Signature Bank Reports 2021 Fourth Quarter and Year-End Results

January 18, 2022 5:00 AM EST

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  • Net Income for the 2021 Fourth Quarter Was A Record $272.0 Million, or $4.34 Diluted Earnings Per Share, Versus $173.0 Million, or $3.26 Diluted Earnings Per Share, Reported in the 2020 Fourth Quarter. Pre-Tax, Pre-Provision Earnings for the 2021 Fourth Quarter Were $385.4 Million, an Increase of $123.9 Million, or 47.4 Percent, Compared with $261.5 Million for the 2020 Fourth Quarter
  • Net Income for 2021 Was A Record $918.4 Million, or $15.03 Diluted Earnings Per Share, Compared with $528.4 Million or $9.96 Diluted Earnings Per Share in 2020. Pre-Tax, Pre-Provision Earnings for 2021 Were $1.30 Billion, an Increase of $317.5 Million, or 32.4 Percent, Compared with $980.3 Million for 2020
  • Total Deposits in the Fourth Quarter Increased $10.57 Billion to $106.13 Billion, While Average Deposits Increased $9.88 Billion, or 10.9 Percent
  • Total Deposits Grew a Record $42.82 Billion, or 67.6 Percent, in 2021. Average Deposits for 2021 Grew to $85.31 Billion, Representing a Record Increase of $34.75 Billion, or 68.7 Percent, Versus $50.56 Billion in 2020
  • For the 2021 Fourth Quarter, Loans Increased a Record $6.28 Billion. Since Year-end 2020, Loans Increased a Record $16.03 Billion, or 32.8 Percent
  • Non-Accrual Loans Were $218.3 Million, or 0.34 Percent of Total Loans, at December 31, 2021, Versus $165.4 Million, or 0.28 Percent, at the End of the 2021 Third Quarter and $120.2 Million, or 0.25 Percent, at the End of the 2020 Fourth Quarter
  • COVID-19 Related Non-Payment Deferrals Reduced by $1.30 Billion to $8.3 Million, or 99.4 Percent as of December 31, 2021 Compared to $1.31 Billion at December 31, 2020
  • Net Interest Margin on a Tax-Equivalent Basis was 1.91 Percent, Compared With 1.88 Percent for the 2021 Third Quarter and 2.23 Percent for the 2020 Fourth Quarter. Significant Excess Cash Balances From Continued Strong Deposit Flows Negatively Impacted Core Net Interest Margin by 52 Basis Points
  • Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 7.27 Percent, 9.58 Percent, 10.49 Percent, and 11.73 Percent, Respectively, at December 31, 2021. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.02 Percent
  • The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After February 11, 2022 to Common Shareholders of Record at the Close of Business on January 28, 2022. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After March 30, 2022 to Preferred Shareholders of Record at the Close of Business on March 18, 2022
  • During 2021, the Bank On-boarded Eight Private Client Banking Teams in Total: Two Teams in New York, Four Teams on the West Coast, as well as the Corporate Mortgage Finance and the SBA Origination Teams. Additionally, the Bank Added Numerous Group Directors to Existing Teams and Signature Financial Added Several Executive Sales Officers Across Their National Footprint

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter ended December 31, 2021.

Net income for the 2021 fourth quarter was $272.0 million, or $4.34 diluted earnings per share, versus $173.0 million, or $3.26 diluted earnings per share, for the 2020 fourth quarter. The increase in net income for the 2021 fourth quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong average deposit and loan growth, as well as a higher provision for credit losses booked in the fourth quarter of 2020 predominantly due to the effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision earnings were $385.4 million for the 2021 fourth quarter, representing an increase of $123.9 million, or 47.4 percent, compared with $261.5 million for the 2020 fourth quarter.

Net interest income for the 2021 fourth quarter rose $140.9 million, or 35.7 percent, to $535.9 million, when compared with the fourth quarter of 2020. This increase is primarily due to growth in average interest-earning assets. Total assets reached $118.45 billion at December 31, 2021, expanding $44.56 billion, or 60.3 percent, from $73.89 billion at December 31, 2020. Average assets for the 2021 fourth quarter reached $112.73 billion, an increase of $40.92 billion, or 57.0 percent, versus the comparable period a year ago.

