Signature Bank Reports 2022 Second Quarter Results

Rhea-AI Summary

Signature Bank (Nasdaq: SBNY) reported a record net income of $339.2 million for Q2 2022, up 58.1% year-over-year, leading to $5.26 diluted EPS. Pre-tax, pre-provision earnings reached $476.7 million, a 54.5% increase. Total assets grew 19.7% to $115.97 billion. However, total deposits decreased by $5.04 billion to $104.12 billion, driven by reductions in client balances. Loans increased 8.4% quarter-over-quarter to $72 billion. The bank declared a cash dividend of $0.56 per share, payable on August 12, 2022.

Positive

• Record net income of $339.2 million, up 58.1% year-over-year.
• Pre-tax, pre-provision earnings reached $476.7 million, a 54.5% increase.
• Loan growth of 8.4% quarter-over-quarter, totaling $72 billion.

Negative

• Total deposits decreased by $5.04 billion to $104.12 billion.

• Net Income for the 2022 Second Quarter Increased $124.7 Million, or 58.1 Percent, to a Record $339.2 Million, or $5.26 Diluted Earnings Per Share, Versus $214.5 Million, or $3.57 Diluted Earnings Per Share, Reported in the 2021 Second Quarter. Pre-Tax, Pre-Provision Earnings for the 2022 Second Quarter Were a Record $476.7 Million, an Increase of $168.2 Million, or 54.5 Percent, Compared with $308.6 Million for the 2021 Second Quarter
  
  

• Total Deposits in the Second Quarter Declined $5.04 Billion to $104.12 Billion, While Average Deposits Increased $816.8 Million. The Decline Was Primarily Driven by Client Balances of the New York Banking Teams, Which Decreased $2.4 Billion and the Digital Asset Banking Team, Which Declined $2.4 Billion. Conversely, Off-Balance Sheet Treasuries Increased $1.5 Billion Due to Purchasing Activity in the Digital Asset Banking Space. Total Deposits for the Prior Twelve Months Have Grown $18.56 Billion, or 21.7 Percent
  
  

• For the 2022 Second Quarter, Loans Increased $5.60 Billion, or 8.4 Percent, to $72 Billion. Since the End of the 2021 Second Quarter, Loans Have Increased 32.1 Percent, or $17.49 Billion
  
  

• For the 2022 Second Quarter, Non-Accrual Loans Decreased $9.9 Million to $167.9 Million, or 0.23 Percent of Total Loans, at June 30, 2022, Versus $177.8 Million, or 0.27 Percent, at the End of the 2022 First Quarter
  
  
  
  
• Net Interest Margin on a Tax-Equivalent Basis Increased to 2.23 Percent, Compared With 1.99 Percent for the 2022 First Quarter and 2.02 Percent for the 2021 Second Quarter
  
  

• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 7.92 Percent, 9.96 Percent, 10.76 Percent, and 11.85 Percent, Respectively, at June 30, 2022. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.31 percent
  
  
  
  
• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After August 12, 2022 to Common Shareholders of Record at the Close of Business on July 29, 2022. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After September 30, 2022 to Preferred Shareholders of Record at the Close of Business on September 16, 2022
  
  

• In the 2022 Second Quarter, the Bank Launched a New National Banking Practice, the Healthcare Banking and Finance Team, to Provide Lending Services and Garner Deposits in this Space. Additionally, the Bank On-boarded Eleven Private Client Banking Teams; Six on the West Coast and Five in New York

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its second quarter ended June 30, 2022.

Net income for the 2022 second quarter was a record $339.2 million, or $5.26 diluted earnings per share, versus $214.5 million, or $3.57 diluted earnings per share, for the 2021 second quarter. The increase in net income for the 2022 second quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong average deposit, loan and securities growth, as well as higher interest rates. Pre-tax, pre-provision earnings were a record $476.7 million, representing an increase of $168.2 million, or 54.5 percent, compared with $308.6 million for the 2021 second quarter.

