Skip to main content
Investor Relations

Press Release

Signature Bank Reports 2007 Second Quarter Results

Company Release - 7/26/2007 5:00 AM ET

NEW YORK--(BUSINESS WIRE)--

Signature Bank (Nasdaq: SBNY):

    --  Net Income Up 24.3 Percent to $10.2 Million or $0.34 Diluted
        Earnings Per Share Versus $8.2 Million or $0.28 Diluted
        Earnings Per Share in the 2006 Second Quarter

    --  Deposits Reached $4.51 Billion, Growing $539.9 Million in the
        Quarter, which Includes Core Deposit Growth of $160.4 Million
        and an Increase of $379.6 Million in Short-Term Escrow
        Deposits; Average Deposits Increased $364.9 Million for the
        Quarter

    --  Loans Rose $122.4 Million or 7.4 Percent for the Quarter;
        Average Loans During the Quarter Up $137.7 Million, or 8.6
        Percent

    --  Net Interest Margin Expands 12 Basis Points to 2.95 Percent,
        on a Linked Quarter Basis; 8 Basis Points Attributable to
        Short-Term Escrow Deposits

    --  Two Private Client Banking Teams Joined During the Quarter and
        Another in July 2007; 20th and 21st Locations to Open in the
        Second Half of 2007

Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its 2007 second quarter ended June 30, 2007.

Net income for the quarter increased to $10.2 million or $0.34 diluted earnings per share, up 24.3 percent when compared with $8.2 million or $0.28 diluted earnings per share reported in the 2006 second quarter. The growth in net income is primarily attributable to expanding net interest margins resulting from across the board increases in core deposits, short-term escrow deposits and loans.

Net interest income totaled $36.8 million for the quarter, an increase of $7.2 million or 24.3 percent from the same period last year. Total assets reached $5.71 billion, representing a $1.01 billion increase or 21.4 percent over the $4.7 billion reported at the end of the 2006 second quarter.

Deposits for the second quarter increased $539.9 million, totaling $4.51 billion at June 30, 2007. This includes core deposit growth of $160.4 million, coupled with an increase of $379.6 million in short-term escrow deposits. Excluding short-term escrow deposits of $550.3 million at December 31, 2006 and $501.6 million at June 30, 2007, core deposits increased $344.7 million in the first six months of 2007. When compared with deposits at June 30, 2006, the overall deposit growth represents an increase of $792.3 million or 21.3 percent.

"Our story remains consistent and positive. Each quarter we have delivered deposit, loan and earnings growth by sticking to our core philosophy - offering privately owned businesses that are often underserved by today's mega banks a single point of contact to meet all their needs," noted Joseph J. DePaolo, President and Chief Executive Officer.

"We continue to carefully implement our focused strategy and carry out our plan while the industry faces uncertainty. The changing industry and rapid consolidation simply creates opportunity for us by strengthening our ability to attract top bankers and high-quality clients. Since the beginning of this year, a total of five teams joined the Bank. Bankers are fast-recognizing that mega-banks no longer offer an appropriate platform for personally serving clients. At Signature Bank, we afford bankers the autonomy and freedom necessary to cultivate and maintain long-lasting client relationships. As bankers understand our structure, they are actually the ones spreading the word about Signature Bank, which is helping us to quickly expand our network and client base," DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: "We have carefully calibrated our asset liability management in this challenging yield curve environment to expand our net interest margin. Our commitment to staying focused on the successful execution of our business plan is clearly paying off, as evidenced by the impact of our bankers' efforts on our financial performance, and the steady, solid results we deliver with each passing quarter."

Net Interest Income

Net interest income for the second quarter 2007 was $36.8 million, an increase of $7.2 million, or 24.3 percent, from the same quarter a year ago. Average interest-earning assets for the second quarter of 2007 increased $771.7 million, which reflects an 18.3 percent increase from the second quarter 2006. Asset yields for the second quarter of 2007 grew 51 basis points to 5.91 percent, versus the second quarter of 2006, due to higher short-term rates, more favorable market conditions and an increase in loans as a percentage of average interest-earning assets. Average cost of funds and deposits for the 2007 second quarter increased by 38 and 44 basis points to 3.05 and 2.73 percent, respectively, versus the comparable quarter last year. The increase in the cost of funds and deposits is reflective of the competitive marketplace.

