Signature Bank
Jan 21, 2014

Signature Bank Reports 2013 Fourth Quarter and Year-End Results

Deposit Growth, Loan Growth and Net Income All Reach Record Levels in 2013

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter and year ended December 31, 2013.

Net income for the 2013 fourth quarter reached a record $64.3 million, or $1.34 diluted earnings per share, compared with $50.1 million, or $1.05 diluted earnings per share, for the 2012 fourth quarter. The record net income for the 2013 fourth quarter, when compared with the same period last year, is primarily the result of an increase in net interest income, fueled by record deposit growth and record loan growth. These factors were partially offset by a decrease in loan prepayment penalty income and an increase in non-interest expenses.

Net interest income for the 2013 fourth quarter rose $31.2 million, or 21.2 percent, to $178.3 million, compared with the fourth quarter of 2012. This increase is primarily due to growth in average interest-earning assets. Total assets reached $22.38 billion at December 31, 2013, expanding $4.92 billion, or 28.2 percent, from $17.46 billion at December 31, 2012. Average assets for the 2013 fourth quarter reached $21.67 billion, an increase of $4.75 billion, or 28.1 percent, versus the comparable period a year ago.

Deposits for the 2013 fourth quarter rose $1.01 billion, or 6.3 percent, to $17.06 billion at December 31, 2013. Overall deposit growth in 2013 was 21.1 percent, or a record $2.97 billion, when compared with deposits at the end of 2012. Excluding short-term escrow and brokered deposits of $1.66 billion at year-end 2013 and $994.8 million at year-end 2012, core deposits increased a record $2.31 billion, or 17.6 percent, in 2013. Average total deposits for 2013 were $15.63 billion, growing $2.55 billion, or 19.5 percent, versus average total deposits of $13.08 billion for 2012.

"2013 was another record year for Signature Bank where we again achieved record deposit growth and record loan growth, which was fueled by our successful commercial real estate banking business. This year was also our sixth consecutive year of record earnings. The foundation for our continued success stems from our core philosophy to maintain a conservative and well-capitalized balance sheet for our depositors. Moreover, while achieving these record results, we spent this past year building a stronger base for Signature Bank in 2014 and beyond. To this end, we added ten private client banking teams to our growing network, which now includes 89 teams in total. We also appointed a new group to focus on asset-based lending, marking the Bank's entry into that arena, and continued our emphasis in specialty finance through our Signature Financial subsidiary," explained Joseph J. DePaolo, President and Chief Executive Officer.

"All these endeavors have further strengthened our core business while also allowing us to diversify by entering into other complementary areas. We believe these initiatives have enhanced our market position, contributed to the record results and also helped to better position the Bank for future success as we compete at an even higher level within the ever changing banking landscape," DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: "As our economy emerges from years of slow growth, we are enjoying traction across all segments of our business. Throughout the economic cycle, we maintained strong disciplines in our lending efforts, which resulted in a very low non-performing loan to asset ratio of 0.14% -- among the lowest ratio of any bank in the nation. Despite Signature Bank being a conservative lender, borrowers know we deliver the best service and are committed to ensuring their satisfaction first and foremost. This commitment to high standards and service has resulted in our record loan growth. Pristine credit criterion, coupled with our strong capital ratios and ample liquidity, has driven our record deposit growth. Clients like to bank with us because we are a stable and dependable institution primarily focused on helping their businesses grow through trustworthy, easy, safe and reliable banking. The final key part to our success is the network of talented bankers that have seen firsthand Signature Bank is the best place for them to service all their clients' needs. As we look ahead, we pledge to stand by our pillars of safety and service in 2014 and beyond."