Net interest income for the 2022 second quarter reached $649.1 million, up $191.9 million, or 42.0 percent, when compared with the 2021 second quarter. This increase is primarily due to growth in average interest-earning assets and higher prevailing market interest rates. Total assets reached $115.97 billion at June 30, 2022, an increase of $19.08 billion, or 19.7 percent, from $96.89 billion at June 30, 2021. Average assets for the 2022 second quarter reached $118.85 billion, an increase of $26.99 billion, or 29.4 percent, compared with the 2021 second quarter.

Deposits for the 2022 second quarter decreased $5.04 billion to $104.12 billion, including a non-interest bearing deposit reduction of $5.31 billion, which brings our non-interest bearing mix to 39.8 percent of deposits at June 30, 2022. Overall deposit growth for the last twelve months was 21.7 percent, or $18.56 billion. Average deposits for the 2022 second quarter reached $106.68 billion, an increase of $816.8 million when compared with the prior quarter.

“Very few banks achieve strong shareholder returns while delivering long-term growth at a pace like that of Signature Bank. Year after year, we consistently do both because we remain focused on what we do best: attracting experienced, banking teams and developing new national businesses. While we cannot control the ebb and flow of macro-economic cycles, our ability to overcome obstacles and continuously build our franchise value is based on the deep experience of our colleagues. These veteran bankers are experts and the expansion of their books of business directly results in diversification of our balance sheet. We have employed this same organic growth strategy since our inception when the Bank commenced with just 12 New York area-based teams. Our commitment to this strategy is highlighted by the recent onboarding of our Health Care Banking and Finance Team. The 137 teams and business lines added to our banking network throughout our 21-year history are responsible for transforming Signature Bank into an institution spanning numerous deposit and lending businesses across a national footprint,” noted Joseph J. DePaolo, Signature Bank President and Chief Executive Officer.

“This quarter we once again delivered record earnings of $339.2 million, realizing our strongest growth in pre-provision net revenue of 54 percent, compared with same period last year. We credit this meaningful growth in earnings to all of our business lines, collectively, as there is no single one which has brought us to this point. As we look ahead, we will continue to take advantage of the abundant team onboarding opportunities which exist across our entire footprint and rely upon our proven approach to organic growth to continue to drive earnings, despite some unsettling times,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “We built Signature Bank for times of volatility and uncertainty like those of today. Accordingly, our clients have come to continually appreciate our strong balance sheet, which emphasizes depositor safety more than anything else. Our investment portfolio is built around low-risk highly liquid securities, and our lending efforts are also centered around lower risk arenas. This depositor safety-first philosophy led to us being the only bank in the U.S. with more than $4 billion in assets to escape the Great Financial Crisis without a down year in earnings. In times like these, we are able to seize opportunities that build our business as we endeavor to onboard new clients and attract new teams. We have always stayed firm on serving our clients through our relationship-based, single-point-of-contact team approach, which has become the hallmark of our enterprise. These are among the reasons we believe Signature Bank will continue to grow and prosper.”

Net Interest Income

Net interest income for the 2022 second quarter was $649.1 million, an increase of $191.9 million, or 42.0 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets and higher prevailing market interest rates. Average interest-earning assets of $116.99 billion for the 2022 second quarter represent an increase of $26.01 billion, or 28.6 percent, from the 2021 second quarter. Due to higher interest rates across all of our asset classes, the yield on interest-earning assets for the 2022 second quarter increased 29 basis points to 2.66 percent, compared to the second quarter of last year.

Average cost of deposits and average cost of funds for the second quarter of 2022 increased by 13 and 8 basis points, to 0.40 percent and 0.46 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2022 second quarter was 2.23 percent versus 2.02 percent reported in the 2021 second quarter and 1.99 percent in the 2022 first quarter.

