- Net Income for the 2021 Third Quarter Increased $102.9
Million, or 74.2 Percent, to a Record $241.4 Million, or $3.88
Diluted Earnings Per Share, Versus $138.6 Million, or $2.62 Diluted
Earnings Per Share, Reported in the 2020 Third Quarter
- Pre-Tax, Pre-Provision Earnings for the 2021 Third Quarter
Was a Record $331.0 Million, an Increase of $78.6 Million, or 31.2
Percent, Compared with $252.4 Million for the 2020 Third
Quarter
- Total Deposits in the Third Quarter Grew $10.00 Billion to
$95.57 Billion, While Average Deposits Increased $9.97 Billion.
Total Deposits for the Prior Twelve Months Have Grown $41.23
Billion, or 75.9 Percent
- For the 2021 Third Quarter, Loans Increased $4.08 Billion,
or 7.5 Percent, to $58.59 Billion. Core Loans (Excluding Paycheck
Protection Program Loans) for the Quarter Increased a Record $5.01
Billion. Since the End of the 2020 Third Quarter, Core Loans Have
Increased 29.4 Percent, or $12.99 Billion
- Non-Accrual Loans Were $165.4 Million, or 0.28 Percent of
Total Loans, at September 30, 2021, Versus $136.1 Million, or 0.25
Percent, at the End of the 2021 Second Quarter and $81.3 Million,
or 0.18 Percent, at the End of the 2020 Third Quarter
- COVID-19 Related Non-Payment Deferrals Reduced by $1.06
Billion to $254.2 Million, or 80.6 Percent as of October 10, 2021
Compared to $1.31 Billion at December 31, 2020
- Significant Excess Cash Balances From Continued Strong
Deposit Flows Negatively Impacted Net Interest Margin by 59 Basis
Points. Net Interest Margin on a Tax-Equivalent Basis was 1.88
Percent, Compared With 2.02 Percent for the 2021 Second Quarter and
2.55 Percent for the 2020 Third Quarter
- Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1
Risk-Based, and Total Risk-Based Capital Ratios were 7.83 Percent,
10.49 Percent, 11.53 Percent, and 12.96 Percent, Respectively, at
September 30, 2021. Signature Bank Remains Significantly Above FDIC
“Well Capitalized” Standards. Tangible Common Equity Ratio was 6.45
percent
- The Bank Declared a Cash Dividend of $0.56 Per Share,
Payable on or After November 12, 2021 to Common Shareholders of
Record at the Close of Business on October 29, 2021. The Bank Also
Declared a Cash Dividend of $12.50 Per Share Payable on or After
December 30, 2021 to Preferred Shareholders of Record at the Close
of Business on December 17, 2021
- During the Third Quarter, the Bank Raised $654.8 Million of
Common Stock in a Public Offering
- In the 2021 Third Quarter, the Bank On-boarded One Large
Private Client Banking Team in New York. This Brings the Total Team
Hires to Eight for the Year: Two Teams in New York, Four Teams on
the West Coast, as Well as the Corporate Mortgage Finance and the
SBA Origination Teams
Signature Bank (Nasdaq: SBNY), a New York-based full-service
commercial bank, today announced results for its third quarter
ended September 30, 2021.
Net income for the 2021 third quarter was $241.4 million, or
$3.88 diluted earnings per share, versus $138.6 million, or $2.62
diluted earnings per share, for the 2020 third quarter. The
increase in net income for the 2021 third quarter, versus the
comparable quarter last year, is primarily the result of an
increase in net interest income, fueled by strong average deposit
and loan growth, as well as a higher provision for credit losses
booked in the third quarter of 2020, which was predominantly due to
the effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision
earnings were $331.0 million, representing an increase of $78.6
million, or 31.2 percent, compared with $252.4 million for the 2020
third quarter.
Net interest income for the 2021 third quarter reached $480.9
million, up $92.2 million, or 23.7 percent, when compared with the
2020 third quarter. This increase is primarily due to growth in
average interest-earning assets. Total assets reached $107.85
billion at September 30, 2021, an increase of $44.09 billion, or
69.2 percent, from $63.76 billion at September 30, 2020. Average
assets for the 2021 third quarter reached $102.49 billion, an
increase of $40.93 billion, or 66.5 percent, compared with the 2020
third quarter.
