Signature Bank
Jul 20, 2016

Signature Bank Reports 2016 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, 2016. Net income for the 2016 second quarter reached $102.2 million, or $1.90 diluted earnings per share, versus $90.5 million, or $1.77 diluted earnings per share, for the 2015 second quarter. The increase in net income for the 2016 second quarter, versus the comparable quarter last year, is primarily due to an increase in net interest income, fueled by strong deposit and loan growth. These factors were partially offset by an increase in the provision for loan losses of $24.3 million and an increase in non-interest expenses, as well as a decrease in loan prepayment penalty income.

Net interest income for the 2016 second quarter reached $281.6 million, up $45.3 million, or 19.2 percent, when compared with the 2015 second quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $36.55 billion at June 30, 2016, an increase of $6.58 billion, or 21.9 percent, from $29.97 billion at June 30, 2015. Average assets for the 2016 second quarter reached $36.01 billion, an increase of $6.66 billion, or 22.7 percent, compared with the 2015 second quarter.

Deposits for the 2016 second quarter rose $1.47 billion, or 5.2 percent, to $29.58 billion at June 30, 2016. When compared with deposits at June 30, 2015, overall deposit growth for the last twelve months was 21.0 percent, or $5.12 billion. Average deposits for the 2016 second quarter reached $29.08 billion, an increase of $1.39 billion, or 5.0 percent.

"There are many uncertainties in the current global environment - political, economic and regulatory, among others. However, the one constant is our conviction to depositor safety. In times of turmoil, volatility and market disruption, we rely on the strength and success of Signature Bank's highly focused depositor-first model to sustain our growth. This deposit first-and-foremost strategy continues to allow us to not only weather storms, but also to seize opportunities arising from changing market conditions," explained Joseph J. DePaolo, Signature Bank President and Chief Executive Officer.

"We have always emphasized the importance of building our franchise by attracting core relationship deposits, and since our founding, have never ceased to focus on that philosophy. We continue to add talented banking teams that complement and contribute to our growing, depositor-centric network. Our strong growth this quarter speaks directly to the single-point-of-contact approach that is the hallmark of our business and distinguishes us in the marketplace," DePaolo concluded.

Scott A. Shay, Chairman of the Board, commented: "At Signature Bank, we strive to provide our clients with answers to questions that assist them as they grow their companies and build a sound financial future. We are always here to serve and support our clients. We are not like other banks that oftentimes dictate what their clients should be doing or determine how they should fit into their pre-set bank parameters. Rather, we are a straightforward institution that stands behind all our clients in times of economic and financial turmoil. Sadly, there are too few financial institutions offering straightforward solutions. Nevertheless, we will continue to drive this point home by relentlessly putting our depositors first and keeping our balance sheet at rock-solid levels. This commitment is demonstrative of the ways in which we serve our clients and allows us to better navigate through whatever effects the changing economy might present."

Capital

In the 2016 second quarter, the Bank issued $260.0 million in subordinated debt to institutional investors. Proceeds from the offering will be used to continue the Bank's growth in serving its niche market of privately owned businesses. The Bank's Tier 1 leverage, common equity Tier 1 risk-based, Tier 1 risk-based, and total risk-based capital ratios were approximately 9.60 percent, 12.00 percent, 12.00 percent, and 13.67 percent, respectively, as of June 30, 2016. 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 9.52 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 2016 second quarter was $281.6 million, an increase of $45.3 million, or 19.2 percent, versus the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $35.61 billion for the 2016 second quarter represent an increase of $6.62 billion, or 22.8 percent, from the 2015 second quarter. Yield on interest-earning assets for the 2016 second quarter decreased four basis points, to 3.66 percent, compared with the 2015 second quarter. This decrease was primarily attributable to prolonged low interest rates and lower prepayment penalty income.

Average cost of deposits and average cost of funds for the second quarter of 2016 increased by one and six basis points, respectively, versus the 2015 second quarter to 0.41 percent and 0.53 percent, respectively.

Net interest margin for the 2016 second quarter was 3.18 percent versus 3.27 percent reported in the same period a year ago. On a linked quarter basis, net interest margin decreased 14 basis points. Excluding loan prepayment penalties in both quarters, linked quarter core net interest margin decreased five basis points to 3.12 percent. Four basis points of the decline are attributable to the April 2016 subordinated debt issuance.