Provision for Credit Losses

The Bank’s provision for credit losses for the second quarter of 2022 was $4.2 million, compared with $2.7 million for the 2022 first quarter and $8.3 million for the 2021 second quarter. The decrease in the provision for credit losses for the 2022 second quarter, compared to the same quarter last year, was predominantly attributable to improved macroeconomic conditions in our multi-family commercial real estate portfolio compared with the same period last year.

Net charge offs for the 2022 second quarter were $19.7 million, or 0.11 percent of average loans, on an annualized basis, versus $17.8 million, or 0.11 percent, for the 2022 first quarter and net charge offs of $15.3 million, or 0.12 percent, for the 2021 second quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2022 second quarter was $37.7 million, up $14.3 million when compared with $23.4 million reported in the 2021 second quarter. The increase was primarily driven by a $8.2 million increase in fees and service charges and a $6.7 million increase in other income, including foreign currency activity, as well as mark-to-market gains related to our non-hedging derivatives.

Non-interest expense for the second quarter of 2022 was $210.0 million, an increase of $38.0 million, or 22.1 percent, versus $172.0 million reported in the 2021 second quarter. The increase was predominantly due to an increase of $20.0 million in salaries and benefits from the hiring of private client banking teams, national banking practices, and operational personnel, as well as consulting and professional fees related to various new projects initiated to support the growing needs of our clients.

Despite the significant team hiring and operational investment, the Bank’s efficiency ratio improved to 30.6 percent for the 2022 second quarter compared with 35.8 percent for the same period a year ago, and 31.8 percent for the first quarter of 2022.

Loans

Loans, excluding loans held for sale, grew $5.60 billion, or 8.4 percent, during the second quarter of 2022 to $72 billion, compared with $66.40 billion at March 31, 2022. Average loans, excluding loans held for sale, reached $68.67 billion in the 2022 second quarter, growing $3.57 billion, or 5.5 percent, from the 2022 first quarter and $16.19 billion, or 30.9 percent, from the 2021 second quarter.

At June 30, 2022, non-accrual loans were $167.9 million, representing 0.23 percent of total loans and 0.14 percent of total assets, compared with non-accrual loans of $177.8 million, or 0.27 percent of total loans, at March 31, 2022 and $136.1 million, or 0.25 percent of total loans, at June 30, 2021. The ratio of allowance for credit losses for loans and leases to total loans at June 30, 2022 was 0.62 percent, versus 0.69 percent at March 31, 2022 and 0.94 percent at June 30, 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 second quarter versus 259 percent for the first quarter of 2022 and 378 percent for the 2021 second 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 7.92 percent, 9.96 percent, 10.76 percent, and 11.85 percent, respectively, as of June 30, 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 declared a cash dividend of $0.56 per share, payable on or after August 12, 2022 to common stockholders of record at the close of business on July 29, 2022. The Bank also declared a cash dividend of $12.50 per share payable on September 30, 2022 to preferred shareholders of record at the close of business on September 16, 2022. In the second 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 April 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 June 17, 2022.

Conference Call

Signature Bank’s management will host a conference call to review results of its 2022 second quarter on Tuesday, July 19, 2022, at 9:00 AM ET. All participants should dial 866-342-8591 and international callers should dial 203-518-9713, at least ten minutes prior to the start of the call and reference conference ID SBNYQ222.

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 the Signature Bank’s website here.

To listen to a telephone replay of the conference call, please dial 800-839-5128 or 402-220-1504. The replay will be available from approximately 12:00 PM ET on Tuesday, July 19, 2022 through 11:59 PM ET on Friday, July 22, 2022.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 38 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; 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 solution to be approved for use by the NYS Department of Financial Services.

