SBNY
$138.93
Signature Bank
($4.24)
(2.96%)
Earnings Details
Quarter December 2022
Tuesday, January 17, 2023 5:00:00 AM
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Summary

Signature Bank Misses

Signature Bank (SBNY) reported Quarter December 2022 earnings of $4.65 per share on revenue of $1.2 billion. The consensus earnings estimate was $4.92 per share on revenue of $726.3 million. The Earnings Whisper number was $4.90 per share. Revenue grew 88.0% on a year-over-year basis.

Signature Bank is a full service commercial bank, which offers business and personal banking products and services, as well as investment, brokerage, asset management and insurance products and services through its subsidiary.

Results
Reported Earnings
$4.65
Earnings Whisper
$4.90
Consensus Estimate
$4.92
Reported Revenue
$1.20 Bil
Revenue Estimate
$726.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Signature Bank Reports 2022 Fourth Quarter and Year-End Results

  • Net Income for the 2022 Fourth Quarter Was $300.8 Million, or $4.65 Diluted Earnings Per Share, Versus $272.0 Million, or $4.34 Diluted Earnings Per Share, Reported in the 2021 Fourth Quarter. Pre-Tax, Pre-Provision Earnings for the 2022 Fourth Quarter Were $450.6 Million, an Increase of $65.2 Million, or 16.9 Percent, Compared with $385.4 Million for the 2021 Fourth Quarter
  • Net Income for 2022 Was a Record $1.34 Billion, or $20.76 Diluted Earnings Per Share, Compared with $918.4 Million or $15.03 Diluted Earnings Per Share in 2021. Pre-Tax, Pre-Provision Earnings for 2022 Were a Record $1.83 Billion, an Increase of $536.4 Million, or 41.3 Percent, Compared with $1.30 Billion for 2021
  • Return on Common Equity Reaches a Record 16.35 Percent for the Year 2022
  • The Bank Declared a Cash Dividend of $0.70 Per Share, an Increase of $0.14 Per Share, Payable on or After February 10, 2023 to Common Shareholders of Record at the Close of Business on January 27, 2023. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After March 30, 2023 to Preferred Shareholders of Record at the Close of Business on March 17, 2023
  • Total Deposits in the Fourth Quarter Declined $14.19 Billion to $88.59 Billion. The Decline Was Primarily Driven by Our Planned Reduction in Digital Asset Banking Deposits, Which Declined $7.35 Billion. In Conjunction with the Seventh Fed Funds Rate Increase, We Decided Not to Match the December Increase in many of our High-Cost, Traditional Deposits Which Led to a Decline. A Decrease in 1031 Exchange Activity and Seasonal Outflows in the Mortgage Servicing Industry, Which are Also High-Cost, Contributed to Traditional Deposit Outflows
  • Total Deposits for the Prior Twelve Months Declined $17.54 Billion, or 16.5 Percent. Excluding the Digital Asset Banking Deposits, Which Were Down $12.39 Billion Due to Our Planned Reduction in This Space and a Challenging Cryptocurrency Environment, Total Deposits Declined $5.15 Billion
  • As of January 13, 2023, Deposits Have Increased By $1.84 Billion Since Year End. This Includes an Increase in Traditional Deposits of $2.53 Billion, Offset by a Decline in Digital Deposits of $691 million
  • For the 2022 Fourth Quarter, Loans Increased $452.3 Million. Since Year-end 2021, Loans Increased $9.43 Billion, or 14.5 Percent
  • Non-Accrual Loans Were $184.0 Million, or 0.25 Percent of Total Loans, at December 31, 2022, Versus $185.3 Million, or 0.25 Percent, at the End of the 2022 Third Quarter and $218.3 Million, or 0.34 Percent, at the End of the 2021 Fourth Quarter
  • Net Interest Margin on a Tax-Equivalent Basis was 2.31 Percent, Compared With 2.38 Percent for the 2022 Third Quarter and 1.91 Percent for the 2021 Fourth Quarter
  • Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 8.79 Percent, 10.42 Percent, 11.21 Percent, and 12.33 Percent, Respectively, at December 31, 2022. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.62 Percent
  • During 2022, the Bank Hired 12 Private Client Banking Teams; 5 in New York and 7 on the West Coast. Additionally, Our Newest National Banking Practice, the Health Care Banking and Finance Team, Launched in the Second Quarter of 2022

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, 2022.