Deposits for the 2021 fourth quarter increased $10.57 billion, or 11.1 percent to $106.13 billion, including non-interest bearing deposit growth of $9.98 billion. Non-interest bearing deposits now represent 41.8 percent of total deposits. Overall deposit growth for the last twelve months was 67.6 percent, or $42.82 billion, when compared with deposits at the end of 2020. Average total deposits for 2021 were $85.31 billion, growing $34.75 billion, or 68.7 percent, versus average total deposits of $50.56 billion for 2020.

“2021, which marks Signature Bank’s 20th anniversary, was a sensational year in terms of growth and achievements. All our businesses contributed to the Bank’s stellar performance -- whether it be from our established New York banking franchise and emerging West Coast presence to our newer, nationwide businesses. The performance includes a multitude of accomplishments, such as record growth in deposits of $42.8 billion, which comes on the heels of our 2020 record deposit growth of $22.9 billion. Additionally, growth in non-interest bearing deposits, core loans and investment securities, all reached record levels. It is our founding, client-centric model that drives this robust organic growth, and, when combined with the inherent, best-in-class operating efficiencies of Signature Bank, it results in record revenue growth and record net income. In 2021, we did in fact execute on all we said we would -- and then some. Throughout the 20 years we have been in business, we seldom take time to acknowledge our achievements, such as our recent inclusion in the S&P 500 Index, for which we are very honored. Instead, we remain focused on our bright future and commitment to staying at the forefront of innovation as the financial services industry continues to undergo digital transformation,” explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

“Signature Bank’s theme for our 20th year anniversary is ‘Looking Forward. Giving Back.’ We plan to make this our permanent purpose and it will be embedded within our distinguished logo. We’re proud of the many strides made this year and value the meaningful ways our 1,800+ colleagues gave back. As we enter another year, we are saddened by the continued effects the pandemic has had on many of our colleagues and their families. We have not yet regained the normalcy we all can recall but look ahead positively by concentrating our efforts on doing more for one other and the world at large. To quote the legendary Winston Churchill, ‘We make a living by what we get, we make a life by what we give’. And, we will continue to give,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “It is humbling, amazing and gratifying to all of us who were present at the opening of our doors to have gone from perhaps the smallest bank in the country to a $100 billion enterprise, purely organically. No colleague or client is at Signature Bank because they were acquired from a legacy bank. Rather, they all are here because they want to be. We started the Bank with a set of values centered around a single point of contact, depositor safety and top-notch service. Twenty years later, those same tenets remain at our core."

“We have been innovators since we opened our doors. This pertains to all we have achieved, including both our Metro New York and West Coast expansion, formation of our Specialized Mortgage Services, Fund Banking Division, Venture Banking Group, Digital Assets and more. Lastly, our recent admittance to the S&P 500 is acknowledgment of all the hard work of our colleagues put forth each and every day.”

“Financial technologies are rapidly transforming, and remain at the forefront of the new types of industries this disruption is creating. We understood then – and recognize even more now – the importance of this novel arena because of our abilities to adapt to market disruption. We are committed to evolving to better serve our institutional clients as we continue to adapt within the fast-developing world of digital assets,” Shay concluded.

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 7.27 percent, 9.58 percent, 10.49 percent, and 11.73 percent, respectively, as of December 31, 2021. Each of these ratios is well in excess of regulatory requirements. 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 6.02 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.

The Bank declared a cash dividend of $0.56 per share, payable on or after February 11, 2022 to common stockholders of record at the close of business on January 28, 2022. The Bank also declared a cash dividend of $12.50 per share payable on or after March 30, 2022 to preferred shareholders of record at the close of business on March 18, 2022. In the fourth quarter of 2021, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on October 29, 2021. The Bank also paid a cash dividend of $12.50 per share to preferred shareholders of record at the close of business on December 17, 2021.

