Signature Bank
Oct 22, 2013

Signature Bank Reports 2013 Third Quarter Results

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its third quarter ended September 30, 2013.

Net income for the 2013 third quarter reached a record $60.2 million, or $1.25 diluted earnings per share, versus $47.7 million, or $1.00 diluted earnings per share, for the 2012 third quarter. The record net income for the 2013 third quarter, versus the comparable quarter last year, is primarily due to an increase in net interest income, fueled by strong deposit and record loan growth. These factors were partially offset by an increase in non-interest expenses.

Net interest income for the 2013 third quarter reached $167.4 million, up $25.7 million, or 18.2 percent, when compared with the 2012 third quarter. This increase is primarily due to growth in average interest-earning assets and an increase of $2.4 million in loan prepayment penalty income. Total assets reached $21.0 billion at September 30, 2013, an increase of $4.55 billion, or 27.6 percent, from $16.46 billion at September 30, 2012. Average assets for the 2013 third quarter reached $20.39 billion, an increase of $4.29 billion, or 26.6 percent, compared with the 2012 third quarter.

Deposits for the 2013 third quarter rose $774.9 million, or 5.1 percent, to $16.05 billion at September 30, 2013. When compared with deposits at December 31, 2012, overall deposit growth for the first nine months of 2013 was 14.0 percent, or $1.96 billion. Excluding short-term escrow deposits and brokered deposits of $871.2 million and $312.3 million at September 30, 2013, and $842.4 million and $148.2 million at June 30, 2013, respectively, core deposits increased $582.1 million for the quarter. Average deposits for the 2013 third quarter reached $15.94 billion, an increase of $829.6 million, or 5.5 percent.

"This marks another quarter of top-line revenue growth, driven by strong core deposit and record loan growth, culminating in the Bank's 16th consecutive quarter of record earnings. We believe our unwavering commitment to our client-centric model and single-point-of-contact approach is the key driver to our success. While remaining dedicated to our deposit-focused philosophy, we continue to advance earnings by increasing loans as a percentage of our well capitalized balance sheet with a further quarter of record loan growth. This emphasis has helped mitigate the effects from the prolonged low-interest rate environment on our net interest margin," explained Joseph J. DePaolo, President and Chief Executive Officer.

"Moreover, while delivering record earnings -- quarter after quarter -- we remain focused on our long-term strategy of adding seasoned private client banking teams as well as diversifying our services offerings, where relevant. This is evidenced by the further expansion of our specialty finance subsidiary, Signature Financial, and the recently announced addition of an asset-based lending team. The ABL team that just joined brings decades of related industry experience and further enhances our product offerings within the business community," DePaolo noted.

Scott A. Shay, Chairman of the Board, added: "Our results this quarter demonstrate the strength, balance, diversity and potential of our proven business model. Our deposit growth once again reflects both the desire and interest exhibited by New York-area businesses to align with a bank that offers unparalleled service and dedicated client attention, like Signature Bank. We continue to attract clients by demonstrating that service is a part of our business composition, not merely just a widely used industry slogan. Service is also key to our consistent loan growth, as clients know we can quickly close transactions in a seamless manner. This commitment, coupled with our pledge to maintain depositor safety, permeates all that we do and results in the strong and lasting relationships we have forged with our clients."

Capital

The Bank's Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios were approximately 8.74 percent, 14.61 percent and 15.66 percent, respectively, as of September 30, 2013. 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 8.38 percent. The Bank defines 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 2013 third quarter was $167.4 million, an increase of $25.7 million, or 18.2 percent, versus the same period last year, primarily due to growth in average interest-earning assets and an increase of $2.4 million in loan prepayment penalty income. Average interest-earning assets of $19.98 billion for the 2013 third quarter represent an increase of $4.16 billion, or 26.3 percent, from the 2012 third quarter. Yield on interest-earning assets for the 2013 third quarter decreased 38 basis points, to 3.87 percent, compared with the 2012 third quarter. This decrease was primarily attributable to prolonged low interest rates.