Provision for Loan Losses

The Bank's provision for loan losses for the second quarter of 2016 was $33.3 million, compared with $19.8 million for the 2016 first quarter and $9.0 million for the 2015 second quarter. The increase was primarily due to additional reserves for Chicago taxi medallion loans. The Bank now has an allowance for loan losses to loans ratio of 30.0% for Chicago taxi medallion loans.

Net charge-offs for the 2016 second quarter were $15.4 million, or 0.24 percent of average loans on an annualized basis, versus $7.8 million, or 0.13 percent, for the 2016 first quarter and $2.6 million, or 0.05 percent, for the 2015 second quarter. $11.2 million of the charge-offs were for Chicago taxi medallion loans.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2016 second quarter was $13.1 million, up $3.4 million when compared with $9.8 million reported in the 2015 second quarter. The increase was due to a $4.4 million increase in net gains on sales of securities.

Non-interest expense for the second quarter of 2016 was $92.3 million, an increase of $7.4 million, or 8.7 percent, versus $84.9 million reported in the 2015 second quarter. The increase was primarily a result of the addition of new private client banking teams, as well as an increase in costs in our risk management and compliance related activities.

The Bank's efficiency ratio improved to 31.3 percent for the 2016 second quarter versus 34.5 percent for the comparable period last year. The improvement was primarily due to growth in net interest income.

Loans

Loans, excluding loans held for sale, grew $1.67 billion, or 6.7 percent, during the second quarter of 2016 to $26.71 billion, compared with $25.04 billion at March 31, 2016. At June 30, 2016, loans accounted for 73.1 percent of total assets, versus 71.8 percent at the end of the 2016 first quarter and 68.5 percent at the end of 2015 second quarter. Average loans, excluding loans held for sale, reached $26.05 billion in the 2016 second quarter, growing $1.66 billion, or 6.8 percent, from the 2016 first quarter and $6.07 billion, or 30.4 percent, from the 2015 second quarter. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans.

At June 30, 2016, non-accrual loans were $129.5 million, representing 0.48 percent of total loans and 0.35 percent of total assets, compared with non-accrual loans of $105.0 million, or 0.42 percent of total loans, at March 31, 2016 and $41.6 million, or 0.20 percent of total loans, at June 30, 2015. At the end of the 2016 second quarter, $104.9 million of non-accrual loans were taxi medallions. At June 30, 2016, the ratio of allowance for loan and lease losses to total loans was 0.84 percent, versus 0.83 percent at March 31, 2016 and 0.86 percent at June 30, 2015. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 174 percent for the 2016 second quarter versus 197 percent for the first quarter of 2016 and 426 percent for the 2015 second quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2016 second quarter on Wednesday, July 20, 2016, 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 #43493373. 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 "Investor Information," then, under "Company News," select "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 #43493373. The replay will be available from approximately 1:00 PM ET on Wednesday, July 20, 2016 through 11:59 PM ET on Sunday, July 24, 2016.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 30 private client offices throughout the New York metropolitan area, including those in Manhattan, Brooklyn, Westchester, Long Island, Queens, the Bronx, Staten Island and Connecticut. 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. Its specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing. Signature Securities Group Corporation, a wholly owned Bank subsidiary, is a licensed broker-dealer, investment adviser and member FINRA/SIPC, offering investment, brokerage, asset management and insurance products and services.

Signature Bank ranked sixth on Forbes' Best and Worst Banks in America 2016 list and third on leading trade journal Bank Director's 2015 Bank Performance Scorecard for banks with assets between $5 and $50 billion.

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 teams 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 INCOME
(unaudited)
 
Three months ended

June 30,

Six months ended

June 30,

(dollars in thousands, except per share amounts)       2016     2015     2016     2015
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 742 512 1,991 1,108
Loans and leases, net 253,894 202,198 499,833 387,962
Securities available-for-sale 51,055 47,131 101,342 96,367
Securities held-to-maturity 16,044 16,690 32,333 33,768
Other short-term investments       2,226       1,063       4,236       2,351  
  Total interest income      

