Signature Bank (SBNY) Misses Q3 EPS by 14c

Signature Bank (NASDAQ: SBNY) reported Q3 EPS of $2.62, $0.14 worse than the analyst estimate of $2.76.

• Net Income for the 2020 Third Quarter Was $138.6 Million, or $2.62 Diluted Earnings Per Share, Versus $148.1 Million, or $2.74 Diluted Earnings Per Share, Reported in the 2019 Third Quarter
• Pre-Tax, Pre-Provision Earnings for the 2020 Third Quarter Were $252.4 Million, an Increase of $43.9 Million, or 21.1 Percent, Compared with $208.4 Million for the 2019 Third Quarter
• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After November 13, 2020 to Common Stockholders of Record at the Close of Business on November 2, 2020
• Total Deposits in the Third Quarter Grew $4.11 Billion to $54.34 Billion, While Average Deposits Increased $4.24 Billion. Total Deposits for the Prior Twelve Months Have Grown $15.28 Billion, or 39.1 Percent
• For the 2020 Third Quarter, Loans Increased $1.01 Billion, or 2.2 Percent, to $46.21 Billion. Since the End of the 2019 Third Quarter, Core Loans (Excluding Paycheck Protection Program Loans) Have Increased 16.6 Percent, or $6.29 Billion
• Non-Accrual Loans Were $81.3 Million, or 0.18 Percent of Total Loans, at September 30, 2020, Versus $46.9 Million, or 0.10 Percent, at the End of the 2020 Second Quarter and $32.5 Million, or 0.09 Percent, at the End of the 2019 Third Quarter
• Total Principal and Interest Deferrals as of October 15, 2020 Decreased Sharply to $2.31 Billion, or 5.0 Percent of Total Loans From a High of $11.08 Billion, or 24.5 Percent of Total Loans, as of June 30, 2020
• Significant Excess Cash Balances From Continued Strong Deposit Flows Impacted Core Net Interest Margin by 21 Basis Points. Net Interest Margin on a Tax-Equivalent Basis was 2.55 Percent, Compared With 2.77 Percent for the 2020 Second Quarter and 2.68 Percent for the 2019 Third Quarter. Core Net Interest Margin on a Tax-Equivalent Basis Excluding Loan Prepayment Penalty Income Decreased 17 Basis Points to 2.52 Percent, Compared with 2.69 Percent for the 2020 Second Quarter
• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 8.56 Percent, 10.26 Percent, 10.26 Percent, and 11.98 Percent, Respectively, at September 30, 2020. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 7.75 Percent
• On October 6, 2020, the Bank Completed a Public Offering of $375.0 Million in Subordinated Debt
• In the 2020 Third Quarter, the Bank On-Boarded Three Private Client Banking Teams: One Team in New York and Two in the Greater Los Angeles Marketplace. Together With Our San Francisco Office, the Bank Now Has a Total of 22 Private Client Banking Teams on the West Coast

“Signature Bank continues to realize extraordinary growth during a protracted and challenging recovery from the COVID-19 pandemic. Our founding business philosophy to provide a client-centric, single point-of-contact model led by experienced group directors still distinguishes Signature Bank in the marketplace, particularly in times of distress. We’ve successfully navigated many challenges before and inevitably there will be others. While we don’t always know when or in what form they will materialize, we always knew it was important to be well diversified. As expected, our new initiatives are being embraced by clients, allowing us to continue to deliver solid results during these unsettling times,” explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

“I want to take this opportunity to thank all our colleagues for their continued unwavering commitment to the Bank and its clients as well as their ability to stay focused on the positive throughout this pandemic. They clearly recognized the enormity of the challenge in front of all of us, and met it head on. This dedication and effort is reflected in our third quarter performance, our corporate culture and the strength of our franchise, as we executed on many fronts. Our strong deposit growth, which is up $13.96 billion for the first nine months of 2020 was again driven by across-the-board performance stemming from all our deposit gathering initiatives. Core loans increased solidly again this quarter, up $5.12 billion year-to-date. And, the Bank’s pre-tax pre-provision earnings grew $43.9 million, or 21.1 percent. Additionally, we were able to dramatically reduce principal and interest deferrals to 5.0 percent of total loans, and are proud of the ways in which we worked closely with our clients,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “While current times are very challenging on both the personal and professional fronts for our Signature Bank colleagues, it is also an appropriate time to be proud of what we have accomplished as an organization. Clients often share how grateful they are that their bankers stand ready to listen while offering sage advice and acting as a sounding board on difficult strategic decisions. We believe we have never been closer to our clients, and throughout these unprecedented times, they know we are in the trenches right alongside them. This message has been resounding with both current and new clients as we have achieved greater deposit growth in the first nine months of this year than in our first nine years of business. The Bank continues to expand its business lines and geographic presence as we witness the first fruits of a variety of initiatives put into place over the past several years. We diversified our business in ways that those who remember our NYC roots find pleasantly surprising.”

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

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