[July 19, 2018] |
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Signature Bank Reports 2018 Second Quarter Results
Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial
bank, today announced results for its second quarter ended June 30,
2018. Net income for the 2018 second quarter was $154.6 million, or
$2.83 diluted earnings per share, versus $14.0 million, or $0.26 diluted
earnings per share, for the 2017 second quarter. The increase in net
income for the 2018 second quarter, versus the comparable quarter last
year, is due to a decrease of $179.6 million in the provision for loan
losses nearly all attributable to the New York City taxi medallion
portfolio.
Net interest income for the 2018 second quarter reached $321.0 million,
up $13.8 million, or 4.5 percent, when compared with the 2017 second
quarter. This increase is primarily due to growth in average
interest-earning assets. Total assets reached $45.22 billion at June 30,
2018, an increase of $4.50 billion, or 11.0 percent, from $40.72 billion
at June 30, 2017. Average assets for the 2018 second quarter reached
$44.58 billion, an increase of $4.27 billion, or 10.6 percent, compared
with the 2017 second quarter.
Deposits during the 2018 second quarter rose $176.0 million, or 0.5
percent, to $34.99 billion at June 30, 2018, affected by a decrease of
$918.2 million in escrow deposits. When compared with deposits at June
30, 2017, overall deposit growth for the last twelve months was 5.5
percent, or $1.83 billion. Average deposits for the 2018 second quarter
reached $34.46 billion, an increase of $237.0 million, or 0.7 percent.
"Signature Bank's solid earnings and growth this quarter, coupled with
both the positive impact of the $50 billion SIFI mark moving higher and
tax reform has enabled us to declare an inaugural quarterly cash
dividend of $0.56 per share to our common shareholders, representing an
annualized dividend of $2.24 per share. We are proud of our colleagues
who work hard for our clients every day, and we believe those efforts
show through in our results and in returns for our shareholders,"
explained Joseph J. DePaolo, President and Chief Executive Officer.
"Additionally, Signature Bank continues to make the necessary
investments to further our progress. Recent initiatives indicative of
the Bank's plan for sustained growth include the hiring of private
client banking teams in both New York and San Francisco, where we are
now building a strong Signature Bank presence. We are strengthening our
infrastructure with a new loan system soon to be in place. We are
investing in a new credit approval system, foreign exchange system and
an enhanced payments platform, to which we previously alluded. All these
efforts are augmenting Signature Bank's solid foundation and will allow
us to further our growth initiatives," DePaolo said.
"The recent passing of the Economic Growth, Regulatory Relief and
Consumer Protection Act by Congress bodes well for banks like ours.
Raising the SIFI designation threshold from $50 billion to $250 billion
will foster greater competition by affording banks of varying size more
opportunity within the banking industry," said Scott A. Shay, Chairman
of the Board.
"In turn, this will prove beneficial for small and medium-sized
businesses as they stand to gain better access to capital. Now, nimble,
medium-sized banks such as Signature Bank will be better positioned to
more effectively compete with the too-big-to-fail megabanks, and the
commercial banking landscape will offer better options to growing
companies thereby further stimulating economic growth," Shay concluded.
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 9.64
percent, 12.10 percent, 12.10 percent, and 13.42 percent, respectively,
as of June 30, 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 9.10 percent. The
Bank defines tangible common equity ratio as the ratio of tangible
common equity to adjusted tangible assets and calculates this ratio by
dividing total consolidated common shareholders' equity by consolidated
total assets.
Net Interest Income
Net interest income for the 2018 second quarter was $321.0 million, an
increase of $13.8 million, or 4.5 percent, versus the same period last
year, primarily due to growth in average interest-earning assets.
Average interest-earning assets of $43.89 billion for the 2018 second
quarter represent an increase of $4.15 billion, or 10.4 percent, from
the 2017 second quarter. Yield on interest-earning assets for the 2018
second quarter increased 16 basis points to 3.82 percent, compared with
the 2017 second quarter.
Average cost of deposits and average cost of funds for the second
quarter of 2018 increased by 27 basis points and 35 basis points, to
0.76 percent and 0.96 percent, respectively versus the 2017 second
quarter.
Net interest margin on a tax-equivalent basis for the 2018 second
quarter was 2.94 percent versus 3.11 percent reported in the same period
a year ago. On a linked quarter basis, net interest margin on a
tax-equivalent basis decreased seven basis points. Excluding loan
prepayment penalties in both quarters, linked quarter core net interest
margin on a tax-equivalent basis decreased six basis points to 2.89
percent.