Net income for the 2022 fourth quarter was $300.8 million, or $4.65 diluted earnings per share, versus $272.0 million, or $4.34 diluted earnings per share, for the 2021 fourth quarter. The increase in net income for the 2022 fourth quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong loan and securities growth, as well as higher interest rates. Pre-tax, pre-provision earnings were $450.6 million for the 2022 fourth quarter, representing an increase of $65.2 million, or 16.9 percent, compared with $385.4 million for the 2021 fourth quarter.

Net interest income for the 2022 fourth quarter reached $638.7 million up $102.8 million, or 19.2 percent, when compared with the fourth quarter of 2021. This increase is primarily due to strong loan and securities growth along with higher prevailing market interest rates. Total assets were $110.36 billion at December 31, 2022, decreasing $8.08 billion, or 6.8 percent, from $118.45 billion at December 31, 2021. Average assets for the 2022 fourth quarter remained relatively flat at $112.71 billion versus the comparable period a year ago.

Deposits for the 2022 fourth quarter decreased $14.19 billion, to $88.59 billion, or 13.8 percent, including a non-interest bearing deposit reduction of $5.86 billion, which brings our non-interest bearing mix to 35.6 percent of total deposits at December 31, 2022. Deposits over the last twelve months declined 16.5 percent, or $17.54 billion, when compared with deposits at the end of 2021. The decline was driven by a challenging cryptocurrency environment and our planned reduction in Digital Asset Banking deposits, which were down $12.39 billion, along with our decision not to match the December Fed Funds rate increase. Average total deposits for 2022 were $103.43 billion, growing $18.12 billion, or 21.2 percent, versus average total deposits of $85.31 billion for 2021.

“At the onset of 2022, we set several goals, including the hiring of numerous private client banking teams and hundreds of colleagues to support our geographic expansion; increasing annual earnings to a record level; and, growing both our loan and deposit portfolios substantially. Most of these were met. During the 2022 second quarter, our newest national business line, the Healthcare Banking and Finance team, was launched. Throughout the year, 12 private client banking teams were onboarded, 3 of which in Nevada, marking the Bank’s entry into the state. To support this team growth, we added hundreds of colleagues across various operational and support areas. Although we grew loans by a strong $9.43 billion, 2022 presented deposit challenges. While we expected to see continued deposit growth, albeit not at 2020 or 2021 levels, seven Fed rate hikes during 2022 totaling 425 basis points, coupled with quantitative tightening and the proliferation of off balance sheet alternatives, resulted in the most difficult deposit environment we have seen in our 22-year history. The arduous rate environment, along with challenges in the digital asset space, led to deposit declines, which we overcame with little difficulty, given our robust liquidity position. Despite these deposit headwinds, we still earned record net income of $1.34 billion and a record return on common equity of 16.35 percent for the year,” said Joseph J. DePaolo, Signature Bank President and Chief Executive Officer.

“Looking ahead, we have plans to further grow our established franchise in 2023 by continuing our effort to hire new banking teams and expanding geographically while remaining mindful of the volatile economic environment. We see growth on the horizon because when Signature Bank lifts out banking teams, it is with top performers who should thrive through our private client banking approach. We look forward to future successes as we stay with our founding and distinguishing single-point-of-contact, team-based banking model, which is the hallmark of our institution,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “Over the years, we have continued to reiterate that Signature Bank was built to be well positioned to navigate tough times, and we continue to prove this to be the case. Throughout our 22 years in operation, this institution has faced many economic challenges, including NYC job losses in 2001-2002 as a result of the 9-11 tragedy, which happened only four short months after our founding. This was followed by the Great Financial Crisis of 2008-2010, the COVID-19 shutdown and the list goes on. On the heels of every challenge, Signature Bank emerged stronger, which will be the case this time as well.

