Signature Bank
Jan 19, 2017

Signature Bank Reports 2016 Fourth Quarter and Year-End Results

Net Income Reached Record Levels in 2016

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, 2016.

Net income for the 2016 fourth quarter reached a record $113.9 million, or $2.11 diluted earnings per share, compared with $103.0 million, or $2.01 diluted earnings per share, for the 2015 fourth quarter. The record net income for the 2016 fourth quarter, when compared with the same period last year, is primarily the result of an increase in net interest income, fueled by strong average deposit and loan growth. These factors were partially offset by an increase in the provision for loan losses and non-interest expenses.

Net interest income for the 2016 fourth quarter rose $28.5 million, or 10.6 percent, to $296.8 million, compared with the fourth quarter of 2015. This increase is primarily due to growth in average interest-earning assets. Total assets reached $39.05 billion at December 31, 2016, expanding $5.60 billion, or 16.7 percent, from $33.45 billion at December 31, 2015. Average assets for the 2016 fourth quarter reached $38.18 billion, an increase of $5.46 billion, or 16.7 percent, versus the comparable period a year ago.

Deposits for the 2016 fourth quarter rose $465.9 million, or 1.5 percent, to $31.86 billion at December 31, 2016. Overall deposit growth in 2016 was 19.0 percent, or $5.09 billion, when compared with deposits at the end of 2015. Average total deposits for 2016 were $29.75 billion, growing $4.45 billion, or 17.6 percent, versus average total deposits of $25.29 billion for 2015.

"2016 was again a year during which Signature Bank delivered record earnings - in fact, our 9th consecutive year - and also another where we reported strong performance across all key metrics. The expansion of our franchise continues, driven by substantial growth in deposits of $5.09 billion and in loans of $5.25 billion. This was all achieved despite challenges in our taxi medallion portfolio. Moreover, we bolstered our capital position with two successful offerings; a common stock offering of nearly $320 million and our first subordinated debt offering of $260 million. These capital raises, along with solid earnings retention, well positions Signature Bank for future expansion," explained Joseph J. DePaolo, President and Chief Executive Officer.

"We continue to execute our highly successful single-point-of-contact business model, which allows Signature Bank to differentiate itself in an extremely competitive marketplace. The care, attention and advocacy for the Bank's clients -- delivered by our committed colleagues -- furthers our business development activities and allows us to better attract and retain clients. Our persistence, commitment and overall strong performance culminated in the Bank achieving deposit and loan growth each in excess of $5 billion, as well as record annual earnings," DePaolo said.

Signature Bank Chairman of the Board Scott A. Shay, noted: "Signature Bank has produced yet another record year of earnings and solid financial performance. We are proud that -- even from the depths of the financial crisis -- we maintained a rapid growth pace while remaining a pillar of strength for our clients during those uncertain times.

"As the Bank continues to grow, we retain our strong disciplines and follow the hedgehog theory of business - doing a few things but doing each of them very well. In our case, that means maintaining our unrelenting commitment to depositor safety and service and conservative lending posture. We look forward to the New Year and to embracing many opportunities as we have built a platform poised to serve an expanding roster of clients," Shay concluded.

Capital

The Bank's Tier 1 leverage, common equity Tier 1 risk-based, Tier 1 risk-based and total risk-based capital ratios were approximately 9.61 percent, 11.92 percent, 11.92 percent and 13.46 percent, respectively, as of December 31, 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 9.21 percent. The Bank defines tangible common equity ratio as the ratio of total tangible common shareholders' equity to total tangible assets.

Net Interest Income

Net interest income for the 2016 fourth quarter was $296.8 million, up $28.5 million, or 10.6 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $37.73 billion for the 2016 fourth quarter represent an increase of $5.43 billion, or 16.8 percent, from the 2015 fourth quarter. The yield on interest-earning assets for the 2016 fourth quarter declined 10 basis points to 3.61 percent, compared to the fourth quarter of last year.

Average cost of deposits and average cost of funds for the 2016 fourth quarter increased by three and seven basis points, to 0.42 percent and 0.53 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2016 fourth quarter was 3.14 percent versus 3.30 percent reported in the 2015 fourth quarter and 3.14 percent in the 2016 third quarter. Excluding loan prepayment penalty income in both quarters, linked quarter core margin on a tax-equivalent basis decreased one basis point to 3.06 percent.

Provision for Loan Losses

The Bank's provision for loan losses for the fourth quarter of 2016 was $22.2 million, an increase of $5.5 million, or 33.2 percent, versus the 2015 fourth quarter. The increase was primarily due to additional reserves for taxi medallion loans.