Net Interest Income

Net interest income for the 2021 fourth quarter was $535.9 million, up $140.9 million, or 35.7 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $111.63 billion for the 2021 fourth quarter represent an increase of $40.79 billion, or 57.6 percent, from the 2020 fourth quarter. Due to the current low interest rate environment, the yield on interest-earning assets for the 2021 fourth quarter fell 59 basis points to 2.16 percent, compared to the fourth quarter of last year.

Average cost of deposits and average cost of funds for the fourth quarter of 2021 decreased 23 and 30 basis points, to 0.19 percent and 0.27 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2021 fourth quarter was 1.91 percent versus 2.23 percent reported in the 2020 fourth quarter and 1.88 percent in the 2021 third quarter. Excluding loan prepayment penalties in both quarters, linked quarter core net interest margin on a tax-equivalent basis increased 2 basis points to 1.89 percent. The 2021 fourth quarter core net interest margin was negatively affected by 52 basis points due to significant excess cash balances driven by record deposit growth.

Provision for Credit Losses

The Bank’s provision for credit losses for the fourth quarter of 2021 was $6.9 million, a decrease of $28.72 million, or 80.7 percent, versus the 2020 fourth quarter. The decrease in the provision for credit losses for the fourth quarter was predominantly attributable to improved macroeconomic conditions compared with the same period last year.

Net charge-offs for the 2021 fourth quarter were $33.7 million, or 0.22 percent of average loans, on an annualized basis, versus $17.3 million, or 0.12 percent, for the 2021 third quarter and net charge-offs of $11.4 million, or 0.10 percent, for the 2020 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2021 fourth quarter was $33.5 million, up $9.3 million when compared with $24.2 million reported in the 2020 fourth quarter. The increase was driven by growth of $6.9 million in fees and service charges.

Non-interest expense for the fourth quarter of 2021 was $183.9 million, an increase of $26.3 million, or 16.7 percent, versus $157.7 million reported in the 2020 fourth quarter. The increase was predominantly due to a rise of $27.4 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 32.3 percent for the 2021 fourth quarter compared with 37.6 percent for the same period a year ago, and 35.4 percent for the third quarter of 2021.

Loans

Loans, excluding loans held for sale, grew $6.28 billion, or 10.7 percent, during the 2021 fourth quarter to $64.86 billion, versus $58.59 billion at September 30, 2021. Core loans (excluding Paycheck Protection Program loans) grew a record $6.82 billion, or 11.9 percent, during the fourth quarter of 2021 to $64.03 billion, compared with $57.21 billion at September 30, 2021. Average loans, excluding loans held for sale, reached $60.50 billion in the 2021 fourth quarter, growing $5.04 billion, or 9.1 percent, from the 2021 third quarter and $13.11 billion, or 27.7 percent, from the fourth quarter of 2020.

At December 31, 2021, non-accrual loans were $218.3 million, representing 0.34 percent of total loans and 0.18 percent of total assets, compared with non-accrual loans of $165.4 million, or 0.28 percent of total loans, at September 30, 2021 and $120.2 million, or 0.25 percent of total loans, at December 31, 2020. At December 31, 2021, the ratio of allowance for credit losses for loans and leases to total loans, was 0.73 percent, versus 0.85 percent at September 30, 2021 and 1.04 percent at December 31, 2020. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 217 percent for the 2021 fourth quarter versus 303 percent for the third quarter of 2021 and 423 percent for the 2020 fourth quarter.

COVID-19 Related Loan Modifications

As of December 31, 2021, total non-payment deferrals were $8.3 million, or 0.01 percent of the Bank’s total loan portfolio and primarily related to our multi-family commercial real estate portfolio, compared with non-payment deferrals of $1.31 billion, or 2.7 percent of total loans, at December 31, 2020. The positive trend is the result of the continued economic recovery coming out of the lows of the COVID-19 pandemic.

Additionally, the Bank has made other COVID-19 related modifications that have resulted in the receipt of modified principal and interest payments totaling 2.9 percent of the loan book.

Conference Call

Signature Bank’s management will host a conference call to review results of the 2021 fourth quarter and year ended December 31, 2021 on Tuesday, January 18, 2022 at 9:00 AM ET. All U.S. participants should dial 866-518-6930 and international callers should dial 203-518-9797 at least ten minutes prior to the start of the call and reference conference ID SBNYQ421.