With more than half a trillion dollars of deposits leaving the banking system in the second and third quarters of 2022 alone, the market for deposits has turned quite competitive. In that context, Signature Bank consciously decided to exit deposit relationships in certain traditional banking sectors that sought the highest marginal pricing from banks willing to pay maximum interest rates. We believe our service is invaluable, and the overwhelming majority of our clients appreciate that.

We remain very optimistic about the future prospects of Signature Bank. Our increasing the quarterly dividend is a sheer reflection of that confidence as well as our ability to continue to deliver consistent earnings to our shareholders."

Net Interest Income

Net interest income for the 2022 fourth quarter was $638.7 million, an increase of $102.8 million, or 19.2 percent, when compared with the same period last year, primarily due to loans and securities growth along with higher prevailing market interest rates. Average interest-earning assets of $110.13 billion for the 2022 fourth quarter represent a decrease of $1.50 billion, or 1.3 percent, from the 2021 fourth quarter. Due to higher interest rates across all of our asset classes, the yield on interest-earning assets for the 2022 fourth quarter increased 202 basis points to 4.18 percent, compared to the fourth quarter of last year.

Average cost of deposits and average cost of funds for the fourth quarter of 2022 each increased by 172 basis points, to 1.91 percent and 1.99 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2022 fourth quarter was 2.31 percent versus 2.38 percent in the 2022 third quarter, and 1.91 percent reported in the 2021 fourth quarter.

Provision for Credit Losses

The Bank’s provision for credit losses for the fourth quarter of 2022 was $42.8 million, an increase of $35.9 million, or over 100 percent, versus the 2021 fourth quarter. The increase in the provision for credit losses for the fourth quarter, compared to the same quarter last year, was predominantly attributable to a deteriorating macroeconomic forecast, particularly related to interest rate, GDP and unemployment forecasts, compared with the same period last year.

Net charge-offs for the 2022 fourth quarter were $18.2 million, or 0.10 percent of average loans, on an annualized basis, versus $10.2 million, or 0.06 percent, for the 2022 third quarter and net charge-offs of $33.7 million, or 0.22 percent, for the 2021 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2022 fourth quarter was $45.2 million, up $11.8 million when compared with $33.5 million reported in the 2021 fourth quarter. The increase was primarily due to a $9.2 million increase in fees and service charges and a $4.2 million increase in other income, primarily foreign currency activity. This was partially offset by a decrease of $2.2 million in net gains on sales of loans.

Non-interest expense for the fourth quarter of 2022 was $233.3 million, an increase of $49.4 million, or 26.8 percent, versus $183.9 million reported in the 2021 fourth quarter. The increase was predominantly due to the addition of new private client banking teams, national banking practices, and operational personnel, as well as client activity related expenses that have increased with the growth in our clients and businesses.

The Bank’s efficiency ratio was 34.11 percent for the 2022 fourth quarter compared with 32.31 percent for the same period a year ago, and 31.41 percent for the third quarter of 2022.

Loans

Loans, excluding loans held for sale, increased $452.3 million to $74.29 billion in the 2022 fourth quarter, versus $73.84 billion at September 30, 2022. Average loans, excluding loans held for sale, reached $74.46 billion in the 2022 fourth quarter, growing $0.99 billion, or 1.3 percent, from the 2022 third quarter and $13.96 billion, or 23.1 percent, from the fourth quarter of 2021.

At December 31, 2022, non-accrual loans were $184.0 million, representing 0.25 percent of total loans and 0.17 percent of total assets, compared with non-accrual loans of $185.3 million, or 0.25 percent of total loans, at September 30, 2022 and $218.3 million, or 0.34 percent of total loans, at December 31, 2021. At December 31, 2022, the ratio of allowance for credit losses for loans and leases to total loans, was 0.66 percent, versus 0.63 percent at September 30, 2022 and 0.73 percent at December 31, 2021. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 266 percent for the 2022 fourth quarter versus 251 percent for the third quarter of 2022 and 217 percent for the 2021 fourth 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 8.79 percent, 10.42 percent, 11.21 percent, and 12.33 percent, respectively, as of December 31, 2022. 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 6.62 percent.