Net charge offs for the 2016 fourth quarter were $13.5 million, or 0.19 percent of average loans on an annualized basis, versus $100.5 million, or 1.46 percent, for the 2016 third quarter and $4.6 million, or 0.08 percent, for the 2015 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2016 fourth quarter was $10.1 million, up $730,000 from $9.3 million reported in the fourth quarter of last year. The increase was driven by increases in all non-interest income categories, but partially offset by a rise of $1.2 million in other losses from additional amortization of low income housing tax credit investments.

Non-interest expense for the 2016 fourth quarter was $95.9 million, an increase of $7.5 million, or 8.5 percent, versus $88.4 million reported in the 2015 fourth quarter. The increase was primarily a result of new private client banking teams joining, as well as an increase in costs in our risk management and compliance related activities.

The Bank's efficiency ratio improved to 31.25 percent for the fourth quarter of 2016 compared with 31.85 percent for the same period a year ago. The improvement was primarily due to growth in net interest income.

Loans

Loans, excluding loans held for sale, expanded $1.27 billion, or 4.6 percent, during the 2016 fourth quarter to $29.04 billion, versus $27.77 billion at September 30, 2016. At December 31, 2016, loans accounted for 74.4 percent of total assets, compared with 73.5 percent at the end of the 2016 third quarter and 71.1 percent at the end of 2015. Average loans, excluding loans held for sale, reached $28.24 billion in the 2016 fourth quarter, growing $916.8 million, or 3.4 percent, from the 2016 third quarter and $5.28 billion, or 23.0 percent, from the fourth quarter of 2015. 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 commercial and industrial loans.

At December 31, 2016, non-accrual loans were $157.6 million, representing 0.54 percent of total loans and 0.40 percent of total assets, versus non-accrual loans of $162.8 million, or 0.59 percent of total loans, at September 30, 2016 and $71.9 million, or 0.30 percent of total loans, at December 31, 2015. At the end of the 2016 fourth quarter, $135.4 million of non-accrual loans were secured by taxi medallions. At December 31, 2016, the ratio of allowance for loan and lease losses to total loans was 0.74 percent, versus 0.74 percent at September 30, 2016 and 0.82 percent at December 31, 2015. Additionally, the ratio of allowance for loan and lease losses to non-accrual loans, or the coverage ratio, was 135 percent for the 2016 fourth quarter versus 126 percent for the 2016 third quarter and 271 percent for the 2015 fourth quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2016 fourth quarter and year-end on Thursday, January 19, 2017, 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 #51388109. 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 #51388109. The replay will be available from approximately 1:00 PM ET on Thursday, January 19, 2017 through 11:59 PM ET on Monday, January 23, 2017.

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 best on Forbes' Best and Worst Banks in America 2016 list and was recently named Best Business Bank for the third consecutive year by the New York Law Journal in the publication's seventh annual reader survey. The Bank also ranked second in the Best Private Bank and Best Attorney Escrow Services categories in the listing.

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
December 31,

Twelve months ended
December 31,

(dollars in thousands, except per share amounts)     2016     2015     2016     2015  
INTEREST AND DIVIDEND INCOME
Loans held for sale $ 963 1,487 4,572 3,885
Loans and leases, net 276,128 234,893 1,042,717 839,782
Securities available-for-sale 47,695 48,328 198,001 191,661
Securities held-to-maturity 15,054 16,420 62,834 66,633
Other short-term investments     2,450     1,270     9,027     4,987  
  Total interest income     342,290     302,398     1,317,151     1,106,948  
INTEREST EXPENSE
Deposits 33,379 26,927 123,285 102,905
Federal funds purchased and securities sold under
agreements to repurchase 2,724 3,420 11,857 13,885
Federal Home Loan Bank borrowings 5,711 3,712 24,565 13,057
Subordinated debt     3,660     -     10,202     -  
  Total interest expense     45,474     34,059     169,909     129,847  
Net interest income before provision for loan and lease losses 296,816 268,339 1,147,242 977,101
Provision for loan and lease losses     22,234     16,686     155,774     44,914  
Net interest income after provision for loan and lease losses     274,582     251,653     991,468     932,187  
NON-INTEREST INCOME
Commissions 3,442 3,342 11,474 11,418
Fees and service charges 5,802 5,166 21,846 21,515
Net gains on sales of securities 569 338 7,711 1,209
Net gains on sales of loans 1,701 1,213 6,750 7,107
Other-than-temporary impairment losses on securities:
Total impairment losses on securities (283 ) (605 ) (986 ) (2,264 )
Portion recognized in other comprehensive income (before taxes)   145     324     559     1,301  
Net impairment losses on securities recognized in earnings (138 ) (281 ) (427 ) (963 )
Other losses     (1,300 )   (433 )   (4,604 )   (3,182 )
  Total non-interest income     10,076     9,345     42,750     37,104  
NON-INTEREST EXPENSE
Salaries and benefits 58,940 58,537 246,406 230,081
Occupancy and equipment 7,758 7,054 29,140 26,024
Data processing 5,450 4,453 20,343 16,649
FDIC assessment fees 6,299 4,562 21,265 15,885
Professional fees 3,249 2,136 9,671 9,460
Other general and administrative     14,223     11,689     49,946     43,115  
  Total non-interest expense     95,919     88,431     376,771     341,214  
Income before income taxes 188,739 172,567 657,447 628,077
Income tax expense     74,802     69,579     261,123     255,012  
Net income   $ 113,937     102,988     396,324     373,065  
PER COMMON SHARE DATA
Earnings per share - basic $ 2.12 2.02 7.42 7.35
Earnings per share - diluted $ 2.11 2.01 7.37 7.27
 
