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Signature Bank Reports 2022 First Quarter Results

Company Release - 04/19/2022
  • Net Income for the 2022 First Quarter Increased $148.0 Million to a Record $338.5 Million, or $5.30 Diluted Earnings Per Share, Versus $190.5 Million, or $3.24 Diluted Earnings Per Share, Reported in the 2021 First Quarter. Pre-Tax, Pre-Provision Earnings for the 2022 First Quarter Were a Record $414.6 Million, an Increase of $141.8 Million, or 52.0 Percent, Compared with $272.8 Million for the 2021 First Quarter
  • Total Deposits in the First Quarter Grew $3.02 Billion, to $109.16 Billion, While Average Deposits Increased $5.28 Billion. Total Deposits for the Prior Twelve Months Have Grown $35.18 Billion, or 47.6 Percent
  • For the 2022 First Quarter, Loans Increased $1.54 Billion, or 2.4 Percent, to $66.40 Billion. Core Loans (Excluding Paycheck Protection Program Loans) for the Quarter Increased $1.90 Billion. Since the End of the 2021 First Quarter, Core Loans Have Increased 36.6 Percent, or $17.65 Billion
  • Total Securities in the First Quarter Grew a Record $4.09 Billion, to $26.24 Billion. Total Securities for the Prior Twelve Months Have Grown $13.01 Billion, or 98.3 Percent
  • For the 2022 First Quarter, Non-Accrual Loans Decreased $40.5 Million to $177.8 Million, or 0.27 Percent of Total Loans, at March 31, 2022, Versus $218.3 Million, or 0.34 Percent, at the End of the 2021 Fourth Quarter and $133.7 Million, or 0.26 Percent, at the End of the 2021 First Quarter
  • Net Interest Margin on a Tax-Equivalent Basis was 1.99 Percent, Compared With 1.91 Percent for the 2021 Fourth Quarter and 2.10 Percent for the 2021 First Quarter. Significant Excess Cash Balances From Continued Strong Deposit Flows Negatively Impacted Net Interest Margin by 36 Basis Points
  • Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 7.74 Percent, 10.49 Percent, 11.37 Percent, and 12.58 Percent, Respectively, at March 31, 2022. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.12 Percent
  • During the 2022 First Quarter, the Bank Raised $731.7 Million in a Public Offering of Common Stock
  • The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After May 13, 2022 to Common Shareholders of Record at the Close of Business on April 29, 2022. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After June 30, 2022 to Preferred Shareholders of Record at the Close of Business on June 17, 2022
  • Since the End of the 2022 First Quarter, the Bank On-boarded One Private Client Banking Team in New York, Three Teams in Central California, and Two Teams in Reno, Nevada, Which Marks the Bank's Entry into the State

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its first quarter ended March 31, 2022.

Net income for the 2022 first quarter was $338.5 million, or $5.30 diluted earnings per share, versus $190.5 million, or $3.24 diluted earnings per share, for the 2021 first quarter. The increase in net income of $148.0 million for the 2022 first quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong average deposit, securities and loan growth, as well as a higher provision for credit losses booked in the first quarter of 2021, which was predominantly due to the effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision earnings were $414.6 million, representing an increase of $141.8 million, or 52.0 percent, compared with $272.8 million for the 2021 first quarter.

Net interest income for the 2022 first quarter rose $167.1 million, or 41.1 percent to $573.6 million, when compared with the first quarter of 2021. This increase is primarily due to growth in average interest-earning assets. Total assets reached $121.85 billion at March 31, 2022, expanding $36.47 billion, or 42.7 percent, from $85.38 billion at March 31, 2021. Average assets for the 2022 first quarter reached $118.58 billion, an increase of $38.86 billion, or 48.7 percent, versus the comparable period a year ago.

Deposits for the 2022 first quarter increased $3.02 billion, or 2.8 percent, to $109.16 billion, including non-interest bearing deposit growth of $2.36 billion. Non-interest bearing deposits now represent 42.8 percent of total deposits. Overall deposit growth for the last twelve months was 47.6 percent, or $35.18 billion, when compared with deposits at March 31, 2021. Average deposits for the 2022 first quarter reached $105.87 billion, an increase of $5.28 billion when compared with the prior quarter.

