Signature Bank
Jan 25, 2007

Signature Bank Reports 2006 Fourth Quarter And Year-End Results

NEW YORK -- January 25, 2007 -- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for the 2006 fourth quarter and year ended December 31, 2006.

Net income for the quarter reached $8.9 million or $0.30 diluted earnings per share, a 20 percent increase when compared with net income of $7.4 million or $0.25 diluted earnings per share for the 2005 fourth quarter. The increase in net income is primarily due to a rise in net interest income fueled by an increase in average interest earning assets of $645.7 million coupled with an increase in non-interest income.

Net interest income for the quarter totaled $32.7 million, up 12.7 percent or $3.7 million when compared with the same period last year. Total assets reached $5.4 billion at the end of 2006, an increase of $1.01 billion from year-end 2005.

Deposits rose $668.1 million during the fourth quarter, totaling $4.21 billion at December 31, 2006. Similar to numerous previous quarters, included in this amount is approximately $550 million in short-term escrow deposits, the bulk of which, due to their nature and as expected, were already released during the first quarter of 2007.

Excluding these short-term escrow funds, deposits increased approximately $117.8 million during the fourth quarter. The overall deposit growth for the year represents an increase of $723.4 million when compared with deposits at December 31, 2005. Excluding short-term escrow deposits of approximately $294 million at the end of 2005 and about $550 million at the end of 2006, deposits increased $466.7 million, or 14.6 percent, for the year.

For the year ended December 31, 2006, net income reached $33.4 million, or $1.12 diluted earnings per share, versus $15.9 million or $0.53 diluted earnings per share last year. Reflected in Signature Bank's expenses during the second quarter of 2005 was the effect of a one-time special bonus of cash and stock totaling $12.0 million, contributed by the Bank's former principal shareholder, in connection with the sale of their controlling shares. Excluding this one-time bonus, 2005 net income was $25.4 million or $0.86 diluted earnings per share.

"We ended the year on a high note by delivering both strong deposit and loan growth for the quarter. Additionally, we continue to garner short-term escrow deposits that other financial institutions of our size typically do not attract. Our ability to attract these escrow deposits speaks to our stellar capabilities and the level of service we provide," said Joseph J. DePaolo, President and Chief Executive Officer.

"We had another solid year in terms of recruitment through the addition of nine private client banking teams and 12 Group Directors, the addition of numerous other professionals to existing teams and the opening of three new offices. Private client teams are the fundamental building blocks of our organization. By expanding our private client banking network by more than 25 percent during 2006, we look forward to the benefits these additions will bring us in 2007 and beyond. We are fast becoming recognized in the marketplace for continuing to successfully execute our model – serving privately owned businesses and their management through a single point of contact. Clearly, our abilities to effectively meet the needs of this often underserved and overlooked market segment have proved advantageous for us, as indicated by yet another robust year of financial performance and outstanding deposit and loan growth," DePaolo explained.

Scott A. Shay, Chairman of the Board, added: "Through our prudent and stringent balance sheet management, we were able to maintain margins for the quarter while the industry continues to face significant margin pressure in a difficult interest rate environment.

"We've essentially been able to meet the challenges of this tough industry landscape by adhering to our growth philosophy, and solidly executing on our business model to attract experienced banking teams who possess the components necessary to help grow our Bank both in deposits and loans. This is truly what has sustained our success quarter after quarter, year over year, for the past nearly six years," Shay explained.

Net Interest Income

Net interest income for the 2006 fourth quarter was $32.7 million, up 12.7 percent or $3.7 million from the same period a year ago. The net interest income growth is attributed to increases in low-cost core deposits, inflows of short-term escrow deposits and a corresponding increase in interest-earning assets. Average interest-earning assets for the fourth quarter of 2006 increased by $645.7 million, a 16.2 percent increase from the fourth quarter of last year. Asset yields for the fourth quarter of 2006 grew 93 basis points to 5.71 percent when compared with the same quarter last year, reflecting an improved asset mix and more favorable market conditions. During the fourth quarter, the average cost of deposits increased 89 basis points to 2.59 percent and the average cost of funds rose 104 basis points to 3.0 percent when compared with the same period last year. The increases in costs of deposits and funds are reflective of the current interest rate environment and competitive marketplace.