Deposits for the 2021 third quarter increased $10.00 billion to
$95.57 billion, including an increase of non-interest bearing
deposits of $5.71 billion, which brings our non-interest bearing
mix to 36.0 percent of deposits at September 30, 2021. When
compared with deposits at September 30, 2020, overall deposit
growth for the last twelve months was 75.9 percent, or $41.23
billion. Average deposits for the 2021 third quarter reached $90.71
billion, an increase of $9.97 billion.
“As Signature Bank surpasses the $100 billion mark, I feel
compelled to reflect on what we have accomplished. Since our
founding in 2001, and throughout the past several quarters in
particular, the Bank realized dramatic growth. This was driven by
the collective success of our legacy banking teams in New York, our
blockchain-based payments platform, Signet™, and the many low-risk
franchises which now comprise our organization. The deposit growth
of $10.00 billion in the third quarter continued to be widespread,
with notable contributions from our Digital Assets Banking team,
including growth on the Signet™ platform, the Specialized Mortgage
Banking Solutions team, and the New York-based legacy banking
teams. Our core loan growth, driven by our Fund Banking Division,
grew a record $5.01 billion in outstandings. Although some of these
businesses have only recently come to fruition, our approach
remained consistent since the day we opened our doors. We’ve always
adhered to our client-centric, single-point-of-contact model, which
invariably attracts top bankers from across the industry as well as
their clients,” said Signature Bank President and Chief Executive
Officer Joseph J. DePaolo.
“Our approach to organic growth, coupled with our
industry-leading efficiency, continues to be the best method for
capital deployment. Signature Bank’s track record confirms that
investing in people is paramount, and the optimal path is to avoid
all of the cultural and organizational disruptions that stem from
M&A, which are often underestimated. Looking ahead, we will
continue to invest in our colleagues whose dedication has brought
us to this next chapter. It has always been and will continue to be
their efforts that culminate into the thriving institution that has
become Signature Bank,” DePaolo concluded.
Scott A. Shay, Chairman of the Board, added: “We started as a
bank with $50 million in assets, and now, just 20 years later,
passed the $100 billion mark purely organically. We believe there
is no bank in the history of the U.S. that has grown organically to
$100 billion on an inflation-adjusted basis in the same time frame.
Organic growth in our case equates to every single banker choosing
to work with us and their clients electing to follow them along
with many new clients who came to the bank from elsewhere because
they heard of our great service and focus on safety. We have not
inherited any clients or had legacy ones since we founded the
institution ourselves. Clients trust us, and we don’t take their
trust lightly. We remain committed to providing sleep-at-night
safety for our depositors while providing exceptional service. In
addition, we continue to identify emerging, safe technologies to
afford our clients the ability to transact their business ever more
efficiently. We truly believe that the best is yet to come for
Signature Bank."
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 7.83 percent, 10.49 percent, 11.53 percent, and 12.96
percent, respectively, as of September 30, 2021. 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. During the quarter, the Bank
raised $654.8 million of common equity in a public offering.
The Bank declared a cash dividend of $0.56 per share, payable on
or after November 12, 2021 to common stockholders of record at the
close of business on October 29, 2021. The Bank also declared a
cash dividend of $12.50 per share payable on December 30, 2021 to
preferred shareholders of record at the close of business on
December 17, 2021. In the third quarter of 2021, the Bank paid a
cash dividend of $0.56 per share to common stockholders of record
at the close of business on July 30, 2021. The Bank also paid a
cash dividend of $12.50 per share to preferred shareholders of
record at the close of business on September 17, 2021.
Net Interest Income
Net interest income for the 2021 third quarter was $480.9
million, an increase of $92.2 million, or 23.7 percent, versus the
same period last year, primarily due to growth in average
interest-earning assets. Average interest-earning assets of $101.66
billion for the 2021 third quarter represent an increase of $40.85
billion, or 67.2 percent, from the 2020 third quarter. Yield on
interest-earning assets for the 2021 third quarter decreased 98
basis points to 2.18 percent, compared to the third quarter of last
year.