The Bank declared a cash dividend of $0.70 per share, a $0.14 per share increase, payable on or after February 10, 2023 to common stockholders of record at the close of business on January 27, 2023. The Bank also declared a cash dividend of $12.50 per share payable on or after March 30, 2023 to preferred shareholders of record at the close of business on March 17, 2023. In the fourth quarter of 2022, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on October 29, 2022. 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.

Conference Call

Signature Bank’s management will host a conference call to review results of its 2022 fourth quarter and year ended December 31, 2022 on Tuesday, January 17, 2023 at 8:00 AM ET. All U.S. participants should dial 800-274-8461 and international callers should dial 203-518-9814 at least ten minutes prior to the start of the call and reference conference ID SBNYQ422.

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.

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

To listen to a telephone replay of the conference call, please dial 800-934-4245 or 402-220-1173. The replay will be available from approximately 12:00 PM ET on Tuesday, January 17, 2023 through 11:59 PM ET on Friday, January 20, 2023.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 40 private client offices throughout the metropolitan New York area, as well as those in Connecticut, California, Nevada 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; and, 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 blockchain-based 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. Forward-looking statements may also address our sustainability progress, plans, and goals (including climate change and environmental-related matters and disclosures), which may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. 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
December 31,

Twelve months ended
December 31,

(dollars in thousands, except per share amounts)

2022

2021

2022

2021

INTEREST INCOME

 

 

 

 

Loans and leases

$

902,026

 

516,287

2,798,945

 

1,892,787

Loans held for sale

 

4,586

 

955

12,983

 

4,157

Securities available-for-sale

 

122,051

 

58,902

401,783

 

194,825

Securities held-to-maturity

 

41,359

 

16,199

115,994

 

54,949

Other investments

 

87,217

 

13,966

220,632

 

43,663

Total interest income

 

1,157,239

 

606,309

3,550,337

 

2,190,381

INTEREST EXPENSE

 

 

 

 

Deposits

 

475,183

 

46,920

913,563

 

210,644

Federal funds purchased and securities sold under agreements to repurchase

 

602

 

602

2,381

 

2,401

Federal Home Loan Bank borrowings

 

36,610

 

16,699

74,444

 

67,745

Subordinated debt

 

6,167

 

6,167

24,615

 

29,067

Total interest expense

 

518,562

 

70,388

1,015,003

 

309,857

Net interest income before provision for credit losses

 

638,677

 

535,921

2,535,334

 

1,880,524

Provision for credit losses

 

42,761

 

6,877

78,770

 

50,042

Net interest income after provision for credit losses

 

595,916

 

529,044

2,456,564

 

1,830,482

NON-INTEREST INCOME

 

 

 

 

Fees and service charges

 

30,721

 

21,501

107,206

 

75,068

Commissions

 

4,696

 

4,020

17,694

 

16,253

Net losses on sales of securities

 

(84

)

(900

)

Net gains on sale of loans

 

2,855

 

5,065

11,282

 

19,170

Other income

 

7,034

 

2,869

25,755

 

10,401

Total non-interest income

 

45,222

 

33,455

161,037

 

120,892

NON-INTEREST EXPENSE

 

 

 

 

Salaries and benefits

 

131,435

 

123,104

524,766

 

458,885

Occupancy and equipment

 

12,771

 

12,160

51,265

 

46,473

Information technology

 

15,906

 

13,103

60,791

 

48,536

FDIC assessment fees

 

6,742

 

7,437

30,344

 

24,543

Professional fees

 

10,621

 

8,589

44,077

 

30,989

Other general and administrative

 

55,835

 

19,555

150,954

 

94,174

Total non-interest expense

 

233,310

 

