Signature Bank Reports 2012 First Quarter Results
- Net Income for the 2012 First Quarter Reached a Record $42.4 Million, or $0.90 Diluted Earnings Per Share, An Increase of $7.8 Million, or 22.5 Percent, from $34.6 Million, or $0.82 Diluted Earnings Per Share, Reported in the 2011 First Quarter. 2011 First Quarter Net Income Included a $5.3 Million Pre-Tax Gain on Sale of an SBA Interest-Only Strip Security. Excluding the Tax-Effected Gain on Sale of the SBA Interest-Only Strip Security, 2011 First Quarter Net Income was $31.6 Million, or $0.75 Diluted Earnings Per Share
- Deposits in the First Quarter Grew a Record $749.8 Million to $12.5 Billion, Including Growth of $147.6 Million in Short-Term Escrow Deposits; Deposits Have Grown $2.31 Billion, or 22.7 Percent, Since the End of the 2011 First Quarter
- Average Deposits Increased $578.4 Million, or 5.0 Percent, in the 2012 First Quarter
- Loans Increased a Record $512.4 Million, or 7.5 Percent, to $7.36 Billion for the 2012 First Quarter
- Non-Accrual Loans Decreased to $35.5 Million, or 0.48 Percent of Total Loans, at March 31, 2012, Versus $42.2 Million, or 0.62 Percent, at the End of the 2011 Fourth Quarter and $39.0 Million, or 0.69 Percent, at the End of the 2011 First Quarter
- Net Interest Margin Decreased Five Basis Points to 3.50 Percent, Compared with 3.55 Percent for the 2011 Fourth Quarter and 3.59 Percent for the 2011 First Quarter
- Core Net Interest Margin Excluding Loan Prepayment Penalty Income Decreased Two Basis Points to 3.44 Percent, Compared with 3.46 Percent for the 2011 Fourth Quarter
- Tier 1 Leverage, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 9.62 Percent, 16.86 Percent and 17.96 Percent, Respectively, at March 31, 2012. Signature Bank Remains Significantly Above FDIC Well Capitalized Standards. Tangible Common Equity Ratio was 9.58 Percent
- Signature Financial Launched Operations During First Quarter, Marking the Banks Entry Into the Specialty Finance Arena
- Two Private Client Banking Teams Joined During the 2012 First Quarter
NEW YORK--(BUSINESS WIRE)-- Signature Bank (SBNY), a New York-based full-service commercial bank, today announced results for its first quarter ended March 31, 2012.
Net income for the 2012 first quarter reached a record $42.4 million, or $0.90 diluted earnings per share, versus $34.6 million, or $0.82 diluted earnings per share, for the 2011 first quarter. The record net income for the 2012 first quarter, versus the comparable quarter last year, is primarily due to an increase in net interest income, fueled by record deposit growth and record loan growth. These factors were partially offset by a decrease in non-interest income primarily from the 2011 gain on sale of an SBA interest-only strip security and an increase in non-interest expense.
Net interest income for the 2012 first quarter reached $126.8 million, up $23.1 million, or 22.3 percent, when compared with the 2011 first quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $15.28 billion at March 31, 2012, an increase of $2.9 billion, or 23.4 percent, from $12.38 billion at March 31, 2011. Average assets for the 2012 first quarter reached $14.85 billion, an increase of $2.82 billion, or 23.5 percent, compared with the 2011 first quarter.
Deposits for the 2012 first quarter rose a record $749.8 million, or 6.4 percent, to $12.5 billion at March 31, 2012. When compared with deposits at March 31, 2011, overall deposit growth for the last twelve months was 22.7 percent, or $2.31 billion. Excluding short-term escrow deposits of $921.6 million and brokered deposits of $47.7 million at the end of the 2012 first quarter and $774.0 million and $57.8 million, respectively, at year-end 2011, core deposits increased a record $612.3 million for the quarter. Average deposits for the 2012 first quarter reached $12.25 billion, an increase of $578.4 million, or 5.0 percent.
We started the year off on a solid note with record deposit growth, record loan growth and record earnings driven by the strong performance of our existing teams. Moreover, weve provided another avenue for future expansion with the launch of our specialty finance subsidiary Signature Financial and the hiring of one of Long Islands most respected C&I-focused, middle market teams, remarked Joseph J. DePaolo, President and Chief Executive Officer.
Our ability to consistently attract high-quality professionals, as we have done in the past and continued this quarter, is a tribute to the sound banking model we have established at Signature Bank. We look forward to the contributions of these new teams, as well as the further success of our existing teams, DePaolo said.
