Signature Bank (SBNY) Misses Q1 EPS by 30c

Signature Bank (NASDAQ: SBNY) reported Q1 EPS of $1.88, $0.30 worse than the analyst estimate of $2.18.

• Net Income for the 2020 First Quarter Was $99.6 Million, or $1.88 Diluted Earnings Per Share, Versus $143.5 Million, or $2.63 Diluted Earnings Per Share, Reported in the 2019 First Quarter
• Pre-Tax, Pre-Provision Earnings for the 2020 First Quarter Were $218.5 Million, an Increase of $10.6 Million, or 5.1 Percent, Compared with $207.9 Million for the 2019 First Quarter
• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After May 15, 2020 to Common Stockholders of Record at the Close of Business on May 4, 2020
• During the 2020 First Quarter, the Bank Repurchased 392,959 Shares of Common Stock for a Total of $50.0 Million. The Bank Has Suspended Any Future Repurchases of Common Stock Given COVID-19 Circumstances
• Total Deposits in the First Quarter Grew $1.86 Billion to $42.24 Billion, While Average Deposits Increased $1.06 Billion. Total Deposits for the Prior Twelve Months Have Grown $5.62 Billion, or 15.3 Percent
• For the 2020 First Quarter, Loans Increased a Record $1.89 Billion, or 4.8 Percent, to $41.0 Billion. Since the End of the 2019 First Quarter, Loans Have Increased 9.4 Percent, or $3.54 Billion
• Non-Accrual Loans Were $59.0 Million, or 0.14 Percent of Total Loans, at March 31, 2020, Versus $57.4 Million, or 0.15 Percent, at the End of the 2019 Fourth Quarter and $94.7 Million, or 0.25 Percent, at the End of the 2019 First Quarter
• On January 1, 2020, the Bank Adopted CECL. Upon Adoption the Bank Recorded an Increase in Allowance for Credit Losses of $45.8 million, or 18.2%. The Bank’s Provision for Credit Losses of $66.8 Million for the First Quarter of 2020 was Wholly Attributable to COVID-19
• Net Interest Margin on a Tax-Equivalent Basis was 2.79 Percent, Compared with 2.72 Percent for the 2019 Fourth Quarter and 2.75 Percent for the 2019 First Quarter. Core Net Interest Margin on a Tax-Equivalent Basis Excluding Loan Prepayment Penalty Income Increased Four Basis Points to 2.71 Percent, Compared with 2.67 Percent for the 2019 Fourth Quarter
• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 9.45 Percent, 11.05 Percent, 11.05 Percent, and 12.77 Percent, Respectively, at March 31, 2020. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 8.90 Percent
• In the 2020 First Quarter, the Bank Appointed New Leadership for the West Coast and Onboarded 12 Private Client Banking Teams; Seven to Spearhead the Banks Efforts in the Greater Los Angeles Marketplace, as well as, Five Additional Teams to Bolster Its Presence in the San Francisco Market. The Bank Plans to Open Four New Offices in Los Angeles

“First, let me say our hearts go out to our clients, colleagues, friends and their families during this tumultuous time in the world. We’re proud of our colleagues’ dedication to their clients, families and communities. They’ve persevered through these extraordinary circumstances. There is no better test of an organization than such periods in history. In the 19 years since we began operations, we endured 9/11 just after opening our doors; during the financial crisis we not only survived, but rather thrived; and, we overcame Super Storm Sandy. Once again, we have come together during the COVID-19 pandemic, where the personal stress level of many have reached monumental proportions, due to life and death situations for the masses. We will endure,” said Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

“Although we are highly focused on the current environment, we have not lost sight of our long-term vision. Once again, we have executed on our proven model by attracting new leadership for our West Coast initiative and onboarding 12 Private Client Banking Teams; seven teams to spearhead our efforts in the greater Los Angeles marketplace, as well as five additional ones to bolster our presence in the San Francisco market. We currently have plans to open four new offices in Los Angeles. Our premise for bringing our banking model to the West Coast is certainly bearing fruit where we continue to see significant disruption in the marketplace,” DePaolo concluded.

“I want to echo Joe’s sentiments about our feelings toward our friends, colleagues, clients and their families during this pandemic. These are unprecedented times for many individuals, the nation and all of humanity. We are working tirelessly to do our part to make the situation better for all those with whom we interact. We never lose sight of the fact that people want to know their money is safe in difficult times. During the financial crisis of 2008-2010, Signature Bank was a source of strength to clients because we always were motivated by our depositors’ desire for our balance sheet to have fortress-like strength,” explained Scott A. Shay, Chairman of the Board.

“As soon as the COVID-19 crisis began, we immediately recognized the nation would be in search of liquidity so we maintained extraordinarily high cash levels, which further solidifies our balance sheet. We pledge to remain a “sleep-at-night” bank for our depositors even in the midst of this crisis. We also want to assure our borrowers who may now need to draw on their lines that there is no need to draw early and pay interest as we have plenty of funds available whenever they need them. We are grateful that our clients recognize the strength of our balance sheet as in this quarter alone, they have deposited nearly $2 billion in new funds with the Bank. We single-mindedly focus on being the safest bank, and in times like these, that makes a world of difference. We are confident that over the long-haul, our deposit base will grow and our shareholders will be rewarded for our commitment to long-term safety and soundness perspective,” Shay said.

For earnings history and earnings-related data on Signature Bank (SBNY) click here.

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