183,948

862,197

 

703,600

Income before income taxes

 

407,828

 

378,551

1,755,404

 

1,247,774

Income tax expense

 

106,982

 

106,560

418,355

 

329,333

Net income

$

300,846

 

271,991

1,337,049

 

918,441

Preferred stock dividends

 

9,125

 

9,125

36,500

 

37,887

Net income available to common shareholders

$

291,721

 

262,866

1,300,549

 

880,554

PER COMMON SHARE DATA

 

 

 

 

Earnings per common share - basic

$

4.67

 

4.38

20.88

 

15.20

Earnings per common share - diluted

$

4.65

 

4.34

20.76

 

15.03

Dividends per common share

$

0.56

 

0.56

2.24

 

2.24

 

SIGNATURE BANK

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

December 31,

 

 

2022

 

2021

 

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

(unaudited)

 

ASSETS

 

 

Cash and due from banks

$

5,874,527

 

29,547,574

 

Short-term investments

 

80,116

 

73,097

 

Total cash and cash equivalents

 

5,954,643

 

29,620,671

 

Securities available-for-sale (amortized cost $21,071,366 at December 31, 2022 and $17,398,906 at December 31, 2021); (zero allowance for credit losses at December 31, 2022 and at December 31, 2021)

 

18,594,056

 

17,152,863

 

Securities held-to-maturity (fair value $7,018,200 at December 31, 2022 and $4,944,777 December 31, 2021); (allowance for credit losses $25 at December 31, 2022 and $56 at December 31, 2021)

 

7,780,374

 

4,998,281

 

Federal Home Loan Bank stock

 

560,343

 

166,697

 

Loans held for sale

 

586,452

 

386,765

 

Loans and leases

 

74,292,404

 

64,862,798

 

Allowance for credit losses for loans and leases

 

(489,862

)

(474,389

)

Loans and leases, net

 

73,802,542

 

64,388,409

 

Premises and equipment, net

 

117,229

 

92,232

 

Operating lease right-of-use assets

 

249,269

 

225,988

 

Accrued interest and dividends receivable

 

449,815

 

306,827

 

Other assets

 

2,268,928

 

1,106,694

 

Total assets

$

110,363,651

 

118,445,427

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

Deposits

 

 

Non-interest-bearing

$

31,512,400

 

44,363,215

 

Interest-bearing

 

57,077,327

 

61,769,579

 

Total deposits

 

88,589,727

 

106,132,794

 

Federal funds purchased and securities sold under agreements to repurchase

 

150,000

 

150,000

 

Federal Home Loan Bank borrowings

 

11,283,738

 

2,639,245

 

Subordinated debt

 

571,635

 

570,228

 

Operating lease liabilities

 

281,570

 

254,660

 

Accrued expenses and other liabilities

 

1,473,880

 

857,882

 

Total liabilities

 

102,350,550

 

110,604,809

 

Shareholders' equity

 

 

Preferred stock, par value $.01 per share; 61,000,000 shares authorized; 730,000 shares issued and outstanding at December 31, 2022 and December 31, 2021

 

7

 

7

 

Common stock, par value $.01 per share; 125,000,000 and 64,000.000 shares authorized at December 31, 2022 and December 31, 2021, respectively; 63,064,643 shares issued and 62,928,819 outstanding at December 31, 2022;60,729,674 shares issued and 60,631,944 outstanding at December 31, 2021

 

629

 

606

 

Additional paid-in capital

 

4,551,819

 

3,763,810

 

Retained earnings

 

5,457,886

 

4,298,527

 

Accumulated other comprehensive loss

 

(1,997,240

)

(222,332

)

Total shareholders' equity

 

8,013,101

 

7,840,618

 

Total liabilities and shareholders' equity

$

110,363,651

 

118,445,427

 

 

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)

2022

 

2021

 

2022

 

2021

PER COMMON SHARE

 

 

 

 

Earnings per common share - basic

$

4.67

 

$

4.38

 

$

20.88

 

$

15.20

 

