Signature Bank
Jan 26, 2010

Signature Bank Reports 2009 Fourth Quarter and Year-End Results

NEW YORK … January 26, 2010 … Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter and year ended December 31, 2009.

Net income available to common shareholders for the 2009 fourth quarter reached a record $21.0 million, or $0.51 diluted earnings per share, compared with $13.1 million, or $0.37 diluted earnings per share, for the 2008 fourth quarter. The 2008 fourth quarter results included pre-tax $6.9 million net impairment losses on securities recognized in earnings on two bank pooled trust preferred securities and one asset-backed security while the 2009 fourth quarter included $523,000. The increase in net income for the 2009 fourth quarter, when compared with the same period last year, is predominantly attributable to net interest income growth, fueled by record core deposit growth and continued loan growth. These factors were partially offset by an increase in the provision for loan losses, a decrease in commissions and an increase in non-interest expenses.

Net interest income for the 2009 fourth quarter reached $75.7 million, up $16.8 million, or 28.6 percent, compared with the 2008 fourth quarter. Total assets were $9.15 billion at December 31, 2009, up $1.95 billion, or 27.2 percent, from the $7.19 billion reported for year-end 2008. Average assets for 2009 reached $7.99 billion, an increase of $1.62 billion, or 25.4 percent, from 2008.

Deposits for the 2009 fourth quarter rose $418.3 million to $7.22 billion at December 31, 2009. This includes core deposit growth of $498.2 million, coupled with a decrease of $13.5 million in short-term escrow deposits and a decrease of $66.4 million in brokered deposits. Overall deposit growth for 2009 was 34.1 percent or $1.83 billion when compared with deposits at December 31, 2008. Excluding short-term escrow and brokered deposits of $372.1 million at year-end 2008 and $389.4 million at year-end 2009, core deposits increased $1.82 billion or 36.2 percent in 2009. Average total deposits for 2009 were $6.29 billion, up $1.54 billion or 32.4 percent versus average total deposits of $4.75 billion for 2008.

For the year ended December 31, 2009, net income available to common shareholders totaled a record $50.5 million or $1.30 diluted earnings per share, compared with $43.0 million, or $1.35 diluted earnings per share for 2008, an increase of $7.6 million or 17.6 percent.

"2009 was a year of considerable achievement for the Bank during which we saw record core deposit growth, solid loan growth, stable credit quality, net interest margin expansion, record net income and the most private client banking teams joining since our 2001 inception. Despite the market chaos surrounding the financial services landscape, Signature Bank thrived, delivering consistent, outstanding performance. We believe the success of our core depositor-focused business model was most noticeably proven this past year," noted Joseph J. DePaolo, President and Chief Executive Officer.

"Our 2009 results confirm the strength of our depositor-oriented model which continues to guide us. This all begins with the hiring of seasoned banking veterans who bring to the Bank the ability to execute our relationship-based model and continues with the Bankers serving as the single-point-of contact for their clients. With 68 private client teams, including 13 added in 2009, our expertise lies in identifying professionals who understand that at Signature Bank, they have the necessary autonomy, resources, capital and balance sheet strength along with a solid management team behind them to personally serve their clients and meet all their needs. These attributes are what has set Signature Bank apart throughout all the turmoil experienced by the financial services industry," DePaolo said.

Scott A. Shay, Chairman of the Board, commented on the Bank's performance, stating: "This has been a milestone year -- in fact, the best in our history -- which is particularly notable given the treacherous environment and severe economic challenges facing our industry and nation. The capital strength of the Bank and the consistent, prudent management of the balance sheet, coupled with our core funding discipline and growing network of talented bankers, are the real assets of Signature Bank. These characteristics have allowed us to continue to flourish, especially during unprecedented times. Again and again, we have demonstrated to clients, investors and the banking arena that we built this bank for depositors, and by remaining steadfast in our execution, we offer the marketplace a safe, sound, solid and dependable institution."

Capital

The Bank's tier one leverage, tier one risk-based, and total risk-based capital ratios were approximately 9.39 percent, 13.57 percent and 14.47 percent, respectively, as of December 31, 2009, each of which is well in excess of regulatory requirements. The Bank's strong risk-based capital ratios reflect the relatively low risk profile of the Bank's balance sheet. The Bank's tangible common equity ratio remains strong at 8.79 percent.

Net Interest Income

Net interest income on a tax-equivalent basis for the 2009 fourth quarter was $75.8 million, up $16.8 million, or 28.6 percent, from the same period a year ago. Average interest-earning assets for the 2009 fourth quarter rose $1.97 billion, or 29.5 percent from the fourth quarter of 2008. Yield on interest earning assets for the 2009 fourth quarter decreased 56 basis points, to 4.90 percent, versus the fourth quarter of 2008. The decrease was primarily the result of lower prevailing interest rates.