Scott A. Shay, Chairman of the Board, added: "This is an exciting time for Signature Bank. We implemented several initiatives this quarter to diversify our revenue streams and broaden our asset deployment. First, we strategically entered the specialty finance and leasing business with the appointment of one of the most highly respected management teams in their industry. Secondly, we added a well-regarded private client banking team, which further enhances our prospects for floating rate commercial and industrial loan growth. We are privileged to have these teams join us, which speaks volumes to Signature Banks emergence as the bank of choice for the most talented bankers in New York that want a platform from which to provide the best in service to their clients.
The Banks Tier 1 leverage, Tier 1 risk-based, and total risk-based capital ratios were approximately 9.62 percent, 16.86 percent and 17.96 percent, respectively, as of March 31, 2012. Each of these ratios is well in excess of regulatory requirements. The Banks strong risk-based capital ratios reflect the relatively low risk profile of the Banks balance sheet. The Banks tangible common equity ratio remains strong at 9.58 percent. The Bank defines tangible common equity ratio as the ratio of tangible common equity to adjusted tangible assets and calculates this ratio by dividing total consolidated common shareholders equity by consolidated total assets.
Net Interest Income
Net interest income for the 2012 first quarter was $126.8 million, an increase of $23.1 million, or 22.3 percent, versus the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $14.58 billion for the 2012 first quarter represent an increase of $2.86 billion, or 24.4 percent, from the 2011 first quarter. Yield on interest-earning assets for the 2012 first quarter decreased 30 basis points, to 4.30 percent, compared with the 2011 first quarter. This decrease was primarily attributable to lower prevailing interest rates.
Average cost of deposits and average cost of funds for the first quarter of 2012 decreased by 19 and 21 basis points, respectively, versus the 2011 first quarter to 0.72 percent and 0.87 percent. These decreases were predominantly due to lower prevailing interest rates.
Net interest margin for the 2012 first quarter was 3.50 percent versus 3.59 percent reported in the same period a year ago. On a linked quarter basis, net interest margin decreased 5 basis points. The linked quarter decrease was primarily due to a decline of $940,000 in loan prepayment penalty income.
Provision for Loan Losses
The Banks provision for loan losses for the first quarter of 2012 was $10.7 million, a decrease of $1.7 million, or 13.5 percent, compared with the 2011 first quarter. The decrease was largely due to a decrease in charge-offs.
Net charge-offs for the 2012 first quarter were $5.0 million, or 0.29 percent of average loans on an annualized basis, versus $11.9 million, or 0.71 percent, for the 2011 fourth quarter and $6.5 million, or 0.49 percent, for the 2011 first quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2012 first quarter was $9.1 million, down $6.0 million when compared with $15.1 million reported in the 2011 first quarter. The decrease was driven by a $5.3 million gain on sale of an SBA interest-only strip security in the 2011 first quarter.
Non-interest expense for the first quarter of 2012 was $50.4 million, an increase of $5.7 million, or 12.7 percent, versus $44.7 million reported in the 2011 first quarter. The increase was primarily a result of the addition of new private client banking teams.
The Banks efficiency ratio improved to 37.1 percent for the 2012 first quarter versus 37.6 percent for the comparable period last year. Excluding the gain on sale of the SBA interest-only strip security in the 2011 first quarter, the efficiency ratio was 39.4 percent. The improvement was primarily due to growth in net interest income coupled with expense containment.
Loans, excluding loans held for sale, grew a record $512.4 million, or 7.5 percent, during the first quarter of 2012 to $7.36 billion, compared with $6.85 billion at December 31, 2011. At March 31, 2012, loans accounted for 48.2 percent of total assets, versus 46.7 percent at the end of the 2011 fourth quarter and 45.6 percent at the end of 2011 first quarter. Average loans, excluding loans held for sale, reached $7.06 billion in the 2012 first quarter, growing $406.9 million, or 6.1 percent, from the 2011 fourth quarter and $1.64 billion, or 30.2 percent, from the 2011 first quarter. The increase in loans for the quarter was primarily driven by growth in commercial real estate and multi-family loans underwritten within the Banks stringent standards.
At March 31, 2012, non-accrual loans were $35.5 million, representing 0.48 percent of total loans and 0.23 percent of total assets, compared with non-accrual loans of $42.2 million, or 0.62 percent of total loans, at December 31, 2011 and $39.0 million, or 0.69 percent of total loans, at March 31, 2011. At March 31, 2012, the ratio of allowance for loan losses to total loans was 1.25 percent, versus 1.26 percent at December 31, 2011 and 1.30 percent at March 31, 2011. Additionally, the ratio of allowance for loan losses to non-accrual loans, or the coverage ratio, was 259 percent for the 2012 first quarter versus 204 percent for the fourth quarter of 2011 and 188 percent for the 2011 first quarter.