Average cost of deposits and average cost of funds for the third
quarter of 2021 decreased by 29 and 34 basis points, to 0.22
percent and 0.32 percent, respectively, versus the comparable
period a year ago.
Net interest margin on a tax-equivalent basis for the 2021 third
quarter was 1.88 percent versus 2.55 percent reported in the 2020
third quarter and 2.02 percent in the 2021 second quarter.
Excluding loan prepayment penalties in both quarters, linked
quarter core net interest margin on a tax-equivalent basis
decreased 12 basis points to 1.87 percent. The 2021 third quarter
net interest margin was negatively affected by 59 basis points due
to significant excess cash balances driven by record deposit
growth.
Provision for Credit Losses
The Bank’s provision for credit losses for the third quarter of
2021 was $4.0 million, compared with $8.3 million for the 2021
second quarter and $52.7 million for the 2020 third quarter. The
decrease in the provision for credit losses for the third quarter
was predominantly attributable to improved macroeconomic conditions
compared with the same period last year.
Net charge offs for the 2021 third quarter were $17.3 million,
or 0.12 percent of average loans, on an annualized basis, versus
$15.3 million, or 0.12 percent, for the 2021 second quarter and net
charge offs of $10.5 million, or 0.09 percent, for the 2020 third
quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2021 third quarter was $31.4
million, up $7.2 million when compared with $24.2 million reported
in the 2020 third quarter. The increase was driven by growth of
$9.2 million in fees and service charges.
Non-interest expense for the third quarter of 2021 was $181.2
million, an increase of $20.7 million, or 12.9 percent, versus
$160.6 million reported in the 2020 third quarter. The increase was
predominantly due to a rise of $15.6 million in salaries and
benefits from the significant hiring of private client banking
teams, and operational support to meet the Bank's growing
needs.
The Bank’s efficiency ratio improved to 35.4 percent for the
2021 third quarter compared with 38.9 percent for the same period a
year ago, and 35.8 percent for the second quarter of 2021.
Loans
Loans, excluding loans held for sale, grew $4.08 billion, or 7.5
percent, during the third quarter of 2021 to $58.59 billion,
compared with $54.51 billion at June 30, 2021. Core loans
(excluding Paycheck Protection Program loans) grew a record $5.01
billion, or 9.6 percent, during the third quarter of 2021 to $57.21
billion, compared with $52.20 billion at June 30, 2021. Average
loans, excluding loans held for sale, reached $55.45 billion in the
2021 third quarter, growing $2.98 billion, or 5.7 percent, from the
2021 second quarter and $10.03 billion, or 22.1 percent, from the
2020 third quarter.
At September 30, 2021, non-accrual loans were $165.4 million,
representing 0.28 percent of total loans and 0.15 percent of total
assets, compared with non-accrual loans of $136.1 million, or 0.25
percent of total loans, at June 30, 2021 and $81.3 million, or 0.18
percent of total loans, at September 30, 2020. The ratio of
allowance for credit losses for loans and leases to total loans at
September 30, 2021 was 0.85 percent, versus 0.94 percent at June
30, 2021 and 1.05 percent at September 30, 2020. Additionally, the
ratio of allowance for credit losses for loans and leases to
non-accrual loans, or the coverage ratio, was 303 percent for the
2021 third quarter versus 378 percent for the second quarter of
2021 and 596 percent for the 2020 third quarter.
COVID-19 Related Loan Modifications
As of October 10, 2021, total non-payment deferrals were $254.2
million, or 0.43 percent of the Bank’s total loan portfolio,
compared with non-payment deferrals of $308.7 million, or 0.57
percent of total loans, at July 15, 2021, and $11.08 billion, or
24.5 percent of total loans at their peak level as of June 30,
2020. The positive trend is the result of the continued economic
recovery coming out of the lows of the COVID-19 pandemic.