"Signature Bank continues to prove its earnings power as we drive both profitability and efficiency at a rapid pace, while expanding the balance sheet and maintaining a robust risk management discipline. This is exhibited by the increase in net income of 77.7 percent year-over-year along with continued improvement in our efficiency ratio, both of which were propelled by a 38.4 percent revenue increase. We are just beginning to realize the benefits of our transformed, asset sensitive balance sheet. We expect this will further accelerate our revenue growth amid a higher rate environment. Additionally, we have remained patient and purposeful in the prudent deployment of excess cash by not chasing rate, which is proving to be advantageous,” explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

“Our successes to date stem from the business plan we created more than 20 years ago, which continues to thrive. The most critical component of our strategy has been selecting the right colleagues when attracting teams and cultivating new businesses. Since our founding, we consistently applied precision and exercised discipline in our approach and cherry-picked the very best bankers available in our marketplace. To this end, we already successfully on-boarded six teams since the end of the first quarter, and are seeing a robust pipeline for additional teams. Furthermore, we significantly enhanced our Signet offering with the introduction of wire API and look forward to the launching of a new commercial lending vertical that will soon follow,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “During this time of many rapid inflection points throughout our economy, from supply chain disruptions, labor shortages, interest rates and dramatic changes in regulatory policies to the Ukraine war, clients appreciate more than ever the trusted banker they have in Signature Bank. Signature Bank differentiates itself by allowing bankers to spend the time helping our clients better navigate these uncertain times. While no one welcomes such tumultuous times, when they do occur, our single-point-of-contact model truly shines for our clients."

“Concurrently, we remain focused on helping clients with their pressing short-term matters and highly attentive to long-term changes in the financial service landscape. To this end, our expanded Signet™ capabilities permitting seamless wire transfer access demonstrates our nimbleness. The payment transfer market is constantly evolving, and we intend to continue to lead the way, just as we did when we were the first Bank to introduce a real-time blockchain-based payments platform,” Shay concluded.

Net Interest Income

Net interest income for the 2022 first quarter was $573.6 million, up $167.1 million, or 41.1 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $117.45 billion for the 2022 first quarter represent an increase of $38.71 billion, or 49.2 percent, from the 2021 first quarter. Due to the current low interest rate environment, the yield on interest-earning assets for the 2022 first quarter fell 32 basis points to 2.22 percent, compared with the first quarter of last year.

Average cost of deposits and average cost of funds for the first quarter of 2022 decreased by 16 and 22 basis points, to 0.18 percent and 0.25 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2022 first quarter was 1.99 percent versus 2.10 percent reported in the 2021 first quarter and 1.91 percent in the 2021 fourth quarter. The 2022 first quarter net interest margin was negatively affected by 36 basis points due to significant excess cash balances driven by continued strong deposit growth.

Provision for Credit Losses

The Bank’s provision for credit losses for the first quarter of 2022 was $2.7 million, a decrease of $28.2 million, or 91.3 percent, versus the 2021 first quarter. The decrease in the Bank’s provision for credit losses for the 2022 first quarter was predominantly attributable to improved macroeconomic conditions compared with the same period last year.

Net charge-offs for the 2022 first quarter were $17.8 million, or 0.11 percent of average loans, on an annualized basis, versus $33.7 million, or 0.22 percent, for the 2021 fourth quarter and net charge-offs of $17.9 million, or 0.15 percent, for the 2021 first quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2022 first quarter was $34.4 million, up $1.7 million from $32.7 million reported in the first quarter of last year. The increase was primarily driven by a $5.8 million increase in fees and service charges, partially offset by a $4.0 million decrease in net gains on sales of securities and loans.