Average cost of deposits and average cost of funds for the third quarter of 2013 decreased by 11 and 17 basis points, respectively, versus the 2012 third quarter to 0.51 percent and 0.58 percent. These decreases were predominantly due to prolonged low interest rates.

Net interest margin for the 2013 third quarter was 3.32 percent versus 3.56 percent reported in the same period a year ago. On a linked quarter basis, net interest margin decreased four basis points. Excluding loan prepayment penalties in both quarters, linked quarter core margin declined five basis points to 3.16 percent. The linked quarter decreases in overall and core margin are predominantly due to the reinvestment of cash flows from investments and commercial mortgages, including refinance activity, into lower yielding investments and loans.

Provision for Loan Losses

The Bank's provision for loan losses for the third quarter of 2013 was $11.0 million, an increase of $933,000, or 9.3 percent, compared with the 2012 third quarter. The increase was largely driven by an increase in loan growth.

Net charge-offs for the 2013 third quarter were $3.1 million, or 0.11 percent of average loans on an annualized basis, versus $3.5 million, or 0.13 percent, for the 2013 second quarter and $4.6 million, or 0.22 percent, for the 2012 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2013 third quarter was $7.9 million, down $485,000 when compared with $8.3 million reported in the 2012 third quarter. The decrease was mostly due to a $1.7 million decline in net gains on sales of loans and a $966,000 increase in write-downs on other than temporary impairment of securities. These declines were partially offset by an increase of $2.2 million in net gains on sales of securities. Included in this amount is a pre-tax $1.8 million gain on sale of an SBA interest-only strip security.

Non-interest expense for the third quarter of 2013 was $62.3 million, an increase of $7.4 million, or 13.5 percent, versus $54.9 million reported in the 2012 third quarter. The increase was primarily a result of new private client banking teams joining, the addition of an asset based lending team and our continued investment in the growth of Signature Financial.

The Bank's efficiency ratio improved to 35.6 percent for the 2013 third quarter versus 36.6 percent for the comparable period last year. The improvement was primarily due to growth in net interest income coupled with expense containment.

Loans

Loans, excluding loans held for sale, grew a record $1.04 billion, or 9.4 percent, during the third quarter of 2013 to $12.11 billion, compared with $11.07 billion at June 30, 2013. At September 30, 2013, loans accounted for 57.6 percent of total assets, versus 56.1 percent at the end of the 2013 second quarter and 53.2 percent at the end of 2012 third quarter. Average loans, excluding loans held for sale, reached $11.55 billion in the 2013 third quarter, growing $814.9 million, or 7.6 percent, from the 2013 second quarter and $3.18 billion, or 37.9 percent, from the 2012 third quarter. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans, as well as specialty finance.

At September 30, 2013, non-accrual loans were $40.2 million, representing 0.33 percent of total loans and 0.19 percent of total assets, compared with non-accrual loans of $35.9 million, or 0.32 percent of total loans, at June 30, 2013 and $28.0 million, or 0.32 percent of total loans, at September 30, 2012. At September 30, 2013, the ratio of allowance for loan and lease losses to total loans was 1.05 percent, versus 1.08 percent at June 30, 2013 and 1.18 percent at September 30, 2012. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 316 percent for the 2013 third quarter versus 332 percent for the second quarter of 2013 and 367 percent for the 2012 third quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2013 third quarter on Tuesday, October 22, 2013, at 10:00 AM ET. All participants should dial 866-359-8135 at least ten minutes prior to the start of the call and reference conference ID # 76521684. International callers should dial 901-300-3484.