Earnings per common share - diluted

$

4.65

 

$

4.34

 

$

20.76

 

$

15.03

 

Weighted average common shares outstanding - basic

 

62,440

 

 

60,003

 

 

62,250

 

 

57,871

 

Weighted average common shares outstanding - diluted

 

62,627

 

 

60,563

 

 

62,605

 

 

58,508

 

Book value per common share

$

116.08

 

$

117.63

 

$

116.08

 

$

117.63

 

 

 

 

 

 

SELECTED FINANCIAL DATA

 

 

 

 

Return on average total assets

 

1.06

%

 

0.96

%

 

1.15

%

 

0.95

%

Return on average common shareholders' equity

 

16.35

%

 

14.76

%

 

17.55

%

 

13.81

%

Efficiency ratio (1)

 

34.11

%

 

32.31

%

 

31.98

%

 

35.16

%

Yield on interest-earning assets

 

4.17

%

 

2.15

%

 

3.10

%

 

2.28

%

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

 

4.18

%

 

2.16

%

 

3.11

%

 

2.29

%

Cost of deposits and borrowings

 

1.99

%

 

0.27

%

 

0.95

%

 

0.35

%

Net interest margin

 

2.30

%

 

1.90

%

 

2.22

%

 

1.96

%

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

 

2.31

%

 

1.91

%

 

2.23

%

 

1.97

%

(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.

 

 

 

 

December 31,
2022

September 30,
2022

December 31,
2021

CAPITAL RATIOS

 

 

 

Tangible common equity (4)

 

6.62

%

 

6.10

%

 

6.02

%

Tier 1 leverage (5)

 

8.79

%

 

8.47

%

 

7.27

%

Common equity Tier 1 risk-based (5)

 

10.42

%

 

10.11

%

 

9.60

%

Tier 1 risk-based (5)

 

11.21

%

 

10.90

%

 

10.51

%

Total risk-based (5)

 

12.33

%

 

11.99

%

 

11.76

%

 

 

 

 

ASSET QUALITY

 

 

 

Non-accrual loans

$

183,961

 

$

185,300

 

$

218,295

 

Allowance for credit losses for loans and leases (ACLLL)

$

489,862

 

$

464,858

 

$

474,389

 

ACLLL to non-accrual loans

 

266.29

%

 

250.87

%

 

217.32

%

ACLLL to total loans

 

0.66

%

 

0.63

%

 

0.73

%

Non-accrual loans to total loans

 

0.25

%

 

0.25

%

 

0.34

%

Quarterly net charge-offs to average loans, annualized

 

0.10

%

 

0.06

%

 

0.22

%

(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, 2022 ratios are preliminary.

 

SIGNATURE BANK

NET INTEREST MARGIN ANALYSIS

(unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

December 31, 2022

Three Months Ended

December 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

$

8,565,395

 

82,230

 

3.84

%

30,474,298

11,831

 

0.15

%

Investment securities

 

26,630,543

 

168,397

 

2.53

%

20,297,693

77,236

 

1.52

%

Commercial loans, mortgages and leases

 

74,347,595

 

902,889

 

4.82

%

60,358,789

516,861

 

3.40

%

Residential mortgages and consumer loans

 

108,490

 

1,381

 

5.05

%

139,935

1,126

 

3.19

%

Loans held for sale

 

478,238

 

4,586

 

3.80

%

356,256

955

 

1.06

%

Total interest-earning assets (1)

 

110,130,261

 

1,159,483

 

4.18

%

111,626,971

608,009

 

2.16

%

Non-interest-earning assets

 

2,580,676

 

 

1,101,262

 

 

Total assets

$

112,710,937

 

 

112,728,233

 

 

INTEREST-BEARING LIABILITIES

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

NOW and interest-bearing demand

$

22,799,246

 

181,836

 

3.16

%

18,694,556

15,862

 

0.34

%

Money market

 

36,238,210

 

263,286

 

2.88

%

41,433,741

28,030

 

0.27

%

Time deposits

 

3,719,121

 