323,961

      267,594       639,735       521,556  
INTEREST EXPENSE
Deposits 29,798 24,786 58,035 49,602
Federal funds purchased and securities sold under
agreements to repurchase 3,099 3,580 6,167 7,301
Federal Home Loan Bank borrowings 6,510 2,929 12,669 5,857
Long-term debt       2,906       -       2,906       -  
  Total interest expense       42,313       31,295       79,777       62,760  
Net interest income before provision for loan and lease losses 281,648 236,299 559,958 458,796
Provision for loan and lease losses       33,269       8,957       53,081       16,844  
Net interest income after provision for loan and lease losses       248,379       227,342       506,877       441,952  
NON-INTEREST INCOME
Commissions 2,619 2,909 5,326 5,462
Fees and service charges 5,451 5,905 10,601 10,926
Net gains on sales of securities 4,617 203 4,854 621
Net gains on sales of loans 1,354 1,545 2,981 5,011
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (369 ) (360 ) (424 ) (1,293 )
Portion recognized in other comprehensive income (before taxes)   306       139       306       731  
Net impairment losses on securities recognized in earnings (63 ) (221 ) (118 ) (562 )
Other losses       (835 )     (585 )     (2,037 )     (1,553 )
  Total non-interest income       13,143       9,756       21,607       19,905  
NON-INTEREST EXPENSE
Salaries and benefits 61,927 57,759 124,207 112,835
Occupancy and equipment 7,069 6,322 13,709 12,248
Data processing 4,874 3,961 9,759 7,922
FDIC assessment fees 4,302 3,655 9,285 7,468
Professional fees 2,304 2,524 4,190 5,458
Other general and administrative       11,833       10,692       23,485       20,679  
  Total non-interest expense       92,309       84,913       184,635       166,610  
Income before income taxes 169,213 152,185 343,849 295,247
Income tax expense       66,971       61,723       137,572       121,395  
Net income     $ 102,242       90,462       206,277       173,852  
PER COMMON SHARE DATA
Earnings per share - basic $ 1.91 1.78 3.88 3.44
Earnings per share - diluted $ 1.90 1.77 3.86 3.40
 
       
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
June 30, December 31,
2016 2015
(dollars in thousands, except shares and per share amounts)     (unaudited)      
ASSETS
Cash and due from banks $ 255,260 311,254
Short-term investments       34,970     30,292  
  Total cash and cash equivalents       290,230     341,546  
Securities available-for-sale 6,459,614 6,240,761
Securities held-to-maturity (fair value $2,133,798 at June 30, 2016
and $2,137,913 at December 31, 2015) 2,068,304 2,133,144
Federal Home Loan Bank stock 147,438 154,405
Loans held for sale 493,241 456,358
Loans and leases, net 26,489,602 23,597,541
Premises and equipment, net 46,373 44,161
Accrued interest and dividends receivable 99,697 94,006
Other assets       452,336     388,623  
  Total assets     $ 36,546,835     33,450,545  
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing $ 9,412,096 8,567,300
Interest-bearing       20,166,678     18,206,623  
  Total deposits       29,578,774     26,773,923  
Federal funds purchased and securities sold under agreements
to repurchase 585,000 817,000
Federal Home Loan Bank borrowings 2,380,000 2,720,163
Long-term debt 256,354 -
Accrued expenses and other liabilities       252,221     247,625  
  Total liabilities       33,052,349     30,558,711  
Shareholders' equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized;
none issued at June 30, 2016 and December 31, 2015 - -
Common stock, par value $.01 per share; 64,000,000 shares authorized;
54,610,987 shares issued and 53,683,172 shares outstanding at June 30, 2016;
51,929,064 shares issued and 50,901,408 shares outstanding at December 31, 2015; 537 509
Additional paid-in capital 1,741,240 1,399,501
Retained earnings 1,713,288 1,507,011
Treasury stock, none at June 30, 2016 and 41,087 shares at December 31, 2015 - (5,684 )
Accumulated other comprehensive income (loss)       39,421     (9,503 )
  Total shareholders' equity       3,494,486     2,891,834  
  Total liabilities and shareholders' equity     $ 36,546,835     33,450,545  
 
             
SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
 
Three months ended

June 30,

Six months ended

June 30,

(in thousands, except ratios and per share amounts)     2016     2015     2016     2015
PER COMMON SHARE
Net income - basic $ 1.91 $ 1.78 $ 3.88 $ 3.44
Net income - diluted $ 1.90 $ 1.77 $ 3.86 $ 3.40
Average shares outstanding - basic 53,668 50,809 53,126 50,582
Average shares outstanding - diluted 53,886 51,217 53,461 51,078
Book value $ 65.09 $ 53.06 $ 65.09 $ 53.06
 
SELECTED FINANCIAL DATA
Return on average total assets 1.14% 1.24% 1.18% 1.22%
Return on average shareholders' equity 11.98% 13.64% 12.99% 13.50%
Efficiency ratio (1) 31.31% 34.51% 31.75% 34.80%

