Signature Bank
Jul 24, 2012

Signature Bank Reports 2012 Second Quarter Results

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its second quarter ended June 30, 2012.

Net income for the 2012 second quarter reached a record $45.3 million, or $0.96 diluted earnings per share, versus $36.6 million, or $0.87 diluted earnings per share, for the 2011 second quarter. The record net income for the 2012 second quarter, versus the 2011 second quarter, is primarily due to an increase in net interest income, fueled by strong deposit growth and record loan growth. These factors were partially offset by an increase in non-interest expense.

Net interest income for the 2012 second quarter reached $134.2 million, an increase of $21.2 million, or 18.8 percent, versus the 2011 second quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $15.87 billion at June 30, 2012, up $2.79 billion, or 21.3 percent, from $13.08 billion at June 30, 2011. Average assets for the 2012 second quarter reached $15.54 billion, an increase of $2.81 billion, or 22.0 percent, compared with the 2011 second quarter.

Deposits for the 2012 second quarter increased $449.7 million, or 3.6 percent, to $12.95 billion at June 30, 2012. When compared with deposits at December 31, 2011, overall deposit growth during the first half of 2012 was 10.2 percent, or $1.2 billion. Excluding short-term escrow deposits of $867.8 million and brokered deposits of $87.9 million at the end of the 2012 second quarter and $921.6 million and $47.7 million, respectively, at the end of the 2012 first quarter, core deposits grew $463.3 million for the quarter. Average deposits for the 2012 second quarter reached $12.7 billion, an increase of $448.7 million, or 3.7 percent.

"We continued to demonstrate strength in our financial performance this quarter as evidenced by record earnings and record loan growth as well as significant growth in deposits. Furthermore, one of the highlights of the 2012 second quarter was the introduction of Signature Financial, our new specialty finance subsidiary. Signature Financial is an excellent growth opportunity for the Bank that further diversifies our revenue streams and is a natural fit for our progress," explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

"We are pleased with the initial results from the launch of this new business endeavor, as well as the ongoing success of our Private Client Banking and Commercial Real Estate Banking teams. Moreover, we continue to seek new private client banking teams interested in joining our institution, as the market still affords us many opportunities on which to capitalize," DePaolo noted.

Scott A. Shay, Chairman of the Board, said: "In these uncertain economic times -- where both foreign and U.S. capital markets remain unstable -- we have stayed firmly centered on meeting the banking needs of our clients. For the past decade, our veteran relationship bankers have provided steadfast assistance to our clients throughout various economic cycles. Our outwardly focused commitment to our clients' success is again reflected in the Bank's ongoing strong financial performance, with the 2012 second quarter being a continuation of our pace."

Capital

The Bank's Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios were approximately 9.57 percent, 16.45 percent and 17.55 percent, respectively, as of June 30, 2012. 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 9.55 percent. The Bank defines the tangible common equity ratio as the ratio of tangible common equity to adjusted tangible assets and calculates this ratio by dividing total consolidated common shareholders' equity by consolidated total assets.

Net Interest Income

Net interest income for the 2012 second quarter was $134.2 million, up $21.2 million, or 18.8 percent, versus the 2011 second quarter, primarily due to growth in average interest-earning assets. Average interest-earning assets of $15.24 billion for the 2012 second quarter represent an increase of $2.78 billion, or 22.4 percent, from the 2011 second quarter. Yield on interest-earning assets for the 2012 second quarter decreased 35 basis points, to 4.28 percent, versus the 2011 second quarter. This decrease was primarily attributable to the continued effect of the prolonged low interest rate environment.

Average cost of deposits and average cost of funds for the second quarter of 2012 decreased by 20 and 25 basis points, respectively, compared with the 2011 second quarter to 0.67 percent and 0.81 percent. These decreases were predominantly due to the continued effect of the prolonged low interest rate environment.

Net interest margin for the 2012 second quarter was 3.54 percent versus 3.64 percent reported in the 2011 second quarter. On a linked quarter basis, net interest margin increased 4 basis points. The linked quarter increase was primarily the result of an increase of $1.8 million in loan prepayment penalty income.

Provision for Loan and Lease Losses

The Bank's provision for loan and lease losses for the 2012 second quarter was $10.3 million, a decrease of $2.5 million, or 19.8 percent, versus the 2011 second quarter. The decrease was largely due to a decrease in charge-offs.