Non-interest expense for the first quarter of 2022 was $193.4 million, an increase of $27.0 million, or 16.2 percent, versus $166.4 million reported in the 2021 first quarter. The increase was predominantly due to an increase of $21.0 million in salaries and benefits from the significant hiring of private client banking teams and operational support to meet the Bank's growing needs.

The Bank’s efficiency ratio improved to 31.8 percent for the 2022 first quarter compared with 37.9 percent for the same period a year ago, and 32.3 percent for the fourth quarter of 2021.

Income Taxes

Income tax expense for the first quarter of 2022 included one-time tax benefits totaling $41.6 million, mostly related to the vesting of employee stock based compensation awards at a price significantly higher than the fair market value at the time of grant. These tax benefits lowered the Bank's effective tax rate for the first quarter of 2022 to 17.8 percent compared with 21.2 percent for the same period a year ago, and 28.1 percent for the fourth quarter of 2021.

Loans

Loans, excluding loans held for sale, expanded $1.54 billion, or 2.4 percent, during the 2022 first quarter to $66.40 billion, versus $64.86 billion at December 31, 2021. Core loans (excluding Paycheck Protection Program loans) increased $1.90 billion, or 3.0 percent, during the 2022 first quarter to $65.93 billion, versus $64.03 billion at December 31, 2021. Average loans, excluding loans held for sale, reached $65.10 billion in the 2022 first quarter, growing $4.60 billion, or 7.6 percent, from the 2021 fourth quarter and $15.74 billion, or 31.9 percent, from the first quarter of 2021.

At March 31, 2022, non-accrual loans were $177.8 million, representing 0.27 percent of total loans and 0.15 percent of total assets, compared with non-accrual loans of $218.3 million, or 0.34 percent of total loans, at December 31, 2021 and $133.7 million, or 0.26 percent of total loans, at March 31, 2021. At March 31, 2022, the ratio of allowance for credit losses for loans and leases to total loans was 0.69 percent, versus 0.73 percent at December 31, 2021 and 1.02 percent at March 31, 2021. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 259 percent for the 2022 first quarter versus 217 percent for the fourth quarter of 2021 and 390 percent for the 2021 first quarter.

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 7.74 percent, 10.49 percent, 11.37 percent, and 12.58 percent, respectively, as of March 31, 2022. 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 6.12 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. During the quarter, the Bank raised $731.7 million in a public offering of common equity.

The Bank declared a cash dividend of $0.56 per share, payable on or after May 13, 2022 to common stockholders of record at the close of business on April 29, 2022. The Bank also declared a cash dividend of $12.50 per share payable on or after June 30, 2022 to preferred stockholders of record at the close of business on June 17, 2022. In the first quarter of 2022, the Bank paid a cash dividend of $0.56 per share to common shareholders of record at the close of business on January 28, 2022. The Bank also paid a cash dividend of $12.50 per share to preferred shareholders of record at the close of business on March 18, 2022.

Conference Call

Signature Bank’s management will host a conference call to review results of the 2022 first quarter on Tuesday, April 19, 2022 at 9:00 AM ET. All participants should dial 866-342-8591 and international callers should dial 203-518-9713 at least ten minutes prior to the start of the call and reference conference ID SBNYQ122.

To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Bank’s website at www.signatureny.com, click on “Investor Information,”"Quarterly Results/Conference Calls" to access the link to the call.

An earnings slide presentation will be accessible through the web cast and available following the call on the Signature Bank’s website here.

To listen to a telephone replay of the conference call, please dial 800-723-1517 or 402-220-2659 and enter conference ID SBNYQ122. The replay will be available from approximately 12:00 PM ET on Tuesday, April 19, 2022 through 11:59 PM ET on Friday, April 22, 2022.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 38 private client offices throughout the metropolitan New York area, as well as those in Connecticut, California and North Carolina. Through its single-point-of-contact approach, the Bank’s private client banking teams primarily serve the needs of privately owned businesses, their owners and senior managers. The Bank has two wholly owned subsidiaries: Signature Financial, LLC, provides equipment finance and leasing: Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC, offers investment, brokerage, asset management and insurance products and services. Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform. Signet™ allows commercial clients to make real-time payments in U.S. dollars, 24/7/365 and was also the first solution to be approved for use by the NYS Department of Financial Services.