Signature Banks management will host a conference call to review results of the 2012 first quarter on Tuesday, April 24, 2012, at 10:00 AM ET. All participants should dial 480-629-9722 at least ten minutes prior to the start of the call.
To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Banks 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 303-590-3030 and enter reservation identification number 4531460. The replay will be available from approximately 12:00 PM ET on Tuesday, April 24, 2012 through 11:59 PM ET on Friday, April 27, 2012.
About Signature Bank
Signature Bank, member FDIC, is a New York-based full-service commercial bank with 25 private client offices throughout the New York metropolitan area. The Banks growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers. Signature Bank offers a wide variety of business and personal banking products and services. The Bank operates Signature Financial, LLC, a specialty finance subsidiary focused on equipment finance and leasing, transportation financing and taxi medallion financing. Investment, brokerage, asset management and insurance products and services are offered through the Banks subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC.
Signature Bank's 25 offices are located: In Manhattan (9) - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South; 1020 Madison Avenue; 50 West 57th Street and 2 Penn Plaza. Brooklyn (3) - 26 Court Street; 84 Broadway and 6321 New Utrecht Avenue. Westchester (2) - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island (6) - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 68 South Service Road, Melville; 923 Broadway, Woodmere; 40 Cuttermill Road, Great Neck and 100 Jericho Quadrangle, Jericho. Queens (3) - 36-36 33rd Street, Long Island City; 78-27 37th Avenue, Jackson Heights and 8936 Sutphin Blvd., Jamaica. Bronx (1) - 421 Hunts Point Avenue, Bronx. Staten Island (1) - 2066 Hylan Blvd.
For more information, please visit www.signatureny.com.
This press release and oral statements made from time to time by our representatives contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements include information concerning our future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client team 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, 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 the banking and other financial services regulatory environment and (v) 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.
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three months ended March 31,|
|(dollars in thousands, except per share amounts)||2012||2011|
|INTEREST AND DIVIDEND INCOME|
|Loans held for sale||$||778||968|
|Other short-term investments||487||533|
|Total interest income||155,700||133,068|
|Federal funds purchased and securities sold under|
|agreements to repurchase||5,852||5,185|
|Federal Home Loan Bank advances||1,156||2,293|
|Total interest expense||28,897||29,395|
|Net interest income before provision for loan losses||126,803||103,673|
|Provision for loan losses||10,664||12,322|
|Net interest income after provision for loan losses||116,139||91,351|
|Fees and service charges||3,706||3,949|
|Net gains on sales of securities||1,432||7,877|
|Net gains on sales of loans||1,421||1,333|
|Other-than-temporary impairment losses on securities:|
|Total impairment losses on securities||(5,214||)||(4,010||)|
|Portion of loss recognized in other comprehensive income (before taxes)||4,500||3,284|
|Net impairment losses on securities recognized in earnings||(714||)||(726||)|
|Net trading (loss) income||(20||)||43|
|Total non-interest income||9,114||15,067|
|Salaries and benefits||33,024||26,192|
|Occupancy and equipment||4,386||3,789|
|Other general and administrative||12,941||14,689|
|Total non-interest expense||50,351||44,670|
|Income before income taxes||74,902||61,748|
|Income tax expense||32,533||27,164|
|PER COMMON SHARE DATA|
|Earnings per share basic||$||0.92||0.84|
|Earnings per share diluted||$||0.90||0.82|
|CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION|
|March 31,||December 31,|
|(dollars in thousands, except per share amounts)||(unaudited)|
|Cash and due from banks||$||55,039||34,083|
|Total cash and cash equivalents||58,946||40,154|
|Securities available-for-sale (pledged $2,508,589 at March 31, 2012|
|and $2,672,093 at December 31, 2011)||6,609,053||6,512,855|
|Securities held-to-maturity (fair value $580,579 at March 31, 2012|
|and $571,980 at December 31, 2011; pledged $364,817 at|
|March 31, 2012 and $352,865 at December 31, 2011)||565,743||556,044|
|Federal Home Loan Bank stock||31,502||48,152|
|Loans held for sale||376,336||392,025|
|Premises and equipment, net||30,987||30,574|
