Deposit Growth, Loan Growth and Net Income All Reach Record Levels in 2014
- Net Income for the 2014 Fourth Quarter Reached a Record $81.4 Million, or $1.60 Diluted Earnings Per Share, An Increase of $17.1 Million, or 26.5 Percent, from $64.3 Million, or $1.34 Diluted Earnings Per Share Reported in the 2013 Fourth Quarter.
- Net Income for 2014 Reached a Record $296.7 Million, or $5.95 Diluted Earnings Per Share, Compared with $228.7 Million or $4.76 Diluted Earnings Per Share in 2013, Up $68.0 Million, or 29.7 Percent.
- Deposits in the Fourth Quarter Rose $1.30 Billion to $22.62 Billion. Average Deposits Increased $1.49 Billion, or 7.2 Percent, in the 2014 Fourth Quarter.
- Deposits for 2014 Grew a Record $5.56 Billion, or 32.6 Percent. Core Deposits Up a Record $4.14 Billion, or 26.9 Percent. Average Deposits for 2014 at $19.93 Billion, Representing a Record Increase of $4.31 Billion, or 27.6 Percent, Versus $15.63 Billion in 2013.
- Loans Increased $1.31 Billion, or 7.9 Percent, to $17.86 Billion in the 2014 Fourth Quarter. Since Year-end 2013, Loans Increased a Record $4.39 Billion, or 32.1 Percent.
- Non-Accrual Loans Were $21.0 Million, or 0.12 Percent of Total Loans, at December 31, 2014, Versus $24.4 Million, or 0.15 Percent of Total Loans, at the End of the 2014 Third Quarter. Non-Accrual Loans at Year-end 2013 were $31.3 Million, or 0.23 Percent of Total Loans.
- Net Interest Margin Was 3.23 Percent for the 2014 Fourth Quarter, Compared with 3.25 Percent for the 2014 Third Quarter and 3.32 Percent for the 2013 Fourth Quarter.
- Core Net Interest Margin, Which Excludes Loan Prepayment Penalty Income, Decreased One Basis Point to 3.13 Percent for the 2014 Fourth Quarter, Compared with 3.14 Percent for the 2014 Third Quarter. The Linked Quarter Decline in Net Interest Margin and Core Net Interest Margin Is Attributable to an Excess in Average Cash Resulting From Continued Substantial Deposit Growth and a Limited Market for Securities Investment.
- Tier 1 Leverage, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 9.25 Percent, 13.49 Percent and 14.39 Percent, Respectively, at December 31, 2014. Signature Bank Remains Significantly Above FDIC “Well-Capitalized” Standards. Tangible Common Equity Ratio was 9.14 Percent.
- For 2014, Five Private Client Banking Teams Joined and Three Private Client Banking Group Directors Were Added to Existing Teams. Also in 2014, Signature Financial Expanded With the Addition of Two New Business Lines – National Franchise Finance and Commercial Marine Finance.
NEW YORK … January 22, 2015 … Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter and year ended December 31, 2014.
Net income for the 2014 fourth quarter reached a record $81.4 million, or $1.60 diluted earnings per share, compared with $64.3 million, or $1.34 diluted earnings per share, for the 2013 fourth quarter. The record net income for the 2014 fourth quarter, when compared with the same period last year, is primarily the result of an increase in net interest income, fueled by record deposit growth and record loan growth. These factors were partially offset by an increase in non-interest expenses.
Net interest income for the 2014 fourth quarter rose $37.4 million, or 21.0 percent, to $215.7 million, compared with the fourth quarter of 2013. This increase is primarily due to growth in average interest-earning assets. Total assets reached $27.32 billion at December 31, 2014, expanding $4.94 billion, or 22.1 percent, from $22.38 billion at December 31, 2013. Average assets for the 2014 fourth quarter reached $26.88 billion, an increase of $5.20 billion, or 24.0 percent, versus the comparable period a year ago.
Deposits for the 2014 fourth quarter rose $1.30 billion, or 6.1 percent, to $22.62 billion at December 31, 2014. Overall deposit growth in 2014 was 32.6 percent, or a record $5.56 billion, when compared with deposits at the end of 2013. Excluding short-term escrow and brokered deposits of $3.08 billion at year-end 2014 and $1.66 billion at year-end 2013, core deposits increased a record $4.14 billion, or 26.9 percent, in 2014. Average total deposits for 2014 were $19.93 billion, growing a record $4.31 billion, or 27.6 percent, versus average total deposits of $15.63 billion for 2013.