Provision for Loan Losses
The Bank's provision for loan losses for the second quarter of 2018 was
$8.0 million, compared with $140.8 million for the 2018 first quarter
and $187.6 million for the 2017 second quarter. The elevated provisions
for the 2018 first quarter and the 2017 second quarter were due to the
New York City taxi medallion loan portfolio.
Net charge-offs for the 2018 second quarter were $3.0 million, or 0.04
percent of average loans on an annualized basis, versus $128.3 million,
or 1.58 percent, for the 2018 first quarter and $229.0 million, or 3.04
percent, for the 2017 second quarter. The elevated level of charge-offs
for the 2018 first quarter and the 2017 second quarter were due to the
taxi medallion portfolio.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2018 second quarter was $5.6 million, down
$4.0 million when compared with $9.6 million reported in the 2017 second
quarter. The decrease was due to a $3.8 million increase in tax credit
investment amortization. These investments positively impact our
effective tax rate.
Non-interest expense for the second quarter of 2018 was $112.6 million,
a decrease of $3.7 million, or 3.2 percent, versus $116.3 million
reported in the 2017 second quarter. The decrease was primarily a result
of write-downs of $11.5 million on repossessed New York City taxi
medallion loans that occurred in the 2017 second quarter. This decrease
was partially offset by increases in salaries and benefits from the
addition of new private client banking teams.
The Bank's efficiency ratio decreased to 34.5 percent for the 2018
second quarter versus 36.7 percent for the comparable period last year.
The decrease was primarily due to a decrease in other general and
administrative expenses of $13.7 million primarily due to the absence of
write-downs on repossessed New York City taxi medallion loans.
Loans
Loans, excluding loans held for sale, grew $900.3 million, or 2.7
percent, during the second quarter of 2018 to $34.15 billion, compared
with $33.25 billion at March 31, 2018. At June 30, 2018, loans accounted
for 75.5 percent of total assets, versus 74.8 percent at the end of the
2018 first quarter and 74.6 percent at the end of 2017 second quarter.
Average loans, excluding loans held for sale, reached $33.67 billion in
the 2018 second quarter, growing $732.7 million, or 2.2 percent, from
the 2018 first quarter and $3.50 billion, or 11.6 percent, from the 2017
second quarter. The increase in loans for the quarter was primarily
driven by growth in commercial and industrial lending, specialty
finance, multi-family and commercial real estate loans.
At June 30, 2018, non-accrual loans were $158.1 million, representing
0.46 percent of total loans and 0.35 percent of total assets, compared
with non-accrual loans of $168.7 million, or 0.51 percent of total
loans, at March 31, 2018 and $392.9 million, or 1.29 percent of total
loans, at June 30, 2017. Excluding non-accruing loans secured by taxi
medallions of $134.6 million, non-accrual loans for the remainder of the
entire portfolio are $23.4 million, or seven basis points of total
loans. At June 30, 2018, the ratio of allowance for loan and lease
losses to total loans was 0.62 percent, versus 0.63 percent at March 31,
2018 and 0.60 percent at June 30, 2017. Additionally, the ratio of
allowance for loan and lease losses to non-accrual loans, or the
coverage ratio, was 135 percent for the 2018 second quarter versus 124
percent for the first quarter of 2018 and 46 percent for the 2017 second
quarter.
Conference Call
Signature Bank's management will host a conference call to review
results of the 2018 second quarter on Thursday, July 19, 2018, 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 #6364689.
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 #6364689. The replay will be
available from approximately 1:00 PM ET on Thursday, July 19, 2018
through 11:59 PM ET on Monday, July 23, 2018.
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. 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; named
Best Private Bank and Best Attorney Escrow Services provider and among
the top three Best Business Banks for the eighth consecutive year by the New
York Law Journal in the publication's annual
Best of reader survey; and, cited in the top three of the
nation's best private banking services providers in the 2017
Best of The National Law Journal reader rankings.
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.