Net charge-offs for the 2012 second quarter were $4.7 million, or 0.25 percent of average loans on an annualized basis, compared with $5.0 million, or 0.29 percent, for the 2012 first quarter and $7.7 million, or 0.53 percent, for the 2011 second quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2012 second quarter was $9.9 million, a decrease of $361,000 versus $10.2 million reported in the 2011 second quarter.

Non-interest expense for the 2012 second quarter rose $9.6 million, or 21.3 percent, to $54.9 million versus $45.2 million reported in the 2011 second quarter. The increase was primarily a result of the addition of new private client banking teams and the launch of Signature Financial.

The Bank's efficiency ratio increased slightly to 38.1 percent for the second quarter of 2012 compared with 36.7 percent for same period last year. The increase was primarily due to the hiring for Signature Financial.

Loans

Loans, excluding loans held for sale, grew a record $664.9 million, or 9.0 percent, during the 2012 second quarter to $8.03 billion, versus $7.36 billion at March 31, 2012. At June 30, 2012, loans accounted for 50.6 percent of total assets, compared with 48.2 percent at the end of the 2012 first quarter and 46.7 percent at the end of the 2011 second quarter. Average loans, excluding loans held for sale, were $7.69 billion in the 2012 second quarter, an increase of $632.4 million, or 9.0 percent, from the 2012 first quarter and $1.84 billion, or 31.4 percent, from the 2011 second quarter. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans as well as the launch of the Bank's specialty finance business.

At June 30, 2012, non-accrual loans were $31.9 million, representing 0.40 percent of total loans and 0.20 percent of total assets, versus non-accrual loans of $35.5 million, or 0.48 percent of total loans, at March 31, 2012 and $44.2 million, or 0.72 percent of total loans, at June 30, 2011. At June 30, 2012, the ratio of allowance for loan and lease losses to total loans was 1.21 percent, versus 1.25 percent at March 31, 2012 and 1.28 percent at June 30, 2011. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 305 percent for the 2012 second quarter versus 259 percent for the first quarter of 2012 and 177 percent for the 2011 second quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2012 second quarter on Tuesday, July 24, 2012, at 10:00 AM ET. All participants should dial 480-629-9835 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 4548852. The replay will be available from approximately 12:00 PM ET on Tuesday, July 24, 2012 through 11:59 PM ET on Friday, July, 27, 2012.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 25 private client offices throughout the New York metropolitan area. The Bank's growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers. Signature Bank offers a wide variety of business and personal banking products and services. The Bank operates Signature Financial, LLC, a specialty finance subsidiary focused on equipment finance and leasing, transportation financing and taxi medallion financing. Investment, brokerage, asset management and insurance products and services are offered through the Bank's subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC.

Signature Bank's 25 offices are located: In Manhattan (9) - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South; 1020 Madison Avenue; 50 West 57th Street and 2 Penn Plaza. Brooklyn (3) - 26 Court Street; 84 Broadway and 6321 New Utrecht Avenue. Westchester (2) - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island (6) - 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 (3) - 36-36 33rd Street, Long Island City; 78-27 37th Avenue, Jackson Heights and 8936 Sutphin Blvd., Jamaica. Bronx (1) - 421 Hunts Point Avenue, Bronx. Staten Island (1) - 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. You should not place undue reliance on those statements because they are subject to numerous risks and uncertainties relating to our operations and business environment, all of which are difficult to predict and may be beyond our control. 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," "potential," "opportunity," "could," "project," "seek," "should," "will," would," "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, any of which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance, including earnings on interest-bearing assets; (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 monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; (v) changes in the banking and other financial services regulatory environment and (vi) competition for qualified personnel and desirable office locations. As you read and consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions and can change as a result of many possible events or factors, not all of which are known to us or in our control. Although we believe that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or our beliefs, assumptions and expectations were incorrect, our business, financial condition, liquidity or results of operations may vary materially from those expressed in our forward-looking statements. 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.

