Signature Bank Reports 2012 Fourth Quarter And Year-End Results

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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 team 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. 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. As you read and consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions and can change as a result of many possible events or factors, not all of which are known to us or in our control. Although we believe that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or our beliefs, assumptions and expectations were incorrect, our business, financial condition, liquidity or results of operations may vary materially from those expressed in our forward-looking statements. Additional risks are described in our quarterly and annual reports filed with the FDIC. You should keep in mind that any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time, and we cannot predict these events or how they may affect the Bank. Signature Bank has no duty to, and does not intend to, update or revise the forward-looking statements after the date on which they are made. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.

SIGNATURE BANK CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
		Three months ended December 31,							Twelve months ended December 31,
(dollars in thousands, except per share amounts)		2012				2011			2012			2011
INTEREST AND DIVIDEND INCOME
Loans held for sale		$	1,027			962			3,508			3,772
Loans and leases, net			116,785			90,908			417,837			333,395
Securities available-for-sale			49,685			57,849			216,974			223,129
Securities held-to-maturity			5,418			4,690			20,158			18,403
Other short-term investments			568			386			2,079			1,817
Total interest income			173,483			154,795			660,556			580,516
INTEREST EXPENSE
Deposits			20,236			22,438			84,163			91,100
Federal funds purchased and securities sold under
agreements to repurchase			4,977			5,722			22,132			22,324
Federal Home Loan Bank advances			1,127			1,368			4,455			7,305
Total interest expense			26,340			29,528			110,750			120,729
Net interest income before provision for loan and lease losses			147,143			125,267			549,806			459,787
Provision for loan and lease losses			10,388			14,581			41,427			51,876
Net interest income after provision for loan and lease losses			136,755			110,686			508,379			407,911
NON-INTEREST INCOME
Commissions			1,934			2,186			8,210			9,058
Fees and service charges			3,952			3,571			15,503			15,022
Net gains on sales of securities			974			1,229			6,887			14,387
Net gains on sales of loans			2,610			807			9,273			4,054
Other-than-temporary impairment losses on securities:
Total impairment losses on securities			(2,115	)		(621	)		(11,593	)		(12,272	)
Portion recognized in other comprehensive income (before taxes)			1,590			280			8,520			10,183
Net impairment losses on securities recognized in earnings			(525	)		(341	)		(3,073	)		(2,089	)
Net trading income			200			109			759			319
Other (loss) income			(246	)		341			(1,320	)		1,287
Total non-interest income			8,899			7,902			36,239			42,038
NON-INTEREST EXPENSE
Salaries and benefits			39,298			30,107			146,696			114,537
Occupancy and equipment			4,590			4,282			17,294			16,303
Other general and administrative			14,216			12,742			54,253			51,884
Total non-interest expense			58,104			47,131			218,243			182,724
Income before income taxes			87,550			71,457			326,375			267,225
Income tax expense			37,416			31,482			140,892			117,699
Net income		$	50,134			39,975			185,483			149,526
PER COMMON SHARE DATA
Earnings per share – basic		$	1.07			0.87			3.98			3.43
Earnings per share – diluted		$	1.05			0.85			3.91			3.37

SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		December 31,			December 31,
		2012			2011
(dollars in thousands, except per share amounts)		(unaudited)
ASSETS
Cash and due from banks		$	86,186		34,083
Short-term investments			7,779		6,071
Total cash and cash equivalents			93,965		40,154
Securities available-for-sale (pledged $2,467,409 and $2,672,093 at
December 31, 2012 and 2011)			6,130,356		6,512,855
Securities held-to-maturity (fair value $755,469 and $571,980 at
December 31, 2012 and 2011; pledged $543,351 and $352,865 at
December 31, 2012 and 2011)			739,835		556,044
Federal Home Loan Bank stock			50,012		48,152
Loans held for sale			369,468		392,025
Loans and leases, net			9,664,337		6,764,564
Premises and equipment, net			32,192		30,574
Accrued interest and dividends receivable			64,367		60,533
Other assets			311,525		261,219
Total assets		$	17,456,057		14,666,120
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing			4,444,964		3,148,436
Interest-bearing			9,637,688		8,605,702
Total deposits			14,082,652		11,754,138
Federal funds purchased and securities sold under agreements
to repurchase			995,000		750,800
Federal Home Loan Bank advances			590,000		675,000
Accrued expenses and other liabilities			138,078		78,066
Total liabilities			15,805,730		13,258,004
Shareholders’ equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized; none
issued at December 31, 2012 and 2011			-		-
Common stock, par value $.01 per share; 64,000,000 shares authorized;
47,230,266 and 46,181,890 shares issued and outstanding
at December 31, 2012 and 2011			472		462
Additional paid-in capital			997,517		954,833
Retained earnings			608,511		423,032
Net unrealized gains on securities available-for-sale, net of tax			43,827		29,789
Total shareholders' equity			1,650,327		1,408,116
Total liabilities and shareholders' equity		$	17,456,057		14,666,120

SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
		Three months ended December 31,								Twelve months ended December 31,
(dollars in thousands, except ratios and per share amounts)		2012				2011				2012				2011
PER COMMON SHARE
Net income - basic		$	1.07			$	0.87			$	3.98			$	3.43
Net income - diluted		$	1.05			$	0.85			$	3.91			$	3.37
Average shares outstanding - basic			46,981				46,179				46,633				43,622
Average shares outstanding - diluted			47,666				47,025				47,386				44,418
Book value		$	34.94			$	30.49			$	34.94			$	30.49
SELECTED FINANCIAL DATA
Return on average total assets			1.18	%			1.11	%			1.17	%			1.14	%
Return on average shareholders' equity			12.33	%			11.44	%			12.13	%			12.71	%
Efficiency ratio (1)			37.24	%			35.39	%			37.24	%			36.41	%
Efficiency ratio excluding net gains on sales of securities and net impairment losses on securities recognized in earnings (1)			37.34	%			35.63	%			37.48	%			37.33	%
Yield on interest-earning assets			4.16	%			4.38	%			4.25	%			4.50	%
Cost of deposits and borrowings			0.69	%			0.91	%			0.78	%			1.01	%
Net interest margin			3.53	%			3.55	%			3.53	%			3.57	%
(1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income before provision for loan and lease losses and non-interest income.
		December 31, 2012				September 30, 2012				December 31, 2011
CAPITAL RATIOS
Tangible common equity (2)			9.45	%			9.63	%			9.60	%
Tier 1 leverage			9.51	%			9.60	%			9.67	%
Tier 1 risk-based			15.32	%			16.15	%			17.08	%
Total risk-based			16.35	%			17.23	%			18.17	%
ASSET QUALITY
Non-accrual loans		$	27,190			$	28,026			$	42,218
Allowance for loan and lease losses		$	107,433			$	102,910			$	86,162
Allowance for loan and lease losses to non-accrual loans			395.12	%			367.19	%			204.09	%
Allowance for loan and lease losses to total loans			1.10	%			1.18	%			1.26	%
Non-accrual loans to total loans			0.28	%			0.32	%			0.62	%
Quarterly net charge-offs to average loans (annualized)			0.25	%			0.22	%			0.71	%
(2) We define tangible common equity as the ratio of tangible common equity to adjusted tangible assets (the "TCE ratio") and calculate this ratio by dividing total consolidated common shareholders' equity by consolidated total assets (we had no intangible assets at any of the dates presented above). 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.

SIGNATURE BANK NET INTEREST MARGIN ANALYSIS (unaudited)
		Three months ended						Three months ended
		December 31, 2012						December 31, 2011
(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		$ 130,075		109		0.33%		72,716		63		0.34%
Investment securities		6,975,309		55,562		3.19%		6,967,068		62,862		3.61%
Commercial loans, mortgages and leases		8,795,051		112,747		5.10%		6,263,905		87,125		5.52%
Residential mortgages and consumer loans		394,785		4,038		4.07%		389,313		3,783		3.86%
Loans held for sale		284,998		1,027		1.43%		324,304		962		1.18%
Total interest-earning assets		16,580,218		173,483		4.16%		14,017,306		154,795		4.38%
Non-interest-earning assets		341,926						263,009
Total assets		$ 16,922,144						14,280,315
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand		782,020		816		0.42%		627,638		789		0.50%
Money market		8,143,132		15,942		0.78%		7,165,845		17,743		0.98%
Time deposits		945,556		3,478		1.46%		906,100		3,906		1.71%
Non-interest-bearing demand deposits		4,105,937		-		-		2,968,970		-		-
Total deposits		13,976,645		20,236		0.58%		11,668,553		22,438		0.76%
Borrowings		1,175,007		6,104		2.07%		1,166,630		7,090		2.41%
Total deposits and borrowings		15,151,652		26,340		0.69%		12,835,183		29,528		0.91%
Other non-interest-bearing liabilities
and shareholders' equity		1,770,492						1,445,132
Total liabilities and shareholders' equity		$ 16,922,144						14,280,315
OTHER DATA
Net interest income / interest rate spread				147,143		3.47%				125,267		3.47%
Net interest margin						3.53%						3.55%
Ratio of average interest-earning assets
to average interest-bearing liabilities						109.43%						109.21%

SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
		Twelve months ended								Twelve months ended
		December 31, 2012								December 31, 2011
(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		$	100,289		338		0.34	%		119,393		355		0.30	%
Investment securities			7,114,310		238,873		3.36	%		6,455,877		242,994		3.76	%
Commercial loans, mortgages and leases			7,699,659		402,019		5.22	%		5,664,412		316,856		5.59	%
Residential mortgages and consumer loans			384,659		15,818		4.11	%		388,455		16,539		4.26	%
Loans held for sale			257,709		3,508		1.36	%		261,647		3,772		1.44	%
Total interest-earning assets			15,556,626		660,556		4.25	%		12,889,784		580,516		4.50	%
Non-interest-earning assets			299,368							273,106
Total assets		$	15,855,994							13,162,890
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand			705,604		3,145		0.45	%		632,804		3,269		0.52	%
Money market			7,874,582		66,696		0.85	%		6,611,992		71,557		1.08	%
Time deposits			925,267		14,322		1.55	%		916,992		16,274		1.77	%
Non-interest-bearing demand deposits			3,569,645		-		-			2,702,236		-		-
Total deposits			13,075,098		84,163		0.64	%		10,864,024		91,100		0.84	%
Borrowings			1,161,784		26,587		2.29	%		1,073,430		29,629		2.76	%
Total deposits and borrowings			14,236,882		110,750		0.78	%		11,937,454		120,729		1.01	%
Other non-interest-bearing liabilities
and shareholders' equity			1,619,112							1,225,436
Total liabilities and shareholders' equity		$	15,855,994							13,162,890
OTHER DATA
Net interest income / interest rate spread					549,806		3.47	%				459,787		3.49	%
Net interest margin							3.53	%						3.57	%
Ratio of average interest-earning assets
to average interest-bearing liabilities							109.27	%						107.98	%

SIGNATURE BANK NON-GAAP FINANCIAL MEASURES (unaudited)
Management believes that the presentation of certain non-GAAP financial measures assists investors when comparing results period-to-period in a more consistent manner and provides a better measure of Signature Bank's results. These non-GAAP measures include the Bank's (i) tangible common equity ratio, (ii) net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities and (iii) core net interest margin 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 a reconciliation of net income and diluted earnings per share (as reported) to net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities:
		Three months ended December 31,							Twelve months ended December 31,
(dollars in thousands, except per share amounts)		2012				2011			2012				2011
Net income (as reported)		$	50,134			39,975			$	185,483			149,526
Gains on sales of SBA interest-only strip securities			-			-				(2,664	)		(7,434	)
Tax effect			-			-				1,136			3,281
Net income - excluding after-tax effect of gains on sales of SBA
interest-only strip securities		$	50,134			39,975			$	183,955			145,373
Diluted earnings per share (as reported)		$	1.05			0.85			$	3.91			3.37
Gains on sales of SBA interest-only strip securities			-			-				(0.05	)		(0.17	)
Tax effect			-			-				0.02			0.07
Diluted earnings per share - excluding after-tax effect of gains on sales of
SBA interest-only strip securities		$	1.05			0.85			$	3.88			3.27
The following table reconciles net interest margin (as reported) to core net interest margin excluding loan prepayment penalty income:
		Three months ended December 31,							Twelve months ended December 31,
		2012				2011			2012				2011
Net interest margin (as reported)			3.53	%		3.55	%			3.53	%		3.57	%
Margin contribution from loan prepayment penalty income			(0.21	)%		(0.09	)%			(0.13	)%		(0.08	)%
Core net interest margin - excluding loan prepayment penalty income			3.32	%		3.46	%			3.40	%		3.49	%

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