Signature Bank placed 19th on S&P Global’s list of the largest banks in the U.S., based on deposits.

For more information, please visit https://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 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 expectations regarding future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams hires, new office openings, business strategy and the impact of the COVID-19 pandemic on each of the foregoing and on our business overall. Forward looking statements often include words such as "may," "believe," "expect," "anticipate," "intend," “potential,” “opportunity,” “could,” “project,” “seek,” “target,” “goal,” “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, (vi) our ability to maintain the continuity, integrity, security and safety of our operations and (vii) competition for qualified personnel and desirable office locations. All of these factors are subject to additional uncertainty in the context of the COVID-19 pandemic and the conflict in Ukraine, which are having impacts on all aspects of our operations, the financial services industry and the economy as a whole. Additional risks are described in our quarterly and annual reports filed with the FDIC. 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. 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.

FINANCIAL TABLES ATTACHED

SIGNATURE BANK

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

 

 

 

 

Three months ended March 31,

(dollars in thousands, except per share amounts)

 

2022

2021

INTEREST INCOME

 

 

Loans and leases

$

531,994

428,981

Loans held for sale

 

1,434

580

Securities available-for-sale

 

74,245

41,875

Securities held-to-maturity

 

18,815

12,962

Other investments

 

15,677

7,144

Total interest income

 

642,165

491,542

INTEREST EXPENSE

 

 

Deposits

 

46,040

57,504

Federal funds purchased and securities sold under agreements to repurchase

 

589

602

Federal Home Loan Bank borrowings

 

15,818

17,128

Subordinated debt

 

6,159

9,801

Total interest expense

 

68,606

85,035

Net interest income before provision for credit losses

 

573,559

406,507

Provision for credit losses

 

2,695

30,872

Net interest income after provision for credit losses

 

570,864

375,635

NON-INTEREST INCOME

 

 

Fees and service charges

 

22,690

16,930

Commissions

 

4,241

4,003

Net losses on sales of securities

 

(816)

Net gains on sale of loans

 

3,842

7,061

Other income

 

4,447

4,707

Total non-interest income

 

34,404

32,701

NON-INTEREST EXPENSE

 

 

Salaries and benefits

 

127,021

106,051

Occupancy and equipment

 

12,030

11,773

Information technology

 

14,556

11,481

FDIC assessment fees

 

8,088

5,725

Professional fees

 

9,438

5,142

Other general and administrative

 

22,247

26,219

Total non-interest expense

 

193,380

166,391

Income before income taxes

 

411,888

241,945

Income tax expense

 

73,354

51,412

Net income

$

338,534

190,533

Preferred stock dividends

 

9,125

10,512

Net income available to common shareholders

$

329,409

180,021

PER COMMON SHARE DATA

 

 

Earnings per common share - basic

$

5.34

3.27

Earnings per common share - diluted

$

5.30

3.24

Dividends per common share

$

0.56

0.56

SIGNATURE BANK

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

March 31,
2022

December 31,
2021

(dollars in thousands, except shares and per share amounts)

(unaudited)

 

ASSETS

 

 

Cash and due from banks

$

26,220,547

 

29,547,574

 

Short-term investments

 

103,740

 

73,097

 

Total cash and cash equivalents

 

26,324,287

 

29,620,671

 

Securities available-for-sale (amortized cost $20,781,803 at March 31, 2022

and $17,398,906 at December 31, 2021); (zero allowance for credit losses

at March 31, 2022 and December 31, 2021)

 

19,693,035

 

17,152,863

 

Securities held-to-maturity (fair value $6,227,551 at March 31, 2022

and $4,944,777 at December 31, 2021); (allowance for credit losses $46 at

March 31, 2022 and $56 at December 31, 2021)

 

6,550,691

 

4,998,281

 

Federal Home Loan Bank stock

 

158,916

 

166,697

 

Loans held for sale

 

703,008

 

386,765

 