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 “Investor Information,” "Quarterly Results/Conference Calls" to access the link to the call. To listen to a telephone replay of the conference call, please dial 800-938-1598 or 402-220-1545 and enter conference ID SBNYQ421. The replay will be available from approximately 12:00 PM ET on Tuesday, January 18, 2022 through 11:59 PM ET on Friday, January 21, 2022.

About Signature Bank

Signature Bank (Nasdaq: SBNY), member FDIC, is a New York-based full-service commercial bank with 37 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 22nd 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 team 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, which is having an unprecedented impact 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
December 31,

Twelve months ended
December 31,

(dollars in thousands, except per share amounts)

 

2021

2020

 

2021

2020

 

INTEREST INCOME

 

 

 

 

Loans held for sale

$

955

1,321

 

4,157

3,655

 

Loans and leases

 

516,287

427,018

 

1,892,787

1,661,912

 

Securities available-for-sale

 

58,902

41,886

 

194,825

186,569

 

Securities held-to-maturity

 

16,199

12,675

 

54,949

55,335

 

Other investments

 

13,966

5,658

 

43,663

24,175

 

Total interest income

 

606,309

488,558

 

2,190,381

1,931,646

 

INTEREST EXPENSE

 

 

 

 

Deposits

 

46,920

65,990

 

210,644

297,349

 

Federal funds purchased and securities sold under agreements to

repurchase

 

602

595

 

2,401

2,742

 

Federal Home Loan Bank borrowings

 

16,699

17,420

 

67,745

85,333

 

Subordinated debt

 

6,167

9,570

 

29,067

27,130

 

Total interest expense

 

70,388

93,575

 

309,857

412,554

 

Net interest income before provision for credit losses

 

535,921

394,983

 

1,880,524

1,519,092

 

Provision for credit losses

 

6,877

35,599

 

50,042

248,094

 

Net interest income after provision for credit losses

 

529,044

359,384

 

1,830,482

1,270,998

 

NON-INTEREST INCOME

 

 

 

 

Commissions

 

4,020

3,731

 

16,253

13,441

 

Fees and service charges

 

21,501

14,625

 

75,068

46,397

 

Net (losses) gains on sales of securities

 

(17

)

3,606

 

Net gains on sale of loans

 

5,065

3,099

 

19,170

12,651

 

Other income (loss)

 

2,869

2,753

 

10,401

(847

)

Total non-interest income

 

33,455

24,191

 

120,892

75,248

 

NON-INTEREST EXPENSE

 

 

 

 

Salaries and benefits

 

123,104

95,703

 

458,885

389,125

 

Occupancy and equipment

 

12,160

10,934

 

46,473

44,371

 

Information technology

 

13,103

11,420

 

48,536

43,217

 

FDIC assessment fees

 

7,437

3,955

 

24,543

13,742

 

Professional fees

 

8,589

5,355

 

30,989

18,286

 

Other general and administrative

 

19,555

30,284

 

94,174

105,313

 

Total non-interest expense

 

183,948

157,651

 

703,600

614,054

 

Income before income taxes

 

378,551

225,924

 

1,247,774

732,192

 

Income tax expense

 

106,560

52,915

 

329,333

203,833

 

Net income

$

271,991

173,009

 

918,441

528,359

 

Preferred stock dividends

 

9,125

 

37,887

 

Net income available to common shareholders

$

262,866

173,009

 

880,554

528,359

 

PER COMMON SHARE DATA

 

 

 

 

Earnings per common share - basic

$

4.38

3.28

 

15.20

10.00

 

Earnings per common share - diluted

$

4.34

3.26

 

15.03

9.96

 

Dividends per common share

$

0.56

0.56

 

2.24

2.24

 

SIGNATURE BANK

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

December 31,

 

 

2021

 

2020

 

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

(unaudited)

 

ASSETS

 

 

Cash and due from banks

$

29,547,574

 

12,208,997

 

Short-term investments

 

73,097

 

139,334

 

Total cash and cash equivalents

 

29,620,671

 

12,348,331

 