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 800-585-8367 or 404-537-3406 and enter conference ID # 76521684. The replay will be available from approximately 1:00 PM ET on Tuesday, October 22, 2013 through 11:59 PM ET on Friday, October 25, 2013.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 27 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 27 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 (7) - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 68 South Service Road, Melville; 923 Broadway, Woodmere; 40 Cuttermill Road, Great Neck; 100 Jericho Quadrangle, Jericho and 360 Motor Parkway, Hauppauge. 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 (2) - 2066 Hylan Blvd. and 1688 Victory 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 and other 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

September 30,

Nine months ended

September 30,

(dollars in thousands, except per share amounts)     2013     2012       2013     2012
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 1,637 951 3,309 2,481
Loans and leases, net 132,439 109,154 374,820 301,052
Securities available-for-sale 44,886 53,354 138,489 167,288
Securities held-to-maturity 14,610 5,135 29,581 14,740
Other short-term investments       1,067       508         2,357       1,512  
  Total interest income       194,639       169,102         548,556       487,073  
INTEREST EXPENSE
Deposits 20,390 20,982 59,147 63,927
Federal funds purchased and securities sold under
agreements to repurchase 4,717 5,366 14,572 17,155
Federal Home Loan Bank advances       2,137       1,083         4,803       3,328  
  Total interest expense       27,244       27,431         78,522       84,410  
Net interest income before provision for loan and lease losses 167,395 141,671 470,034 402,663
Provision for loan and lease losses       11,005       10,072         30,600       31,039  
Net interest income after provision for loan and lease losses       156,390       131,599         439,434       371,624  
NON-INTEREST INCOME
Commissions 2,249 1,841 6,893 6,275
Fees and service charges 4,316 4,029 12,707 11,552
Net gains on sales of securities 2,544 345 4,970 5,913
Net gains on sales of loans 823 2,474 5,605 6,663
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (3,896 ) (98 ) (6,624 ) (9,478 )
Portion recognized in other comprehensive income (before taxes)   2,496       (336 )       3,059       6,929  
Net impairment losses on securities recognized in earnings (1,400 ) (434 ) (3,565 ) (2,549 )
Net trading income 277 203 1,258 560
Other loss       (954 )     (118 )       (1,891 )     (1,074 )
  Total non-interest income       7,855       8,340         25,977       27,340  
NON-INTEREST EXPENSE
Salaries and benefits 41,644 37,635 121,894 107,398
Occupancy and equipment 5,022 4,045 14,521 12,704
Other general and administrative       15,673       13,260         46,300       40,037  
  Total non-interest expense       62,339       54,940         182,715       160,139  
Income before income taxes 101,906 84,999 282,696 238,825
Income tax expense       41,738       37,301         118,293       103,476  
Net income     $ 60,168       47,698         164,403       135,349  
PER COMMON SHARE DATA
Earnings per share — basic $ 1.27 1.02 3.48 2.91
Earnings per share — diluted $ 1.25 1.00 3.43 2.86
 
       
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
 
September 30, December 31,
2013 2012
(dollars in thousands, except per share amounts)     (unaudited)      
ASSETS
Cash and due from banks $ 54,809 86,186
Short-term investments       12,798       7,779
  Total cash and cash equivalents       67,607       93,965
Securities available-for-sale (pledged $3,000,490 at September 30, 2013
and $2,467,409 at December 31, 2012) 5,784,080 6,130,356
Securities held-to-maturity (fair value $2,050,989 at September 30, 2013
and $755,469 at December 31, 2012; pledged $1,688,032 at
September 30, 2013 and $543,351 at December 31, 2012) 2,088,795 739,835
Federal Home Loan Bank stock 108,960 50,012
Loans held for sale 506,935 369,468
Loans and leases, net 11,978,853 9,664,337
Premises and equipment, net 36,351 32,192
Accrued interest and dividends receivable 68,418 64,367
Other assets       366,486       311,525
  Total assets     $ 21,006,485       17,456,057
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing 4,831,016 4,444,964
Interest-bearing       11,216,360       9,637,688
  Total deposits       16,047,376       14,082,652
Federal funds purchased and securities sold under agreements
to repurchase 1,224,000 995,000
Federal Home Loan Bank advances 1,820,313 590,000
Accrued expenses and other liabilities       154,200       138,078
  Total liabilities       19,245,889       15,805,730
Shareholders' equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized;
none issued at September 30, 2013 and December 31, 2012 - -
Treasury stock, at cost; 8,652 common shares at September 30, 2013
and none at December 31, 2012 (771 ) -
Common stock, par value $.01 per share; 64,000,000 shares authorized;
47,288,564 shares issued and 47,279,912 shares outstanding at September 30, 2013;
47,230,266 shares issued and outstanding at December 31, 2012 473 472
Additional paid-in capital 1,008,994 997,517
Retained earnings 772,914 608,511
Net unrealized (losses) gains on securities, net of tax       (21,014 )     43,827
  Total shareholders' equity       1,760,596       1,650,327
  Total liabilities and shareholders' equity     $ 21,006,485       17,456,057
 