Capital

The Bank's tier 1 leverage, tier 1 risk-based, and total risk-based capital ratios were approximately 8.54 percent, 14.07 percent and 15.10 percent, respectively, as of December 31, 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 8.04 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 2013 fourth quarter was $178.3 million, up $31.2 million, or 21.2 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $21.3 billion for the 2013 fourth quarter represent an increase of $4.72 billion, or 28.5 percent, from the 2012 fourth quarter. Yield on interest-earning assets for the 2013 fourth quarter decreased 31 basis points, to 3.85 percent, versus the fourth quarter of last year. This decrease was primarily attributable to the continued effect of the prolonged low interest rate environment and a decrease of $2.6 million in loan prepayment penalty income.

Average cost of deposits and average cost of funds for the 2013 fourth quarter decreased by eight and 12 basis points to 0.50 percent and 0.57 percent, respectively, versus the comparable period a year ago. These decreases were predominantly due to the continued effect of the prolonged low interest rate environment.

Net interest margin for the 2013 fourth quarter was 3.32 percent versus 3.53 percent reported in the 2012 fourth quarter and 3.32 percent in the 2013 third quarter. The linked quarter margin continues to be pressured by the prolonged low interest rate environment as well as a decline of $2.4 million in loan prepayment penalty income. However, this was offset by a slowdown in premium amortization on securities and generally higher yields on recent loan originations and securities purchases. Excluding loan prepayment penalty income in both quarters, linked quarter core margin increased five basis points to 3.21 percent.

Provision for Loan Losses

The Bank's provision for loan losses for the fourth quarter of 2013 was $11.0 million, an increase of $655,000 or 6.3 percent, versus the 2012 fourth quarter. The increase was primarily due to a rise in loan growth.

Net charge-offs for the fourth quarter of 2013 were $2.8 million, or 0.09 percent of average loans on an annualized basis, versus $3.1 million, or 0.11 percent, for the 2013 third quarter and $5.9 million, or 0.25 percent, for the 2012 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2013 fourth quarter was $6.0 million, down $2.9 million from $8.9 million reported in the fourth quarter of last year. The decrease was due to a decrease of $1.9 million in net gains on sales of SBA loans and an increase of $2.1 million in write-downs on other than temporary impairment of securities predominantly due to the effects of the interim final Volcker rule.

Non-interest expense for the 2013 fourth quarter was $64.5 million, an increase of $6.4 million, or 10.9 percent, versus $58.1 million reported in the 2012 fourth 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 Signature Financial.

The Bank's efficiency ratio improved to 35.0 percent for the fourth quarter of 2013 compared with 37.2 percent for the same period a year ago. The improvement was primarily due to growth in net income, coupled with expense containment.

Loans

Loans, excluding loans held for sale, expanded a record $1.41 billion, or 11.7 percent, during the 2013 fourth quarter to $13.52 billion, versus $12.11 billion at September 30, 2013. At December 31, 2013, loans accounted for 60.4 percent of total assets, compared with 57.6 percent at the end of the 2013 third quarter and 56.0 percent at the end of 2012. Average loans, excluding loans held for sale, reached $12.75 billion in the 2013 fourth quarter, growing $1.19 billion, or 10.3 percent, from the 2013 third quarter and $3.56 billion, or 38.7 percent, from the fourth quarter of 2012. The increase in loans for the quarter and the year was primarily driven by growth in commercial real estate and multi-family loans as well as specialty finance.

At December 31, 2013, non-accrual loans were $31.3 million, representing 0.23 percent of total loans and 0.14 percent of total assets, versus non-accrual loans of $40.2 million, or 0.33 percent of total loans, at September 30, 2013 and $27.2 million, or 0.28 percent of total loans, at December 31, 2012. At the end of the 2013 fourth quarter, the ratio of allowance for loan losses to total loans was 1.00 percent, versus 1.05 percent at September 30, 2013 and 1.10 percent at December 31, 2012. Additionally, the ratio of allowance for loan losses to non-accrual loans, or the coverage ratio, was 431 percent for the 2013 fourth quarter versus 316 percent for the 2013 third quarter and 395 percent for the 2012 fourth quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2013 fourth quarter and year-end on Tuesday, January 21, 2014, 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 #31082319. 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 #31082319. The replay will be available from approximately 1:15 PM ET on Tuesday, January 21, 2014 through 11:59 PM ET on Friday, January 24, 2014.

