Signature Bank
Apr 28, 2006

Signature Bank Reports 2006 First Quarter Results

NEW YORK ... April 28, 2006 ... Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its 2006 first quarter ended March 31, 2006.

Net income for the quarter increased 39 percent to $8.0 million or $0.27 diluted earnings per share versus $5.7 million or $0.19 diluted earnings per share for the first quarter last year. The improvement in net income is primarily attributable to the growth in deposits, loans and the further leveraging of the Bank's infrastructure.

Net interest income totaled $29.1 million for the quarter, an increase of $7.1 million or 32 percent, compared with the 2005 first quarter. Total assets at the quarter-end were $4.49 billion.

Deposits in the first quarter decreased $163.6 million, totaling $3.32 billion at March 31, 2006. This includes the release of over $250 million of short-term escrow deposits that occurred during the first quarter of 2006, which, due to their nature, was expected. Excluding these short-term escrow deposits, deposits increased approximately $130.0 million in the quarter. In addition, off-balance sheet money market deposits rose $201.2 million to $680.4 million, as a result of increases in off-balance sheet short-term escrow deposits.

"As we approach the Bank's five-year anniversary, we continue to achieve solid earnings growth by expanding our loan portfolio and growing core deposits as well as capitalizing on increased efficiencies within the organization. Loans were up nearly $100 million this past quarter, and we are on target to achieve a 30 percent loan-to-asset ratio by year-end. Clients are continuing to recognize the strong capabilities of our Group Directors, Private Client Teams and Senior Lenders, as evidenced by this quarter's results," stated Joseph J. DePaolo, President and Chief Executive Officer.

"During the first quarter, we remained focused on recruitment, with the addition of two teams, three Group Directors and two Senior Lenders, and the opening of our 16th location in Union Square in January 2006. Additionally, in the second quarter, we have already added another two teams and two Group Directors. This brings our totals to 52 Group Directors and 42 Private Client Banking Teams. We are continually identifying and attracting seasoned bankers to join our team as we expand our network," DePaolo added.

Scott A. Shay, Chairman of the Board, noted: "The value of our franchise is strengthening amid ongoing industry consolidation. The pipeline for additional recruitment remains strong, as ongoing acquisitions within the metro-New York banking arena will likely lead to disarray, further client segmentation and relationship dilution. As in the past, we expect this to translate into opportunity for the growth of Signature Bank."

Net Interest Income

Net interest income for the first quarter 2006 was $29.1 million, representing a $7.1 million or 32 percent increase from the first quarter 2005. Average interest earning assets for the first quarter of 2006 increased by $913.3 million, reflecting a 27.8 percent increase from the first quarter 2005. Asset yields for the 2006 first quarter strengthened by 119 basis points to 5.23 percent, when compared with the first quarter of 2005, benefiting from higher short-term rates and more favorable market conditions. During the first quarter of 2006, the average cost of funds increased by 111 basis points to 2.50 percent when compared with the first quarter of last year. The increase in the cost of funds is reflective of the competitive marketplace. The net interest margin for the 2006 first quarter increased 9 basis points to 2.82 percent, versus the same period last year. On a linked quarter basis, net interest margin decreased 7 basis points predominantly due to the outflow of the significant short-term escrow deposits which was expected, due to their nature. These short-term escrow deposits had helped to accelerate margin expansion in the fourth quarter of 2005. These funds were temporarily replaced with higher cost short-term borrowings. The effect of the escrow deposit outflow was approximately 8 basis points.

The Bank expects that due to the flat yield curve and competitive deposit market its cost of funds will continue to increase with the rise in short-term rates; however, this rise should be mitigated by a stable core deposit mix.

Non-Interest Income and Non-Interest Expense

Non-interest income for the first quarter of 2006 was $4.8 million, an increase of $562,000 or 13.1 percent, versus $4.3 million reported in the comparable period a year ago. This improvement was largely the result of a $721,000 increase in fees and service charges and a $107,000 increase in commissions from brokerage activities. These increases were partially offset by a decrease of $201,000 in net gains on sales of securities and loans.