   

SIGNATURE BANK

FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY

(unaudited)

             
 
Three months ended

September 30,

Nine months ended

September 30,

(dollars in thousands, except ratios and per share amounts)       2013         2012           2013         2012  
PER COMMON SHARE
Net income - basic $ 1.27 $ 1.02 $ 3.48 $ 2.91
Net income - diluted $ 1.25 $ 1.00 $ 3.43 $ 2.86
Average shares outstanding - basic 47,271 46,792 47,260 46,516
Average shares outstanding - diluted 48,048 47,529 47,970 47,333
Book value $ 37.23 $ 33.80 $ 37.23 $ 33.80
 
SELECTED FINANCIAL DATA
Return on average total assets 1.17 % 1.18 % 1.16 % 1.17 %
Return on average shareholders' equity 13.77 % 12.24 % 12.89 % 12.08 %
Efficiency ratio (1) 35.57 % 36.62 % 36.84 % 37.24 %

Efficiency ratio excluding net gains on sales of securities
  and net impairment losses on securities recognized
  in earnings (1)

35.81 % 36.60 % 36.94 % 37.54 %
Yield on interest-earning assets 3.87 % 4.25 % 3.93 % 4.28 %
Cost of deposits and borrowings 0.58 % 0.75 % 0.61 % 0.81 %
 
Net interest margin 3.32 % 3.56 % 3.37 % 3.54 %
 
(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.
                 
 
        September 30,

2013

    June 30,

2013

    December 31,

2012

    September 30,

2012

CAPITAL RATIOS  
Tangible common equity (2) 8.38% 8.65% 9.45% 9.63%
Tier 1 leverage 8.74% 9.14% 9.51% 9.60%
Tier 1 risk-based 14.61% 14.90% 15.32% 16.15%
Total risk-based 15.66% 15.94% 16.35% 17.23%
 
ASSET QUALITY
Non-accrual loans $ 40,182 $ 35,866 $ 27,190 $ 28,026
Allowance for loan and lease losses $ 126,867 $ 118,971 $ 107,433 $ 102,910
Allowance for loan and lease losses to non-accrual loans 315.73% 331.71% 395.12% 367.19%
Allowance for loan and lease losses to total loans 1.05% 1.08% 1.10% 1.18%
Non-accrual loans to total loans 0.33% 0.32% 0.28% 0.32%
Quarterly net charge-offs to average loans (annualized) 0.11% 0.13% 0.25% 0.22%
 
(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
September 30, 2013 September 30, 2012

(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 $ 135,164 122 0.36% 100,108 87 0.35%
Investment securities 7,802,630 60,441 3.10% 7,079,719 58,910 3.33%
Commercial loans, mortgages and leases 11,184,860 129,007 4.58% 7,990,214 105,179 5.24%
Residential mortgages and consumer loans 369,992 3,432 3.68% 389,170 3,975 4.06%
Loans held for sale       486,317     1,637     1.34%       258,929     951     1.46%
Total interest-earning assets       19,978,963     194,639     3.87%       15,818,140     169,102     4.25%
Non-interest-earning assets       410,894                   284,815            