Non-Payment
Modifications
(dollars in millions)
Portfolio Balance September
30, 2021
Deferral Balance October 10,
2021
% of Loan Category
Multi-family
$
15,438
76
0.5
%
Retail
5,601
95
1.7
%
Office
3,890
6
0.2
%
Acquisition, Development, and Construction
(ADC)
1,545
8
0.5
%
Industrial
672
—
—
%
Hotel
76
—
—
%
Land
42
—
—
%
Other
339
—
—
%
Total Commercial Real Estate
27,603
185
0.7
%
Fund Banking and Venture Banking
21,166
—
—
%
Asset Based Lending
330
—
—
%
Signature Financial
5,053
—
—
%
Traditional Commercial &
Industrial
2,592
59
2.3
%
Total Commercial & Industrial
29,141
59
0.2
%
PPP Loans
1,374
—
—
%
Consumer and Residential
546
10
1.8
%
Net deferred fees and costs
(78
)
—
—
%
Total Loans
$
58,586
$
254
0.4
%
Additionally, the Bank has made other COVID-19 related
modifications that have resulted in the receipt of modified
principal and interest payments totaling 4.7 percent of the loan
book.
Conference Call
Signature Bank’s management will host a conference call to
review results of the 2021 third quarter on Tuesday, October 19,
2021, at 9:00 AM ET. All participants should dial 866-342-8591 at
least ten minutes prior to the start of the call and reference
conference ID SBNYQ321. International callers should dial
203-518-9713.
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,”
"Quarterly Results/Conference Calls" to access the link to the
call. To listen to a telephone replay of the conference call,
please dial 800-723-0488 or 402-220-2651 and enter conference ID
SBNYQ321. The replay will be available from approximately 12:00 PM
ET on Tuesday, October 19, 2021 through 11:59 PM ET on Friday,
October 22, 2021.
About Signature Bank
Signature Bank, member FDIC, is a New York-based full-service
commercial bank with 37 private client offices throughout
the metropolitan New York area, as well as those in Connecticut,
California and North Carolina. Through its single-point-of-contact
approach, the Bank’s private client banking teams primarily serve
the needs of privately owned businesses, their owners and senior
managers. The Bank has two wholly owned subsidiaries: Signature
Financial, LLC, provides equipment finance and leasing; and,
Signature Securities Group Corporation, a licensed broker-dealer,
investment adviser and member FINRA/SIPC, offers investment,
brokerage, asset management and insurance products and services.
Signature Bank was the first FDIC-insured bank to launch a
blockchain-based digital payments platform. Signet™ allows
commercial clients to make real-time payments in U.S. dollars,
24/7/365 and was also the first solution to be approved for use by
the NYS Department of Financial Services.
Signature Bank placed 22nd on S&P Global’s list of the
largest banks in the U.S., based on deposits.
For more information, please visit
https://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.
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 expectations
regarding future results, interest rates and the interest rate
environment, loan and deposit growth, loan performance, operations,
new private client team hires, new office openings, business
strategy and the impact of the COVID-19 pandemic on each of the
foregoing and on our business overall. Forward looking statements
often include words such as "may," "believe," "expect,"
"anticipate," "intend," “potential,” “opportunity,” “could,”
“project,” “seek,” “target,” “goal,” “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, (vi) our ability to maintain the continuity,
integrity, security and safety of our operations and (vii)
competition for qualified personnel and desirable office locations.
All of these factors are subject to additional uncertainty in the
context of the COVID-19 pandemic, which is having an unprecedented
impact on all aspects of our operations, the financial services
industry and the economy as a whole. Additional risks are described
in our quarterly and annual reports filed with the FDIC. 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. 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.