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SIGNATURE BANK
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CONSOLIDATED STATEMENTS OF INCOME
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(unaudited)
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Three months ended
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Six months ended
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June 30,
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June 30,
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(dollars in thousands, except per share amounts)
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2018
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2017
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2018
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2017
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INTEREST AND DIVIDEND INCOME
|
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|
|
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|
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Loans held for sale
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$
|
3,499
|
|
|
860
|
|
|
5,763
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|
|
2,244
|
|
Loans and leases, net
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|
|
337,584
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|
|
291,892
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|
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660,021
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|
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573,467
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Securities available-for-sale
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54,428
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|
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50,848
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|
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106,692
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100,667
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Securities held-to-maturity
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|
14,510
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|
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14,784
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|
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29,043
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|
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29,797
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Other investments
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|
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6,783
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|
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3,553
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|
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12,355
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|
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6,367
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Total interest income
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416,804
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|
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361,937
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|
|
813,874
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|
|
712,542
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INTEREST EXPENSE
|
|
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|
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Deposits
|
|
|
65,201
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|
|
40,311
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|
|
120,063
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|
|
75,113
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Federal funds purchased and securities sold under
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|
|
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|
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agreements to repurchase
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3,003
|
|
|
2,025
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|
|
5,390
|
|
|
5,416
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Federal Home Loan Bank borrowings
|
|
|
23,945
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|
|
8,756
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|
|
41,980
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|
|
15,772
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Subordinated debt
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|
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3,643
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|
|
3,605
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|
|
7,283
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|
|
7,245
|
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Total interest expense
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|
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95,792
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|
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54,697
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|
|
174,716
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|
|
103,546
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Net interest income before provision for loan and lease losses
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|
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321,012
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|
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307,240
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|
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639,158
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|
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608,996
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Provision for loan and lease losses
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|
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7,970
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|
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187,590
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|
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148,732
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|
|
207,220
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Net interest income after provision for loan and lease losses
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|
|
313,042
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|
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119,650
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|
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490,426
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|
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401,776
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NON-INTEREST INCOME
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Commissions
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3,280
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3,051
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6,455
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|
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6,058
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Fees and service charges
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|
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7,152
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|
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6,067
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13,794
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|
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12,015
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Net gains on sales of securities
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|
|
357
|
|
|
1,679
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|
|
798
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|
|
2,529
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Net gains on sales of loans
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|
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1,183
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|
|
1,956
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|
|
3,202
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|
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4,453
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Other-than-temporary impairment losses on securities:
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Total impairment losses on securities
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-
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|
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(81
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)
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(2
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)
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(273
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)
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Portion recognized in other comprehensive income (before taxes)
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|
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-
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-
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(14
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)
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32
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Net impairment losses on securities recognized in earnings
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|
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-
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|
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(81
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)
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(16
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)
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(241
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)
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Tax credit investment amortization
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|
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(7,423
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)
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(3,672
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)
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(13,285
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)
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(7,135
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)
