Signature Bank
Oct 25, 2007

Signature Bank Reports 2007 Third Quarter Results

NEW YORK ... October 25, 2007 ... Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its 2007 third quarter ended September 30, 2007.

Net income for the quarter rose 29.8 percent to $10.7 million or $0.36 diluted earnings per share, versus $8.3 million or $0.28 diluted earnings per share for the 2006 third quarter. The growth in net income is primarily the result of expanding core net interest margins derived from increases in core deposits and loans as a percentage of assets.

Net interest income totaled $38.2 million for the third quarter, an increase of $7.6 million or 24.8 percent from the comparable period last year. Total assets were at $5.61 billion, up $899.2 million or 19.1 percent over the $4.71 billion reported at the end of the third quarter of 2006.

Deposits at the end of the third quarter were $4.39 billion, a decrease of $116.9 million over the second quarter 2007. This includes core deposit growth of $196.8 million and a decrease of $313.7 million in short-term escrow deposits, which due to their nature and as expected, were released during the quarter. Excluding short-term escrow deposits of $550.3 million at December 31, 2006 and $187.8 million at September 30, 2007, core deposits increased $541.5 million during the first nine months of 2007. When compared with deposits at September 30, 2006, the overall deposit growth represents an increase of $847.1 million or 23.9 percent.

Commenting on the results for the 2007 third quarter, Joseph J. DePaolo, President and Chief Executive Officer, said: "We achieved another solid quarter, one where we delivered steady growth on all fronts including banking teams, core deposits, loans, core margins and earnings. We continue to reach these milestones and demonstrate consistent financial performance as we execute our strategy, which includes attracting talented, veteran banking professionals and providing them a platform that offers their clients a consistent single point of contact.

"During the past several years, Signature Bank has fast become the bank of choice for both bankers and clients throughout our target market. All the recent consolidation and other changes in the financial services industry have left Signature Bank as virtually the only remaining mid-sized commercial bank headquartered in New York City catering to privately owned businesses providing us many excellent recruitment opportunities to date. Our business model affords those who join the Bank the ability to serve clients without the bureaucracy and red tape often found at the mega-banks," DePaolo explained.

Scott A. Shay, Chairman of the Board, noted that: "Signature Bank has executed on its model and core philosophy. We continue to deliver shareholder value by carefully and effectively managing our balance sheet and attaining solid growth across all the key metrics used when measuring the Bank's success. Our sustained performance over the quarters indicates that we have a distinct understanding of the marketplace we serve, which enables us to take full advantage of the consolidation and changes that are proceeding at a rapid pace."

Net Interest Income

Net interest income for the third quarter of 2007 was $38.2 million, representing an increase of $7.6 million, or 24.8 percent, from the same period last year. Average interest-earning assets for the 2007 third quarter increased $841.7 million, an increase of 19.2 percent from the comparable period a year ago. Asset yields for the 2007 third quarter grew 29 basis points to 5.92 percent, when compared with the third quarter of 2006, based on higher short-term rates, more favorable market conditions and an increase in loans as a percentage of average interest-earning assets. Average cost of deposits and funds for the third quarter of 2007 increased by 43 and 17 basis points to 2.85 and 3.11 percent, respectively, versus the comparable quarter last year. The increase in the cost of deposits and funds is reflective of the competitive marketplace.

Net interest income for the nine-month period ended September 30, 2007 was $108.7 million, up $19.4 million or 21.7 percent from the comparable period last year.

The net interest margin for the third quarter of 2007 increased 13 basis points to 2.91 percent when compared with the same period last year. On a linked quarter basis, net interest margin decreased four basis points, which largely reflects the outflow of short-term escrow deposits during the quarter. Excluding the effects of the short-term escrow deposits, core net interest margin increased approximately three basis points from the linked quarter. This core margin expansion was driven by the benefits from continued improvement in the average loan to average earning asset mix as well as the growth in core deposits.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2007 third quarter was $7.5 million, up $2.4 million or 46.2 percent, compared with $5.1 million reported in the same period last year. For the first nine months of 2007, non-interest income was $21.7 million, compared with $15.1 million reported in the comparable period a year ago, representing an increase of $6.7 million, or 44.2 percent. This was largely the result of commissions associated with off-balance sheet escrow deposits as well as an increase in fees and service charges related to client expansion.

Non-interest expense for the quarter ended September 30, 2007 was $25.5 million versus $20.6 million reported for the third quarter a year ago. This increase was primarily due to the addition of new private client banking teams and locations, increased growth in client activity, including the operating expense associated with short-term escrow deposits, as well as additional expense for newly enacted FDIC deposit assessment fees.

The Bank's efficiency ratio was 55.9 percent for third quarter 2007, versus 57.5 percent for the 2006 third quarter and 56.8 percent for the second quarter of 2007. This improvement was due to growth in net interest income and non-interest income coupled with expense containment.


For the 2007 third quarter, loans, excluding loans held for sale, increased $115.2 million or 6.4 percent to $1.90 billion at September 30, 2007, versus $1.79 billion at June 30, 2007. At September 30, 2007, loans to total assets were at 33.9 percent, compared with 31.3 percent at the end of the 2007 second quarter. The increase was driven by the aforementioned rise in loans, coupled with the outflow of short-term escrow deposits and corresponding decrease in total assets. Average loans, excluding loans held for sale, for the 2007 third quarter increased $116.4 million, or 6.7 percent, to $1.86 billion.

Loans held for sale were $182.3 million as of September 30, 2007, an increase of $43.7 million or 31.6 percent from June 30, 2007. Periodic fluctuations of loans held for sale are predominantly due to the timing of SBA loan purchases and subsequent pool sales.

At September 30, 2007 and June 30, 2007, non-performing loans were $2.6 million, representing 0.14 percent of total loans. At September 30, 2007, the ratio of allowance for loan losses to total loans was at 0.72 percent and the ratio of allowance for loan losses to total non-performing loans was 519.6 percent.


Signature Bank's capital ratios remain strong. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 15.16 percent, 15.63 percent and 8.06 percent, respectively, as of September 30, 2007, 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 2007 third quarter on Thursday, October 25, 2007, at 10:00 AM ET. Participants should dial 866-250-4375 at least ten minutes prior to the start of the call. International callers should dial 303-262-2139.

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, click on the "Investor Relations" tab, then select "Company News," followed by "Conference Calls," to access the link to the call. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11099635. The replay will be available from approximately 12:00 PM ET on Thursday, October 25, 2007, through 11:59 PM ET on Tuesday, October 30, 2007.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 19 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 19 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; 923 Broadway, Woodmere and 40 Cuttermill Road in Great Neck. Queens - 36-36 33rd Street, Long Island City and 78-27 37th Avenue, Jackson Heights. Bronx - 421 Hunts Point Avenue, Bronx.

For more information, please visit

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 and the interest rate environment, 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
Media Contact:
Susan J. Lewis,