FINANCIAL TABLES ATTACHED
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF
INCOME
(unaudited)
Three months ended September
30,
Nine months ended September
30,
(dollars in thousands, except per share
amounts)
2021
2020
2021
2020
INTEREST INCOME
Loans held for sale
$
1,625
692
3,202
2,334
Loans and leases
480,771
416,617
1,376,500
1,234,894
Securities available-for-sale
47,325
45,251
135,923
144,683
Securities held-to-maturity
12,549
14,036
38,750
42,660
Other investments
13,450
4,896
29,697
18,517
Total interest income
555,720
481,492
1,584,072
1,443,088
INTEREST EXPENSE
Deposits
51,272
66,069
163,724
231,359
Federal funds purchased and securities
sold under agreements to repurchase
602
680
1,799
2,147
Federal Home Loan Bank borrowings
16,803
20,174
51,045
67,914
Subordinated debt
6,167
5,856
22,900
17,560
Total interest expense
74,844
92,779
239,468
318,980
Net interest income before provision for
credit losses
480,876
388,713
1,344,604
1,124,108
Provision for credit losses
3,985
52,664
43,165
212,495
Net interest income after provision for
credit losses
476,891
336,049
1,301,439
911,613
NON-INTEREST INCOME
Commissions
4,331
3,183
12,233
9,710
Fees and service charges
20,032
10,871
53,567
31,772
Net gains on sales of securities
—
3,623
—
3,623
Net gains on sales of loans
3,651
4,996
14,104
9,552
Other (loss) income
3,353
1,540
7,532
(3,600
)
Total non-interest income
31,367
24,213
87,436
51,057
NON-INTEREST EXPENSE
Salaries and benefits
116,924
101,306
335,781
293,422
Occupancy and equipment
11,761
11,618
34,313
33,437
Information technology
13,230
11,324
35,433
31,797
FDIC assessment fees
6,896
3,190
17,107
9,787
Professional fees
9,981
3,399
22,401
12,931
Other general and administrative
22,451
29,726
74,618
75,028
Total non-interest expense
181,243
160,563
519,653
456,402
Income before income taxes
327,015
199,699
869,222
506,268
Income tax expense
85,592
61,149
222,773
150,918
Net income
$
241,423
138,550
646,449
355,350
Preferred stock dividends
9,125
—
28,762
—
Net income available to common
shareholders
$
232,298
138,550
617,687
355,350
PER COMMON SHARE DATA
Earnings per common share - basic
$
3.91
2.62
10.79
6.73
Earnings per common share - diluted
$
3.88
2.62
10.68
6.70
Dividends per common share
$
0.56
0.56
1.68
1.68
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION
September 30,
December 31,
2021
2020
(dollars in thousands, except shares and
per share amounts)
(unaudited)
ASSETS
Cash and due from banks
$
28,641,740
12,208,997
Short-term investments
193,917
139,334
Total cash and cash equivalents
28,835,657
12,348,331
Securities available-for-sale (amortized
cost $14,220,005 at September 30, 2021 and $8,891,709 at December
31, 2020); (zero allowance for credit losses at September 30, 2021
and $4 at December 31, 2020)
14,084,136
8,890,417
Securities held-to-maturity (fair value
$4,034,224 at September 30, 2021 and $2,329,378 at December 31,
2020); (allowance for credit losses $101 at September 30, 2021 and
$51 at December 31, 2020)
4,042,411
2,282,830
Federal Home Loan Bank stock
167,670
171,678
Loans held for sale
865,180
407,363
Loans and leases
58,585,996
48,833,098
Allowance for credit losses for loans and
leases
(500,862
)
(508,299
)
Loans and leases, net
58,085,134
48,324,799
Premises and equipment, net
88,872
80,274
Operating lease right-of-use assets
222,555
237,407
Accrued interest and dividends
receivable