Securities available-for-sale (amortized cost $17,398,906 at December 31, 2021

and $8,894,719 at December 31, 2020); (zero allowance for credit losses at

December 31, 2021 and $4 at December 31, 2020)

 

17,152,863

 

8,890,417

 

Securities held-to-maturity (fair value $4,944,777 at December 31, 2021 and

$2,329,378 December 31, 2020); (allowance for credit losses $56 at

December 31, 2021 and $51 at December 31, 2020)

 

4,998,281

 

2,282,830

 

Federal Home Loan Bank stock

 

166,697

 

171,678

 

Loans held for sale

 

386,765

 

407,363

 

Loans and leases

 

64,862,798

 

48,833,098

 

Allowance for credit losses for loans and leases

 

(474,389

)

(508,299

)

Loans and leases, net

 

64,388,409

 

48,324,799

 

Premises and equipment, net

 

92,232

 

80,274

 

Operating lease right-of-use assets

 

225,988

 

237,407

 

Accrued interest and dividends receivable

 

306,827

 

277,801

 

Other assets

 

1,106,694

 

867,444

 

Total assets

$

118,445,427

 

73,888,344

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Deposits

 

 

Non-interest-bearing

$

44,363,215

 

18,757,771

 

Interest-bearing

 

61,769,579

 

44,557,552

 

Total deposits

 

106,132,794

 

63,315,323

 

Federal funds purchased and securities sold under agreements to repurchase

 

150,000

 

150,000

 

Federal Home Loan Bank borrowings

 

2,639,245

 

2,839,245

 

Subordinated debt

 

570,228

 

828,588

 

Operating lease liabilities

 

254,660

 

265,354

 

Accrued expenses and other liabilities

 

857,882

 

662,925

 

Total liabilities

 

110,604,809

 

68,061,435

 

Shareholders' equity

 

 

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

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

December 31, 2020

 

7

 

7

 

Common stock, par value $.01 per share; 125,000,000 and 64,000.000 shares

authorized at December 31, 2021 and December 31, 2020, respectively;

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

55,520,417 shares issued and 53,564,573 outstanding at December 31, 2020

 

606

 

555

 

Additional paid-in capital

 

3,763,810

 

2,583,514

 

Retained earnings

 

4,298,527

 

3,548,260

 

Treasury stock, zero shares at December 31, 2021 and 1,899,336 shares at

December 31, 2020

 

 

(232,531

)

Accumulated other comprehensive loss

 

(222,332

)

(72,896

)

Total shareholders' equity

 

7,840,618

 

5,826,909

 

Total liabilities and shareholders' equity

$

118,445,427

 

73,888,344

 

SIGNATURE BANK

FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY

(unaudited)

 

 

 

 

 

 

 

 

 

 

Three months ended
December 31,

Twelve months ended
December 31,

(in thousands, except ratios and per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

PER COMMON SHARE

 

 

 

 

Earnings per common share - basic

$

4.38

 

$

3.28

 

$

15.20

 

$

10.00

 

Earnings per common share - diluted

$

4.34

 

$

3.26

 

$

15.03

 

$

9.96

 

Weighted average common shares outstanding - basic

 

60,003

 

 

52,673

 

 

57,871

 

 

52,641

 

Weighted average common shares outstanding - diluted

 

60,563

 

 

52,970

 

 

58,508

 

 

52,889

 

Book value per common share

$

117.63

 

$

95.56

 

$

117.63

 

$

95.56

 

 

 

 

 

 

SELECTED FINANCIAL DATA

 

 

 

 

Return on average total assets

 

0.96

%

 

0.96

%

 

0.95

%

 

0.87

%

Return on average common shareholders' equity

 

14.76

%

 

13.59

%

 

13.81

%

 

10.75

%

Efficiency ratio (1)

 

32.31

%

 

37.61

%

 

35.16

%

 

38.51

%

Yield on interest-earning assets

 

2.15

%

 

2.74

%

 

2.28

%

 

3.24

%

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

 

2.16

%

 

2.75

%

 

2.29

%

 

3.25

%

Cost of deposits and borrowings

 

0.27

%

 

0.57

%

 

0.35

%

 

0.75

%

Net interest margin

 

1.90

%

 

2.22

%

 

1.96

%

 

2.55

%

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

 

1.91

%

 

2.23

%

 

1.97

%

 

2.56

%

(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 Income" for related calculation.

