Signature Bank
Jan 29, 2009

Signature Bank Reports 2008 Fourth Quarter and Year-end Results

NEW YORK … January 29, 2009 … Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter and year ended December 31, 2008.

Net income for the quarter was $13.1 million, or $0.37 diluted earnings per share, compared with a net loss of $3.0 million, or $0.10 diluted loss per share, for the 2007 fourth quarter. The 2008 fourth quarter results include a $6.9 million other than temporary impairment ("OTTI") write-down on two bank pooled trust preferred securities and one asset-backed security. Excluding the after-tax effects of impairment write-downs on securities for the fourth quarters of 2008 and 2007 of $6.9 million and $21.4 million, respectively, net income for the 2008 fourth quarter would have been $16.9 million, or $0.48 diluted earnings per share, compared with net income of $8.9 million, or $0.30 diluted earnings per share for the 2007 fourth quarter.

The increase in net income for the 2008 fourth quarter versus the same period last year is attributable to numerous factors, including an increase in loans as a percentage of assets, deposit growth, net interest margin expansion and increased non-interest income (excluding the securities write-down). These factors were partially offset by increases in non-interest expense and the provision for loan losses.

Net interest income for the 2008 fourth quarter reached $58.9 million, up $20.8 million, or 54.7 percent, versus the comparable period last year. Total assets were $7.19 billion at December 31, 2008, up $1.35 billion, or 23.0 percent, over the $5.85 billion for year-end 2007. Average assets for the 2008 fourth quarter reached $7.14 billion, an increase of $1.41 billion, or 24.6 percent, from the 2007 fourth quarter.

Deposits rose $422.6 million in the fourth quarter of 2008 to $5.39 billion at December 31, 2008. This includes core deposit growth of $213.8 million, coupled with an increase of $65.6 million in short-term escrow deposits and $143.2 million in brokered deposits. Overall deposit growth for 2008 was 19.4 percent or $876.0 million when compared with the end of 2007. Excluding brokered deposits and short-term escrow deposits of $145.5 million at year-end 2007 and $372.1 million at year-end 2008, core deposits increased $649.4 million or 14.9 percent in 2008. Average total deposits for 2008 were $4.75 billion, up $619.8 million or 15.0 percent versus average total deposits of $4.13 billion for 2007.

For the year ended December 31, 2008, net income totaled $43.0 million or $1.35 diluted earnings per share, compared with $27.3 million, or $0.91 diluted earnings per share for 2007, an increase of $15.7 million or 57.5 percent. Excluding the after-tax effects of impairment write-downs on securities for the years 2008 and 2007 of $16.5 million and $21.4 million, respectively, net income for 2008 was $52.2 million, or $1.64 diluted earnings per share, compared with net income for 2007 of $39.2 million or $1.30 diluted earnings per share.

"Signature Bank has remained focused on doing what we do best as the banking sector, including our Bank, attempts to tackle the economic uncertainty that lies ahead. We built this bank for the depositor and our client-centric focus has allowed us to repeatedly deliver solid financial performance. During the 2008 fourth quarter and year, we delivered strong core deposit and loan growth and record earnings performance. We also expanded our network with the addition of new private client banking teams and the opening of offices. We are continually encouraged that our clients recognize Signature Bank as a safe place to deposit their funds," said Joseph J. DePaolo, Signature Bank's President and Chief Executive Officer.

Scott A. Shay, Chairman of the Board, added: "Signature Bank is navigating through these treacherous times by holding fast to our core principle of focusing foremost on depositor safety. Maintaining our strength and durability across cycles is the key to building client trust as well as shareholder value. We are dedicated to building a reputation as a bank for all seasons. Our financial results demonstrate our fidelity to conservative asset liability management, appropriate credit standards and prudent operational controls."

Capital

Signature Bank's already strong capital ratios, which are among the highest in the industry, were further strengthened by the completion of a $120.0 million offering from the sale of 120,000 senior preferred shares and the issuance of warrants to purchase 595,829 common shares through the U.S. Department of Treasury's Capital Purchase Program in the fourth quarter of 2008 and a successful public offering of $148.0 million of common stock during the 2008 third quarter. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 17.00 percent, 17.83 percent and 10.61 percent, respectively, as of December 31, 2008, well in excess of regulatory requirements. The risk-based ratios also reflect the relatively low risk profile of the balance sheet.

Net Interest Income

Net interest income on a tax-equivalent basis for the 2008 fourth quarter was $58.9 million, up $20.6 million, or 53.7 percent, from same period last year. Average interest-earning assets for the 2008 fourth quarter grew $1.25 billion, or 23.1 percent from the 2007 fourth quarter. Yield on interest earning assets for the 2008 fourth quarter decreased 43 basis points, to 5.46 percent, compared with the fourth quarter of 2007. The decrease was primarily due to lower prevailing interest rates.

Average costs of deposits and average costs of funds for the 2008 fourth quarter decreased by 121 and 113 basis points to 1.73 and 2.05 percent, respectively, versus the 2007 fourth quarter. These decreases are predominantly due to lower prevailing interest rates.

Net interest income on a tax-equivalent basis for the year ended December 31, 2008 was $195.6 million, up $48.5 million, or 33.0 percent, from last year.