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Other Income
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1,066
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|
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550
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1,870
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1,745
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Total non-interest income
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|
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5,615
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9,550
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12,818
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19,424
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NON-INTEREST EXPENSE
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Salaries and benefits
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75,720
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68,358
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148,883
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134,744
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Occupancy and equipment
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8,335
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7,985
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16,534
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16,070
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Information technology
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6,291
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5,464
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12,578
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10,773
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FDIC assessment fees
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|
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7,447
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|
|
6,839
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|
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14,434
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|
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12,981
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Professional fees
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|
|
3,503
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2,667
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6,778
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6,040
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Other general and administrative
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11,297
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24,960
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50,718
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38,863
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Total non-interest expense
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112,593
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|
|
116,273
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249,925
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219,471
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Income before income taxes
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|
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206,064
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|
|
12,927
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|
|
253,319
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201,729
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Income tax expense (benefit)
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|
51,479
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(1,030
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)
|
|
64,261
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|
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53,856
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Net income
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|
$
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154,585
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|
|
13,957
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189,058
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|
147,873
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PER COMMON SHARE DATA
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Earnings per share - basic
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$
|
2.84
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|
|
0.26
|
|
|
3.48
|
|
|
2.74
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Earnings per share - diluted
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|
$
|
2.83
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0.26
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3.47
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|
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2.73
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SIGNATURE BANK
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
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|
|
|
|
|
|
June 30,
|
|
December 31,
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|
|
2018
|
|
2017
|
(dollars in thousands, except shares and per share amounts)
|
|
(unaudited)
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|
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ASSETS
|
|
|
|
|
Cash and due from banks
|
|
$
|
500,617
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|
|
290,078
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Short-term investments
|
|
|
43,302
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|
|
45,388
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Total cash and cash equivalents
|
|
|
543,919
|
|
|
335,466
|
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Securities available-for-sale
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|
|
7,012,774
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|
|
6,953,719
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|
Securities held-to-maturity (fair value $1,849,822 at June 30, 2018
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|
|
|
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and $1,983,087 at December 31, 2017)
|
|
|
1,904,377
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|
|
1,996,376
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Federal Home Loan Bank stock
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|
|
257,002
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|
|
227,920
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Loans held for sale
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|
|
664,717
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|
|
432,277
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Loans and leases, net
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|
|
33,934,159
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|
|
32,416,580
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Premises and equipment, net
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|
|
66,499
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|
|
61,571
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Accrued interest and dividends receivable
|
|
|
126,272
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|
|
117,070
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Other assets
|
|
|
705,765
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|
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576,741
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Total assets
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|
$
|
45,215,484
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|
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43,117,720
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Deposits
|
|
|
|
|
Non-interest-bearing
|
|
$
|
11,808,240
|
|
|
11,353,038
|
|
Interest-bearing
|
|
|
23,185,497
|
|
|
22,086,789
|
|
Total deposits
|
|
|
34,993,737
|
|
|
33,439,827
|
|
Federal funds purchased and securities sold under agreements
|
|
|
|
|
to repurchase
|
|
|
585,000
|
|
|
790,000
|
|
Federal Home Loan Bank borrowings
|
|
|
4,795,000
|
|
|
4,195,000
|
|
Subordinated debt
|
|
|
257,774
|
|
|
257,381
|
|
Accrued expenses and other liabilities
|
|
|
436,350
|
|
|
403,821
|
|
Total liabilities
|
|
|
41,067,861
|
|
|
39,086,029
|
|
Shareholders' equity
|
|
|
|
|
Preferred stock, par value $.01 per share; 61,000,000 shares
authorized;
|
|
|
|
|
none issued at June 30, 2018 and December 31, 2017
|
|
|
-
|
|
|
-
|
|
Common stock, par value $.01 per share; 64,000,000 shares authorized;
|
|
|
|
|
55,351,482 shares issued and outstanding at June 30, 2018;
|
|
|
|
|
54,979,213 shares issued and 54,977,971 outstanding at December 31,
2017
|
|
|
554
|
|
|
550
|
|
Additional paid-in capital
|
|
|
1,835,574
|
|
|
1,809,642
|
|
Retained earnings
|
|
|
2,476,623
|
|
|
2,290,537
|
|
Treasury stock, none at June 30, 2018 and 1,242 shares at December
31, 2017
|
|
|
-
|
|
|
(171
|
)
|
Accumulated other comprehensive loss
|
|
|
(165,128
|
)
|
|
(68,867
|
)
|
Total shareholders' equity
|
|
|
4,147,623
|
|
|
4,031,691
|
|
Total liabilities and shareholders' equity
|
|
$
|
45,215,484
|
|
|
43,117,720
|
|
|
|
|
|
|
|
|
|
SIGNATURE BANK
|
|
|
|
|
|
|
|
|
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
June 30,
|
|
June 30,
|
(in thousands, except ratios and per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
PER COMMON SHARE
|
|
|
|
|
|
|
|
|
Net income - basic
|
|
$
|
2.84
|
|
|
$
|
0.26
|
|
|
$
|
3.48
|
|
|
$
|
2.74
|
|
Net income - diluted
|
|
$
|
2.83
|
|
|
$
|
0.26
|
|
|
$
|
3.47
|
|
|
$
|
2.73
|
|
Average shares outstanding - basic
|
|
|
54,527
|
|
|
|
54,083
|
|
|
|
54,336
|
|
|
|
53,902
|
|
Average shares outstanding - diluted
|
|
|
54,599
|
|
|
|
54,290
|
|
|
|
54,558
|
|
|
|
54,262
|
|
Book value
|
|
$
|
74.93
|
|
|
$
|
69.07
|
|
|
$
|
74.93
|
|
|
$
|
69.07
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
|
Return on average total assets
|
|
|
1.39
|
%
|
|
|
0.14
|
%
|
|
|
0.86
|
%
|
|
|
0.75
|
%
|
Return on average shareholders' equity
|
|
|
15.22
|
%
|
|
|
1.48
|
%
|
|
|
9.32
|
%
|
|
|
8.05
|
%
|
Efficiency ratio (1)
|
|
|
34.47
|
%
|
|
|
36.70
|
%
|
|
|
38.33
|
%
|
|
|
34.92
|
%
|
Yield on interest-earning assets
|
|
|
3.81
|
%
|
|
|
3.65
|
%
|
|
|
3.78
|
%
|
|
|
3.64
|
%
|
Yield on interest-earning assets, tax-equivalent basis (1)(2)
|
|
|
3.82
|
%
|
|
|
3.66
|
%
|
|
|
3.78
|
%
|
|
|
3.65
|
%
|
Cost of deposits and borrowings
|
|
|
0.96
|
%
|
|
|
0.61
|
%
|
|
|
0.89
|
%
|
|
|
0.58
|
%
|
Net interest margin
|
|
|
2.93
|
%
|
|
|
3.10
|
%
|
|
|
2.97
|
%
|
|
|
3.12
|
%
|
Net interest margin, tax-equivalent basis (2)(3)
|
|
|
2.94
|
%
|
|
|
3.11
|
%
|
|
|
2.97
|
%
|
|
|
3.12
|
%
|
|
|
|
(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.