 

 

 

 

December 31,
2021

September 30,
2021

December 31,
2020

CAPITAL RATIOS

 

 

 

Tangible common equity (4)

 

6.02

%

 

6.45

%

 

6.89

%

Tier 1 leverage (5)

 

7.27

%

 

7.83

%

 

8.55

%

Common equity Tier 1 risk-based (5)

 

9.58

%

 

10.49

%

 

9.87

%

Tier 1 risk-based (5)

 

10.49

%

 

11.53

%

 

11.20

%

Total risk-based (5)

 

11.73

%

 

12.96

%

 

13.54

%

 

 

 

 

ASSET QUALITY

 

 

 

Non-accrual loans

$

218,295

 

$

165,384

 

$

120,171

 

Allowance for credit losses for loans and leases (ACLLL)

$

474,389

 

$

500,862

 

$

508,299

 

ACLLL to non-accrual loans

 

217.32

%

 

302.85

%

 

422.98

%

ACLLL to total loans

 

0.73

%

 

0.85

%

 

1.04

%

Non-accrual loans to total loans

 

0.34

%

 

0.28

%

 

0.25

%

Quarterly net charge-offs to average loans, annualized

 

0.22

%

 

0.12

%

 

0.10

%

 

 

 

 

(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) December 31, 2021 ratios are preliminary.

 

 

 

 

 

 

 

SIGNATURE BANK

 

 

 

 

 

 

NET INTEREST MARGIN ANALYSIS

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31, 2021

Three Months Ended
December 31, 2020

(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

$

30,474,298

 

11,831

 

0.15

%

12,511,429

3,569

 

0.11

%

Investment securities

 

20,297,693

 

77,236

 

1.52

%

10,631,245

56,650

 

2.13

%

Commercial loans, mortgages and leases

 

60,358,789

 

516,861

 

3.40

%

47,223,197

427,210

 

3.60

%

Residential mortgages and consumer loans

 

139,935

 

1,126

 

3.19

%

162,349

1,444

 

3.54

%

Loans held for sale

 

356,256

 

955

 

1.06

%

305,885

1,321

 

1.72

%

Total interest-earning assets (1)

 

111,626,971

 

608,009

 

2.16

%

70,834,105

490,194

 

2.75

%

Non-interest-earning assets

 

1,101,262

 

 

972,433

 

 

Total assets

$

112,728,233

 

 

71,806,538

 

 

INTEREST-BEARING LIABILITIES

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

NOW and interest-bearing demand

$

18,694,556

 

15,862

 

0.34

%

12,362,930

19,334

 

0.62

%

Money market

 

41,433,741

 

28,030

 

0.27

%

28,511,134

39,934

 

0.56

%

Time deposits

 

1,583,242

 

3,028

 

0.76

%

1,898,286

6,722

 

1.41

%

Non-interest-bearing demand deposits

 

38,876,207

 

 

%

19,203,186

 

%

Total deposits

 

100,587,746

 

46,920

 

0.19

%

61,975,536

65,990

 

0.42

%

Subordinated debt

 

569,998

 

6,167

 

4.33

%

808,454

9,570

 

4.73

%

Other borrowings

 

2,805,278

 

17,301

 

2.45

%

2,989,245

18,015

 

2.40

%

Total deposits and borrowings

 

103,963,022

 

70,388

 

0.27

%

65,773,235

93,575

 

0.57

%

Other non-interest-bearing liabilities

 

989,002

 

 

854,144

 

 

Preferred equity

 

708,173

 

 

115,818

 

 

Common equity

 

7,068,036

 

 

5,063,341

 

 

Total liabilities and shareholders' equity

$

112,728,233

 

 

71,806,538

 

 

OTHER DATA

 

 

 

 

 

 

Net interest income / interest rate spread (1)

 

$

537,621

 

1.89

%

 

396,619

 