Efficiency ratio excluding net gains on sales of securities
  and net impairment losses on securities recognized
  in earnings(1)(2)

31.80% 34.51% 32.01% 34.81%
Yield on interest-earning assets 3.66% 3.70% 3.71% 3.71%
Yield on interest-earning assets, tax-equivalent basis (3) 3.66% 3.70% 3.71% 3.71%
Cost of deposits and borrowings 0.53% 0.47% 0.51% 0.49%
Net interest margin 3.18% 3.27% 3.25% 3.26%
Net interest margin, tax-equivalent basis (3) 3.19% 3.27% 3.25% 3.26%
 
(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.
 
(2) The efficiency ratio excluding net gains on sales of securities and net impairment losses on securities recognized in earnings is considered 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. This ratio is a metric used by management to evaluate the performance of the Bank's core business activities.
 
(3) Based on the 35 percent U.S. federal statutory tax rate. The tax-equivalent basis is considered 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. This ratio is a metric used by management to evaluate the impact of tax-exempt assets on the Bank's yield on interest-earning assets and net interest margin.
 
                 
        June 30,

2016

    March 31,

2016

    December 31,

2015

    June 30,

2015

CAPITAL RATIOS
Tangible common equity (4) 9.52% 9.61% 8.65% 9.01%
Tier 1 leverage (5) 9.60% 9.79% 8.87% 9.16%
Common equity Tier 1 risk-based (5) 12.00% 12.42% 11.33% 11.85%
Tier 1 risk-based (5) 12.00% 12.42% 11.33% 11.85%
Total risk-based (5) 13.67% 13.19% 12.10% 12.63%
 
ASSET QUALITY
Non-accrual loans $ 129,460 $ 105,010 $ 71,905 $ 41,615
Allowance for loan and lease losses $ 224,878 $ 207,046 $ 195,023 $ 177,086
Allowance for loan and lease losses to non-accrual loans 173.70% 197.17% 271.22% 425.53%
Allowance for loan and lease losses to total loans 0.84% 0.83% 0.82% 0.86%
Non-accrual loans to total loans 0.48% 0.42% 0.30% 0.20%
Quarterly net charge-offs to average loans, annualized 0.24% 0.13% 0.08% 0.05%
 
(4)   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. 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.
 
(5) June 30, 2016 ratios are preliminary.
 
                       
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Three months ended Three months ended
June 30, 2016 June 30, 2015
(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 $ 446,254 546 0.49 % 301,149 178 0.24 %
Investment securities 8,838,625 68,779 3.11 % 8,501,414 64,706 3.04 %
Commercial loans, mortgages and leases (1) 25,749,690 251,240 3.92 % 19,653,963 199,156 4.06 %
Residential mortgages and consumer loans 301,430 2,894 3.86 % 328,843 3,042 3.71 %
Loans held for sale       276,256     742       1.08 %     205,415     512     1.00 %
Total interest-earning assets       35,612,255     324,201       3.66 %     28,990,784     267,594     3.70 %
Non-interest-earning assets       401,871                 367,823            
Total assets     $ 36,014,126                 29,358,607            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 3,510,696 3,939 0.45 % 1,935,269 1,867 0.39 %
Money market 14,850,446 22,717 0.62 % 13,939,795 20,289 0.58 %
Time deposits 1,256,480 3,142 1.01 % 931,854 2,630 1.13 %
Non-interest-bearing demand deposits       9,461,144     -       -       7,748,568     -     -  
Total deposits       29,078,766     29,798       0.41 %     24,555,486     24,786     0.40 %
Long-term debt 205,882 2,906 5.65 % - - -
Other borrowings       3,082,813     9,609       1.25 %     1,951,514     6,509     1.34 %
Total deposits and borrowings       32,367,461     42,313       0.53 %     26,507,000     31,295     0.47 %
Other non-interest-bearing liabilities
and shareholders' equity       3,646,665                 2,851,607            
Total liabilities and shareholders' equity     $ 36,014,126                 29,358,607            
OTHER DATA
Net interest income / interest rate spread (1) 281,888 3.13 % 236,299 3.23 %
Tax-equivalent adjustment (240 ) -
Net interest income, as reported 281,648   236,299
Net interest margin 3.18 % 3.27 %
Tax-equivalent effect 0.01 % -  
Net interest margin on a fully tax-equivalent basis 3.19 % 3.27 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 110.02 % 109.37 %
(1) Presented on a tax-equivalent basis using the U.S. federal statutory tax rate of 35 percent.
 