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 and can change as a result of many possible events or factors, not all of which are known to us or in our control. 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. 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
December 31,

Twelve months ended
December 31,

(dollars in thousands, except per share amounts)   2013   2012   2013   2012
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 1,030 1,027 4,338 3,508
Loans and leases, net 140,116 116,785 514,936 417,837
Securities available-for-sale 47,680 49,685 186,170 216,974
Securities held-to-maturity 16,617 5,418 46,198 20,158
Other short-term investments     1,151     568     3,508     2,079  
Total interest income     206,594     173,483     755,150     660,556  
INTEREST EXPENSE
Deposits 21,062 20,236 80,209 84,163

Federal funds purchased and securities sold under agreements to repurchase

4,645 4,977 19,217 22,132
Federal Home Loan Bank advances     2,578     1,127     7,381     4,455  
Total interest expense     28,285     26,340     106,807     110,750  
Net interest income before provision for loan and lease losses 178,309 147,143 648,343 549,806
Provision for loan and lease losses     11,043     10,388     41,643     41,427  
Net interest income after provision for loan and lease losses     167,266     136,755     606,700     508,379  
NON-INTEREST INCOME
Commissions 2,474 1,934 9,367 8,210
Fees and service charges 4,592 3,952 17,299 15,503
Net gains on sales of securities 1,258 974 6,228 6,887
Net gains on sales of loans 682 2,610 6,287 9,273
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (2,584 ) (2,115 ) (9,208 ) (11,593 )
Portion recognized in other comprehensive income (before taxes)   -     1,590     3,059     8,520  
Net impairment losses on securities recognized in earnings (2,584 ) (525 ) (6,149 ) (3,073 )
Net trading income 380 200 1,638 759
Other loss     (768 )   (246 )   (2,659 )   (1,320 )
Total non-interest income     6,034     8,899     32,011     36,239  
NON-INTEREST EXPENSE
Salaries and benefits 41,660 39,298 163,554 146,696
Occupancy and equipment 5,160 4,590 19,681 17,294
Other general and administrative     17,642     14,216     63,942     54,253  
Total non-interest expense     64,462     58,104     247,177     218,243  
Income before income taxes 108,838 87,550 391,534 326,375
Income tax expense     44,498     37,416     162,790     140,892  
Net income   $ 64,340     50,134     228,744     185,483  
PER COMMON SHARE DATA
Earnings per share - basic $ 1.36 1.07 4.84 3.98
Earnings per share - diluted $ 1.34 1.05 4.76 3.91
 
 
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
   
 
December 31, December 31,
2013 2012
(dollars in thousands, except per share amounts)   (unaudited)    
ASSETS
Cash and due from banks $ 119,479 86,186
Short-term investments     24,498     7,779  
Total cash and cash equivalents     143,977     93,965  

Securities available-for-sale (pledged $3,227,828 and $2,467,409 at December 31, 2013 and 2012)

5,632,233 6,130,356

Securities held-to-maturity (fair value $2,110,290 and $755,469 at December 31, 2013 and 2012; pledged $1,886,753 and $543,351 at December 31, 2013 and 2012)

2,175,844 739,835
Federal Home Loan Bank stock 130,785 50,012
Loans held for sale 420,759 369,468
Loans and leases, net 13,384,400 9,664,337
Premises and equipment, net 36,331 32,192
Accrued interest and dividends receivable 71,668 64,367
Other assets     380,666     311,525  
Total assets   $ 22,376,663     17,456,057  
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing 5,391,483 4,444,964
Interest-bearing     11,665,614     9,637,688  
Total deposits     17,057,097     14,082,652  

Federal funds purchased and securities sold under agreements to repurchase

1,065,000 995,000
Federal Home Loan Bank advances 2,305,313 590,000
Accrued expenses and other liabilities     149,314     138,078  
Total liabilities     20,576,724     15,805,730  
Shareholders' equity