30,061

 

3.21

%

1,583,242

3,028

 

0.76

%

Non-interest-bearing demand deposits

 

35,855,867

 

 

%

38,876,207

 

%

Total deposits

 

98,612,444

 

475,183

 

1.91

%

100,587,746

46,920

 

0.19

%

Subordinated debt

 

571,402

 

6,167

 

4.32

%

569,998

6,167

 

4.33

%

Other borrowings

 

3,968,074

 

37,212

 

3.72

%

2,805,278

17,301

 

2.45

%

Total deposits and borrowings

 

103,151,920

 

518,562

 

1.99

%

103,963,022

70,388

 

0.27

%

Other non-interest-bearing liabilities

 

1,772,228

 

 

989,002

 

 

Preferred equity

 

708,173

 

 

708,173

 

 

Common equity

 

7,078,616

 

 

7,068,036

 

 

Total liabilities and shareholders' equity

$

112,710,937

 

 

112,728,233

 

 

OTHER DATA

 

 

 

 

 

 

Net interest income / interest rate spread (1)

 

$

640,921

 

2.19

%

 

537,621

 

1.89

%

Tax-equivalent adjustment

 

 

(2,244

)

 

 

(1,700

)

 

Net interest income, as reported

 

$

638,677

 

 

 

535,921

 

 

Net interest margin

 

 

2.30

%

 

 

1.90

%

Tax-equivalent effect

 

 

0.01

%

 

 

0.01

%

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

 

 

2.31

%

 

 

1.91

%

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

 

 

106.77

%

 

 

107.37

%

(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, 2022

 

Twelve Months Ended
December 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

$

17,402,433

 

208,906

 

1.18

%

 

25,167,623

35,009

 

0.14

%

Investment securities

 

25,950,867

 

529,503

 

2.04

%

 

15,908,371

258,428

 

1.62

%

Commercial loans, mortgages and leases

 

70,294,647

 

2,802,119

 

3.99

%

 

54,332,257

1,894,745

 

3.49

%

Residential mortgages and consumer loans

 

120,493

 

4,577

 

3.80

%

 

148,137

4,933

 

3.33

%

Loans held for sale

 

503,598

 

12,983

 

2.58

%

 

306,202

4,157

 

1.36

%

Total interest-earning assets (1)

 

114,272,038

 

3,558,088

 

3.11

%

 

95,862,590

2,197,272

 

2.29

%

Non-interest-earning assets

 

1,892,462

 

 

 

941,161

 

 

Total assets

$

116,164,500

 

 

 

96,803,751

 

 

INTEREST-BEARING LIABILITIES

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

NOW and interest-bearing demand

$

21,556,982

 

381,228

 

1.77

%

 

18,296,459

73,622

 

0.40

%

Money market

 

39,438,596

 

489,121

 

1.24

%

 

36,492,490

121,416

 

0.33

%

Time deposits

 

2,146,411

 

43,214

 

2.01

%

 

1,759,229

15,606

 

0.89

%

Non-interest-bearing demand deposits

 

40,290,382

 

 

%

 

28,764,155

 

%

Total deposits

 

103,432,371

 

913,563

 

0.88

%

 

85,312,333

210,644

 

0.25

%

Subordinated debt

 

570,877

 

24,615

 

4.31

%

 

646,359

29,067

 

4.50

%

Other borrowings

 

2,617,723

 

76,825

 

2.93

%

 

2,879,793

70,146

 

2.44

%

Total deposits and borrowings

 

106,620,971

 

1,015,003

 

0.95

%

 

88,838,485

309,857

 

0.35

%

Other non-interest-bearing liabilities

 

1,425,841

 

 

 

878,876

 

 

Preferred equity

 

708,173

 

 

 

708,109

 

 

Common equity

 

7,409,515

 

 

 

6,378,281

 

 

Total liabilities and shareholders' equity

$

116,164,500

 

 

 

96,803,751

 

 

OTHER DATA

 

 

 

 

 

 

 

Net interest income / interest rate spread (1)