         
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
 
Three months ended

June 30,

Six months ended

June 30,

(dollars in thousands, except per share amounts)     2012     2011         2012     2011  
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 753 996 1,530 1,964
Loans and leases, net 99,604 81,578 191,898 156,600
Securities available-for-sale 56,586 56,199 113,934 108,411
Securities held-to-maturity 4,813 4,664 9,605 8,997
Other short-term investments     516     397         1,003     930  
  Total interest income     162,272     143,834         317,970     276,902  
INTEREST EXPENSE
Deposits 21,055 23,200 42,945 45,117
Federal funds purchased and securities sold under
agreements to repurchase 5,937 5,613 11,789 10,798
Federal Home Loan Bank advances     1,089     2,033         2,245     4,326  
  Total interest expense     28,081     30,846         56,979     60,241  
Net interest income before provision for loan and lease losses 134,191 112,988 260,991 216,661
Provision for loan and lease losses     10,303     12,851         20,967     25,173  
Net interest income after provision for loan and lease losses     123,888     100,137         240,024     191,488  
NON-INTEREST INCOME
Commissions 2,065 2,385 4,434 4,700
Fees and service charges 3,817 3,732 7,523 7,681
Net gains on sales of securities 4,136 3,710 5,568 11,587
Net gains on sales of loans 2,768 818 4,189 2,151
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (4,165 ) (4,228 ) (9,379 ) (8,238 )
Portion of loss recognized in other comprehensive income (before taxes)   2,765     3,422         7,265     6,706  
Net impairment losses on securities recognized in earnings (1,400 ) (806 ) (2,114 ) (1,532 )
Net trading income 377 94 357 137
Other (loss) income     (1,877 )   314         (957 )   591  
  Total non-interest income     9,886     10,247         19,000     25,315  
NON-INTEREST EXPENSE
Salaries and benefits 36,740 28,573 69,763 54,766
Occupancy and equipment 4,272 3,996 8,658 7,785
Other general and administrative     13,839     12,651         26,778     27,340  
  Total non-interest expense     54,851     45,220         105,199     89,891  
Income before income taxes 78,923 65,164 153,825 126,912
Income tax expense     33,641     28,548         66,174     55,712  
Net income   $ 45,282     36,616         87,651     71,200  
PER COMMON SHARE DATA
Earnings per share — basic $ 0.97 0.89 1.89 1.72
Earnings per share — diluted $ 0.96 0.87 1.86 1.69
 
     
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
 
June 30, December 31,
2012 2011
(dollars in thousands, except per share amounts)   (unaudited)      
ASSETS
Cash and due from banks $ 91,772 34,083
Short-term investments     5,744     6,071
  Total cash and cash equivalents     97,516     40,154
Securities available-for-sale (pledged $2,690,092 at June 30, 2012
and $2,672,093 at December 31, 2011) 6,479,587 6,512,855
Securities held-to-maturity (fair value $614,679 at June 30, 2012
and $571,980 at December 31, 2011; pledged $429,974 at
June 30, 2012 and $352,865 at December 31, 2011) 595,917 556,044
Federal Home Loan Bank stock 44,387 48,152
Loans held for sale 365,823 392,025
Loans and leases, net 7,930,572 6,764,564
Premises and equipment, net 32,178 30,574
Accrued interest and dividends receivable 62,094 60,533
Other assets     265,765     261,219
  Total assets   $ 15,873,839     14,666,120
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing 3,503,206 3,148,436
Interest-bearing     9,450,381     8,605,702
  Total deposits     12,953,587     11,754,138
Federal funds purchased and securities sold under agreements
to repurchase 825,625 750,800
Federal Home Loan Bank advances 465,000 675,000
Accrued expenses and other liabilities     113,490     78,066
  Total liabilities     14,357,702     13,258,004
Shareholders' equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized;
none issued at June 30, 2012 and December 31, 2011 - -
Common stock, par value $.01 per share; 64,000,000 shares authorized;
46,663,750 and 46,181,890 shares issued and outstanding
at June 30, 2012 and December 31, 2011 467 462
Additional paid-in capital 973,013 954,833
Retained earnings 510,683 423,032
Net unrealized gains on securities available-for-sale, net of tax     31,974     29,789
  Total shareholders' equity     1,516,137     1,408,116
  Total liabilities and shareholders' equity   $ 15,873,839     14,666,120
 
SIGNATURE BANK          
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
 
 
Three months ended

June 30,

Six months ended

June 30,

(dollars in thousands, except ratios and per share amounts)     2012       2011         2012       2011  
PER COMMON SHARE
Net income - basic $ 0.97 $ 0.89 $ 1.89 $ 1.72
Net income - diluted $ 0.96 $ 0.87 $ 1.86 $ 1.69
Average shares outstanding - basic 46,549 41,353 46,377 41,351
Average shares outstanding - diluted 47,307 42,152 47,202 42,120
Book value $ 32.49 $ 25.55 $ 32.49 $ 25.55
 
SELECTED FINANCIAL DATA
Return on average total assets 1.17 % 1.15 % 1.16 % 1.16 %
Return on average shareholders' equity 12.22 % 14.33 % 12.06 % 14.35 %
Efficiency ratio (1) 38.07 % 36.69 % 37.57 % 37.15 %

Efficiency ratio excluding net gains on sales of securities

  and net impairment losses on securities recognized

  in earnings (1)

38.81 % 37.58 % 38.04 % 38.76 %
Yield on interest-earning assets 4.28 % 4.63 % 4.29 % 4.62 %
Cost of deposits and borrowings 0.81 % 1.06 % 0.84 % 1.07 %
Net interest margin 3.54 % 3.64 % 3.52 % 3.61 %
 

(1) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income before provision for loan and lease losses and non-interest income.