“2014 was another stellar year in which we continued to reap solid returns and deliver unprecedented results including record deposit growth, record loan growth and the seventh consecutive year of record earnings. Moreover, it was also a year where we heavily invested in the future of our institution. This is evidenced by the successful public offering we completed this past summer, raising nearly $300 million in common stock to fuel the Bank’s continuing expansion, along with two business lines we added under Signature Financial, five new private client banking teams that joined the Bank and three Banking Group Directors that were appointed to existing teams,” stated Joseph J. DePaolo, President and Chief Executive Officer.
“We continue to execute our highly successful single-point-of-contact business model, which allows Signature Bank to differentiate itself in a crowded marketplace. Our persistence, commitment and overall strong performance culminated in the Bank being named the Best Bank in America by Forbes for 2015. This prestigious ranking is an honor bestowed on us as 2014 closed, and one we are highly gratified to have earned. It represents the ongoing success of our business model coupled with the hard work of all our colleagues and the dedication of our clients. Although we have moved up in the Forbes rankings each year over the past five, and are now at the top, we will not rest on our laurels as we strive to maintain the same discipline and focus that earned us this position on the Forbes list as well as in the marketplace we serve,” DePaolo said.
“From the too-big-to-fail banks to our competitors of all sizes, Signature Bank stood out not only at Forbes but also across other third parties’ lists that recognized our accomplishments this past year. Our ability to rank the Best Bank in America by Forbes is a result of our focus on what matters most to our success and to that of our clients – depositors come first. In an environment when this can sometimes become obscured, we clearly know that’s what earned us this prominent achievement. Depositor safety is our waking thought each day and guides us through every business decision we make,” remarked Chairman of the Board Scott A. Shay.
“Since our founding in 2001, we have remained dedicated to catering to privately owned businesses – a niche we always believed was overlooked by mega-banks and has proved to be the case. How we take care of clients is the reason we ultimately earned this highest of high honors from Forbes. We sincerely thank our colleagues, clients and shareholders for their support in helping Signature Bank become the best bank in the country,” Shay concluded.
The Bank’s tier 1 leverage, tier 1 risk-based, and total risk-based capital ratios were approximately 9.25 percent, 13.49 percent and 14.39 percent, respectively, as of December 31, 2014. 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 9.14 percent. The Bank defines the 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.
Net Interest Income
Net interest income for the 2014 fourth quarter was $215.7 million, up $37.4 million, or 21.0 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $26.5 billion for the 2014 fourth quarter represent an increase of $5.2 billion, or 24.4 percent, from the 2013 fourth quarter. Yield on interest-earning assets for the 2014 fourth quarter decreased 14 basis points, to 3.71 percent, versus the fourth quarter of last year. This decrease was primarily attributable to the continued effect of the prolonged low interest rate environment.
Average cost of deposits and average cost of funds for the 2014 fourth quarter decreased by five and four basis points to 0.45 percent and 0.53 percent, respectively, versus the comparable period a year ago. These decreases were predominantly due to the continued effect of the prolonged low interest rate environment.
Net interest margin for the 2014 fourth quarter was 3.23 percent versus 3.32 percent reported in the 2013 fourth quarter and 3.25 percent in the 2014 third quarter. Excluding loan prepayment penalty income in both quarters, linked quarter core margin decreased one basis point to 3.13 percent. The linked quarter decline in net interest margin and core net interest margin is attributable to an excess in average cash resulting from continued substantial deposit growth and a limited market for securities investment.
Provision for Loan Losses
The Bank’s provision for loan losses for the fourth quarter of 2014 was $7.6 million, a decrease of $3.4 million, or 31.1 percent, versus the 2013 fourth quarter. The decrease was primarily due to a decline in net charge offs of $3.0 million.
Net recoveries for the fourth quarter of 2014 were $181,000, or 0.00 percent of average loans on an annualized basis, versus net charge-offs of $1.5 million, or 0.04 percent, for the 2014 third quarter and $2.8 million, or 0.09 percent, for the 2013 fourth quarter.