Signature Bank placed 19^th 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. 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 June 30,				Six months ended June 30,
(dollars in thousands, except per share amounts)	2022		2021		2022		2021
INTEREST INCOME
Loans and leases	$	601,726	466,748		1,133,720		895,729
Loans held for sale		2,743	998		4,177		1,577
Securities available-for-sale		98,715	46,722		172,960		88,597
Securities held-to-maturity		26,295	13,240		45,110		26,202
Other investments		45,100	9,102		60,777		16,246
Total interest income		774,579	536,810		1,416,744		1,028,351
INTEREST EXPENSE
Deposits		106,304	54,948		152,344		112,452
Federal funds purchased and securities sold under agreements to repurchase		588	595		1,178		1,197
Federal Home Loan Bank borrowings		12,459	17,114		28,275		34,242
Subordinated debt		6,122	6,932		12,281		16,733
Total interest expense		125,473	79,589		194,078		164,624
Net interest income before provision for credit losses		649,106	457,221		1,222,666		863,727
Provision for credit losses		4,249	8,308		6,944		39,180
Net interest income after provision for credit losses		644,857	448,913		1,215,722		824,547
NON-INTEREST INCOME
Fees and service charges		24,790	16,605		47,480		33,535
Commissions		4,267	3,899		8,508		7,902
Net losses on sales of securities		—	—		(816	)	—
Net gains on sales of loans		2,454	3,393		6,296		10,454
Other (loss) income		6,151	(529	)	10,598		4,178
Total non-interest income		37,662	23,368		72,066		56,069
NON-INTEREST EXPENSE
Salaries and benefits		132,820	112,806		259,841		218,857
Occupancy and equipment		12,582	10,779		24,612		22,552
Information technology		14,927	10,722		29,483		22,203
FDIC assessment fees		7,853	4,486		15,942		10,211
Professional fees		12,080	7,278		21,518		12,420
Other general and administrative		29,783	25,948		52,030		52,167
Total non-interest expense		210,045	172,019		403,426		338,410
Income before income taxes		472,474	300,262		884,362		542,206
Income tax expense		133,272	85,769		206,626		137,181
Net income	$	339,202	214,493		677,736		405,025
Preferred stock dividends		9,125	9,125		18,250		19,637
Net income available to common shareholders	$	330,077	205,368		659,486		385,388
PER COMMON SHARE DATA
Earnings per common share - basic	$	5.28	3.59		10.62		6.87
Earnings per common share - diluted	$	5.26	3.57		10.54		6.80
Dividends per common share	$	0.56	0.56		1.12		1.12

SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
	June 30,			December 31,
	2022			2021
(dollars in thousands, except shares and per share amounts)	(unaudited)
ASSETS
Cash and due from banks	$	14,497,512		29,547,574
Short-term investments		80,849		73,097
Total cash and cash equivalents		14,578,361		29,620,671
Securities available-for-sale (amortized cost $21,268,894 at June 30, 2022 and $17,398,906 at December 31, 2021); (zero allowance for credit losses at June 30, 2022 and at December 31, 2021)		19,587,707		17,152,863
Securities held-to-maturity (fair value $6,238,826 at June 30, 2022 and $4,944,777 at December 31, 2021); (allowance for credit losses $25 at June 30, 2022 and $56 at December 31, 2021)		6,728,016		4,998,281
Federal Home Loan Bank stock		131,220		166,697
Loans held for sale		815,386		386,765
Loans and leases		72,001,189		64,862,798
Allowance for credit losses for loans and leases		(445,965	)	(474,389	)
Loans and leases, net		71,555,224		64,388,409
Premises and equipment, net		104,218		92,232
Operating lease right-of-use assets		260,236		225,988
Accrued interest and dividends receivable		349,190		306,827
Other assets		1,857,245		1,106,694
Total assets	$	115,966,803		118,445,427
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest-bearing	$	41,408,804		44,363,215
Interest-bearing		62,710,242		61,769,579
Total deposits		104,119,046		106,132,794
Federal funds purchased and securities sold under agreements to repurchase		150,000		150,000
Federal Home Loan Bank borrowings		1,574,517		2,639,245
Subordinated debt		570,926		570,228
Operating lease liabilities		289,278		254,660
Accrued expenses and other liabilities		1,231,230		857,882
Total liabilities		107,934,997		110,604,809
Shareholders’ equity
Preferred stock, par value $.01 per share; 61,000,000 shares authorized; 730,000 shares issued and outstanding at June 30, 2022 and December 31, 2021		7		7
Common stock, par value $.01 per share; 125,000,000 shares authorized; 63,064,475 shares issued and 62,928,651 outstanding at June 30, 2022; 60,729,674 shares issued and 60,631,944 outstanding at December 31, 2021		629		606
Additional paid-in capital		4,524,343		3,763,810
Retained earnings		4,887,453		4,298,527
Accumulated other comprehensive loss		(1,380,626	)	(222,332	)
Total shareholders' equity		8,031,806		7,840,618
Total liabilities and shareholders' equity	$	115,966,803		118,445,427

SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
	Three months ended June 30,						Six months ended June 30,
(in thousands, except ratios and per share amounts)	2022			2021			2022			2021
PER COMMON SHARE
Earnings per common share - basic	$	5.28		$	3.59		$	10.62		$	6.87
Earnings per common share - diluted	$	5.26		$	3.57		$	10.54		$	6.80
Weighted average common shares outstanding - basic		62,440			57,128			62,057			56,069
Weighted average common shares outstanding - diluted		62,692			57,527			62,502			56,614
Book value per common share	$	116.38		$	106.24		$	116.38		$	106.24
SELECTED FINANCIAL DATA
Return on average total assets		1.14	%		0.94	%		1.15	%		0.95	%
Return on average common shareholders' equity		17.94	%		13.61	%		17.69	%		13.33	%
Efficiency ratio (1)		30.58	%		35.79	%		31.16	%		36.79	%
Yield on interest-earning assets		2.66	%		2.37	%		2.43	%		2.44	%
Yield on interest-earning assets, tax-equivalent basis (1)(2)		2.66	%		2.37	%		2.44	%		2.45	%
Cost of deposits and borrowings		0.46	%		0.38	%		0.36	%		0.42	%
Net interest margin		2.23	%		2.02	%		2.10	%		2.05	%
Net interest margin, tax-equivalent basis (2)(3)		2.23	%		2.02	%		2.11	%		2.06	%

(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.

	June 30, 2022			March 31, 2022			December 31, 2021			June 30, 2021
CAPITAL RATIOS
Tangible common equity (4)		6.31	%		6.12	%		6.02	%		6.31	%
Tier 1 leverage (5)		7.92	%		7.74	%		7.27	%		7.86	%
Common equity Tier 1 risk-based (5)		9.96	%		10.49	%		9.60	%		10.07	%
Tier 1 risk-based (5)		10.76	%		11.37	%		10.51	%		11.20	%
Total risk-based (5)		11.85	%		12.58	%		11.76	%		12.77	%
ASSET QUALITY
Non-accrual loans	$	167,889		$	177,761		$	218,295		$	136,099
Allowance for credit losses for loans and leases (ACLLL)	$	445,965		$	461,275		$	474,389		$	514,794
ACLLL to non-accrual loans		265.63	%		259.49	%		217.32	%		378.25	%
ACLLL to total loans		0.62	%		0.69	%		0.73	%		0.94	%
Non-accrual loans to total loans		0.23	%		0.27	%		0.34	%		0.25	%
Quarterly net charge-offs to average loans, annualized		0.11	%		0.11	%		0.22	%		0.12	%

(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) June 30, 2022 ratios are preliminary.

SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
	Three months ended June 30, 2022							Three months ended June 30, 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	$	20,863,980		42,867		0.82	%	23,729,151	6,763		0.11	%
Investment securities		26,838,274		127,243		1.90	%	14,511,607	62,301		1.72	%
Commercial loans, mortgages and leases		68,542,338		602,531		3.53	%	52,324,060	467,188		3.58	%
Residential mortgages and consumer loans		126,409		1,005		3.19	%	151,401	1,286		3.41	%
Loans held for sale		622,114		2,743		1.77	%	271,611	998		1.47	%
Total interest-earning assets (1)		116,993,115		776,389		2.66	%	90,987,830	538,536		2.37	%
Non-interest-earning assets		1,854,512						868,338
Total assets	$	118,847,627						91,856,168
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand	$	22,117,228		51,429		0.93	%	18,488,233	19,551		0.42	%
Money market		40,943,635		52,938		0.52	%	34,895,844	31,288		0.36	%
Time deposits		1,309,546		1,937		0.59	%	1,842,956	4,109		0.89	%
Non-interest-bearing demand deposits		42,313,080		—		—	%	25,511,558	—		—	%
Total deposits		106,683,489		106,304		0.40	%	80,738,591	54,948		0.27	%
Subordinated debt		570,697		6,122		4.29	%	620,709	6,932		4.47	%
Other borrowings		2,161,605		13,047		2.42	%	2,914,245	17,709		2.44	%
Total deposits and borrowings		109,415,791		125,473		0.46	%	84,273,545	79,589		0.38	%
Other non-interest-bearing liabilities		1,343,525						819,989
Preferred equity		708,173						708,071
Common equity		7,380,138						6,054,563
Total liabilities and shareholders' equity	$	118,847,627						91,856,168
OTHER DATA
Net interest income / interest rate spread (1)			$	650,916		2.20	%		458,947		1.99	%
Tax-equivalent adjustment				(1,810	)				(1,726	)
Net interest income, as reported			$	649,106					457,221
Net interest margin						2.23	%				2.02	%
Tax-equivalent effect						—	%				—	%
Net interest margin on a tax-equivalent basis (1)						2.23	%				2.02	%
Ratio of average interest-earning assets
to average interest-bearing liabilities						106.93	%				107.97	%

(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)
	Six months ended June 30, 2022							Six months ended June 30, 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	$	24,720,614		56,487		0.46	%	20,437,320	11,779		0.12	%
Investment securities		25,228,371		222,360		1.76	%	13,336,026	119,266		1.79	%
Commercial loans, mortgages and leases		66,681,061		1,135,194		3.43	%	50,772,133	896,523		3.56	%
Residential mortgages and consumer loans		129,406		2,061		3.21	%	154,335	2,620		3.42	%
Loans held for sale		462,797		4,177		1.82	%	202,237	1,577		1.57	%
Total interest-earning assets (1)		117,222,249		1,420,279		2.44	%	84,902,051	1,031,765		2.45	%
Non-interest-earning assets		1,494,219						919,686
Total assets	$	118,716,468						85,821,737
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand	$	19,780,632		67,167		0.68	%	17,286,749	39,499		0.46	%
Money market		41,536,660		81,117		0.39	%	32,608,177	63,974		0.40	%
Time deposits		1,361,190		4,060		0.60	%	1,815,886	8,979		1.00	%
Non-interest-bearing demand deposits		43,598,843		—		—	%	23,095,758	—		—	%
Total deposits		106,277,325		152,344		0.29	%	74,806,570	112,452		0.30	%
Subordinated debt		570,523		12,281		4.31	%	724,167	16,733		4.62	%
Other borrowings		2,437,363		29,453		2.44	%	2,948,223	35,439		2.42	%
Total deposits and borrowings		109,285,211		194,078		0.36	%	78,478,960	164,624		0.42	%
Other non-interest-bearing liabilities		1,203,293						802,551
Preferred equity		708,173						708,045
Common equity		7,519,791						5,832,181
Total liabilities and shareholders' equity	$	118,716,468						85,821,737
OTHER DATA
Net interest income / interest rate spread (1)			$	1,226,201		2.08	%		867,141		2.03	%
Tax-equivalent adjustment				(3,535	)				(3,414	)
Net interest income, as reported			$	1,222,666					863,727
Net interest margin						2.10	%				2.05	%
Tax-equivalent effect						0.01	%				0.01	%
Net interest margin on a tax-equivalent basis (1)						2.11	%				2.06	%
Ratio of average interest-earning assets
to average interest-bearing liabilities						107.26	%				108.18	%