 
 
    June 30,

2012

  March 31,

2012

    December 31,

2011

  June 30,

2011

CAPITAL RATIOS
Tangible common equity (2) 9.55 % 9.58 % 9.60 % 8.08 %
Tier 1 leverage 9.57 % 9.62 % 9.67 % 8.15 %
Tier 1 risk-based 16.45 % 16.86 % 17.08 % 14.20 %
Total risk-based 17.55 % 17.96 % 18.17 % 15.29 %
 
ASSET QUALITY
Non-accrual loans $ 31,905 $ 35,492 $ 42,218 $ 44,234
Allowance for loan and lease losses $ 97,403 $ 91,786 $ 86,162 $ 78,370
Allowance for loan and lease losses to non-accrual loans 305.29 % 258.61 % 204.09 % 177.17 %
Allowance for loan and lease losses to total loans 1.21 % 1.25 % 1.26 % 1.28 %
Non-accrual loans to total loans 0.40 % 0.48 % 0.62 % 0.72 %
Quarterly net charge-offs to average loans (annualized) 0.25 % 0.29 % 0.71 % 0.53 %
(2)   We define tangible common equity as the ratio of tangible common equity to adjusted tangible assets (the "TCE ratio") and calculate this ratio by dividing total consolidated common shareholders' equity by consolidated total assets (we had no intangible assets at any of the dates presented above). Tangible common equity is considered to be a non-GAAP financial measure and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The TCE ratio is a metric used by management to evaluate the adequacy of our capital levels. In addition to tangible common equity, management uses other metrics, such as Tier 1 capital related ratios, to evaluate capital levels.
 
                       
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Three months ended Three months ended
June 30, 2012 June 30, 2011
(dollars in thousands)  

Average
Balance

   

Interest
Income/
Expense

   

Average
Yield/
Rate

     

Average
Balance

   

Interest
Income/
Expense

   

Average
Yield/
Rate

INTEREST-EARNING ASSETS
Short-term investments $ 79,214 67 0.34 % 88,352 68 0.31 %
Investment securities 7,245,984 61,848 3.41 % 6,266,851 61,192 3.91 %
Commercial loans, mortgages and leases 7,330,435 93,973 5.16 % 5,477,837 75,779 5.55 %
Residential mortgages 168,747 1,775 4.21 % 179,077 2,199 4.91 %
Consumer loans 193,328 3,856 8.02 % 197,146 3,600 7.32 %
Loans held for sale     220,666     753     1.37 %       244,485     996     1.63 %
Total interest-earning assets     15,238,374     162,272     4.28 %       12,453,748     143,834     4.63 %
Non-interest-earning assets     299,585                   277,852            
Total assets   $ 15,537,959                   12,731,600            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 660,303 751 0.46 % 650,747 850 0.52 %
Money market 7,777,176 16,714 0.86 % 6,460,707 18,248 1.13 %
Time deposits 917,656 3,590 1.57 % 921,973 4,102 1.78 %
Non-interest-bearing demand deposits     3,340,556     -     -         2,667,529     -     -  
Total deposits     12,695,691     21,055     0.67 %       10,700,956     23,200     0.87 %
Borrowings     1,266,234     7,026     2.23 %       953,012     7,646     3.22 %
Total deposits and borrowings     13,961,925     28,081     0.81 %       11,653,968     30,846     1.06 %
Other non-interest-bearing liabilities
and shareholders' equity     1,576,034                   1,077,632            
Total liabilities and shareholders' equity   $ 15,537,959                   12,731,600            
OTHER DATA
Net interest income / interest rate spread         134,191     3.47 %             112,988     3.57 %
Net interest margin               3.54 %                   3.64 %
Ratio of average interest-earning assets
to average interest-bearing liabilities               109.14 %                   106.86 %
 
                       
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Six months ended Six months ended
June 30, 2012 June 30, 2011
(dollars in thousands)  

Average
Balance

   