Loans and leases

 

66,403,705

 

64,862,798

 

Allowance for credit losses for loans and leases

 

(461,275

)

(474,389

)

Loans and leases, net

 

65,942,430

 

64,388,409

 

Premises and equipment, net

 

98,937

 

92,232

 

Operating lease right-of-use assets

 

232,195

 

225,988

 

Accrued interest and dividends receivable

 

337,611

 

306,827

 

Other assets

 

1,806,192

 

1,106,694

 

Total assets

$

121,847,302

 

118,445,427

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Deposits

 

 

Non-interest-bearing

$

46,723,546

 

44,363,215

 

Interest-bearing

 

62,431,559

 

61,769,579

 

Total deposits

 

109,155,105

 

106,132,794

 

Federal funds purchased and securities sold under agreements to repurchase

 

150,000

 

150,000

 

Federal Home Loan Bank borrowings

 

2,449,517

 

2,639,245

 

Subordinated debt

 

570,575

 

570,228

 

Operating lease liabilities

 

260,818

 

254,660

 

Accrued expenses and other liabilities

 

1,088,126

 

857,882

 

Total liabilities

 

113,674,141

 

110,604,809

 

Shareholders' equity

 

 

Preferred stock, par value $.01 per share; 61,000,000 shares authorized;

730,000 shares issued and outstanding at March 31, 2022 and December 31, 2021

 

7

 

7

 

Common stock, par value $.01 per share; 125,000,000 shares authorized;

63,200,942 shares issued and 63,065,118 outstanding at March 31, 2022;

60,729,674 shares issued and 60,631,944 outstanding at December 31, 2021

 

629

 

606

 

Additional paid-in capital

 

4,509,080

 

3,763,810

 

Retained earnings

 

4,592,691

 

4,298,527

 

Accumulated other comprehensive loss

 

(929,246

)

(222,332

)

Total shareholders' equity

 

8,173,161

 

7,840,618

 

Total liabilities and shareholders' equity

$

121,847,302

 

118,445,427

 

SIGNATURE BANK

FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY

(unaudited)

 

Three months ended

(in thousands, except ratios and per share amounts)

March 31,
2022

December 31,
2021

March 31,
2021

PER COMMON SHARE

 

 

 

Earnings per common share - basic

$

5.34

$

4.38

$

3.27

Earnings per common share - diluted

$

5.30

$

4.34

$

3.24

Weighted average common shares outstanding - basic

 

61,670

 

60,003

 

54,998

Weighted average common shares outstanding - diluted

 

62,125

 

60,563

 

55,531

Book value per common share

$

118.37

$

117.63

$

102.69

 

 

 

 

SELECTED FINANCIAL DATA

 

 

 

Return on average total assets

 

1.16 %

 

0.96 %

 

0.97 %

Return on average common shareholders' equity

 

17.44 %

 

14.76 %

 

13.02 %

Efficiency ratio (1)

 

31.81 %

 

32.31 %

 

37.88 %

Yield on interest-earning assets

 

2.21 %

 

2.15 %

 

2.53 %

Yield on interest-earning assets, tax-equivalent basis (1)(2)

 

2.22 %

 

2.16 %

 

2.54 %

Cost of deposits and borrowings

 

0.25 %

 

0.27 %

 

0.47 %

Net interest margin

 

1.98 %

 

1.90 %

 

2.09 %

Net interest margin, tax-equivalent basis (2)(3)

 

1.99 %

 

1.91 %

 

2.10 %

 

 

 

 

(1) See "Non-GAAP Financial Measures" for related calculation.

(2) Based on the 21 percent U.S. federal statutory tax rate for the periods presented. 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.