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
CAPITAL RATIOS
|
|
|
|
|
|
|
|
|
Tangible common equity (4)
|
|
|
9.10
|
%
|
|
|
8.95
|
%
|
|
|
9.29
|
%
|
|
|
9.26
|
%
|
Tier 1 leverage (5)
|
|
|
9.64
|
%
|
|
|
9.47
|
%
|
|
|
9.72
|
%
|
|
|
9.52
|
%
|
Common equity Tier 1 risk-based (5)
|
|
|
12.10
|
%
|
|
|
12.09
|
%
|
|
|
11.99
|
%
|
|
|
11.68
|
%
|
Tier 1 risk-based (5)
|
|
|
12.10
|
%
|
|
|
12.09
|
%
|
|
|
11.99
|
%
|
|
|
11.68
|
%
|
Total risk-based (5)
|
|
|
13.42
|
%
|
|
|
13.45
|
%
|
|
|
13.32
|
%
|
|
|
13.03
|
%
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY
|
|
|
|
|
|
|
|
|
Non-accrual loans
|
|
$
|
158,077
|
|
|
$
|
168,713
|
|
|
$
|
326,918
|
|
|
$
|
392,880
|
|
Allowance for loan and lease losses
|
|
$
|
213,367
|
|
|
$
|
208,385
|
|
|
$
|
195,959
|
|
|
$
|
182,541
|
|
Allowance for loan and lease losses to non-accrual loans
|
|
|
134.98
|
%
|
|
|
123.51
|
%
|
|
|
59.94
|
%
|
|
|
46.46
|
%
|
Allowance for loan and lease losses to total loans
|
|
|
0.62
|
%
|
|
|
0.63
|
%
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
Non-accrual loans to total loans
|
|
|
0.46
|
%
|
|
|
0.51
|
%
|
|
|
1.00
|
%
|
|
|
1.29
|
%
|
Quarterly net charge-offs to average loans, annualized
|
|
|
0.04
|
%
|
|
|
1.58
|
%
|
|
|
0.48
|
%
|
|
|
3.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, 2018 ratios are preliminary.
|
|
|
|
SIGNATURE BANK
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST MARGIN ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Three months ended
|
|
|
June 30, 2018
|
|
June 30, 2017
|
|
|
|
|
Interest
|
|
Average
|
|
|
|
Interest
|
|
Average
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
Average
|
|
Income/
|
|
Yield/
|
(dollars in thousands)
|
|
Balance
|
|
Expense
|
|
Rate
|
|
Balance
|
|
Expense
|
|
Rate
|
INTEREST-EARNING ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
$
|
443,433
|
|
1,979
|
|
|
1.79
|
%
|
|
528,169
|
|
1,358
|
|
|
1.03
|
%
|
Investment securities
|
|
|
9,301,617
|
|
73,742
|
|
|
3.17
|
%
|
|
8,889,069
|
|
67,827
|
|
|
3.05
|
%
|
Commercial loans, mortgages and leases (1)(2)
|
|
|
33,437,782
|
|
336,005
|
|
|
4.03
|
%
|
|
29,899,100
|
|
290,189
|
|
|
3.89
|
%
|
Residential mortgages and consumer loans
|
|
|
233,213
|
|
2,464
|
|
|
4.24
|
%
|
|
271,284
|
|
2,561
|
|
|
3.79
|
%
|
Loans held for sale
|
|
|
477,407
|
|
3,499
|
|
|
2.94
|
%
|
|
159,497
|
|
860
|
|
|
2.16
|
%
|
Total interest-earning assets
|
|
|
43,893,452
|
|
417,689
|
|
|
3.82
|
%
|
|
39,747,119
|
|
362,795
|
|
|
3.66
|
%
|
Non-interest-earning assets
|
|
|
688,126
|
|
|
|
|
|
568,253
|
|
|
|
|
Total assets
|
|
$
|
44,581,578
|
|
|
|
|
|
40,315,372
|
|
|
|
|
INTEREST-BEARING LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand
|
|
$
|
3,539,748
|
|
11,892
|
|
|
1.35
|
%
|
|
3,832,360
|
|
6,654
|
|
|
0.70
|
%
|
Money market
|
|
|
17,691,714
|
|
47,565
|
|
|
1.08
|
%
|
|
17,062,993
|
|
29,735
|
|
|
0.70
|
%
|
Time deposits
|
|
|
1,392,458
|
|
5,744
|
|
|
1.65
|
%
|
|
1,469,043
|
|
3,922
|
|
|
1.07
|
%
|
Non-interest-bearing demand deposits
|
|
|
11,831,308
|
|
-
|
|
|
-
|
|
|
10,592,678
|
|
-
|
|
|
-
|
|
Total deposits
|
|
|
34,455,228
|
|
65,201
|
|
|
0.76
|
%
|
|
32,957,074
|
|
40,311
|
|
|
0.49
|
%
|
