Signature Bank Reports 2019 Second Quarter Results

Signature Bank reported its results for the second quarter of 2019, which included a net income of $147.9 million, or $2.72 diluted earnings per share, versus $154.6 million, or $2.83 diluted earnings per share, for Q2/2018.

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.

Other highlights from the quarter included:

  • 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 grew $917.9 million to $37.54 billion; total deposits have grown $2.55 billion, or 7.3%, since the end of the 2018 second quarter. Average deposits increased $456.0 million in the 2019 second quarter.
  • Loans increased $466.5 million, or 1.2%, to $37.93 billion. Since the end of the 2018 second quarter, loans have increased 11.1%, 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% of total loans, as of June 30, 2019, versus $94.7 million, or 0.25%, at the end of the 2019 first quarter and $158.1 million, or 0.46%, 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%, compared with 2.75% for the 2019 first quarter and 2.94% 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%, compared with 2.73% 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%, 11.59%, 11.59%, and 12.82%, respectively, as of June 30, 2019. Signature bank remains significantly above fdic “well capitalized” standards. Tangible common equity ratio was 9.46%.
  • 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.

“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 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, Signature president and CEO.

“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,” said Scott A. Shay, chairman of the Board of Directors.

Signature Bank 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 provides equipment finance and leasing.

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