 

 

 

 

 

March 31,
2022

December 31,
2021

March 31,
2021

 

 

 

 

CAPITAL RATIOS

 

 

 

Tangible common equity (4)

 

6.12 %

 

6.02 %

 

6.92 %

Tier 1 leverage (5)

 

7.74 %

 

7.27 %

 

8.82 %

Common equity Tier 1 risk-based (5)

 

10.49 %

 

9.60 %

 

10.92 %

Tier 1 risk-based (5)

 

11.37 %

 

10.51 %

 

12.18 %

Total risk-based (5)

 

12.58 %

 

11.76 %

 

14.41 %

 

 

 

 

ASSET QUALITY

 

 

 

Non-accrual loans

$

177,761

$

218,295

$

133,713

Allowance for credit losses for loans and leases (ACLLL)

$

461,275

$

474,389

$

521,761

ACLLL to non-accrual loans

 

259.49 %

 

217.32 %

 

390.21 %

ACLLL to total loans

 

0.69 %

 

0.73 %

 

1.02 %

Non-accrual loans to total loans

 

0.27 %

 

0.34 %

 

0.26 %

Quarterly net charge-offs to average loans, annualized

 

0.11 %

 

0.22 %

 

0.15 %

 

 

 

 

(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.

(5) March 31, 2022 ratios are preliminary.

SIGNATURE BANK

NET INTEREST MARGIN ANALYSIS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Three months ended

 

 

March 31, 2022

 

March 31, 2021

(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

 

$

28,450,419

 

13,621

 

0.19 %

 

17,108,914

5,016

 

0.12 %

Investment securities

 

 

23,600,581

 

95,116

 

1.61 %

 

12,147,383

56,965

 

1.88 %

Commercial loans, mortgages and leases

 

 

64,968,784

 

532,663

 

3.33 %

 

49,202,964

429,337

 

3.54 %

Residential mortgages and consumer loans

 

 

132,437

 

1,056

 

3.23 %

 

157,302

1,334

 

3.44 %

Loans held for sale

 

 

301,710

 

1,434

 

1.93 %

 

132,092

580

 

1.78 %

Total interest-earning assets (1)

 

 

117,453,931

 

643,890

 

2.22 %

 

78,748,655

493,232

 

2.54 %

Non-interest-earning assets

 

 

1,129,922

 

 

 

971,604

 

 

Total assets

 

$

118,583,853

 

 

 

79,720,259

 

 

INTEREST-BEARING LIABILITIES

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

NOW and interest-bearing demand

 

$

17,418,073

 

15,737

 

0.37 %

 

16,071,916

19,947

 

0.50 %

Money market

 

 

42,136,274

 

28,180

 

0.27 %

 

30,295,092

32,687

 

0.44 %

Time deposits

 

 

1,413,408

 

2,123

 

0.61 %

 

1,788,516

4,870

 

1.10 %

Non-interest-bearing demand deposits

 

 

44,898,892

 

 

— %

 

20,653,116

 

— %

Total deposits

 

 

105,866,647

 

46,040

 

0.18 %

 

68,808,640

57,504

 

0.34 %

Subordinated debt

 

 

570,347

 

6,159

 

4.32 %

 

828,775

9,801

 

4.73 %

Other borrowings

 

 

2,716,186

 

16,407

 

2.45 %

 

2,982,579

17,730

 

2.41 %

Total deposits and borrowings

 

 

109,153,180

 

68,606

 

0.25 %

 

72,619,994

85,035

 

0.47 %

Other non-interest-bearing liabilities

 

 

1,061,504

 

 

 

784,921

 

 

Preferred equity

 

 

708,173

 

 

 

708,019

 

 

Common equity

 

 

7,660,996

 

 

 

5,607,325

 

 

Total liabilities and shareholders' equity

 

$

118,583,853

 

 

 

79,720,259

 

 

OTHER DATA

 

 

 

 

 

 

 

 

Net interest income / interest rate spread (1)

 

 

$

575,284

 

1.97 %

 

 

408,197

 

2.07 %

Tax equivalent adjustment

 

 

 

(1,725

)

 

 

 

(1,690

)

 

Net interest income, as reported

 

 

$

573,559

 

 

 

 

406,507

 

 

Net interest margin

 

 

 

1.98 %

 

 

 

2.09 %

Tax-equivalent effect

 

 

 

0.01 %

 

 

 

0.01 %

Net interest margin on a tax-equivalent basis (1)

 

 

 

1.99 %

 

 

 

2.10 %

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

 

 

 

107.60 %

 

 

 

108.44 %

 

 

 

 

 

 

 

 

 

(1) Presented on a tax-equivalent, non-GAAP, basis for municipal leasing and financing transactions recorded in Commercial loans, mortgages and leases using the U.S. federal statutory tax rate of 21 percent for the periods presented.