SIGNATURE BANK    
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
 
December 31, December 31,
2016 2015
(dollars in thousands, except shares and per share amounts)   (unaudited)    
ASSETS
Cash and due from banks $ 499,856 311,254
Short-term investments     39,095     30,292  
Total cash and cash equivalents     538,951     341,546  
Securities available-for-sale 6,335,347 6,240,761
Securities held-to-maturity (fair value $2,027,393 at December 31, 2016
and $2,137,913 at December 31, 2015) 2,038,125 2,133,144
Federal Home Loan Bank stock 132,629 154,405
Loans held for sale 559,528 456,358
Loans and leases, net 28,829,670 23,597,541
Premises and equipment, net 50,698 44,161
Accrued interest and dividends receivable 102,963 94,006
Other assets     459,700     388,623  
Total assets   $ 39,047,611     33,450,545  
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing $ 10,520,529 8,567,300
Interest-bearing     21,340,731     18,206,623  
Total deposits     31,861,260     26,773,923  
Federal funds purchased and securities sold under agreements
to repurchase 893,000 817,000
Federal Home Loan Bank borrowings 2,050,900 2,720,163
Subordinated debt 256,588 -
Accrued expenses and other liabilities     373,599     247,625  
Total liabilities     35,435,347     30,558,711  
Shareholders' equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized;
none issued at December 31, 2016 and December 31, 2015 - -
Common stock, par value $.01 per share; 64,000,000 shares authorized;
54,610,170 shares issued and outstanding at December 31, 2016;
51,929,064 shares issued and outstanding at December 31, 2015; 546 509
Additional paid-in capital 1,763,100 1,399,501
Retained earnings 1,903,332 1,507,011
Treasury stock, none at December 31, 2016 and 41,087 shares at December 31, 2015 - (5,684 )
Accumulated other comprehensive loss     (54,714 )   (9,503 )
Total shareholders' equity     3,612,264     2,891,834  
Total liabilities and shareholders' equity   $ 39,047,611     33,450,545  
 
SIGNATURE BANK        
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
 
 

Three months ended
December 31,

Twelve months ended
December 31,

(in thousands, except ratios and per share amounts)     2016       2015       2016       2015  
PER COMMON SHARE
Net income - basic $ 2.12 $ 2.02 $ 7.42 $ 7.35
Net income - diluted $ 2.11 $ 2.01 $ 7.37 $ 7.27
Average shares outstanding - basic 53,684 50,901 53,406 50,739
Average shares outstanding - diluted 54,060 51,341 53,811 51,302
Book value $ 66.15 $ 56.81 $ 66.15 $ 56.81
 
SELECTED FINANCIAL DATA
Return on average total assets 1.19 % 1.25 % 1.09 % 1.23 %
Return on average shareholders' equity 12.64 % 14.30 % 12.19 % 13.85 %
Efficiency ratio (1) 31.25 % 31.85 % 31.66 % 33.64 %
Yield on interest-earning assets 3.61 % 3.71 % 3.66 % 3.69 %
Yield on interest-earning assets, tax-equivalent basis (1)(2) 3.61 % 3.71 % 3.66 % 3.69 %
Cost of deposits and borrowings 0.53 % 0.46 % 0.52 % 0.47 %
Net interest margin 3.13 % 3.30 % 3.19 % 3.26 %
Net interest margin, tax-equivalent basis (2)(3) 3.14 % 3.30 % 3.19 % 3.26 %
(1)   See "Non-GAAP Financial Measures" for related calculation.
 