Net interest income for the year ended December 31, 2006 was $122.0 million, up $22.9 million or 23.1 percent from last year.

The net interest margin for the 2006 fourth quarter decreased nine basis points to 2.80 percent when compared with the 2005 fourth quarter. On a linked quarter basis, net interest margin expanded two basis points. The net interest margin continues to be impacted by the prolonged difficult interest rate environment of 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 the Bank's 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 fourth quarter of 2006 reached $6.3 million, compared with $4.9 million reported for the same period last year. This improvement was primarily due to a $1.5 million rise in commissions, largely associated with a significant increase in off-balance sheet short-term escrow deposits. The increase was partially mitigated by a decrease of $108,000 in net gains on sales of securities and loans.

For the year, non-interest income was $21.3 million versus $18.7 million for the comparable period last year. The increase of $2.7 million, or 14.2 percent, is primarily the result of the aforementioned commissions and fees and service charges, which, again, were partially offset by a decrease in net gains on sales of securities and loans.

Non-interest expense for the fourth quarter was $21.9 million versus $19.8 million for the fourth quarter last year. This increase is primarily attributable to the addition of new private client teams and offices. At the close of 2006, the Bank employed 59 Group Directors and 47 private client teams versus 47 Group Directors and 38 teams at the end of 2005. This represents an increase of more than 25 percent in the Bank's Group Director network. Additionally, the Bank opened three new offices during 2006.

For the year, non-interest expense was $81.2 million, a decrease of $515,000 when compared with 2005. Adjusting for the effects of a one-time special bonus of cash and stock totaling $12.0 million paid by the Bank's former principal shareholder and reflected in the Bank's 2005 expenses, non-interest expense for 2005 was $69.8 million resulting in an increase of $11.5 million, or 16.4 percent, for 2006.

The Bank's efficiency ratio improved to 56.15 percent for the fourth quarter of 2006 versus 57.52 percent for the third quarter of 2006. This is primarily due to the growth in interest income and non-interest income as well as prudent cost management practices.

Loans

For the fourth quarter, loans, excluding loans held for sale, increased $176.5 million, or 12.6 percent, to $1.58 billion at December 31, 2006, compared with $1.40 billion at September 30, 2006. Loans at December 31, 2006 increased $572.5 million, or 57.0 percent, compared with December 31, 2005. At December 31, 2006, loans to total assets stood at 29.2 percent, compared with 22.9 percent at the end of 2005.

Loans held for sale were $126.0 million as of December 31, 2006, an increase of $22.9 million from September 30, 2006. The periodic fluctuation in loans held for sale is primarily due to the timing of SBA loan purchases and subsequent pool sales.

During the fourth quarter of 2006, non-performing loans decreased from $8.9 million to $8.8 million, which represents 0.56 percent of total loans. Quarterly net charge-offs to average loans remained low at 0.01 percent. The non-performing loan balance continues to predominantly consist of two loans, one of which was paid-off in January 2007. This pay-off will result in a $3.7 million reduction in non-performing loans in the first quarter of 2007.

Capital

Signature Bank's capital ratios remain strong. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 16.18 percent, 16.73 percent and 8.41 percent, respectively, as of December 31, 2006, well in excess of regulatory requirements. The ratios reflect the relatively low risk profile of the Bank's balance sheet.

DePaolo summarized the year and outlook ahead, stating: "We continue to recognize the opportunities that exist in our marketplace as changes unfold in the financial services arena. Our ability to capitalize on these changes has helped Signature Bank become one of the few remaining mid-sized commercial banks headquartered in metro-New York. This is a market position we are prepared to strengthen as we look ahead, and one on which we must capitalize now."

Conference Call

Signature Bank's management will host a conference call to review results of the fourth quarter and year ended December 31, 2006 on Thursday, January 25, 2007 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 303-262-2138.

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 35658. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11082030. The replay will be available from approximately 12:00 PM ET on Thursday, January 25, 2007, through 11:59 PM ET on Tuesday, January 30, 2007.

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 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.











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