                       
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Six months ended Six months ended
June 30, 2016 June 30, 2015
(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 $ 419,500 1,019 0.49 % 389,094 466 0.24 %
Investment securities 8,743,452 136,892 3.13 % 8,533,169 132,020 3.09 %
Commercial loans, mortgages and leases (1) 24,918,212 494,397 3.99 % 18,880,787 381,788 4.08 %
Residential mortgages and consumer loans 304,524 5,841 3.86 % 331,828 6,174 3.75 %
Loans held for sale       295,719     1,991       1.35 %     205,410     1,108     1.09 %
Total interest-earning assets       34,681,407     640,140       3.71 %     28,340,288     521,556     3.71 %
Non-interest-earning assets       396,750                 331,760            
Total assets     $ 35,078,157                 28,672,048            
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 3,216,304 7,229 0.45 % 1,856,637 3,587 0.39 %
Money market 14,891,820 44,966 0.61 % 13,697,667 40,607 0.60 %
Time deposits 1,175,688 5,840 1.00 % 947,240 5,408 1.15 %
Non-interest-bearing demand deposits       9,100,203     -       -       7,471,156     -     -  
Total deposits       28,384,015     58,035       0.41 %     23,972,700     49,602     0.42 %
Long-term debt 102,942 2,906 5.65 % - - -
Other borrowings       3,042,137     18,836       1.25 %     1,925,317     13,158     1.38 %
Total deposits and borrowings       31,529,094     79,777       0.51 %     25,898,017     62,760     0.49 %
Other non-interest-bearing liabilities
and shareholders' equity       3,549,063                 2,774,031            
Total liabilities and shareholders' equity     $ 35,078,157                 28,672,048            
OTHER DATA
Net interest income / interest rate spread (1) 560,363 3.20 % 458,796 3.22 %
Tax-equivalent adjustment (405 ) -
Net interest income, as reported 559,958   458,796
Net interest margin 3.25 % 3.26 %
Tax-equivalent effect -   -  
Net interest margin on a fully tax-equivalent basis 3.25 % 3.26 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 110.00 % 109.43 %
(1) Presented on a tax-equivalent basis using the U.S. federal statutory tax rate of 35 percent.
 
 
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) net income and diluted earnings per share excluding the after tax effect of net gains on sales of securities and net impairment losses on securities recognized in earnings, (ii) tangible common equity ratio, (iii) efficiency ratio excluding net gains on sales of securities and net impairment losses on securities recognized in earnings, (iv) yield on interest-earning assets, tax-equivalent basis, (v) net interest margin, tax-equivalent basis, and (vi) 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. For a description of the tangible common equity ratio, efficiency ratio, tax-equivalent yield on interest-earning assets, and tax equivalent net interest margin see "Financial Summary, Capital Ratios, Asset Quality".
 
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 securities and net impairment losses on securities recognized in earnings:
 
      Three months ended

June 30,

  Six months ended

June 30,

(dollars in thousands, except per share amounts)     2016     2015     2016     2015
Net income (as reported) $ 102,242     $ 90,462 206,277     173,852
Net gains on sales of securities (4,617 ) (203 ) (4,854 ) (621 )
Net impairment losses on securities recognized in earnings 63 221 118 562
Tax effect       1,802         (7 )     1,876       25  
Net income - excluding after tax effect of net gains on sales of securities
and net impairment losses on securities recognized in earnings     $ 99,490         90,473       203,417       173,818  
 
Diluted earnings per share (as reported) $ 1.90 $ 1.77 3.86 3.40
Net gains on sales of securities (0.08 ) - (0.09 ) (0.01 )
Net impairment losses on securities recognized in earnings - - - 0.01
Tax effect       0.03         -       0.03       -  
Diluted earnings per share - excluding after tax effect of net gains on sales of securities
of securities and net impairment losses on securities recognized in earnings     $ 1.85         1.77       3.80       3.40  
 
 
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,

          2016         2015       2016       2015  
Net interest margin (as reported) 3.18 % 3.27 % 3.25 % 3.26 %
Tax-equivalent adjustment 0.01 % - - -
Margin contribution from loan prepayment penalty income       (0.07 )%       (0.10 )%     (0.11 )%     (0.10 )%
Core net interest margin - excluding loan prepayment penalty income       3.12 %       3.17 %     3.14 %     3.16 %
 

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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