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Signature Bank Reports 2012 Fourth Quarter And Year-End Results

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 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 %
 




Stock quotes in this article: SBNY 

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