(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)	June 30, 2022		March 31, 2022	December 31, 2021	June 30, 2021
Consolidated total shareholders' equity	$	8,031,806	8,173,161	7,840,618	6,844,563
Less: Preferred equity		708,173	708,173	708,173	708,173
Common shareholders' equity	$	7,323,633	7,464,988	7,132,445	6,136,390
Less: Intangible assets		3,801	3,788	3,977	19,886
Tangible common shareholders' equity (TCE)	$	7,319,832	7,461,200	7,128,468	6,116,504
Consolidated total assets	$	115,966,803	121,847,302	118,445,427	96,887,801
Less: Intangible assets		3,801	3,788	3,977	19,886
Consolidated tangible total assets (TTA)	$	115,963,002	121,843,514	118,441,450	96,867,915
Tangible common equity ratio (TCE/TTA)		6.31%	6.12%	6.02%	6.31%

The following table presents the efficiency ratio calculation:

	Three months ended June 30,			Six months ended June 30,
(dollars in thousands)	2022		2021	2022	2021
Non-interest expense (NIE)	$	210,045	172,019	403,426	338,410
Net interest income before provision for credit losses		649,106	457,221	1,222,666	863,727
Other non-interest income		37,662	23,368	72,066	56,069
Total income (TI)	$	686,768	480,589	1,294,732	919,796
Efficiency ratio (NIE/TI)		30.58%	35.79%	31.16%	36.79%

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

	Three months ended June 30,			Six months ended June 30,
(dollars in thousands)	2022		2021	2022	2021
Interest income (as reported)	$	774,579	536,810	1,416,744	1,028,351
Tax-equivalent adjustment		1,810	1,726	3,535	3,414
Interest income, tax-equivalent basis	$	776,389	538,536	1,420,279	1,031,765
Interest-earnings assets	$	116,993,115	90,987,830	117,222,249	84,902,051
Yield on interest-earning assets		2.66%	2.37%	2.43%	2.44%
Tax-equivalent effect		—%	—%	0.01%	0.01%
Yield on interest-earning assets, tax-equivalent basis		2.66%	2.37%	2.44%	2.45%

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

	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Net interest margin (as reported)	2.23	%	2.02	%	2.10	%	2.05	%
Tax-equivalent adjustment	—	%	—	%	0.01	%	0.01	%
Net interest margin, tax-equivalent basis	2.23	%	2.02	%	2.11	%	2.06	%

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

	Three months ended June 30,			Six months ended June 30,
(dollars in thousands)	2022		2021	2022	2021
Net income (as reported)	$	339,202	214,493	677,736	405,025
Income tax expense		133,272	85,769	206,626	137,181
Provision for credit losses		4,249	8,308	6,944	39,180
Pre-tax, pre-provision earnings	$	476,723	308,570	891,306	581,386

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220719005252/en/

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

FAQ

What was Signature Bank's net income for Q2 2022?

Signature Bank reported a net income of $339.2 million for Q2 2022.

What is the diluted EPS for Signature Bank in Q2 2022?

The diluted EPS for Signature Bank in Q2 2022 was $5.26.

How much did Signature Bank's total deposits decrease in Q2 2022?

Total deposits decreased by $5.04 billion to $104.12 billion in Q2 2022.

What are the future prospects for Signature Bank after Q2 2022?

Signature Bank aims to continue leveraging its organic growth strategy despite current economic challenges.