Subordinated debt
|
|
|
257,645
|
|
3,643
|
|
|
5.66
|
%
|
|
256,851
|
|
3,605
|
|
|
5.61
|
%
|
Other borrowings
|
|
|
5,394,121
|
|
26,948
|
|
|
2.00
|
%
|
|
2,927,435
|
|
10,781
|
|
|
1.48
|
%
|
Total deposits and borrowings
|
|
|
40,106,994
|
|
95,792
|
|
|
0.96
|
%
|
|
36,141,360
|
|
54,697
|
|
|
0.61
|
%
|
Other non-interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
and shareholders' equity
|
|
|
4,474,584
|
|
|
|
|
|
4,174,012
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
44,581,578
|
|
|
|
|
|
40,315,372
|
|
|
|
|
OTHER DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / interest rate spread (1)
|
|
|
|
321,897
|
|
|
2.86
|
%
|
|
|
|
308,098
|
|
|
3.05
|
%
|
Tax-equivalent adjustment
|
|
|
|
(885
|
)
|
|
|
|
|
|
(858
|
)
|
|
|
Net interest income, as reported
|
|
|
|
321,012
|
|
|
|
|
|
|
307,240
|
|
|
|
Net interest margin
|
|
|
|
|
|
2.93
|
%
|
|
|
|
|
|
3.10
|
%
|
Tax-equivalent effect
|
|
|
|
|
|
0.01
|
%
|
|
|
|
|
|
0.01
|
%
|
Net interest margin on a tax-equivalent basis (1)(2)
|
|
|
|
|
|
2.94
|
%
|
|
|
|
|
|
3.11
|
%
|
Ratio of average interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
to average interest-bearing liabilities
|
|
|
|
|
|
109.44
|
%
|
|
|
|
|
|
109.98
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 June 30,
2018 and 35 percent for the period ended June 30, 2017.
|
|
|
|
(2)
|
|
See "Non-GAAP Financial Measures" for related calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNATURE BANK
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST MARGIN ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
Six months ended
|
|
|
June 30, 2018
|
|
June 30, 2017
|
|
|
|
|
Interest
|
|
Average
|
|
|
|
Interest
|
|
Average
|
|
|
Average
|
|
Income/
|
|
Yield/
|
|
Average
|
|
Income/
|
|
Yield/
|
(dollars in thousands)
|
|
Balance
|
|
Expense
|
|
Rate
|
|
Balance
|
|
Expense
|
|
Rate
|
INTEREST-EARNING ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investments
|
|
$
|
454,902
|
|
3,721
|
|
|
1.65
|
%
|
|
471,649
|
|
2,142
|
|
|
0.92
|
%
|
Investment securities
|
|
|
9,275,523
|
|
144,369
|
|
|
3.11
|
%
|
|
8,842,191
|
|
134,689
|
|
|
3.05
|
%
|
Commercial loans, mortgages and leases (1)(2)
|
|
|
33,067,533
|
|
656,893
|
|
|
4.01
|
%
|
|
29,615,113
|
|
569,780
|
|
|
3.88
|
%
|
Residential mortgages and consumer loans
|
|
|
239,130
|
|
4,862
|
|
|
4.10
|
%
|
|
274,420
|
|
5,201
|
|
|
3.82
|
%
|
Loans held for sale
|
|
|
417,029
|
|
5,763
|
|
|
2.79
|
%
|
|
219,105
|
|
2,244
|
|
|
2.07
|
%
|
Total interest-earning assets
|
|
|
43,454,117
|
|
815,608
|
|
|
3.78
|
%
|
|
39,422,478
|
|
714,056
|
|
|
3.65
|
%
|
Non-interest-earning assets
|
|
|
675,674
|
|
|
|
|
|
553,844
|
|
|
|
|
Total assets
|
|
$
|
44,129,791
|
|
|
|
|
|
39,976,322
|
|
|
|
|
INTEREST-BEARING LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW and interest-bearing demand
|
|
$
|
3,691,222
|
|
22,721
|
|
|
1.24
|
%
|
|
3,793,164
|
|
11,875
|
|
|
0.63
|
%
|
Money market
|
|
|
17,465,933
|
|
86,283
|
|
|
1.00
|
%
|
|
16,872,945
|
|
55,904
|
|
|
0.67
|
%
|
Time deposits
|
|
|
1,461,716
|
|
11,059
|
|
|
1.53
|
%
|
|
1,451,516
|
|
7,334
|
|
|
1.02
|
%
|
Non-interest-bearing demand deposits
|
|
|
11,718,727
|
|
-
|
|
|
-
|
|
|