Preferred stock, par value $.01 per share; 61,000,000 shares authorized; none issued at December 31, 2013 and 2012

- -

Common stock, par value $.01 per share; 64,000,000 shares authorized; 47,293,162 and 47,230,266 shares issued and outstanding at December 31, 2013 and 2012

473 472
Additional paid-in capital 1,013,900 997,517
Retained earnings 837,250 608,511
Net unrealized (losses) gains on securities, net of tax     (51,684 )   43,827  
Total shareholders' equity     1,799,939     1,650,327  
Total liabilities and shareholders' equity   $ 22,376,663     17,456,057  
 
       
SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
 
 

Three months ended
December 30,

Twelve months ended
December 30,

(dollars in thousands, except ratios and per share amounts)   2013   2012   2013   2012
PER COMMON SHARE
Net income - basic $ 1.36 $ 1.07 $ 4.84 $ 3.98
Net income - diluted $ 1.34 $ 1.05 $ 4.76 $ 3.91
Average shares outstanding - basic 47,287 46,981 47,267 46,633
Average shares outstanding - diluted 48,174 47,666 48,029 47,386
Book value $ 38.06 $ 34.94 $ 38.06 $ 34.94
 
SELECTED FINANCIAL DATA
Return on average total assets 1.18 % 1.18 % 1.16 % 1.17 %
Return on average shareholders' equity 14.34 % 12.33 % 13.26 % 12.13 %
Efficiency ratio (1) 34.97 % 37.24 % 36.33 % 37.24 %

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

34.72 % 37.34 % 36.33 % 37.48 %
Yield on interest-earning assets 3.85 % 4.16 % 3.91 % 4.25 %
Cost of deposits and borrowings 0.57 % 0.69 % 0.60 % 0.78 %
Net interest margin 3.32 % 3.53 % 3.36 % 3.53 %
 
(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.
 
     
   

December 31,
2013

 

September 30,
2013

 

December 31,
2012

CAPITAL RATIOS
Tangible common equity (2) 8.04 % 8.38 % 9.45 %
Tier 1 leverage 8.54 % 8.74 % 9.51 %
Tier 1 risk-based 14.07 % 14.61 % 15.32 %
Total risk-based 15.10 % 15.66 % 16.35 %
 
ASSET QUALITY
Non-accrual loans $ 31,342 $ 40,182 $ 27,190
Allowance for loan and lease losses $ 135,071 $ 126,867 $ 107,433
Allowance for loan and lease losses to non-accrual loans 430.96 % 315.73 % 395.12 %
Allowance for loan and lease losses to total loans 1.00 % 1.05 % 1.10 %
Non-accrual loans to total loans 0.23 % 0.33 % 0.28 %
Quarterly net charge-offs to average loans (annualized) 0.09 % 0.11 % 0.25 %
 
(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
December 31, 2013 December 31, 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 $ 131,910 114 0.34 % 130,075 109 0.33 %
Investment securities 8,044,210 65,334 3.25 % 6,975,309 55,562 3.19 %
Commercial loans, mortgages and leases 12,387,520 136,622 4.38 % 8,795,051 112,747 5.10 %
Residential mortgages and consumer loans 360,820 3,494 3.84 % 394,785 4,038 4.07 %
Loans held for sale     377,648   1,030   1.08 %   284,998   1,027   1.43 %
Total interest-earning assets     21,302,108   206,594   3.85 %   16,580,218   173,483   4.16 %
Non-interest-earning assets     372,287           341,926        
Total assets   $ 21,674,395           16,922,144        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 867,204 799 0.37 % 782,020 816 0.42 %
Money market 9,506,959 16,978 0.71 % 8,143,132 15,942 0.78 %
Time deposits 1,196,387 3,285 1.09 % 945,556 3,478 1.46 %
Non-interest-bearing demand deposits     5,272,854   -   -     4,105,937   -   -  
Total deposits     16,843,404   21,062   0.50 %   13,976,645   20,236   0.58 %
Borrowings     2,884,573   7,223   0.99 %   1,175,007   6,104   2.07 %
Total deposits and borrowings     19,727,977   28,285   0.57 %   15,151,652   26,340   0.69 %