2.18

%

Tax-equivalent adjustment

 

 

(1,700

)

 

 

(1,636

)

 

Net interest income, as reported

 

$

535,921

 

 

 

394,983

 

 

Net interest margin

 

 

1.90

%

 

 

2.22

%

Tax-equivalent effect

 

 

0.01

%

 

 

0.01

%

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

 

 

1.91

%

 

 

2.23

%

Ratio of average interest-earning assets

 

 

 

 

 

 

to average interest-bearing liabilities

 

 

107.37

%

 

 

107.69

%

 

 

 

 

 

 

 

(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

 

 

 

 

 

 

NET INTEREST MARGIN ANALYSIS

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended
December 31, 2021

Twelve Months Ended
December 31, 2020

(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

$

25,167,623

 

35,009

 

0.14

%

5,887,909

11,748

 

0.20

%

Investment securities

 

15,908,371

 

258,428

 

1.62

%

9,812,898

254,331

 

2.59

%

Commercial loans, mortgages and leases

 

54,332,257

 

1,894,745

 

3.49

%

43,612,057

1,661,455

 

3.81

%

Residential mortgages and consumer loans

 

148,137

 

4,933

 

3.33

%

175,560

6,742

 

3.84

%

Loans held for sale

 

306,202

 

4,157

 

1.36

%

196,948

3,655

 

1.86

%

Total interest-earning assets (1)

 

95,862,590

 

2,197,272

 

2.29

%

59,685,372

1,937,931

 

3.25

%

Non-interest-earning assets

 

941,161

 

 

920,531

 

 

Total assets

$

96,803,751

 

 

60,605,903

 

 

INTEREST-BEARING LIABILITIES

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

NOW and interest-bearing demand

$

18,296,459

 

73,622

 

0.40

%

8,783,053

67,948

 

0.77

%

Money market

 

36,492,490

 

121,416

 

0.33

%

23,924,076

191,353

 

0.80

%

Time deposits

 

1,759,229

 

15,606

 

0.89

%

2,132,466

38,048

 

1.78

%

Non-interest-bearing demand deposits

 

28,764,155

 

 

%

15,722,196

 

%

Total deposits

 

85,312,333

 

210,644

 

0.25

%

50,561,791

297,349

 

0.59

%

Subordinated debt

 

646,359

 

29,067

 

4.50

%

545,031

27,130

 

4.98

%

Other borrowings

 

2,879,793

 

70,146

 

2.44

%

3,804,585

88,075

 

2.31

%

Total deposits and borrowings

 

88,838,485

 

309,857

 

0.35

%

54,911,407

412,554

 

0.75

%

Other non-interest-bearing liabilities

 

878,876

 

 

750,691

 

 

Preferred equity

 

708,109

 

 

29,112

 

 

Common equity

 

6,378,281

 

 

4,914,693

 

 

Total liabilities and shareholders' equity

$

96,803,751

 

 

60,605,903

 

 

OTHER DATA

 

 

 

 

 

 

Net interest income / interest rate spread (1)

 

$

1,887,415

 

1.94

%

 

1,525,377

 

2.50

%

Tax-equivalent adjustment

 

 

(6,891

)

 

 

(6,285

)

 

Net interest income, as reported

 

$

1,880,524

 

 

 

1,519,092

 

 

Net interest margin

 

 

1.96

%

 

 

2.55

%

Tax-equivalent effect

 

 

0.01

%

 

 

0.01

%

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

 

 

1.97

%

 

 

2.56

%

Ratio of average interest-earning assets

 

 

 

 

 

 

to average interest-bearing liabilities

 

 

107.91

%

 

 

108.69

%

 

 

 

 

 

 

 

(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) core net interest margin, tax-equivalent basis excluding loan prepayment penalty income, (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:

(dollars in thousands)

December 31,
2021

September 30,
2021

December 31,
2020

Consolidated total shareholders' equity

$

7,840,618

 

7,679,139

 

5,826,909

 

Less: Preferred equity

 

708,173

 

708,173

 

708,019

 

Common shareholders' equity

$

7,132,445

 

6,970,966

 

5,118,890

 