10,492,211
|
|
-
|
|
|
-
|
|
Total deposits
|
|
|
34,337,598
|
|
120,063
|
|
|
0.71
|
%
|
|
32,609,836
|
|
75,113
|
|
|
0.46
|
%
|
Subordinated debt
|
|
|
257,547
|
|
7,283
|
|
|
5.66
|
%
|
|
256,754
|
|
7,245
|
|
|
5.64
|
%
|
Other borrowings
|
|
|
5,078,834
|
|
47,370
|
|
|
1.88
|
%
|
|
3,001,291
|
|
21,188
|
|
|
1.42
|
%
|
Total deposits and borrowings
|
|
|
39,673,979
|
|
174,716
|
|
|
0.89
|
%
|
|
35,867,881
|
|
103,546
|
|
|
0.58
|
%
|
Other non-interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
and shareholders' equity
|
|
|
4,455,812
|
|
|
|
|
|
4,108,441
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
44,129,791
|
|
|
|
|
|
39,976,322
|
|
|
|
|
OTHER DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income / interest rate spread (1)
|
|
|
|
640,892
|
|
|
2.89
|
%
|
|
|
|
610,510
|
|
|
3.07
|
%
|
Tax-equivalent adjustment
|
|
|
|
(1,734
|
)
|
|
|
|
|
|
(1,514
|
)
|
|
|
Net interest income, as reported
|
|
|
|
639,158
|
|
|
|
|
|
|
608,996
|
|
|
|
Net interest margin
|
|
|
|
|
|
2.97
|
%
|
|
|
|
|
|
3.12
|
%
|
Tax-equivalent effect
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
Net interest margin on a tax-equivalent basis (1)(2)
|
|
|
|
|
|
2.97
|
%
|
|
|
|
|
|
3.12
|
%
|
Ratio of average interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
to average interest-bearing liabilities
|
|
|
|
|
|
109.53
|
%
|
|
|
|
|
|
109.91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 June 30,
2018 and 35 percent for the period ended June 30, 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 assists investors when comparing results
period-to-period in a more consistent manner and provides a better
measure of Signature Bank's results. These non-GAAP measures include
the Bank's i) Net income and diluted earnings per share (as
reported) to net income and diluted earnings per share excluding
write-downs and fair value adjustments for the taxi medallion
portfolio,(ii) tangible common equity ratio, (iii) efficiency
ratio,(iv) yield on interest-earning assets, tax-equivalent basis,
and (v) 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 change in net income excluding
write-downs and fair value adjustments for the taxi medallion
portfolio:
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
|
|
June 30,
|
|
June 30,
|
(dollars in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (as reported)
|
|
$
|
154,585
|
|
|
13,957
|
|
|
189,058
|
|
|
147,873
|
|
Write-downs and fair value (FV) adjustments for the taxi medallion
portfolio
|
|
|
(848
|
)
|
|
179,309
|
|
|
153,602
|
|
|
193,251
|
|
Tax effect, taxi medallion portfolio write-downs and FV adjustments
|
|
|
216
|
|
|
(73,034
|
)
|
|
(38,975
|
)
|
|
(94,088
|
)
|
Total net income (adjusted)
|
|
$
|
153,953
|
|
|
120,232
|
|
|
303,685
|
|
|
247,036
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share (as reported)
|
|
|
2.83
|
|
|
0.26
|
|
|
3.47
|
|
|
2.73
|
|
Write-downs and FV adjustments for the taxi medallion portfolio
|
|
|
(0.02
|
)
|
|
3.30
|
|
|
2.82
|
|
|
3.56
|
|
Tax effect, taxi medallion portfolio write-downs and FV adjustments
|
|
|
0.01
|
|
|
(1.35
|
)
|
|
(0.72
|
)
|
|
(1.74
|
)
|
Diluted earnings per share - excluding write-downs and FV