SIGNATURE BANK
NON-GAAP FINANCIAL MEASURES
(unaudited)

This press release contains both financial measures based on GAAP and non-GAAP financial measures where 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, (v) pre-tax, pre-provision earnings, and (vi) loans and leases to core loans (excluding Paycheck Protection Program loans). 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:

 

Three months ended March 31,

(dollars in thousands)

 

2022

2021

Consolidated total shareholders' equity

$

8,173,161

6,642,403

Less: Preferred equity

 

708,173

708,019

Common shareholders' equity

 

7,464,988

5,934,384

Less: Intangible assets

 

3,788

28,630

Tangible common shareholders' equity (TCE)

$

7,461,200

5,905,754

 

 

 

Consolidated total assets

$

121,847,302

85,382,194

Less: Intangible assets

 

3,788

28,630

Consolidated tangible total assets (TTA)

$

121,843,514

85,353,564

Tangible common equity ratio (TCE/TTA)

 

6.12%

6.92%

The following table presents the efficiency ratio calculation:

 

Three months ended March 31,

(dollars in thousands)

 

2022

2021

Non-interest expense (NIE)

$

193,380

166,391

Net interest income before provision for credit losses

 

573,559

406,507

Other non-interest income

 

34,404

32,701

Total income (TI)

$

607,963

439,208

Efficiency ratio (NIE/TI)

 

31.81 %

37.88 %

SIGNATURE BANK
NON-GAAP FINANCIAL MEASURES
(unaudited)

The following table reconciles yield on interest-earning assets to the yield on interest-earning assets on a tax-equivalent basis:

 

Three months ended March 31,

(dollars in thousands)

 

2022

2021

Interest income (as reported)

$

642,165

491,542

Tax-equivalent adjustment

 

1,725

1,690

Interest income, tax-equivalent basis

$

643,890

493,232

Interest-earnings assets

$

117,453,931

78,748,655

Yield on interest-earning assets

 

2.21 %

2.53 %

Tax-equivalent effect

 

0.01 %

0.01 %

Yield on interest-earning assets, tax-equivalent basis

 

2.22 %

2.54 %

The following table reconciles net interest margin (as reported) to net interest margin on a tax-equivalent basis:

 

Three months ended March 31,

(dollars in thousands)

2022

 

2021

Net interest margin (as reported)

1.98 %

 

2.09%

Tax-equivalent adjustment

0.01 %

 

0.01%

Net interest margin, tax-equivalent basis

1.99 %

 

2.10 %

The following table reconciles net income (as reported) to pre-tax, pre-provision earnings:

 

Three months ended March 31,

(dollars in thousands)

2022

2021

Net income (as reported)

$ 338,534

190,533

Income tax expense

73,354

51,412

Provision for credit losses

2,695

30,872

Pre-tax, pre-provision earnings

$ 414,583

272,817

The following table reconciles loans and leases (as reported) to core loans (excluding Paycheck Protection Program ("PPP") loans):

 

 

 

 

(dollars in thousands)

March 31,
2022

December 31,
2021

March 31,
2021

Loans and leases (as reported)

$

66,403,705

64,862,798

50,952,998

Less: PPP loans

 

473,135

835,743

2,672,816

Core loans excluding PPP loans

$

65,930,570

64,027,055

48,280,182

 

Investor Contact:
Brian Wyremski
Senior Vice President and Director of Investor Relations & Corporate Development
646-822-1479, bwyremski@signatureny.com

Media Contact:
Susan Turkell Lewis, 646-822-1825,
slewis@signatureny.com

Source: Signature Bank

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