Less: Intangible assets

 

3,977

 

15,858

 

32,301

 

Tangible common shareholders' equity (TCE)

$

7,128,468

 

6,955,108

 

5,086,589

 

 

 

 

 

Consolidated total assets

$

118,445,427

 

107,850,739

 

73,888,344

 

Less: Intangible assets

 

3,977

 

15,858

 

32,301

 

Consolidated tangible total assets (TTA)

$

118,441,450

 

107,834,881

 

73,856,043

 

Tangible common equity ratio (TCE/TTA)

 

6.02

%

6.45

%

6.89

%

The following table presents the efficiency ratio calculation:

 

Three months ended
December 31,

Twelve months ended
December 31,

(dollars in thousands)

 

2021

 

2020

 

2021

 

2020

 

Non-interest expense (NIE)

$

183,948

 

157,651

 

703,600

 

614,054

 

Net interest income before provision for credit losses

 

535,921

 

394,983

 

1,880,524

 

1,519,092

 

Other non-interest income

 

33,455

 

24,191

 

120,892

 

75,248

 

Total income (TI)

$

569,376

 

419,174

 

2,001,416

 

1,594,340

 

Efficiency ratio (NIE/TI)

 

32.31

%

37.61

%

35.16

%

38.51

%

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

 

Three months ended
December 31,

Twelve months ended
December 31,

(dollars in thousands)

 

2021

 

2020

 

2021

 

2020

 

Interest income (as reported)

$

606,309

 

488,558

 

2,190,381

 

1,931,646

 

Tax-equivalent adjustment

 

1,700

 

1,636

 

6,891

 

6,285

 

Interest income, tax-equivalent basis

$

608,009

 

490,194

 

2,197,272

 

1,937,931

 

Interest-earnings assets

$

111,626,971

 

70,834,105

 

95,862,590

 

59,685,372

 

 

 

 

 

 

Yield on interest-earning assets

 

2.15

%

2.74

%

2.28

%

3.24

%

Tax-equivalent effect

 

0.01

%

0.01

%

0.01

%

0.01

%

Yield on interest-earning assets, tax-equivalent basis

 

2.16

%

2.75

%

2.29

%

3.25

%

 

 

 

 

 

The following table reconciles net interest margin (as reported) to core net interest margin on a tax-equivalent basis excluding loan prepayment penalty income:

 

Three months ended
December 31,

Three months ended
September 30,

Twelve months ended
December 31,

(dollars in thousands)

2021

 

2020

 

2021

 

2020

 

2021

 

2020

 

Net interest margin (as reported)

1.90

%

2.22

%

1.88

%

2.54

%

1.96

%

2.55

%

Tax-equivalent adjustment

0.01

%

0.01

%

0.00

%

0.01

%

0.01

%

0.01

%

Margin contribution from loan prepayment penalty income

(0.02

) %

(0.02

) %

(0.01

) %

(0.03

) %

(0.02

) %

(0.07

) %

Core net interest margin, tax-equivalent basis excluding loan prepayment penalty income

1.89

%

2.21

%

1.87

%

2.52

%

1.95

%

2.49

%

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

 

Three months ended
December 31,

Twelve months ended
December 31,

(dollars in thousands)

 

2021

2020

2021

2020

Net income (as reported)

$

271,991

173,009

918,441

528,359

Income tax expense

 

106,560

52,915

329,333

203,833

Provision for credit losses

 

6,877

35,599

50,042

248,094

Pre-tax, pre-provision earnings

$

385,428

261,523

1,297,816

980,286

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

 

 

 

 

(dollars in thousands)

December 31,
2021

September 30,
2021

December 31,
2020

Loans and leases (as reported)

$

64,862,798

58,585,996

48,833,098

Less: PPP loans

 

835,743

1,374,040

1,874,447

Core loans excluding PPP loans

$

64,027,055

57,211,956

46,958,651

 

Investor Contact:
Brian Wyremski, Vice President -
Investor Relations & Corporate Development
646-822-1479, [email protected]

Media Contact:
Susan Turkell Lewis, 646-822-1825,
[email protected]

Source: Signature Bank



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