312,151
277,801
Other assets
1,146,973
867,444
Total assets
$
107,850,739
73,888,344
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits
Non-interest-bearing
$
34,384,568
18,757,771
Interest-bearing
61,181,772
44,557,552
Total deposits
95,566,340
63,315,323
Federal funds purchased and securities
sold under agreements to repurchase
150,000
150,000
Federal Home Loan Bank borrowings
2,664,245
2,839,245
Subordinated debt
569,873
828,588
Operating lease liabilities
251,198
265,354
Accrued expenses and other liabilities
969,944
662,925
Total liabilities
100,171,600
68,061,435
Shareholders’ equity
Preferred stock, par value $.01 per share;
61,000,000 shares authorized; 730,000 shares issued and outstanding
at September 30, 2021 and December 31, 2020
7
7
Common stock, par value $.01 per share;
125,000,000 and 64,000,000 shares authorized at September 30, 2021
and December 31, 2020, respectively; 60,730,317 shares issued and
60,632,587 outstanding at September 30, 2021; 55,520,417 shares
issued and 53,564,573 outstanding at December 31, 2020
606
555
Additional paid-in capital
3,751,582
2,583,514
Retained earnings
4,069,670
3,548,260
Treasury stock, zero shares at September
30, 2021 and 1,899,336 shares at December 31, 2020
—
(232,531
)
Accumulated other comprehensive loss
(142,726
)
(72,896
)
Total shareholders' equity
7,679,139
5,826,909
Total liabilities and shareholders'
equity
$
107,850,739
73,888,344
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)
2021
2020
2021
2020
PER COMMON SHARE
Earnings per common share - basic
$
3.91
$
2.62
$
10.79
$
6.73
Earnings per common share - diluted
$
3.88
$
2.62
$
10.68
$
6.70
Weighted average common shares outstanding
- basic
59,284
52,673
57,152
52,631
Weighted average common shares outstanding
- diluted
59,745
52,835
57,740
52,824
Book value per common share
$
114.97
$
93.03
$
114.97
$
93.03
SELECTED FINANCIAL DATA
Return on average total assets
0.93
%
0.90
%
0.95
%
0.83
%
Return on average common shareholders'
equity
13.63
%
11.20
%
13.44
%
9.76
%
Efficiency ratio (1)
35.38
%
38.88
%
36.29
%
38.84
%
Yield on interest-earning assets
2.17
%
3.15
%
2.34
%
3.45
%
Yield on interest-earning assets,
tax-equivalent basis (1)(2)
2.18
%
3.16
%
2.35
%
3.46
%
Cost of deposits and borrowings
0.32
%
0.66
%
0.38
%
0.83
%
Net interest margin
1.88
%
2.54
%
1.99
%
2.68
%
Net interest margin, tax-equivalent basis
(2)(3)
1.88
%
2.55
%
1.99
%
2.69
%
(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 Income" for
related calculation.
September 30,
2021
June 30, 2021
December 31,
2020
September 30,
2020
CAPITAL RATIOS
Tangible common equity (4)
6.45
%
6.31
%
6.89
%
7.75
%
Tier 1 leverage (5)
7.83
%
7.86
%
8.55
%
8.56
%
Common equity Tier 1 risk-based (5)
10.49
%
10.07
%
9.87
%
10.26
%
Tier 1 risk-based (5)
11.53
%
11.20
%
11.20
%
10.26
%
Total risk-based (5)
12.96
%
12.77
%
13.54
%
11.98
%
ASSET QUALITY
Non-accrual loans
$
165,384
$
136,099
$
120,171
$
81,305
Allowance for credit losses for loans and
leases (ACLLL)
$
500,862
$
514,794
$
508,299
$
484,923
ACLLL to non-accrual loans
302.85
%
378.25
%
422.98
%
596.42
%
ACLLL to total loans
0.85
%
0.94
%
1.04
%
1.05
%
Non-accrual loans to total loans
0.28
%
0.25
%
0.25
%
0.18
%
Quarterly net charge-offs to average
loans, annualized
0.12
%
0.12
%
0.10
%
0.09
%
(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.
(5)
September 30, 2021 ratios are
preliminary.