The net interest margin for the second quarter of 2007 rose 14 basis points to 2.95 percent, compared with the same period last year. On a linked quarter basis, net interest margin grew 12 basis points. This increase largely reflects the benefits of the increase in short-term escrows received during the latter portion of the quarter. Excluding the effects of the short-term escrow deposits, core net interest margin increased approximately four basis points from the linked quarter. This core margin expansion was driven by the benefits from the continued improvement in the average loan to average earning asset mix as well as the growth in core deposits.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2007 second quarter was $7.4 million, an increase of $2.3 million or 45.1 percent, versus $5.1 million reported in the comparable period last year. This was largely the result of commissions associated with off-balance sheet escrow deposits as well as an increase in fees and service charges related to client expansion.

Non-interest expense for the second quarter of 2007 was $25.1 million, compared with $19.3 million reported for the 2006 second quarter. This increase was primarily due to the addition of new private client banking teams and locations as well as increased growth in client activity, including the operating expense associated with short-term escrow deposits.

The Bank's efficiency ratio was at 56.8 percent for second quarter 2007, versus 55.7 percent for the 2006 second quarter, up slightly due to the growth in salaries and benefits arising from the addition of new private client banking teams. On a linked quarter basis, the Bank's efficiency ratio improved to 56.8 percent from 57.5 percent.

Loans

During the 2007 second quarter, loans, excluding loans held for sale, increased $122.4 million or 7.4 percent to $1.79 billion at June 30, 2007, compared with $1.67 billion at March 31, 2007. At June 30, 2007, loans to total assets were at 31.3 percent, versus 32.1 percent at the end of the 2007 first quarter. The decrease is due to the significant rise in total assets, driven by the increase in short-term escrow deposits for the 2007 second quarter. Average loans, excluding loans held for sale, for the 2007 second quarter increased $137.7 million, or 8.6 percent, to $1.74 billion.

Loans held for sale were $138.5 million as of June 30, 2007, a decrease of $14.2 million or 9.3 percent from March 31, 2007. Periodic fluctuations of loans held for sale are predominantly due to the timing of SBA loan purchases and subsequent pool sales.

At June 30, 2007, non-performing loans decreased to $2.6 million from $5.7 million at March 31, 2007, representing 0.14 percent of total loans. A previously reported non-performing loan was charged off in the amount of $3.4 million. At June 30, 2007, the allowance for loan losses to total loans was at 0.68 percent and the allowance for loan losses to total non-performing loans was 478.8 percent.

Capital

Signature Bank's capital ratios remain strong. The Bank's tier 1 risk-based, total risk-based and leverage capital ratios were approximately 15.43 percent, 15.86 percent and 8.21 percent, respectively, as of June 30, 2007, well in excess of regulatory requirements. The ratios reflect the relatively low risk profile of the balance sheet.

Conference Call

Signature Bank's management will host a conference call to review results of the 2007 second quarter on Thursday, July 26, 2007, at 10:00 AM ET. Participants should dial 800-257-3401 at least ten minutes prior to the start of the call. International callers should dial 303-262-2141.

To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Bank's web site at www.signatureny.com, click on the "Investor Relations" tab, then select "Company News," followed by "Conference Calls," to access the link to the call. To listen to a telephone replay of the conference call, please dial 303-590-3000 and enter reservation identification number 11093190. The replay will be available from approximately 12:00 PM ET on Thursday, July 26, 2007, through 11:59 PM ET on Tuesday, July 31, 2007.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 19 private client offices located in the New York metropolitan area, serving the needs of privately owned businesses, their owners and senior managers through dozens of private client groups. The Bank offers a wide variety of business and personal banking products and services as well as investment, brokerage, asset management and insurance products and services through its subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member NASD/SIPC.

Signature Bank's 19 offices are located throughout the metropolitan New York area. In Manhattan - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South and 1020 Madison Avenue. Brooklyn - 26 Court Street and 84 Broadway. Westchester - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 58 South Service Road, Melville; 923 Broadway, Woodmere and 40 Cuttermill Road in Great Neck. Queens - 36-36 33rd Street, Long Island City and 78-27 37th Avenue, Jackson Heights. Bronx - 421 Hunts Point Avenue, Bronx.

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. Forward-looking statements include information concerning our future results, interest rates, loan and deposit growth, operations, new private client team hires, new office openings and business strategy. These statements often include words such as "may," "believe," "expect," "anticipate," "intend," "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, which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance; (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; and (iv) competition for qualified personnel and desirable office locations. 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.