Non-Interest Income and Non-Interest Expense
Non-interest income for the 2014 fourth quarter was $7.4 million, up $1.4 million from $6.0 million reported in the fourth quarter of last year. The increase was due to a rise in net gains on sales of loans of $1.4 million and a decrease of $2.2 million in write-downs on other than temporary impairment of securities. The increase was partially offset by a decrease of $803,000 in net gains on sales of securities and an increase of $1.8 million in other loss from the amortization of low income housing tax credit investments.
Non-interest expense for the 2014 fourth quarter was $76.0 million, an increase of $11.5 million, or 17.8 percent, versus $64.5 million reported in the 2013 fourth quarter. The increase was primarily a result of new private client banking teams joining and our continued investment in Signature Financial, as well as an increase in costs in our risk management and compliance related activities.
The Bank’s efficiency ratio improved to 34.1 percent for the fourth quarter of 2014 compared with 35.0 percent for the same period a year ago. The improvement was primarily due to growth in net interest income, coupled with expense containment.
Loans, excluding loans held for sale, expanded $1.31 billion, or 7.9 percent, during the 2014 fourth quarter to $17.86 billion, versus $16.55 billion at September 30, 2014. At December 31, 2014, loans accounted for 65.4 percent of total assets, compared with 63.8 percent at the end of the 2014 third quarter and 60.4 percent at the end of 2013. Average loans, excluding loans held for sale, reached $17.06 billion in the 2014 fourth quarter, growing $1.21 billion, or 7.7 percent, from the 2014 third quarter and $4.31 billion, or 33.8 percent, from the fourth quarter of 2013. The increase in loans for the quarter and the year was primarily driven by growth in commercial real estate and multi-family loans as well as specialty finance.
At December 31, 2014, non-accrual loans were $21.0 million, representing 0.12 percent of total loans and 0.08 percent of total assets, versus non-accrual loans of $24.4 million, or 0.15 percent of total loans, at September 30, 2014 and $31.3 million, or 0.23 percent of total loans, at December 31, 2013. At the end of the 2014 fourth quarter, the ratio of allowance for loan losses to total loans was 0.92 percent, versus 0.95 percent at September 30, 2014 and 1.00 percent at December 31, 2013. Additionally, the ratio of allowance for loan losses to non-accrual loans, or the coverage ratio, was 783 percent for the 2014 fourth quarter versus 642 percent for the 2014 third quarter and 431 percent for the 2013 fourth quarter.
Signature Bank’s management will host a conference call to review results of the 2014 fourth quarter and year-end on Thursday, January 22, 2015, at 10:00 AM ET. All participants should dial 866-359-8135 at least ten minutes prior to the start of the call and reference conference ID #60466509. International callers should dial 901-300-3484.
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”, then under “Company News,” select “Conference Calls,” to access the link to the call. To listen to a telephone replay of the conference call, please dial 800-585-8367 or 404-537-3406 and enter conference ID #60466509. The replay will be available from approximately 1:00 PM ET on Thursday, January 22, 2015 through 11:59 PM ET on Monday, January 26, 2015.
About Signature Bank
Signature Bank, member FDIC, is a New York-based full-service commercial bank with 28 private client offices throughout the New York metropolitan area, including those in Manhattan, Brooklyn, Westchester, Long Island, Queens, the Bronx and Staten Island. The Bank’s growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers.
Signature Bank offers a wide variety of business and personal banking products and services. Its specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing as well as transportation and taxi medallion financing. Signature Securities Group Corporation, a wholly owned Bank subsidiary, is a licensed broker-dealer, investment adviser and member FINRA/SIPC, offering investment, brokerage, asset management and insurance products and services.
For 2015, the Bank was named the Best Bank in America by Forbes and the only large cap bank to appear on Forbes’ list of America’s 50 Most Trustworthy Financial Companies. Furthermore, Signature Bank was voted Best Business Bank by the New York Law Journal in the publication’s fifth annual reader survey; named the nation’s fifth top-performing bank by ABA Banking Journal; and, ranked seventh on Bank Director magazine’s 2014Bank Performance Scorecard for banks with assets between $5 and $50 billion.
For more information, please visit 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 that are subject to risks and uncertainties. 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 future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams and other hires, new office openings and business strategy. These statements often include words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “potential,” “opportunity,” “could,” “project,” “seek,” “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 and (vi) competition for qualified personnel and desirable office locations. 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. Additional risks are described in our quarterly and annual reports filed with the FDIC. 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. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.
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