Signature Bank Inc. (SBNY) Q2 2010 Earnings Call July 27, 2010; 10:00 am ET Executives Joseph J. DePaolo - President & Chief Executive Officer Eric R. Howell - Chief Financial Officer Susan Lewis - Investor Relations Analysts Bob Ramsey - FBR Capital Markets Christopher Nolan - Maxim Group Lana Chan - BMO Capital Markets Tom Alonso - Macquarie Casey Haire - Bank of America Merrill Lynch Jeff Bernstein - AH Lisanti Capital Growth Peyton Green - Sterne, Agee Bruce Harting - Barclays Presentation Operator
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 one, prevailing economic and regulatory conditions; two, changes in interest rates, loan demand, real estate values and competition, which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance; three, the level of defaults, losses in 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 require credit loss reserve levels and four, competition for client's loans, deposits, qualified personnel and desirable office locations. 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 conference or elsewhere might not reflect actual results. Now, I’d like to turn the call back to Joe. Joseph DePaolo Thank you Susan. I will provide some overview into the quarterly results, and then Eric Howell, our Chief Financial Officer, will review the Bank's financial performance in greater detail. Eric and I will address your questions at the end of our remarks.
Signature Bank posted another quarter, a solid financial performance, highlighted by crossing $10 billion in total assets, exceeding $8 billion in deposit, increasing loans by $195 million approaching $900 million in capital, while maintaining stable credit quality.I will jump right into the results starting with deposits. Deposits increased $571 million reaching nearly $8.5 billion. This includes quarterly core deposit growth of $508 million or 7%. Since the second quarter of last year, older deposits grew $2.4 billion or 39% during the past 12 months. Also in the quarter short term relationship based escrow deposits rose $63 million, now totaling $523 million. Average deposits in the 2010 second quarter were $8.14 billion, an increase of $2.3 billion or 39% compared with $5.88 billion reported in the 2009 second quarter. Remember this is a key deposit metric, which we closely monitor due to fluctuations in short-term escrow deposits. Non-interest bearing deposits are $1.94 billion represented 23% of total deposits. With the significant deposit growth, total assets reached $10.4 billion, up $2.5 billion or 32% since the 2009 second quarter. We achieved this milestone in assets, organically and just a little over nine years after commencing operations with only $42.5 million in initial capital. Moving on to loans. Loans during 2010 second quarter rose $195 million or 4% reaching $4.69 billion, which represented 45% of total assets at quarter end. The increases in loans during the quarter were primarily driven by growth in commercial real estate multifamily loans, with continued conservative underwriting standards. Non-performing loans remained stable this quarter at 0.95% of total loans and only 0.43% of total assets or $44.6 million. This compares with 0.99% of total loans or $44.4 million at the end of the 2010 first quarter and 1.27% of total loans or $47.9 million in the 2009 second quarter. The provision for loan loss in the second quarter 2010 is $11.1 million, compared with $11.2 million for the 2010 first quarter and $9.4 million for the 2009 second quarter. This is now the 11 th consecutive quarter, where our provision significantly exceeded charge offs. Read the rest of this transcript for free on seekingalpha.com