6,083
27,552
18,661
FDIC assessment fees
3,191
7,070
9,538
21,504
Professional fees
4,075
3,307
10,693
10,086
Other general and administrative
19,639
15,970
60,235
66,689
Total non-interest expense
134,295
117,208
391,247
367,135
Income before income taxes
198,537
204,780
589,831
458,096
Income tax expense
49,809
49,334
149,127
113,594
Net income
$
148,728
155,446
440,704
344,502
PER COMMON SHARE DATA Earnings per share – basic
$
2.76
2.84
8.13
6.32
Earnings per share – diluted
$
2.75
2.84
8.10
6.30
Dividends per common share
$
0.56
0.56
1.68
0.56
SIGNATURE BANK CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION
September 30,
December 31,
2019
2018
(dollars in thousands, except shares and per share amounts)
(unaudited)
ASSETS Cash and due from banks
$
798,524
269,204
Short-term investments
71,400
48,051
Total cash and cash equivalents
869,924
317,255
Securities available-for-sale
7,124,746
7,301,604
Securities held-to-maturity (fair value $2,100,094 at September 30,
2019 and $1,845,198 at December 31, 2018)
2,069,940
1,883,533
Federal Home Loan Bank stock
245,964
264,877
Loans held for sale
282,700
485,305
Loans and leases, net
37,694,277
36,193,122
Premises and equipment, net
57,723
59,051
Operating lease right-of-use assets (1)
223,781
-
Accrued interest and dividends receivable
142,533
141,829
Other assets
700,168
718,240
Total assets
$
49,411,756
47,364,816
LIABILITIES AND SHAREHOLDERS' EQUITY Deposits
Non-interest-bearing
$
12,016,920
12,016,197
Interest-bearing
27,039,967
24,362,576
Total deposits
39,056,887
36,378,773
Federal funds purchased and securities sold under agreements to
repurchase
150,000
820,000
Federal Home Loan Bank borrowings
4,467,144
4,970,000
Subordinated debt
258,768
258,174
Operating lease liabilities (1)
247,146
-
Accrued expenses and other liabilities
489,955
530,729
Total liabilities
44,669,900
42,957,676
Shareholders’ equity Preferred stock, par value $.01 per share;
61,000,000 shares authorized; none issued at September 30, 2019 and
December 31, 2018
-
-
Common stock, par value $.01 per share; 64,000,000 shares
authorized; 55,445,643 shares issued and 54,242,614 outstanding at
September 30, 2019; 55,405,531 shares issued and 55,039,433
outstanding at December 31, 2018
554
554
Additional paid-in capital
1,861,197
1,862,896
Retained earnings
3,079,002
2,730,899
Treasury stock, 1,203,029 shares at September 30, 2019 and 366,098
shares at December 31, 2018
(146,346
)
(42,680
)
Accumulated other comprehensive loss
(52,551
)
(144,529
)
Total shareholders' equity
4,741,856
4,407,140
Total liabilities and shareholders' equity
$
49,411,756
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 ended September
30,
Nine months ended September
30,
(in thousands, except ratios and per share amounts)
2019
2018
2019
2018
PER COMMON SHARE Net income - basic
$
2.76
$
2.84
$
8.13
$
6.32
Net income - diluted
$
2.75
$
2.84
$
8.10
$
6.30
Average shares outstanding - basic
53,722
54,544
54,032
54,406
Average shares outstanding - diluted
53,830
54,610
54,224
54,646
Book value
$
87.42
$
76.52
$
87.42
$
76.52
SELECTED FINANCIAL DATA Return on average total
assets
1.19
%
1.36
%
1.21
%
1.03
%
Return on average shareholders' equity
12.55
%
14.71
%
12.88
%
11.14
%
Efficiency ratio (1)
40.21
%
35.59
%
39.36
%
37.41
%
Yield on interest-earning assets
3.93
%
3.84
%
3.99
%
3.80
%
Yield on interest-earning assets, tax-equivalent basis (1)(2)
3.94
%
3.85
%
4.00
%
3.81
%
Cost of deposits and borrowings
1.40
%
1.06
%
1.40
%
0.95
%
Net interest margin
2.67
%
2.87
%
2.71
%
2.93
%
Net interest margin, tax-equivalent basis (2)(3)
2.68
%
2.88
%
2.72
%
2.94
%
(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.