(2) 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.
 
(3) See "Net Interest Margin Analysis" for related calculation.
 
         

December 31,
2016

 

September 30,
2016

 

December 31,
2015

CAPITAL RATIOS            
Tangible common equity (4) 9.21 % 9.41 % 8.64 %
Tier 1 leverage (5) 9.61 % 9.51 % 8.87 %
Common equity Tier 1 risk-based (5) 11.92 % 12.00 % 11.33 %
Tier 1 risk-based (5) 11.92 % 12.00 % 11.33 %
Total risk-based (5) 13.46 % 13.56 % 12.10 %
 
ASSET QUALITY
Non-accrual loans $ 157,578 $ 162,772 $ 71,905
Allowance for loan and lease losses $ 213,495 $ 204,809 $ 195,023
Allowance for loan and lease losses to non-accrual loans 135.49 % 125.83 % 271.22 %
Allowance for loan and lease losses to total loans 0.74 % 0.74 % 0.82 %
Non-accrual loans to total loans 0.54 % 0.59 % 0.30 %
Quarterly net charge-offs to average loans, annualized 0.19 % 1.46 % 0.08 %
(4)   We define tangible common equity as the ratio of total tangible common equity to total tangible assets (the "TCE ratio"). 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. See "Non-GAAP Financial Measures" for related calculation.
 
(5) December 31, 2016 ratios are preliminary.
 
SIGNATURE BANK            
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Three months ended Three months ended
December 31, 2016 December 31, 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 $ 604,788 781 0.51 % 320,199 230 0.28 %
Investment securities 8,612,077 64,418 2.99 % 8,574,256 65,788 3.07 %
Commercial loans, mortgages and leases (1) 27,954,484 274,048 3.90 % 22,638,929 231,666 4.06 %
Residential mortgages and consumer loans 287,757 2,640 3.65 % 318,670 3,227 4.02 %
Loans held for sale     275,110   963     1.39 %   454,122   1,487   1.30 %
Total interest-earning assets     37,734,216   342,850     3.61 %   32,306,176   302,398   3.71 %
Non-interest-earning assets     447,739           417,596        
Total assets   $ 38,181,955           32,723,772        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 4,078,045 4,879 0.48 % 2,677,008 2,852 0.42 %
Money market 16,199,212 25,234 0.62 % 14,674,558 21,518 0.58 %
Time deposits 1,397,421 3,266 0.93 % 1,000,999 2,557 1.01 %
Non-interest-bearing demand deposits     10,002,625   -     -     8,736,667   -   -  
Total deposits     31,677,303   33,379     0.42 %   27,089,232   26,927   0.39 %
Subordinated debt 256,502 3,659 5.71 % - - -
Other borrowings     2,337,563   8,436     1.44 %   2,497,568   7,132   1.13 %
Total deposits and borrowings     34,271,368   45,474     0.53 %   29,586,800   34,059   0.46 %
Other non-interest-bearing liabilities
and shareholders' equity     3,910,587           3,136,972        
Total liabilities and shareholders' equity   $ 38,181,955           32,723,772        
OTHER DATA
Net interest income / interest rate spread (1) 297,376 3.08 % 268,339 3.25 %
Tax-equivalent adjustment (560 ) -
Net interest income, as reported 296,816   268,339
Net interest margin 3.13 % 3.30 %
Tax-equivalent effect 0.01 % -  
Net interest margin on a fully tax-equivalent basis (1) 3.14 % 3.30 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 110.10 % 109.19 %
 
(1) Presented on a tax-equivalent, non-GAAP, basis using the U.S. federal statutory tax rate of 35 percent.
 
SIGNATURE BANK            
NET INTEREST MARGIN ANALYSIS
(unaudited)
 
