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10 Well-Run, Profitable Banks (Update 3)

4. Signature Bank

Shares of Signature Bank (SBNY - Get Report) of New York closed at $59.99 Friday, returning 20% during 2011.

The bank's third-quarter efficiency ratio was 36.45, according to SNL Financial.

Signature Bank has been a unique growth story in its home market, and was included last month among TheStreet's 10 Bank Stocks Beating Analysts' Price Targets.

The bank had $13.9 billion in total assets as of Sept. 30, with 25 branches in New York City and in Nassau, Suffolk, and Westchester counties, in New York, focusing on private banking services as well as commercial lending.

Signature Bank's balance sheet grew 19% year over year through the third quarter, with total loans growing 23%, to $6.4 billion as of Sept. 30. Third-quarter net income was $38.4 million, or 83 cents a share, increasing from $27.4 million, or 66 cents a share, a year earlier.

The third-quarter ROA was 1.13%, according to SNL.

Guggenheim Securities analyst David Darst has a neutral rating on the shares, saying in early December that they were fairly valued based on forward earnings estimates, but adding that the "disarray" among local competitors would "continue to drive opportunities for SBNY to add new teams and locations, allowing SBNY to drive above-peer growth over the next year." Darst estimates the bank will earn $3.71 a share in 2012.

Deutsche Bank analyst Dave Rochester on Thursday initiated his firm's coverage of Signature Bank with a "Buy" rating and a $69 price target, touting the bank's "unique model to drive coverage-leading EPS growth." The analyst expects Signature to earn $3.70 a share in 2012.

Rochester added that "with some of the strongest capital levels in the industry, SBNY has all the pieces in place to support above-peer revenue/EPS growth for the next few years, equating to premium trading multiples and share outperformance."

The shares trade for 16 times the consensus 2012 EPS estimate of $3.67, among analysts polled by FactSet, and for twice their Sept. 30 tangible book value of $29.57, according to SNL Financial.

Out of 16 analysts covering Signature Bank, seven rate the shares a buy, while the remaining analysts all have neutral ratings.

Interested in more on Signature Bank? See TheStreet Ratings' report card for this stock.

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