Signature Bank
Jul 27, 2010

Signature Bank Reports 2010 Second Quarter Results

NEW YORK ... July 27, 2010 ... Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its second quarter ended June 30, 2010.

Net income for the 2010 second quarter reached a record $22.3 million, or $0.54 diluted earnings per share, compared with $12.0 million, or $0.32 diluted earnings per share, for the 2009 second quarter. The considerable improvement in net income for the 2010 second quarter, versus the same period last year, is mostly the result of an increase in net interest income, fueled by core deposit growth and continued loan growth. These factors were partially offset by increases in the provision for loan losses and non-interest expenses.

Net interest income for the 2010 second quarter reached $81.1 million, up $20.5 million, or 33.9 percent, when compared with the 2009 second quarter. Total assets were $10.38 billion at June 30, 2010, an increase of $2.5 billion, or 31.7 percent, from $7.88 billion for the 2009 second quarter. Average assets for the 2010 second quarter reached $9.93 billion, an increase of $2.45 billion, or 32.8 percent, from the same period a year ago.

Deposits for the 2010 second quarter rose $570.9 million, or 7.2 percent, to $8.47 billion at June 30, 2010. This includes core deposit growth of $507.7 million, coupled with an increase of $63.2 million in short-term escrow deposits. When compared with deposits at December 31, 2009, the overall deposit growth during the first half of 2010 totaled $1.25 billion, or 17.3 percent. When compared with deposits at June 30, 2009, overall deposit growth for the past 12 months was $2.37 billion, or 38.8 percent.

"Our success this quarter, where we crossed $10 billion in total assets, stems from our ongoing commitment to our depositors and continually ensuring that we offer them a well capitalized, financially sound institution; one where they can sleep at night knowing their deposits are safe. The Bank continues to demonstrate that our depositor-focused model distinguishes this institution in the marketplace, particularly during a time of turmoil and uncertainty," stated Joseph J. DePaolo, President and Chief Executive Officer at Signature Bank.

"We continue to invest in our future by attracting veteran bankers, and during the first half of this year, we added four private client banking teams. Clearly, with Signature Bank having only one percent deposit market share there remains significant client opportunity in, by far, the largest deposit market in the country. Our growing network of banking teams offers clients a safe institution with a solid capital position that delivers strong financial performance and unrivaled financial service," DePaolo remarked.

Scott A. Shay, Chairman of the Board, explained: "As we surpass the milestones of $10 billion in assets and $8 billion in deposits and approach $900 million in capital, it is an appropriate time to recall that Signature Bank opened its doors just over nine years ago with no deposits and no financial assets, other than $42.5 million of initial contributed capital. Our key assets were non-financial: our people, our drive and our spirit. These assets led us to where we are today, and allowed the Bank to enjoy significant growth without any acquisitions. From the day we commenced operations, we placed the interests of our depositors first and foremost, and we will continue to do so. Our success is a result of our intense focus on assisting our clients to succeed and ensuring that the safety of their money is our top priority. We also expect to continue to be a bit boring by avoiding the latest hot trends in favor of staid and conservative investments. We believe that in banking, boring is good."

Shay further noted: "As expected, given the Bank's business model of serving privately owned businesses, we anticipate being largely unaffected by the banking reform legislation since we are not active in derivatives, proprietary trading or in the broad retail consumer space."

Capital

The Bank's tier one leverage, tier one risk-based, and total risk-based capital ratios were approximately 8.98 percent, 13.55 percent and 14.54 percent, respectively, as of June 30, 2010. Each of these ratios 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 8.54 percent.

Net Interest Income

Net interest income on a tax-equivalent basis for the 2010 second quarter was $81.1 million, up $20.5 million, or 33.9 percent, from the same period last year. Average interest-earning assets of $9.62 billion for the second quarter of 2010 were up $2.45 billion, or 34.1 percent from the 2009 second quarter. Yield on interest-earning assets for the 2010 second quarter decreased 39 basis points, to 4.69 percent, versus the second quarter of 2009. The decrease was primarily attributable to lower prevailing interest rates and unusually high levels of cash.

Average cost of deposits and average cost of funds for the 2010 second quarter decreased by 30 and 39 basis points to 1.10 percent and 1.39 percent, respectively, when compared with the 2009 second quarter. These decreases are predominantly due to lower prevailing interest rates.

Net interest margin on a tax-equivalent basis for the 2010 second quarter was 3.38 percent versus 3.39 percent reported in the same period last year. On a linked quarter basis, net interest margin on a tax-equivalent basis declined 13 basis points. The linked quarter decline was primarily due to a higher-than-normal level of cash for the quarter driven by significant deposit flows and the Bank's prudent deployment strategy.

Provision for Loan Losses

The Bank's provision for loan losses for the second quarter of 2010 was $11.1 million, an increase of $1.7 million, or 18.4 percent, over the 2009 second quarter. The increase was primarily driven by charge offs and provisions to recognize the potential effect of the challenging economic environment on the Bank's loan portfolio.

Net charge-offs for the 2010 second quarter were $6.3 million, or 0.55 percent of average loans on an annualized basis, compared with $6.4 million, or 0.59 percent, for the 2010 first quarter and $4.4 million, or 0.48 percent, for the 2009 second quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2010 second quarter was $10.3 million, an increase of $2.9 million when compared with the $7.3 million reported in the 2009 second quarter. The increase was predominantly due to an increase in net gains on sales of securities and loans. This was partially offset by a decrease in commissions as well as an increase of $1.7 million in other-than-temporary impairment losses on securities.

Non-interest expense for the 2010 second quarter was $41.7 million, an increase of $2.8 million, or 7.2 percent, versus $38.9 million reported in the 2009 second quarter. The increase was primarily a result of the addition of new private client banking teams and growth in client activity. The 2009 second quarter included an FDIC special assessment fee of $3.5 million.

The Bank's efficiency ratio improved to 45.7 percent for the 2010 second quarter versus 57.4 percent for the 2009 second quarter. Excluding the FDIC special assessment fee, the efficiency ratio for the 2009 second quarter was 52.2 percent. The improvement was primarily due to growth in net interest income coupled with expense containment.

Loans

Loans, excluding loans held for sale, grew $195.1 million, or 4.3 percent, during the 2010 second quarter to $4.69 billion at June 30, 2010, compared with $4.49 billion at March 31, 2010. At June 30, 2010, loans were 45.1 percent of total assets, versus 46.1 percent at March 31, 2010. Average loans, excluding loans held for sale, reached $4.55 billion in the 2010 second quarter, growing $128.9 million, or 2.9 percent, since the quarter ended March 31, 2010. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans underwritten within the Bank's stringent standards.

At June 30, 2010, non-performing loans remained stable at $44.6 million, representing 0.95 percent of total loans and 0.43 percent of total assets, versus non-performing loans of $44.4 million, or 0.99 percent of total loans, at March 31, 2010 and $47.9 million, or 1.27 percent of total loans, at June 30, 2009. At the end of the 2010 second quarter, the ratio of allowance for loan losses to total loans was 1.38 percent, compared with 1.33 percent at March 31, 2010 and 1.18 percent at June 30, 2009.

Conference Call

Signature Bank's management will host a conference call to review results of the 2010 second quarter on Tuesday, July 27, 2010, at 10:00 AM ET. All participants should dial 480-629-9692 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 4330440. The replay will be available from approximately 12:00 PM ET on Tuesday, July 27, 2010, through 11:59 PM ET on Friday, July 30, 2010.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 23 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 23 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; 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, 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; (iv) changes in the banking and other financial services regulatory environment 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.

FINANCIAL TABLES ATTACHED




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