Average costs of deposits and average costs of funds for the 2009 fourth quarter decreased by 52 and 53 basis points to 1.21 and 1.52 percent, respectively, versus the 2008 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, 2009 was $262.5 million, an increase of $66.9 million, or 34.2 percent, when compared with 2008.

Net interest margin on a tax-equivalent basis for the 2009 fourth quarter decreased 3 basis points to 3.48 percent versus last year. On a linked quarter basis, net interest margin on a tax-equivalent basis grew 9 basis points. The linked quarter expansion was primarily driven by a 12 basis point decrease in the cost of deposits.

Provision for Loan Losses

The Bank's provision for loan losses for the fourth quarter of 2009 was $11.8 million, an increase of $3.2 million, or 36.5 percent, versus the comparable period last year and down $100,000 from $11.9 million reported in the 2009 third quarter. For the year ended December 31, 2009, the provision for loan losses was $42.7 million, an increase of $15.8 million, or 58.9 percent, when compared to the previous year. The increases are primarily driven by growth in the loan portfolio, combined with increases in charge-offs, non-performing loans and provisions stemming from the challenging economic environment.

Net charge-offs for the 2009 fourth quarter were $6.4 million, or 0.61 percent of average loans on an annualized basis, compared with $6.6 million, or 0.66 percent, for the 2009 third quarter and $2.7 million, or 0.32 percent, for the 2008 fourth quarter. Net charge-offs for 2009 were $24.6 million, or 0.64 percent of average loans, compared to $8.1 million, or 0.30 percent, for 2008.

Non-Interest Income and Non-Interest Expense

Non-interest income for the fourth quarter of 2009 was $9.6 million, an increase of $5.3 million when compared with $4.3 million reported in the 2008 fourth quarter. For 2009, non-interest income was $34.6 million versus $27.6 million reported last year, representing an increase of $7.0 million, or 25.3 percent. The increases for the quarter and year were predominantly due to a decrease in net impairment losses on securities recognized in earnings. This was partially offset in both periods by a decrease in commission income, primarily associated with the decline in off-balance sheet money market deposits and a reduction in the commission percentages earned on the off-balance sheet money market deposits.

Non-interest expense for the 2009 fourth quarter was $38.4 million, an increase of $6.6 million, or 20.9 percent, versus $31.8 million reported in the 2008 fourth quarter. For the year, non-interest expense was $149.9 million, up $26.1 million or 21.1 percent versus last year. The increases for the quarter and year were 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 increase for all FDIC associated fees for 2009 was $9.0 million, representing 34.5 percent of the total increase in non-interest expense.

The Bank's efficiency ratio improved to 45.0 percent for the 2009 fourth quarter versus 50.3 percent for the 2008 fourth quarter. For the year, the efficiency ratio improved to 50.5 percent compared to 55.6 percent for 2008. 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 $247.5 million, or 6.0 percent, in the fourth quarter of 2009 to $4.38 billion at December 31, 2009, versus $4.13 billion at September 30, 2009. For 2009, loans increased $905.6 million, or 26.1 percent. At December 31, 2009, loans were 47.8 percent of total assets, compared with 48.0 percent at the end of the 2009 third quarter and 48.3 percent at the end of 2008. Average loans, excluding loans held for sale, reached $4.21 billion in the 2009 fourth quarter, up $252.1 million, or 6.4 percent, from third quarter of 2009 and an increase of $886.5 million, or 26.7 percent, from the 2008 fourth quarter. The increases in loans for the quarter and the year were primarily driven by growth in commercial real estate and multi-family loans with tighter underwriting standards.

At December 31, 2009, non-performing loans were $46.6 million, representing 1.07 percent of total loans and 0.51 percent of total assets, compared with non-performing loans of $51.2 million, or 1.24 percent of total loans, at September 30, 2009 and non-performing loans of $31.9 million, or 0.92 percent of total loans, at December 31, 2008. At the end of the 2009 fourth quarter, the ratio of allowance for loan losses to total loans was at 1.26 percent, compared with 1.20 percent at September 30, 2009 and 1.07 percent at December 31, 2008.

Conference Call

Signature Bank's management will host a conference call to review results of the 2009 fourth quarter and year-end on Tuesday, January 26, 2010, at 10:00 AM ET. All participants should dial 480-629-9866 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 303-590-3030 and enter reservation identification number 4202022. The replay will be available from approximately 12:00 PM ET on Tuesday, January 26, 2010, through 11:59 PM ET on Friday, January 29, 2010.

About Signature Bank

Signature Bank, member FDIC, a New York-based full-service commercial bank with 23 private client offices throughout the New York metropolitan area, serves 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 FINRA/SIPC.

Signature Bank's 23 offices are located: In Manhattan - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South, 1020 Madison Avenue and 50 West 57th Street. 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, competition, capitalization, new private client team hires, new office openings, the regulatory environment 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 and regulatory 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 clients, loans, deposits, 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