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
Three months ended September 30,
2021
Three months ended September 30,
2020
(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
$
29,167,303
11,399
0.16
%
5,584,666
1,877
0.13
%
Investment securities
16,579,859
61,925
1.49
%
9,633,122
62,306
2.59
%
Commercial loans, mortgages and leases
55,309,881
481,360
3.45
%
45,251,833
416,597
3.66
%
Residential mortgages and consumer
loans
144,144
1,187
3.27
%
172,233
1,623
3.75
%
Loans held for sale
460,689
1,625
1.40
%
172,154
692
1.60
%
Total interest-earning assets (1)
101,661,876
557,496
2.18
%
60,814,008
483,095
3.16
%
Non-interest-earning assets
823,307
745,523
Total assets
$
102,485,183
61,559,531
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand
$
19,884,855
18,261
0.36
%
9,476,192
15,728
0.66
%
Money market
39,193,202
29,412
0.30
%
24,114,937
42,131
0.70
%
Time deposits
1,823,747
3,599
0.78
%
2,034,445
8,210
1.61
%
Non-interest-bearing demand deposits
29,804,055
—
—
15,991,893
—
—
Total deposits
90,705,859
51,272
0.22
%
51,617,467
66,069
0.51
%
Subordinated debt
569,642
6,167
4.33
%
456,927
5,856
5.13
%
Other borrowings
2,819,680
17,405
2.45
%
3,732,941
20,854
2.22
%
Total deposits and borrowings
94,095,181
74,844
0.32
%
55,807,335
92,779
0.66
%
Other non-interest-bearing liabilities
918,894
807,270
Preferred equity
708,173
—
Common equity
6,762,935
4,944,926
Total liabilities and shareholders'
equity
$
102,485,183
61,559,531
OTHER DATA
Net interest income / interest rate spread
(1)
$
482,652
1.86
%
390,316
2.50
%
Tax-equivalent adjustment
(1,776
)
(1,603
)
Net interest income, as reported
$
480,876
388,713
Net interest margin
1.88
%
2.54
%
Tax-equivalent effect
0.00
%
0.01
%
Net interest margin on a tax-equivalent
basis (1)
1.88
%
2.55
%
Ratio of average interest-earning assets
to average interest-bearing liabilities
108.04
%
108.97
%
(1)
Presented on a tax-equivalent,
non-GAAP, basis for municipal leasing and financing transactions
recorded in Commercial loans, mortgages and leases using the U.S.
federal statutory tax rate of 21 percent for the periods
presented.
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
Nine months ended September 30,
2021
Nine months ended September 30,
2020
(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
$
23,379,293
23,179
0.13
%
3,664,001
8,179
0.30
%
Investment securities
14,429,186
181,191
1.67
%
9,538,078
197,681
2.76
%
Commercial loans, mortgages and leases
52,301,338
1,377,883
3.52
%
42,399,557
1,234,245
3.89
%
Residential mortgages and consumer
loans
150,901
3,807
3.37
%
179,996
5,298
3.93
%
Loans held for sale
289,334
3,202
1.48
%
160,371
2,334
1.94
%
Total interest-earning assets (1)
90,550,052
1,589,262
2.35
%
55,942,003
1,447,737
3.46
%
Non-interest-earning assets
887,206
910,273
Total assets
$
91,437,258
56,852,276
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand
$
18,162,301
57,760
0.43
%
7,581,051
48,614
0.86
%
Money market
34,827,306
93,386
0.36
%
22,383,896
151,419
0.90
%
Time deposits
1,818,535
12,578
0.92
%
2,211,097
31,326
1.89
%
Non-interest-bearing demand deposits
25,356,430
—
—
14,553,396
—
—
Total deposits
80,164,572
163,724
0.27
%
46,729,440
231,359
0.66
%
Subordinated debt
672,093
22,900
4.54
%
456,584
17,560
5.13
%
Other borrowings
2,904,905
52,844
2.43
%
4,078,348
70,061
2.29
%
Total deposits and borrowings
83,741,570
239,468
0.38
%
51,264,372
318,980
0.83
%
Other non-interest-bearing liabilities
841,763
723,122
Preferred equity
708,088
—
Common equity
6,145,837
4,864,782
Total liabilities and shareholders'
equity
$
91,437,258
56,852,276
OTHER DATA
Net interest income / interest rate spread
(1)
$
1,349,794
1.96
%
1,128,757
2.63
%
Tax-equivalent adjustment
(5,190
)
(4,649
)
Net interest income, as reported
$
1,344,604
1,124,108
Net interest margin
1.99
%
2.68
%
Tax-equivalent effect
0.00
%
0.01
%
Net interest margin on a tax-equivalent
basis (1)
1.99
%
2.69
%
Ratio of average interest-earning assets
to average interest-bearing liabilities
108.13
%
109.12
%
(1)
Presented on a tax-equivalent,
non-GAAP, basis for municipal leasing and financing transactions
recorded in Commercial loans, mortgages and leases using the U.S.
federal statutory tax rate of 21 percent for the periods
presented.