 

$

2,543,085

 

2.16

%

 

 

1,887,415

 

1.94

%

Tax-equivalent adjustment

 

 

(7,751

)

 

 

 

(6,891

)

 

Net interest income, as reported

 

$

2,535,334

 

 

 

 

1,880,524

 

 

Net interest margin

 

 

2.22

%

 

 

 

1.96

%

Tax-equivalent effect

 

 

0.01

%

 

 

 

0.01

%

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

 

 

2.23

%

 

 

 

1.97

%

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

 

 

107.18

%

 

 

 

107.91

%

 

 

 

 

 

 

 

 

(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, and (v) pre-tax, pre-provision earnings. 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,
2022

September 30,
2022

December 31,
2021

Consolidated total shareholders' equity

$

8,013,101

 

7,690,523

 

7,840,618

 

Less: Preferred equity

 

708,173

 

708,173

 

708,173

 

Common shareholders' equity

$

7,304,928

 

6,982,350

 

7,132,445

 

Less: Intangible assets

 

398

 

2,025

 

3,977

 

Tangible common shareholders' equity (TCE)

$

7,304,530

 

6,980,325

 

7,128,468

 

 

 

 

 

Consolidated total assets

$

110,363,651

 

114,468,746

 

118,445,427

 

Less: Intangible assets

 

398

 

2,025

 

3,977

 

Consolidated tangible total assets (TTA)

$

110,363,253

 

114,466,721

 

118,441,450

 

Tangible common equity ratio (TCE/TTA)

 

6.62

%

6.10

%

6.02

%

The following table presents the efficiency ratio calculation:

 

Three months ended
December 31,

 

Twelve months ended
December 31,

(dollars in thousands)

 

2022

 

2021

 

 

2022

 

2021

 

Non-interest expense (NIE)

$

233,310

 

183,948

 

 

862,197

 

703,600

 

Net interest income before provision for credit losses

 

638,677

 

535,921

 

 

2,535,334

 

1,880,524

 

Other non-interest income

 

45,222

 

33,455

 

 

161,037

 

120,892

 

Total income (TI)

$

683,899

 

569,376

 

 

2,696,371

 

2,001,416

 

Efficiency ratio (NIE/TI)

 

34.11

%

32.31

%

 

31.98

%

35.16

%

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)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest income (as reported)

$

1,157,239

 

606,309

 

3,550,337

 

2,190,381

 

Tax-equivalent adjustment

 

2,244

 

1,700

 

7,751

 

6,891

 

Interest income, tax-equivalent basis

$

1,159,483

 

608,009

 

3,558,088

 

2,197,272

 

Interest-earnings assets

$

110,130,261

 

111,626,971

 

114,272,038

 

95,862,590

 

 

 

 

 

 

Yield on interest-earning assets

 

4.17

%

2.15

%

3.10

%

2.28

%

Tax-equivalent effect

 

0.01

%

0.01

%

0.01

%

0.01

%

Yield on interest-earning assets, tax-equivalent basis

 

4.18

%

2.16

%

3.11

%

2.29

%

 

 

 

 

 

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

 

Three months ended
December 31,

 

Three months ended
S
eptember 30,

 

Twelve months ended
December 31,

(dollars in thousands)

2022

 

2021

 

2022

 

2021

 

2022

 

2021

Net interest margin (as reported)

2.30%

1.90%

2.37%

1.88%

2.22%

1.96%

Tax-equivalent adjustment

0.01%

0.01%

0.01%

0.00%

0.01%

0.01%

Net interest margin, tax-equivalent basis

2.31%

1.91%

2.38%

1.88%

2.23%

1.97%

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)

2022

 

2021

 

2022

 

2021

Net income (as reported)

$

300,846

271,991

1,337,049

918,441

Income tax expense

 

106,982

106,560

418,355

329,333

Provision for credit losses

 

42,761

6,877

78,770

50,042

Pre-tax, pre-provision earnings

$

450,589

385,428

1,834,174

1,297,816

 

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