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Signature Bank Pushes Growth With Sales Hirings

Investors place a premium on banks with strong loan growth. Signature Bank's shares closed at $91.05 Tuesday and traded for 2.5 times their reported June 30 tangible book value of $36.10 and for 17.9 times the consensus 2014 EPS estimate of $5.09. The consensus 2015 EPS estimate is $5.76, for an implied earnings growth rate of 13%.

Signature Bank's shares have returned 28% this year, following a 19% return during 2012.

KBW analyst Christopher McGratty rates Signature Bank "market perform," with a $93 price target, but estimates the company will grow its loan portfolio by $2.6 billion during 2013, exceeding the bank's stated goal by a wide margin.

"Signature continues to exceed growth expectations, as the company had already announced the addition of seven private banking teams YTD" before the hiring announcement on Tuesday, according to McGratty.

In a note to clients on Tuesday, the analyst wrote that "the additional scale in the specialty finance business further diversifies the company from both a loan portfolio mix and geographical perspective."

"Only 16 months old, Signature Financial has now added 19 sales executives in 17 locations throughout the country, and has already booked over $1.3B in new originations since creation," McGratty added.

Among 21 analysts polled by Thomson Reuters, 15 rate Signature Bank a "buy" while the remaining six analysts all have neutral ratings for the stock.

SBNY Chart SBNY data by YCharts

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

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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