SIGNATURE BANK NON-GAAP FINANCIAL MEASURES
(unaudited)
This press release contains both financial measures based on
GAAP and non-GAAP financial measures where 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, (iv) core net
interest margin, tax-equivalent basis excluding loan prepayment
penalty income, (v) pre-tax, pre-provision earnings, and (vi) loans
and leases to core loans (excluding Paycheck Protection Program
loans). 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,
2021
June 30, 2021
December 31,
2020
September 30,
2020
Consolidated common shareholders'
equity
$
7,679,139
6,844,563
5,826,909
4,983,199
Less: Preferred equity
708,173
708,173
708,019
—
Common shareholders' equity
$
6,970,966
6,136,390
5,118,890
4,983,199
Less: Intangible assets
15,858
19,886
32,301
43,768
Tangible common shareholders' equity
(TCE)
$
6,955,108
6,116,504
5,086,589
4,939,431
Consolidated total assets
$
107,850,739
96,887,801
73,888,344
63,760,313
Less: Intangible assets
15,858
19,886
32,301
43,768
Consolidated tangible total assets
(TTA)
$
107,834,881
96,867,915
73,856,043
63,716,545
Tangible common equity ratio (TCE/TTA)
6.45
%
6.31
%
6.89
%
7.75
%
The following table presents the efficiency ratio
calculation:
Three months ended September
30,
Nine months ended September
30,
(dollars in thousands)
2021
2020
2021
2020
Non-interest expense (NIE)
$
181,243
160,563
519,653
456,402
Net interest income before provision for
credit losses
480,876
388,713
1,344,604
1,124,108
Other non-interest income
31,367
24,213
87,436
51,057
Total income (TI)
$
512,243
412,926
1,432,040
1,175,165
Efficiency ratio (NIE/TI)
35.38
%
38.88
%
36.29
%
38.84
%
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)
2021
2020
2021
2020
Interest income (as reported)
$
555,720
481,492
1,584,072
1,443,088
Tax-equivalent adjustment
1,776
1,603
5,190
4,649
Interest income, tax-equivalent basis
$
557,496
483,095
1,589,262
1,447,737
Interest-earnings assets
$
101,661,876
60,814,008
90,550,052
55,942,003
Yield on interest-earning assets
2.17
%
3.15
%
2.34
%
3.45
%
Tax-equivalent effect
0.01
%
0.01
%
0.01
%
0.01
%
Yield on interest-earning assets,
tax-equivalent basis
2.18
%
3.16
%
2.35
%
3.46
%
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,
(dollars in thousands)
2021
2020
2021
2020
Net interest margin (as reported)
1.88
%
2.54
%
1.99
%
2.68
%
Tax-equivalent adjustment
0.00
%
0.01
%
0.00
%
0.01
%
Margin contribution from loan prepayment
penalty income
(0.01
)%
(0.03
)%
(0.02
)%
(0.06
)%
Core net interest margin, tax-equivalent
basis excluding loan prepayment penalty income
1.87
%
2.52
%
1.97
%
2.63
%
The following table reconciles net income (as reported) to
pre-tax, pre-provision earnings:
Three months ended September
30,
Nine months ended September
30,
(dollars in thousands)
2021
2020
2021
2020
Net income (as reported)
$
241,423
138,550
646,449
355,350
Income tax expense
85,592
61,149
222,773
150,918
Provision for credit losses
3,985
52,664
43,165
212,495
Pre-tax, pre-provision earnings
$
331,000
252,363
912,387
718,763
The following table reconciles loans and leases (as reported) to
core loans (excluding Paycheck Protection Program ("PPP")
loans):
(dollars in thousands)
September 30,
2021
June 30, 2021
December 31,
2020
September 30,
2020
Loans and leases (as reported)
$
58,585,996
54,509,167
48,833,098
46,212,092
Less: PPP loans
1,374,040
2,306,564
1,874,447
1,985,357
Core loans excluding PPP loans
$
57,211,956
52,202,603
46,958,651
44,226,735
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211019005382/en/
Investor Contact: Brian Wyremski,
Vice President - Investor Relations & Corporate Development
646-822-1479, bwyremski@signatureny.com Media
Contact: Susan Turkell Lewis, 646-822-1825,
slewis@signatureny.com
Signature Bank (NASDAQ:SBNY)
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Signature Bank (NASDAQ:SBNY)
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