|Accrued interest and dividends receivable||62,456||60,533|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Federal funds purchased and securities sold under agreements|
|Federal Home Loan Bank advances||305,000||675,000|
|Accrued expenses and other liabilities||131,578||78,066|
|Preferred stock, par value $.01 per share; 61,000,000 shares authorized;|
|none issued at March 31, 2012 and December 31, 2011|
|Common stock, par value $.01 per share; 64,000,000 shares authorized;||-||-|
|46,412,611 and 46,181,890 shares issued and outstanding|
|at March 31, 2012 and December 31, 2011||464||462|
|Additional paid-in capital||959,874||954,833|
|Net unrealized gains on securities available-for-sale, net of tax||37,953||29,789|
|Total shareholders' equity||1,463,692||1,408,116|
|Total liabilities and shareholders' equity||$||15,280,367||14,666,120|
|FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY|
|Three months ended|
|(dollars in thousands, except ratios and per share amounts)||
|PER COMMON SHARE|
|Net income - basic||$||0.92||$||0.87||$||0.84|
|Net income - diluted||$||0.90||$||0.85||$||0.82|
|Average shares outstanding - basic||46,205||46,179||41,349|
|Average shares outstanding - diluted||47,051||47,025||42,070|
|SELECTED FINANCIAL DATA|
|Return on average total assets||1.15||%||1.11||%||1.17||%|
|Return on average shareholders' equity||11.87||%||11.44||%||14.48||%|
|Efficiency ratio (1)||37.05||%||35.39||%||37.62||%|
Efficiency ratio excluding net gains on sales of securities
|Yield on interest-earning assets||4.30||%||4.38||%||4.60||%|
|Cost of deposits and borrowings||0.87||%||0.91||%||1.08||%|
|Net interest margin||3.50||%||3.55||%||3.59||%|
(1) The efficiency ratio is calculated by dividing non-interest
expense by the sum of net interest income
|Tangible common equity (2)||9.58||%||9.60||%||8.02||%|
|Tier 1 leverage||9.62||%||9.67||%||8.29||%|
|Tier 1 risk-based||16.86||%||17.08||%||13.87||%|
|Allowance for loan losses||$||91,786||$||86,162||$||73,211|
|Allowance for loan losses to non-accrual loans||258.61||%||204.09||%||187.81||%|
|Allowance for loan losses to total loans||1.25||%||1.26||%||1.30||%|
|Non-accrual loans to total loans||0.48||%||0.62||%||0.69||%|
|Quarterly net charge-offs to average loans (annualized)||0.29||%||0.71||%||0.49||%|
We define tangible common equity as the ratio of tangible common
equity to adjusted tangible assets (the "TCE ratio") and
|NET INTEREST MARGIN ANALYSIS|
|Three months ended||Three months ended|
|March 31, 2012||March 31, 2011|
|(dollars in thousands)||
Commercial loans and commercial
|Loans held for sale||265,929||778||1.18||%||271,180||968||1.45||%|
|Total interest-earning assets||14,575,265||155,700||4.30||%||11,719,734||133,068||4.60||%|
|NOW and interest-bearing demand||658,742||776||0.47||%||675,457||836||0.50||%|
|Non-interest-bearing demand deposits||3,198,843||-||-||2,437,952||-||-|
|Total deposits and borrowings||13,354,765||28,897||0.87||%||11,014,008||29,395||1.08||%|
|Other non-interest-bearing liabilities|
|and shareholders' equity||1,491,725||1,007,995|
|Total liabilities and shareholders' equity||$||14,846,490||12,022,003|
|Net interest income / interest rate spread||126,803||3.43||%||103,673||3.52||%|
|Net interest margin||3.50||%||3.59||%|
|Ratio of average interest-earning assets|
|to average interest-bearing liabilities||109.14||%||106.41||%|
|NON-GAAP FINANCIAL MEASURES|
Management believes that the presentation of certain non-GAAP
financial measures assists investors when
The following table presents a reconciliation of net income and
diluted earnings per share (as reported) to net income
|Three months ended March 31,|
|(dollars in thousands, except per share amounts)||2012||2011|
|Net income (as reported)||$||42,369||34,584|
|Gains on sales of SBA interest-only strip securities||(39||)||(5,291||)|
|Net income - excluding after-tax effect of gains on sales of SBA|
|interest-only strip securities||$||42,347||31,620|
|Diluted earnings per share (as reported)||$||0.90||0.82|
|Gains on sales of SBA interest-only strip securities||-||(0.13||)|
|Diluted earnings per share - excluding after-tax effect of gains on sales of|
|SBA interest-only strip securities||$||0.90||0.75|
The following table reconciles net interest margin (as reported)
to core net interest margin excluding loan prepayment
|Three months ended March 31,|
|Net interest margin (as reported)||3.50||%||3.59||%|
|Margin contribution from loan prepayment penalty income||(0.06||)%||(0.08||)%|
|Core net interest margin - excluding loan prepayment penalty income||3.44||%||3.51||%|
Eric R. Howell, 646-822-1402
Chief Financial Officer
Susan J. Lewis, 646-822-1825
Source: Signature BankCopyright Business Wire 2012