Other non-interest-bearing liabilities and shareholders' equity

    1,946,418           1,770,492        
Total liabilities and shareholders' equity   $ 21,674,395           16,922,144        
OTHER DATA
Net interest income / interest rate spread       178,309   3.28 %       147,143   3.47 %
Net interest margin           3.32 %           3.53 %

Ratio of average interest-earning assets to average interest-bearing liabilities

          107.98 %           109.43 %
 
           
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Twelve months ended Twelve months ended
December 31, 2013 December 31, 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 $ 126,995 446 0.35 % 100,289 338 0.34 %
Investment securities 7,549,126 235,430 3.12 % 7,114,310 238,873 3.36 %
Commercial loans, mortgages and leases 10,907,825 500,712 4.59 % 7,699,659 402,019 5.22 %
Residential mortgages and consumer loans 374,938 14,224 3.79 % 384,659 15,818 4.11 %
Loans held for sale     365,768   4,338   1.19 %   257,709   3,508   1.36 %
Total interest-earning assets     19,324,652   755,150   3.91 %   15,556,626   660,556   4.25 %
Non-interest-earning assets     362,127           299,368        
Total assets   $ 19,686,779           15,855,994        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand 819,164 3,081 0.38 % 705,604 3,145 0.45 %
Money market 8,959,324 64,095 0.72 % 7,874,582 66,696 0.85 %
Time deposits 1,065,139 13,033 1.22 % 925,267 14,322 1.55 %
Non-interest-bearing demand deposits     4,782,428   -   -     3,569,645   -   -  
Total deposits     15,626,055   80,209   0.51 %   13,075,098   84,163   0.64 %
Borrowings     2,192,788   26,598   1.21 %   1,161,784   26,587   2.29 %
Total deposits and borrowings     17,818,843   106,807   0.60 %   14,236,882   110,750   0.78 %

Other non-interest-bearing liabilities and shareholders' equity

    1,867,936           1,619,112        
Total liabilities and shareholders' equity   $ 19,686,779           15,855,994        
OTHER DATA
Net interest income / interest rate spread       648,343   3.31 %       549,806   3.47 %
Net interest margin           3.36 %           3.53 %

Ratio of average interest-earning assets to average interest-bearing liabilities

          108.45 %           109.27 %
 
 
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
December 31,

 

Twelve months ended
December 30,

(dollars in thousands, except per share amounts)   2013   2012   2013   2012
Net income (as reported) $ 64,340   50,134 228,744   185,483
Gains on sales of SBA interest-only strip securities - - (1,811 ) (2,664 )
Tax effect     -     -     742     1,136  

Net income - excluding after-tax effect of gains on sales of SBA interest-only strip securities

  $ 64,340     50,134     227,675     183,955  
 
Diluted earnings per share (as reported) $ 1.34 1.05 4.76 3.91
Gains on sales of SBA interest-only strip securities - - (0.04 ) (0.05 )
Tax effect     -     -     0.02     0.02  

Diluted earnings per share - excluding after-tax effect of gains on sales of SBA interest-only strip securities

  $ 1.34     1.05     4.74     3.88  
 
The following table reconciles net interest margin (as reported) to core net interest margin excluding loan prepayment penalty income:
       
Three months ended

December 31,

Twelve months ended

December 31,

    2013   2012   2013   2012
Net interest margin (as reported) 3.32 % 3.53 % 3.36 % 3.53 %
Margin contribution from loan prepayment penalty income   (0.11 )%   (0.21 )%   (0.14 )%   (0.13 )%
Core net interest margin - excluding loan prepayment penalty income   3.21 %   3.32 %   3.22 %   3.40 %

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

Source: Signature Bank

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