September 30, 2019
June 30, 2019
December 31, 2018
September 30, 2018
CAPITAL RATIOS Tangible common equity (4)
9.51
%
9.46
%
9.21
%
9.15
%
Tier 1 leverage (5)
9.66
%
9.70
%
9.70
%
9.67
%
Common equity Tier 1 risk-based (5)
11.91
%
11.61
%
12.11
%
12.16
%
Tier 1 risk-based (5)
11.91
%
11.61
%
12.11
%
12.16
%
Total risk-based (5)
13.16
%
12.84
%
13.41
%
13.47
%
ASSET QUALITY Non-accrual loans
$
32,539
$
41,255
$
108,654
$
134,197
Allowance for loan and lease losses
$
242,754
$
244,517
$
230,005
$
220,706
Allowance for loan and lease losses to non-accrual loans
746.04
%
592.70
%
211.69
%
164.46
%
Allowance for loan and lease losses to total loans
0.64
%
0.64
%
0.63
%
0.63
%
Non-accrual loans to total loans
0.09
%
0.11
%
0.30
%
0.38
%
Quarterly net charge-offs (recoveries) to average loans, annualized
0.03
%
(0.04
)%
(0.03
)%
0.00
%
(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)
September 30, 2019 ratios are preliminary.
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS (unaudited)
Three months ended
Three months ended
September 30, 2019
September 30, 2018
(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
$
1,285,289
7,173
2.21
%
485,749
2,488
2.03
%
Investment securities
9,569,671
76,046
3.18
%
9,526,123
77,555
3.26
%
Commercial loans, mortgages and leases (1)(2)
37,621,834
398,523
4.20
%
34,301,452
350,358
4.05
%
Residential mortgages and consumer loans
213,251
2,385
4.44
%
223,929
2,393
4.24
%
Loans held for sale
139,332
1,284
3.66
%
320,712
2,442
3.02
%
Total interest-earning assets
48,829,377
485,411
3.94
%
44,857,965
435,236
3.85
%
Non-interest-earning assets
790,888
624,664
Total assets
$
49,620,265
45,482,629
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand
$
4,304,971
21,078
1.94
%
3,654,079
14,122
1.53
%
Money market
19,431,159
81,088
1.66
%
18,090,481
56,798
1.25
%
Time deposits
2,677,536
16,142
2.39
%
1,765,996
8,280
1.86
%
Non-interest-bearing demand deposits
12,266,945
-
-
12,213,759
-
-
Total deposits
38,680,611
118,308
1.21
%
35,724,315
79,200
0.88
%
Subordinated debt
258,636
3,645
5.64
%
257,843
3,645
5.65
%
Other borrowings
5,212,259
34,083
2.59
%
4,850,924
26,587
2.17
%
Total deposits and borrowings
44,151,506
156,036
1.40
%
40,833,082
109,432
1.06
%
Other non-interest-bearing liabilities and shareholders' equity
5,468,759
4,649,547
Total liabilities and shareholders' equity
$
49,620,265
45,482,629
OTHER DATA Net interest income / interest rate spread (1)
329,375
2.54
%
325,804
2.79
%
Tax-equivalent adjustment
(1,356
)
(1,008
)
Net interest income, as reported
328,019
324,796
Net interest margin
2.67
%
2.87
%
Tax-equivalent effect
0.01
%
0.01
%
Net interest margin on a tax-equivalent basis (1)(2)
2.68
%
2.88
%
Ratio of average interest-earning assets to average
interest-bearing liabilities
110.60
%
109.86
%
(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 NET INTEREST MARGIN ANALYSIS
(unaudited)
Nine months ended
Nine months ended
September 30, 2019
September 30, 2018
(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
$
759,275
13,372
2.35
%
465,298
6,209
1.78
%
Investment securities
9,568,596
233,596
3.26
%
9,359,974
221,924
3.16
%
Commercial loans, mortgages and leases (1)(2)
37,296,197
1,176,139
4.22
%
33,483,359
1,007,252
4.02
%
Residential mortgages and consumer loans
215,350
7,331
4.55
%
234,007
7,255
4.15
%
Loans held for sale
146,868
3,653
3.33
%
384,571
8,205
2.85
%
Total interest-earning assets
47,986,286
1,434,091
4.00
%
43,927,209
1,250,845
3.81
%
Non-interest-earning assets
774,028
593,551
Total assets
$
48,760,314
44,520,760
INTEREST-BEARING LIABILITIES Interest-bearing deposits NOW
and interest-bearing demand
$
4,158,317
62,453
2.01
%
3,678,705
36,843
1.34
%
Money market
18,710,445
224,736
1.61
%
17,676,403
143,082
1.08
%
Time deposits
2,521,132
44,613
2.37
%
1,564,257
19,339
1.65
%
Non-interest-bearing demand deposits
11,980,330
-
-
11,845,801
-
-
Total deposits
37,370,224
331,802
1.19
%
34,765,166
199,264
0.77
%
Subordinated debt
258,440
10,928
5.64
%
257,647
10,928
5.66
%
Other borrowings
5,871,966
114,251
2.60
%
5,002,029
73,957
1.98
%
Total deposits and borrowings
43,500,630
456,981
1.40
%