Non-interest expense for the first quarter was $19.5 million, compared with $15.7 million in the same period last year. This increase was primarily due to the addition of new Private Client Teams and locations as well as increased growth in client activity.

The Bank's efficiency ratio improved to 57.3 percent for first quarter 2006, compared with 59.8 percent for the first quarter of last year. This improvement in efficiencies continues to occur while the Bank aggressively adds Private Client personnel. Additionally, the Bank successfully completed the transition of all non-information technology services away from our former parent company, Bank Hapoalim, during the quarter. The Bank expects to complete the transition of information technology services away from Bank Hapoalim by September 30, 2006.

Loans

For the first quarter, loans, excluding loans held for sale, increased $97.8 million or 9.7 percent to $1.1 billion at March 31, 2006, compared with $1.0 billion at December 31, 2005. The Bank's loan pipeline continues to benefit from several key initiatives the Bank began implementing throughout 2005, which included enhancing its commercial real estate lending capabilities, coupled with the increased efforts of the Bank's established Private Client Teams and Senior Lenders.

Loans held for sale were $108.4 million as of March 31, 2006, a decrease of $30.0 million or 22 percent from December 31, 2005. The periodic fluctuation in loans held for sale is predominantly due to the timing of SBA loan purchases and subsequent pool sales.

At March 31, 2006, non-performing loans increased to $9.0 million from $8.8 million at December 31, 2005, representing 0.82 percent of total loans. Quarterly net charge-offs to average loans remained low at 0.06 percent. The non-performing loan balance is predominantly made up of two loans, one of which the Bank restructured in January 2006. The restructuring resulted in additional collateral and an anticipated significant pay-down within the year.

Capital

Signature Bank's capital ratios remain strong. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 18.57 percent, 19.11 percent and 8.42 percent, respectively, as of March 31, 2006, well in excess of regulatory requirements. The ratios reflect the relatively low risk profile of the balance sheet.

Conference Call

Signature Bank's management will host a conference call to review results of the 2006 first quarter on Friday, April 28, 2006, at 10:00 AM ET. Participants should dial 800-257-6607 at least ten minutes prior to the start of the call. International callers should dial 303-262-2131. To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Bank's web site at www.signatureny.com, click on the "investor relations" tab, then select "Company News," followed by "Conference Calls," to access the link to the call. Refer to conference identification number 33248. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11058440. The replay will be available from approximately 12:00 PM ET on Friday, April 28, 2006, through 6:00 PM ET on Wednesday, May 3, 2006.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 16 private client offices located in the New York metropolitan area, serving the needs of privately owned businesses, their owners and senior managers through dozens of private client groups. The Bank offers a wide variety of business and personal banking products and services as well as investment, brokerage, asset management and insurance products and services through its subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member NASD/SIPC.

Signature Bank's 16 offices are located throughout the metropolitan New York area. In Manhattan - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue and 200 Park Avenue South. Brooklyn - 26 Court Street and 84 Broadway. Westchester - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 58 South Service Road, Melville and 923 Broadway, Woodmere. Queens - 36-36 33rd Street in Long Island City. Bronx - 421 Hunts Point Avenue, Hunts Point.

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. Forward-looking statements include information concerning our future results, interest rates, loan and deposit growth, operations, new private client team hires, new office openings and business strategy. These statements often include words such as "may," "believe," "expect," "anticipate," "intend," "plan," "estimate" or 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, which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance; (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; and (iv) competition for qualified personnel and desirable office locations. Additional factors are described in our quarterly and annual reports.

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.







For Further Information:
Investor Contact:
Eric R. Howell, Chief Financial Officer
646.822.1402, ehowell@signatureny.com
Media Contact:
Susan J. Lewis
646.822.1825, slewis@signatureny.com