adjustments for the taxi medallion portfolio (adjusted)
|
|
$
|
2.82
|
|
|
2.21
|
|
|
5.57
|
|
|
4.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the tangible common equity ratio
calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
June 30,
|
(dollars in thousands)
|
|
2018
|
|
2018
|
|
2017
|
|
2017
|
Consolidated common shareholders' equity
|
|
$
|
4,147,623
|
|
|
4,001,172
|
|
|
4,031,691
|
|
|
3,797,246
|
|
Intangible assets
|
|
|
34,261
|
|
|
27,687
|
|
|
28,643
|
|
|
27,374
|
|
Consolidated tangible common shareholders' equity (TCE)
|
|
$
|
4,113,362
|
|
|
3,973,485
|
|
|
4,003,048
|
|
|
3,769,872
|
|
|
|
|
|
|
|
|
|
|
Consolidated total assets
|
|
$
|
45,215,484
|
|
|
44,435,634
|
|
|
43,117,720
|
|
|
40,718,610
|
|
Intangible assets
|
|
|
34,261
|
|
|
27,687
|
|
|
28,643
|
|
|
27,374
|
|
Consolidated tangible total assets (TTA)
|
|
$
|
45,181,223
|
|
|
44,407,947
|
|
|
43,089,077
|
|
|
40,691,236
|
|
Tangible common equity ratio (TCE/TTA)
|
|
|
9.10
|
%
|
|
8.95
|
%
|
|
9.29
|
%
|
|
9.26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the efficiency ratio calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Non-interest expense (NIE)
|
|
$
|
112,593
|
|
|
116,273
|
|
|
249,925
|
|
|
219,471
|
|
Net interest income before provision for loan and lease losses
|
|
|
321,012
|
|
|
307,240
|
|
|
639,158
|
|
|
608,996
|
|
Other non-interest income
|
|
|
5,615
|
|
|
9,550
|
|
|
12,818
|
|
|
19,424
|
|
Total income (TI)
|
|
$
|
326,627
|
|
|
316,790
|
|
|
651,976
|
|
|
628,420
|
|
Efficiency ratio (NIE/TI)
|
|
|
34.47
|
%
|
|
36.70
|
%
|
|
38.33
|
%
|
|
34.92
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNATURE BANK
|
NON-GAAP FINANCIAL MEASURES
|
(unaudited)
|
|
|
The following table reconciles yield on interest-earning assets to
the yield on interest-earning assets on a tax-equivalent basis:
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Interest income (as reported)
|
|
$
|
416,804
|
|
|
361,937
|
|
|
813,874
|
|
|
712,542
|
|
Tax-equivalent adjustment
|
|
|
885
|
|
|
858
|
|
|
1,734
|
|
|
1,514
|
|
Interest income, tax-equivalent basis
|
|
$
|
417,689
|
|
|
362,795
|
|
|
815,608
|
|
|
714,056
|
|
Interest-earnings assets
|
|
$
|
43,893,452
|
|
|
39,747,119
|
|
|
43,454,117
|
|
|
39,422,478
|
|
|
|
|
|
|
|
|
|
|
Yield on interest-earning assets
|
|
|
3.81
|
%
|
|
3.65
|
%
|
|
3.78
|
%
|
|
3.64
|
%
|
Tax-equivalent effect
|
|
|
0.01
|
%
|
|
0.01
|
%
|
|
0.00
|
%
|
|
0.01
|
%
|
Yield on interest-earning assets, tax-equivalent basis
|
|
|
3.82
|
%
|
|
3.66
|
%
|
|
3.78
|
%
|
|
3.65
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 June 30,
|
|
Six months ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net interest margin (as reported)
|
|
2.93
|
%
|
|
3.10
|
%
|
|
2.97
|
%
|
|
3.12
|
%
|
Tax-equivalent adjustment
|
|
0.01
|
%
|
|
0.01
|
%
|
|
-
|
|
|
-
|
|
Margin contribution from loan prepayment penalty income
|
|
(0.05)
|
%
|
|
(0.07)
|
%
|
|
(0.06)
|
%
|
|
(0.06)
|
%
|
Core net interest margin, tax-equivalent basis excluding loan
prepayment penalty income
|
|
2.89
|
%
|
|
3.04
|
%
|
|
2.91
|
%
|
|
3.06
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180719005097/en/
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