40,024,842
284,149
0.95
%
Other non-interest-bearing liabilities and shareholders' equity
5,259,684
4,495,918
Total liabilities and shareholders' equity
$
48,760,314
44,520,760
OTHER DATA Net interest income / interest rate spread (1)
977,110
2.60
%
966,696
2.86
%
Tax-equivalent adjustment
(3,811
)
(2,742
)
Net interest income, as reported
973,299
963,954
Net interest margin
2.71
%
2.93
%
Tax-equivalent effect
0.01
0.01
Net interest margin on a tax-equivalent basis (1)(2)
2.72
%
2.94
%
Ratio of average interest-earning assets to average
interest-bearing liabilities
110.31
%
109.75
%
(1)
Presented on a tax-equivalent, non-GAAP, basis for municipal
leasing and financing transactions using the U.S. federal statutory
tax rate of 21 percent for the 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 assists investors when comparing results
period-to-period in a more consistent manner and provides a better
measure of Signature Bank's results. These non-GAAP measures
include the Bank's (i) tangible common equity ratio, (ii)
efficiency ratio, (iii) yield on interest-earning assets,
tax-equivalent basis, and (iv) core net interest margin,
tax-equivalent basis excluding loan prepayment penalty income.
These non-GAAP measures should not be considered a substitute for
GAAP-basis measures and results. We strongly encourage investors to
review our consolidated financial statements in their entirety and
not to rely on any single financial measure. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies’ non-GAAP
financial measures having the same or similar names.
The following table presents the tangible common equity
ratio calculation: (dollars in thousands)
September 30, 2019
June 30, 2019
December 31, 2018
September 30, 2018
Consolidated common shareholders' equity
$
4,741,856
4,661,724
4,407,140
4,237,997
Intangible assets
49,213
44,148
50,020
43,372
Consolidated tangible common shareholders' equity (TCE)
$
4,692,643
4,617,576
4,357,120
4,194,625
Consolidated total assets
$
49,411,756
48,876,878
47,364,816
45,870,710
Intangible assets
49,213
44,148
50,020
43,372
Consolidated tangible total assets (TTA)
$
49,362,543
48,832,730
47,314,796
45,827,338
Tangible common equity ratio (TCE/TTA)
9.51
%
9.46
%
9.21
%
9.15
%
The following table presents the efficiency ratio
calculation:
Three months ended September
30,
Nine months ended September
30,
(dollars in thousands)
2019
2018
2019
2018
Non-interest expense (NIE)
$
134,295
117,208
391,247
367,135
Net interest income before provision for loan and lease losses
328,019
324,796
973,299
963,954
Other non-interest income
5,977
4,543
20,660
17,360
Total income (TI)
$
333,996
329,339
993,959
981,314
Efficiency ratio (NIE/TI)
40.21
%
35.59
%
39.36
%
37.41
%
The following table reconciles yield on
interest-earning assets to the yield on interest-earning assets on
a tax-equivalent basis:
Three months ended September
30,
Nine months ended September
30,
(dollars in thousands)
2019
2018
2019
2018
Interest income (as reported)
$
484,055
434,228
1,430,280
1,248,103
Tax-equivalent adjustment
1,356
1,008
3,811
2,742
Interest income, tax-equivalent basis
$
485,411
435,236
1,434,091
1,250,845
Interest-earnings assets
$
48,829,377
44,857,965
47,986,286
43,927,209
Yield on interest-earning assets
3.93
%
3.84
%
3.99
%
3.80
%
Tax-equivalent effect
0.01
%
0.01
%
0.01
%
0.01
%
Yield on interest-earning assets, tax-equivalent basis
3.94
%
3.85
%
4.00
%
3.81
%
The following table reconciles net interest margin (as
reported) to core net interest margin on a tax-equivalent basis
excluding loan prepayment penalty income:
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
Net interest margin (as reported)
2.67
%
2.87
%
2.71
%
2.93
%
Tax-equivalent adjustment
0.01
%
0.01
%
0.01
%
0.01
%
Margin contribution from loan prepayment penalty income
(0.02
)%
(0.03
)%
(0.02
)%
(0.05
)%
Core net interest margin, tax-equivalent basis excluding loan
prepayment penalty income
2.66
%
2.85
%
2.70
%
2.89
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191017005171/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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