                     - FINANCIAL TABLES ATTACHED -
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

                               Three months ended   Six months ended
                                    June 30,            June 30,
                               ---------------------------------------
(dollars in thousands, except
 per share amounts)                 2007      2006      2007      2006
----------------------------------------------------------------------
INTEREST AND DIVIDEND INCOME
Loans held for sale               $1,429       917     2,732     2,164
Loans, net                        33,101    21,279    63,098    39,966
Securities available-for-sale     34,380    30,076    68,551    59,899
Securities held-to-maturity        3,786     3,978     7,622     7,941
Other short-term investments       1,005       621     1,474       963
----------------------------------------------------------------------
   Total interest income          73,701    56,871   143,477   110,933
----------------------------------------------------------------------
INTEREST EXPENSE
Deposits                          27,494    19,082    51,661    35,866
Federal funds purchased and
 securities sold under
 agreements to repurchase          6,396     4,667    14,258     9,080
Federal Home Loan Bank
 advances                          2,838     2,767     6,088     6,045
Other short-term borrowings          211       781       993     1,251
----------------------------------------------------------------------
   Total interest expense         36,939    27,297    73,000    52,242
----------------------------------------------------------------------
Net interest income before
 provision for loan losses        36,762    29,574    70,477    58,691
Provision for loan losses          1,828       973     3,147     1,888
----------------------------------------------------------------------
Net interest income after
 provision for loan losses        34,934    28,601    67,330    56,803
----------------------------------------------------------------------
NON-INTEREST INCOME
Commissions                        3,009     1,772     5,964     3,415
Fees and service charges           3,095     2,287     5,812     4,655
Net gains on sales of
 securities and loans                702       517     1,274       879
Other income                         585       518     1,184       989
----------------------------------------------------------------------
   Total non-interest income       7,391     5,094    14,234     9,938
----------------------------------------------------------------------
NON-INTEREST EXPENSE
Salaries and benefits             14,941    12,150    29,008    23,830
Occupancy and equipment            2,547     2,104     4,938     4,203
Other general and
 administrative                    7,612     5,068    14,491    10,750
----------------------------------------------------------------------
   Total non-interest expense     25,100    19,322    48,437    38,783
----------------------------------------------------------------------
Income before income taxes        17,225    14,373    33,127    27,958
Income tax expense                 6,980     6,134    13,563    11,762
----------------------------------------------------------------------
Net income                       $10,245     8,239    19,564    16,196
----------------------------------------------------------------------
PER COMMON SHARE DATA
Earnings per share - basic         $0.35      0.28      0.66      0.55
Earnings per share - diluted       $0.34      0.28      0.65      0.54
SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                           June 30,      December 31,
                                             2007            2006
(dollars in thousands, except per        (unaudited)
 share amounts)
----------------------------------------------------------------------
ASSETS
Cash and due from banks                       $148,946         150,227
Short-term investments                         342,721         320,594
----------------------------------------------------------------------
     Total cash and cash equivalents           491,667         470,821
----------------------------------------------------------------------
Securities available-for-sale (pledged
 $1,485,284 at June 30, 2007 and
 $1,529,241 at December 31, 2006)            2,780,621       2,654,605
Securities held-to-maturity (fair
 market value $336,401 at June 30,
 2007 and $373,541 at December 31,
 2006; pledged $217,889 at June 30,
 2007 and $269,387 at December 31,
 2006)                                         344,523         381,728
Federal Home Loan Bank stock                    16,037          16,961
Loans held for sale                            138,518         125,978
Loans, net                                   1,775,365       1,563,789
Premises and equipment, net                     23,581          22,221
Accrued interest and dividends
 receivable                                     32,406          29,338
Other assets                                   108,381         133,984
----------------------------------------------------------------------
     Total assets                           $5,711,099       5,399,425
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
  Non-interest-bearing                       1,526,503       1,586,440
  Interest-bearing                           2,980,626       2,624,719
----------------------------------------------------------------------
     Total deposits                          4,507,129       4,211,159
----------------------------------------------------------------------
Federal funds purchased and securities
 sold under agreements to repurchase           517,000         467,000
Federal Home Loan Bank advances                225,000         260,000
Other short-term borrowings                      2,498           6,687
Accrued expenses and other liabilities          51,827          61,981
----------------------------------------------------------------------
     Total liabilities                       5,303,454       5,006,827
----------------------------------------------------------------------
Shareholders' equity
Preferred stock, par value $.01;
 61,000,000 shares authorized and
 unissued at June 30, 2007 and
 December 31, 2006                                   -               -
Common stock, par value $.01;
 64,000,000 shares authorized;
 29,687,246 and 29,598,107 shares
 issued and outstanding at June 30,
 2007 and December 31, 2006                        297             296
Additional paid-in capital                     368,829         366,715
Retained earnings                               65,727          46,163
Accumulated other comprehensive loss:

