Signature Bank
Oct 26, 2006

Signature Bank Reports 2006 Third Quarter Results

NEW YORK ... October 26, 2006 ... Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its 2006 third quarter ended September 30, 2006.

Net income for the quarter was $8.3 million or $0.28 diluted earnings per share, a 29 percent increase when compared with net income of $6.4 million or $0.22 diluted earnings per share, reported in the third quarter of last year. Net income for the 2006 third quarter was affected primarily by an increase in net interest income, which was partially offset by an increase in expenses associated with the hiring of four new private client banking teams and the opening of two new offices; one on the Upper East Side of Manhattan and one in Jackson Heights, Queens.

Net interest income for the quarter totaled $30.7 million, an increase of $5.6 million or 22 percent when compared with the third quarter of 2005. Total assets were $4.7 billion at the end of the third quarter of 2006.

Deposits for the third quarter decreased $171.7 million, totaling $3.54 billion at September 30, 2006. This includes the release of approximately $300.0 million of short-term escrow deposits that occurred during the third quarter of 2006, which, due to their nature, was expected. Excluding these short-term escrow outflows, deposits increased approximately $130.0 million for the quarter. The overall deposit growth represents an increase of $412.6 million, or 13 percent, when compared with deposits at September 30, 2005. Core deposits of $3.22 billion for the 2006 third quarter represent 91 percent of total deposits.

"We once again had a successful recruiting quarter where we added four private client banking teams, bringing the total number of teams added to the Signature Bank network to nine this year. To date, we have hired nearly 40 private client banking team professionals, almost double the amount we added for all of last year. We ended the quarter with 47 teams in place, which are headed by 58 Group Directors. This represents an increase of 11 Group Directors since the beginning of the year. The opportunity to bring on board the type of teams we are looking for is clearly present, and we are focused on taking advantage of this," stated Joseph J. DePaolo, President and Chief Executive Officer.

"The addition of teams and the opening of new offices serve as the building blocks of this organization. These initiatives are crucial to the Bank's future expansion and rapidly emerging presence within the marketplace. We are fast becoming the largest mid-sized commercial bank headquartered in the metropolitan-NY area catering to the needs of privately owned businesses," DePaolo continued.

Scott A. Shay, Chairman of the Board, noted: "Clearly, the banking industry is facing a tough interest rate environment as evidenced by the significant margin compression experienced by many of our competitors. However, we continue to navigate our way through these challenging times by sticking to our key fundamental strategy of growing both core deposits and loans as a percentage of the balance sheet. We believe we have demonstrated that commitment, time and again, throughout our brief history."

Net Interest Income

Net interest income for the 2006 third quarter was $30.7 million, up 22 percent or $5.6 million from the comparable period last year. The net interest income growth was fueled by earning asset growth and an increase in net interest margin. Average interest-earning assets for the third quarter of 2006 increased by $758.5 million, reflecting a 21 percent increase from the third quarter of last year. Asset yields for the 2006 third quarter strengthened by 117 basis points to 5.63 percent, when compared with the 2005 third quarter, reflecting an improved asset mix and more favorable market conditions. During the third quarter, the average cost of funds increased by 114 basis points to 2.94 percent when compared with the same quarter last year, and the average cost of deposits increased 87 basis points to 2.42 percent. The increases in costs of funds and deposits are reflective of the current interest rate environment and competitive marketplace.

Net interest income for the nine-month period ended September 30, 2006 was $89.3 million, up $19.2 million or 27 percent, from the comparable period last year.

The net interest margin for the 2006 third quarter increased 3 basis points to 2.78 percent when compared with the same quarter last year. On a linked quarter basis, net interest margin was down 3 basis points.

The net interest margin continues to be impacted by the flat to inverted yield curve and a competitive deposit market. Net interest margin expansion in future periods will remain dependent upon core deposit growth and continued improvement in our loan-to-asset mix. Additionally, large movements in short-term escrow deposits can result in considerable changes in margins in any given quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the third quarter of 2006 was $5.1 million, compared with $4.9 million reported for the same period last year. This improvement was largely the result of a $429,000 rise in fees and service charges. The increase was partially mitigated by a decrease of $262,000 in net gains on sales of securities and loans.

For the first nine months of 2006, non-interest income was $15.1 million versus $13.8 million for the comparable period last year. The increase of $1.3 million, or 9.2 percent, was due mostly to increased fees and service charges, which are reflective of the growth in client balances and activity.

Non-interest expense for the quarter ended September 30, 2006 was $20.6 million, versus $17.6 million in the third quarter last year. This rise is primarily due to the addition of new private client teams and offices. At the close of the 2006 third quarter, the Bank employed 58 Group Directors and 47 private client teams versus 43 Group Directors and 34 teams, respectively, at the end of the third quarter of last year. This represents an increase of over 35 percent, or 15 Group Directors and 13 teams, added since the third quarter of last year. Additionally, five new Signature Bank offices were opened since September 30, 2005.

The Bank's efficiency ratio temporarily declined to 57.5 percent for the third quarter of 2006, versus 55.7 percent for the second quarter of 2006, primarily due to the growth in salaries and benefits from the addition of new private clients teams and increased occupancy expense associated with new offices.

Loans

For the third quarter, loans, excluding loans held for sale, increased $141.4 million or 11.2 percent to $1.40 billion at September 30, 2006, compared with $1.26 billion at June 30, 2006. Loans at September 30, 2006 have increased $528.6 million, or 60.6 percent, compared to September 30, 2005. At September 30, 2006, loans to total assets stood at 29.7 percent, up from 26.8 percent at the end of the second quarter of 2006.

Loans held for sale were $103.1 million as of September 30, 2006, a decrease of $2.6 million from June 30, 2006. The periodic fluctuation in loans held for sale is primarily due to the timing of SBA loan purchases and subsequent pool sales.

At September 30, 2006, non-performing loans remained steady at $8.9 million, which represents 0.88 percent of total loans. Quarterly net charge-offs to average loans remained low at 0.03 percent.

Capital

Signature Bank's capital ratios remain strong. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 17.12 percent, 17.66 percent and 8.31 percent, respectively, as of September 30, 2006, well in excess of regulatory requirements. The ratios reflect the relatively low risk profile of the balance sheet.

In conclusion, DePaolo said: "We continue to build the Signature Bank franchise through the recruitment of new teams and the continued successes of our established ones. We have made great strides toward this end since the beginning of the year and certainly are seeing the ongoing efforts of our private client teams and senior lenders reflected in our financial performance. We have continually realized strong, steady growth in our loan portfolio, while sustaining solid core deposit growth. The landscape of the marketplace continues to present opportunities for the Bank and we look forward to the challenge of capitalizing on those opportunities."

Conference Call

Signature Bank's management will host a conference call to review results of the 2006 third quarter on Thursday, October 26, 2006 at 10:00 AM ET. Participants should dial 800-867-0448 at least ten minutes prior to the start of the call. International callers should dial 303-262-2125.

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 3034. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11074135. The replay will be available from approximately 12:00 PM ET on Thursday, October 26, 2006, through 11:59 PM ET on Tuesday, October 31, 2006.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 18 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 18 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; 200 Park Avenue South and 1020 Madison Avenue. 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, Long Island City and 78-27 37th Avenue, Jackson Heights. 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 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, 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