Interest
Income/
Expense

   

Average
Yield/
Rate

 

Average
Balance

   

Interest
Income/
Expense

   

Average
Yield/
Rate

INTEREST-EARNING ASSETS
Short-term investments $ 85,325 143 0.34 % 77,003 115 0.30 %
Investment securities 7,202,060 124,399 3.45 % 6,114,910 118,223 3.87 %
Commercial loans, mortgages and leases 7,009,801 180,675 5.18 % 5,259,702 145,243 5.57 %
Residential mortgages 169,581 3,650 4.30 % 182,706 4,385 4.80 %
Consumer loans 196,948 7,573 7.73 % 196,688 6,972 7.15 %
Loans held for sale     243,298     1,530     1.26 %       257,758     1,964     1.54 %
Total interest-earning assets     14,907,013     317,970     4.29 %       12,088,767     276,902     4.62 %
Non-interest-earning assets     285,212                   289,994            
Total assets   $ 15,192,225                   12,378,761            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 659,522 1,527 0.47 % 663,034 1,686 0.51 %
Money market 7,637,541 34,159 0.90 % 6,117,044 35,186 1.16 %
Time deposits 904,575 7,259 1.61 % 923,642 8,245 1.80 %
Non-interest-bearing demand deposits     3,269,699     -     -         2,553,375     -     -  
Total deposits     12,471,337     42,945     0.69 %       10,257,095     45,117     0.89 %
Borrowings     1,187,006     14,034     2.38 %       1,078,661     15,124     2.83 %
Total deposits and borrowings     13,658,343     56,979     0.84 %       11,335,756     60,241     1.07 %
Other non-interest-bearing liabilities
and shareholders' equity     1,533,882                   1,043,005            
Total liabilities and shareholders' equity   $ 15,192,225                   12,378,761            
OTHER DATA
Net interest income / interest rate spread         260,991     3.45 %             216,661     3.55 %
Net interest margin               3.52 %                   3.61 %
Ratio of average interest-earning assets
to average interest-bearing liabilities               109.14 %                   106.64 %
 
 
SIGNATURE BANK
NON-GAAP FINANCIAL MEASURES
(unaudited)
Management believes that the presentation of certain non-GAAP financial measures assists investors when comparing results period-to-period in a more consistent manner and provides a better measure of Signature Bank's results. These non-GAAP measures include the Bank's (i) tangible common equity ratio, (ii) net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities and (iii) core net interest margin excluding loan prepayment penalty income. These non-GAAP measures should not be considered a substitute for GAAP-basis measures and results. We strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
 
The following table presents a reconciliation of net income and diluted earnings per share (as reported) to net income and diluted earnings per share excluding the after-tax effect of gains from the sales of SBA interest-only strip securities:
 
               
Three months ended

June 30,

Six months ended

June 30,

(dollars in thousands, except per share amounts)     2012         2011           2012       2011  
Net income (as reported) $ 45,282 36,616 $ 87,651 71,200
Gains on sales of SBA interest-only strip securities (2,624 ) (2,142 ) (2,664 ) (7,434 )
Tax effect     1,119         942           1,136       3,270  
Net income - excluding after-tax effect of gains on sales of SBA
interest-only strip securities   $ 43,777         35,416         $ 86,123       67,036  
 
Diluted earnings per share (as reported) $ 0.96 $ 0.87 $ 1.86 1.69
Gains on sales of SBA interest-only strip securities (0.05 ) (0.05 ) (0.06 ) (0.18 )
Tax effect     0.02         0.02           0.02       0.08  
Diluted earnings per share - excluding after-tax effect of gains on sales of
SBA interest-only strip securities   $ 0.93         0.84         $ 1.82       1.59  
 
 
The following table reconciles net interest margin (as reported) to core net interest margin excluding loan prepayment penalty income:
 
Three months ended

June 30,

Six months ended

June 30,

      2012         2011           2012       2011  
Net interest margin (as reported) 3.54 % 3.64 % 3.52 % 3.61 %
Margin contribution from loan prepayment penalty income     (0.10 )%       (0.10 )%         (0.08 )%     (0.08 )%
Core net interest margin - excluding loan prepayment penalty income     3.44 %       3.54 %         3.44 %     3.53 %

Signature Bank
Investor Contact:
Eric R. Howell, 646-822-1402
Chief Financial Officer
ehowell@signatureny.com
or
Media Contact:
Susan J. Lewis, 646-822-1825
slewis@signatureny.com

Source: Signature Bank

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