  Net unrealized depreciation on
   securities available-for-sale, net
   of tax                                     (27,208)        (20,576)
----------------------------------------------------------------------
     Total shareholders' equity                407,645         392,598
----------------------------------------------------------------------
     Total liabilities and
      shareholders' equity                  $5,711,099       5,399,425
----------------------------------------------------------------------
SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)

                               Three months ended   Six months ended
                               ---------------------------------------
(dollars in thousands, except  June 30,  June 30,  June 30,  June 30,
 ratios and per share amounts)   2007      2006      2007      2006
----------------------------------------------------------------------
PER SHARE
Net income - basic                $0.35     $0.28     $0.66     $0.55
Net income - diluted              $0.34     $0.28     $0.65     $0.54
Average shares outstanding -
 basic                           29,679    29,459    29,652    29,427
Average shares outstanding -
 diluted                         30,024    29,874    30,004    29,840
Book value                       $13.73    $12.07    $13.73    $12.07

SELECTED FINANCIAL DATA
Return on average total assets     0.78%     0.74%     0.76%     0.73%
Return on average
 shareholders' equity             10.08%     9.39%     9.86%     9.34%
Efficiency ratio                  56.85%    55.73%    57.18%    56.51%
Yield on interest-earning
 assets                            5.91%     5.40%     5.89%     5.31%
Cost of deposits and
 borrowings                        3.05%     2.67%     3.09%     2.59%
Net interest margin                2.95%     2.81%     2.89%     2.81%


                               June 30,  March 31, Dec. 31,  June 30,
                                 2007      2007      2006      2006
----------------------------------------------------------------------
CAPITAL RATIOS
Tier one leverage                  8.21%     8.20%     8.41%     8.45%
Tier one risk-based               15.43%    16.74%    16.18%    17.44%
Total risk-based                  15.86%    17.31%    16.73%    17.97%

ASSET QUALITY
Non-performing loans             $2,556    $5,706    $8,756    $8,891
Allowance for loan losses       $12,238   $14,270   $13,829   $11,696
Allowance for loan losses to
 non-performing loans            478.79%   250.09%   157.94%   131.55%
Allowance for loan losses to
 total loans                       0.68%     0.86%     0.88%     0.93%
Non-performing loans to total
 loans                             0.14%     0.34%     0.56%     0.71%
Quarterly net charge-offs to
average loans (annualized)         0.89%     0.22%     0.01%     0.03%
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)

                   Three months ended          Three months ended
                      June 30, 2007               June 30, 2006
               -------------------------------------------------------
(dollars in               Interest Average            Interest Average
 thousands)     Average   Income/  Yield/   Average   Income/  Yield/
                Balance   Expense   Rate    Balance   Expense   Rate
----------------------------------------------------------------------
INTEREST-
 EARNING
 ASSETS
Short-term
 investments      $46,577      680   5.86%    $30,700      398   5.20%
Investment
 securities     3,124,679   38,491   4.93%  2,998,116   34,277   4.57%
Commercial
 loans and
 commercial
 mortgages      1,449,036   27,241   7.54%    926,785   16,993   7.35%
Residential
 mortgages        170,781    2,412   5.65%     83,024    1,135   5.47%
Consumer loans    120,410    3,448  11.49%    131,606    3,151   9.60%
Loans held for
 sale              88,323    1,429   6.49%     57,859      917   6.36%
----------------------------------------------------------------------
Total
 interest-
 earning
 assets         4,999,806   73,701   5.91%  4,228,090   56,871   5.40%
----------------------------------------------------------------------
Non-interest-
 earning
 assets           284,149                     240,318
----------------------------------------------------------------------
Total assets   $5,283,955                  $4,468,408
----------------------------------------------------------------------
INTEREST-
 BEARING
 LIABILITIES
Interest-
 bearing
 deposits
 NOW and
  interest-
  bearing
  checking        296,918    1,462   1.97%    228,720      821   1.44%
 Money market
  accounts      2,126,069   21,753   4.10%  1,808,930   15,536   3.44%
 Time deposits    348,623    4,279   4.92%    262,133    2,725   4.17%
Non-interest-
 bearing
 deposits       1,270,353        -       -  1,042,804        -       -
----------------------------------------------------------------------
Total deposits  4,041,963   27,494   2.73%  3,342,587   19,082   2.29%
----------------------------------------------------------------------
Borrowings        813,381    9,445   4.66%    752,869    8,215   4.38%
----------------------------------------------------------------------
Total deposits
 and
 borrowings     4,855,344   36,939   3.05%  4,095,456   27,297   2.67%
----------------------------------------------------------------------