The net interest margin on a tax-equivalent basis for 2008 fourth quarter increased 70 basis points to a record 3.51 percent when compared with the same period a year ago. On a linked quarter basis, net interest margin on a tax-equivalent basis grew 25 basis points. The linked quarter expansion was primarily driven by a 14 basis point expansion in the average asset yield predominantly due to an increase in loans as a percentage of assets. Also, during the fourth quarter of 2008, the Bank recognized $1.7 million in interest income from the accretion of discounts on securities previously impaired. Additionally, borrowing costs declined 62 basis points due to lower prevailing interest rates. The net interest margin on a tax-equivalent basis for the year rose 37 basis points to 3.25 percent. This growth is mostly due to an increase in loans as a percentage of assets and a decrease of 92 basis points in the Bank's cost of funds.

Provision for Loan Losses

The provision for loan losses for the fourth quarter of 2008 was $8.7 million, an increase of $1.7 million, or 24 percent, compared to the same period last year. For the year ended December 31, 2008, the provision for loan losses was $26.9 million, an increase of $14.6 million, or 118.3 percent, when compared to the previous year. The increases are primarily driven by the growth in the loan portfolio, combined with an increase in provisions for the deteriorating economic environment.

Non-Interest Income and Non-Interest Expense

Non-interest income for the fourth quarter of 2008 was $4.3 million, an increase of $17.3 million versus the loss of $13.0 million reported in the 2007 fourth quarter. For 2008, non-interest income was $27.6 million versus $8.7 million reported last year, representing an increase of $18.9 million. The increase for the quarter and year was predominantly due to an increase in commissions, mostly associated with off-balance money market deposits and increased brokerage activities, and a decrease in write-downs for other than temporary impairment of securities. Excluding the effect of OTTI write-downs in the 2008 and 2007 fourth quarters, non-interest income for the 2008 fourth quarter would have been $11.2 million, an increase of $2.8 million or 33.5 percent versus the 2007 fourth quarter. In the 2008 fourth quarter, the bank incurred an OTTI write-down of $6.6 million on two bank pooled trust preferred securities with an original book value of $10.0 million and a fair value of $3.4 million. Additionally, the Bank incurred an OTTI write-down of $295,000 on one asset-backed security with an original book value of $797,000 and a fair value of $502,000.

Non-interest expense for the fourth quarter of 2008 was $31.8 million, an increase of $6.7 million, or 26.7 percent, versus $25.1 million reported in the 2007 fourth quarter. For the year, non-interest expense was $123.8 million, up $24.8 million or 25.0 percent when compared with 2007. The increase for the quarter and year was primarily due to the addition of new private client banking teams and offices, growth in client activity, and additional costs related to FDIC deposit assessment fees and the FDIC deposit guarantee program.

The Bank's efficiency ratio was 50.3 percent for the fourth quarter of 2008 versus 100.0 percent for the 2007 fourth quarter. Excluding the impairment write-downs in the fourth quarters of 2008 and 2007, the efficiency ratio improved to 45.3 percent in the fourth quarter of 2008 from 53.9 percent in the fourth quarter of 2007. Excluding the impairment write-downs for the years 2008 and 2007, the efficiency ratio improved to 51.7 percent for 2008 compared to 56.0 percent for 2007. The improvements for the quarter and year were primarily due to growth in net interest income and non-interest income, coupled with expense containment.

Loans

Loans, excluding loans held for sale, increased $385.6 million, or 12.5 percent, in the 2008 fourth quarter to $3.47 billion at December 31, 2008, versus $3.08 billion at September 30, 2008. For 2008, loans increased $1.44 billion, or 71.3 percent. At December 31, 2008, loans were 48.3 percent of total assets, compared with 46.0 percent at the end of the 2008 third quarter and 34.7 percent at the end of 2007. Average loans, excluding loans held for sale, reached $3.32 billion in the 2008 fourth quarter, up $440.9 million, or 15.3 percent, from third quarter of 2008 and an increase of $1.33 billion, or 66.5 percent, from the 2007 fourth quarter. The increase in loans for the quarter and the year was driven by growth in commercial real estate and multi-family loans.

At December 31, 2008, non-performing loans were $31.9 million, representing 0.92 percent of total loans and 0.44 percent of total assets, compared with non-performing loans of $30.8 million, or 1.0 percent of total loans, at September 30, 2008. At the end of the 2008 fourth quarter, the ratio of allowance for loan losses to total loans was at 1.07 percent, compared with 1.00 percent at September 30, 2008 and 0.90 percent at December 31, 2007.

Conference Call

Signature Bank's management will host a conference call to review results of the 2008 fourth quarter and year-end on Thursday, January 29, 2009, at 10:00 AM ET. All participants should dial 303-262-2130 at least ten minutes prior to the start of the call.

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. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11125498. The replay will be available from approximately 12:00 PM ET on Thursday, January 29, 2009, through 11:59 PM ET on Tuesday, February 3, 2009.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 22 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 22 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; 84 Broadway and 6321 New Utrecht Avenue. 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; 68 South Service Road, Melville; 923 Broadway, Woodmere; 40 Cuttermill Road, Great Neck and 100 Jericho Quadrangle, Jericho. Queens - 36-36 33rd Street, Long Island City and 78-27 37th Avenue, Jackson Heights. Bronx - 421 Hunts Point Avenue, Bronx. Staten Island - 2066 Hylan Blvd.
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 and the interest rate environment, loan and deposit growth, loan performance, 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) the severe crisis in global credit and financial markets and the resulting government intervention in the banking sector, which are having unprecedented effects on our competitors, or clients, and the regulatory environment; (iii) 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; (iv) 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 (v) 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