 
Twelve months ended Twelve months ended
December 31, 2016 December 31, 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 $ 493,646 2,456 0.50 % 403,403 1,013 0.25 %
Investment securities 8,695,632 267,406 3.08 % 8,530,863 262,268 3.07 %
Commercial loans, mortgages and leases (1) 26,212,811 1,032,829 3.94 % 20,376,793 827,273 4.06 %
Residential mortgages and consumer loans 297,478 11,235 3.78 % 327,113 12,509 3.82 %
Loans held for sale     305,391   4,572     1.50 %   324,048   3,885   1.20 %
Total interest-earning assets     36,004,958   1,318,498     3.66 %   29,962,220   1,106,948   3.69 %
Non-interest-earning assets     410,764           366,592        
Total assets   $ 36,415,722           30,328,812        
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand $ 3,591,984 16,573 0.46 % 2,208,678 8,961 0.41 %
Money market 15,399,825 94,294 0.61 % 14,109,742 83,314 0.59 %
Time deposits 1,286,775 12,418 0.97 % 969,556 10,630 1.10 %
Non-interest-bearing demand deposits     9,469,240   -     -     8,005,589   -   -  
Total deposits     29,747,824   123,285     0.41 %   25,293,565   102,905   0.41 %
Subordinated debt 180,120 10,202 5.66 % - - -
Other borrowings     2,781,305   36,422     1.31 %   2,109,763   26,942   1.28 %
Total deposits and borrowings     32,709,249   169,909     0.52 %   27,403,328   129,847   0.47 %
Other non-interest-bearing liabilities
and shareholders' equity     3,706,473           2,925,484        
Total liabilities and shareholders' equity   $ 36,415,722           30,328,812        
OTHER DATA
Net interest income / interest rate spread (1) 1,148,589 3.14 % 977,101 3.22 %
Tax-equivalent adjustment (1,347 ) -
Net interest income, as reported 1,147,242   977,101
Net interest margin 3.19 % 3.26 %
Tax-equivalent effect -   -  
Net interest margin on a fully tax-equivalent basis (1) 3.19 % 3.26 %
Ratio of average interest-earning assets
to average interest-bearing liabilities 110.08 % 109.34 %
 
(1) Presented on a tax-equivalent, non-GAAP, 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) tangible common equity ratio, (ii) efficiency ratio (iii) yield on interest-earning assets, tax-equivalent basis, (iv) net interest margin, tax-equivalent basis, and (v) core net interest margin, tax-equivalent basis 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 the tangible common equity ratio calculation:
           
(dollars in thousands except, per ratio)  

December 31,

2016

  September 30,

2016

  December 31,

2015

Consolidated common shareholders' equity $ 3,612,264 3,561,597 2,891,834
Intangible assets     19,640     6,527  

 

1,832  
Consolidated tangible common shareholders' equity (TCE)   $ 3,592,624     3,555,070  

 

2,890,002  
 
Consolidated total assets $ 39,047,611 37,792,320 33,450,545
Intangible assets     19,640     6,527  

 

1,832  
Consolidated tangible total assets (TTA)   $ 39,027,971     37,785,793     33,448,713  
Tangible common equity ratio (TCE/TTA)     9.21 %   9.41 %   8.64 %
 
 
The following table presents the efficiency ratio calculation:
 
Three months ended

December 31,

Twelve months ended

December 31,

      2016     2015     2016     2015  
Non-interest expense (NIE)   $ 95,919     88,431  

 

376,771     341,214  
Net interest income before provision for loan and lease losses 296,816 268,339 1,147,242 977,101
Other non-interest income     10,076     9,345     42,750     37,104  
Total income (TI)   $ 306,892     277,684  

 

1,189,992     1,014,205  
Efficiency ratio (NIE/TI)     31.25 %   31.85 %   31.66 %   33.64 %
 
 
The following table reconciles yield on interest-earning assets to the yield on interest-earning assets on a tax-equivalent basis:
 
Three months ended

December 31,

Twelve months ended

December 31,

      2016     2015     2016     2015  
Interest income (as reported) $ 342,290 302,398

 

1,317,151 1,106,948
Tax-equivalent adjustment     560     -     1,347     -  
Interest income, tax-equivalent basis   $ 342,850     302,398  

 

1,318,498     1,106,948  
Interest-earnings assets   $ 37,734,216     32,306,176     36,004,958     29,962,220  
 
Yield on interest-earning assets 3.61 % 3.71 % 3.66 % 3.69 %
Tax-equivalent effect     -     -     -     -  
Yield on interest-earning assets, tax-equivalent basis     3.61 %   3.71 %   3.66 %   3.69 %
 
 
The following table reconciles net interest margin (as reported) to core net interest margin on a tax-equivalent basis excluding loan prepayment penalty income:
 

Three months ended
December 31,

Three months ended
September 30,

Twelve months ended
December 31,

      2016     2015   2016     2015   2016     2015  
Net interest margin (as reported) 3.13 % 3.30 % 3.13 % 3.22 % 3.19 % 3.26 %
Tax-equivalent adjustment 0.01 % - 0.01 % - - -
Margin contribution from loan prepayment penalty income     (0.08 )%   (0.15 )%   (0.07 )%   (0.11 )%   (0.09 )%   (0.11 )%

Core net interest margin, tax-equivalent basis excluding loan prepayment penalty income

    3.06 %   3.15 %   3.07 %   3.11 %   3.10 %   3.15 %
 

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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