Other non-
 interest-
 bearing
 liabilities
 and
 shareholders'
 equity           428,611                     372,952
----------------------------------------------------------------------
Total
 liabilities
 and
 shareholders'
 equity        $5,283,955                  $4,468,408
----------------------------------------------------------------------
OTHER DATA
Net interest
 income /
 interest rate
 spread                     36,762   2.86%              29,574   2.73%
----------------------------------------------------------------------
Net interest
 margin                              2.95%                       2.81%
----------------------------------------------------------------------

Ratio of
 average
 interest-
 earning
 assets to
 average
 interest-
 bearing
 liabilities                       102.98%                     103.24%
----------------------------------------------------------------------
SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)

                    Six months ended            Six months ended
                      June 30, 2007               June 30, 2006
               -------------------------------------------------------
(dollars in     Average   Interest Average  Average   Interest Average
 thousands)     Balance   Income/  Yield/   Balance   Income/  Yield/
                          Expense   Rate              Expense   Rate
----------------------------------------------------------------------
INTEREST-
 EARNING
 ASSETS
Short-term
 investments      $29,275      829   5.71%    $19,367      491   5.11%
Investment
 securities     3,130,110   76,818   4.91%  3,031,035   68,312   4.51%
Commercial
 loans and
 commercial
 mortgages      1,379,631   51,603   7.54%    883,388   31,544   7.20%
Residential
 mortgages        170,011    4,795   5.64%     78,392    2,098   5.35%
Consumer loans    122,129    6,700  11.06%    131,374    6,324   9.71%
Loans held for
 sale              84,655    2,732   6.51%     67,814    2,164   6.44%
----------------------------------------------------------------------
Total
 interest-
 earning
 assets         4,915,811  143,477   5.89%  4,211,370  110,933   5.31%
----------------------------------------------------------------------
Non-interest-
 earning
 assets           302,252                     241,643
----------------------------------------------------------------------
Total assets   $5,218,063                  $4,453,013
----------------------------------------------------------------------
INTEREST-
 BEARING
 LIABILITIES
Interest-
 bearing
 deposits
NOW and
 interest-
 bearing
 checking         283,902    2,741   1.95%    221,568    1,504   1.37%
Money market
 accounts       1,999,790   40,329   4.07%  1,763,860   28,518   3.26%
Time deposits     353,713    8,591   4.90%    292,145    5,844   4.03%
Non-interest-
 bearing
 deposits       1,223,099        -       -  1,023,244        -       -
----------------------------------------------------------------------
Total deposits  3,860,504   51,661   2.70%  3,300,817   35,866   2.19%
----------------------------------------------------------------------
Borrowings        903,873   21,339   4.76%    773,487   16,376   4.27%
----------------------------------------------------------------------
Total deposits
 and
 borrowings     4,764,377   73,000   3.09%  4,074,304   52,242   2.59%
----------------------------------------------------------------------

Other non-
 interest-
 bearing
 liabilities
 and
 shareholders'
 equity           453,686                     378,709
----------------------------------------------------------------------
Total
 liabilities
 and
 shareholders'
 equity        $5,218,063                  $4,453,013
----------------------------------------------------------------------
OTHER DATA
Net interest
 income /
 interest rate
 spread                     70,477   2.80%              58,691   2.72%
----------------------------------------------------------------------
Net interest
 margin                              2.89%                       2.81%
----------------------------------------------------------------------

Ratio of
 average
 interest-
 earning
 assets to
 average
 interest-
 bearing
 liabilities                       103.18%                     103.36%
----------------------------------------------------------------------

Source: Signature Bank

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