Total assets

    $ 20,389,857                   16,102,955            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 822,571 771 0.37% 720,411 801 0.44%
Money market 9,174,460 16,356 0.71% 8,074,961 16,596 0.82%
Time deposits 1,101,123 3,263 1.18% 945,912 3,585 1.51%
Non-interest-bearing demand deposits       4,841,033     -     -       3,626,662     -     -
Total deposits       15,939,187     20,390     0.51%       13,367,946     20,982     0.62%
Borrowings       2,564,801     6,854     1.06%       1,098,667     6,449     2.34%
Total deposits and borrowings       18,503,988     27,244     0.58%       14,466,613     27,431     0.75%
Other non-interest-bearing liabilities
and shareholders' equity       1,885,869                   1,636,342            
Total liabilities and shareholders' equity     $ 20,389,857                   16,102,955            
OTHER DATA
Net interest income / interest rate spread           167,395     3.29%             141,671     3.50%
Net interest margin                 3.32%                   3.56%
Ratio of average interest-earning assets
to average interest-bearing liabilities                 107.97%                   109.34%
 
                         
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Nine months ended Nine months ended
September 30, 2013 September 30, 2012
(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 $ 125,338 332 0.35% 90,288 230 0.34%
Investment securities 7,382,285 170,095 3.07% 7,160,982 183,310 3.41%
Commercial loans, mortgages and leases 10,409,173 364,090 4.68% 7,331,863 289,272 5.27%
Residential mortgages and consumer loans 379,696 10,730 3.78% 381,259 11,780 4.13%
Loans held for sale       361,765     3,309     1.22%       248,546     2,481     1.33%
Total interest-earning assets       18,658,257     548,556     3.93%       15,212,938     487,073     4.28%
Non-interest-earning assets       358,703                   285,078            
Total assets     $ 19,016,960                   15,498,016            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 805,203 2,288 0.38% 679,946 2,328 0.46%
Money market 8,772,544 47,111 0.72% 7,784,412 50,756 0.87%
Time deposits 1,020,909 9,748 1.28% 918,455 10,843 1.58%
Non-interest-bearing demand deposits       4,617,157     -     -       3,389,576     -     -
Total deposits       15,215,813     59,147     0.52%       12,772,389     63,927     0.67%
Borrowings       1,959,658     19,375     1.32%       1,157,344     20,483     2.36%
Total deposits and borrowings       17,175,471     78,522     0.61%       13,929,733     84,410     0.81%
Other non-interest-bearing liabilities
and shareholders' equity       1,841,489                   1,568,283            
Total liabilities and shareholders' equity     $ 19,016,960                   15,498,016            
OTHER DATA
Net interest income / interest rate spread           470,034     3.32%             402,663     3.47%
Net interest margin                 3.37%                   3.54%
Ratio of average interest-earning assets
to average interest-bearing liabilities                 108.63%                   109.21%
 
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

September 30,

Nine months ended

September 30,

(dollars in thousands, except per share amounts)       2013       2012       2013       2012  
Net income (as reported) $ 60,168     47,698   164,403     135,349
Gains on sales of SBA interest-only strip securities (1,811 ) - (1,811 ) (2,664 )
Tax effect       742       -       742       1,136  
Net income - excluding after-tax effect of gains on sales of SBA
interest-only strip securities     $ 59,099       47,698       163,334       133,821  
 
Diluted earnings per share (as reported) $ 1.25 1.00 3.43 2.86
Gains on sales of SBA interest-only strip securities (0.04 ) - (0.04 ) (0.05 )
Tax effect       0.02       -       0.02       0.02  
Diluted earnings per share - excluding after-tax effect of gains on sales of
SBA interest-only strip securities     $ 1.23       1.00       3.41       2.83  
 
The following table reconciles net interest margin (as reported) to core net interest margin excluding loan prepayment penalty income:
      Three months ended

September 30,

  Nine months ended

September 30,

        2013   2012       2013     2012
Net interest margin (as reported) 3.32%   3.56%   3.37%     3.54%
Margin contribution from loan prepayment penalty income     (0.16)%   (0.15)%       (0.15)%     (0.11)%
Core net interest margin - excluding loan prepayment penalty income     3.16%   3.41%       3.22%     3.43%

Signature Bank
Investor Contact:
Eric R. Howell, 646-822-1402
Executive Vice President — Corporate and Business Development
ehowell@signatureny.com
or
Media Contact:
Susan J. Lewis, 646-822-1825
slewis@signatureny.com

Source: Signature Bank

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