Signature Bank in New York reported higher second-quarter profit due to a rise in interest-earning assets.
The $29.9 billion-asset company's net income rose 24.8% to $90.5 million, or $1.77 per share, from a year earlier. That was eight cents higher than the average estimate of analysts polled by Bloomberg.
Net interest income rose 22% to $236.3 million. Average interest-earning assets rose 23% to $29.4 billion. Loans, excluding loans held for sale, increased to $20.5 billion. The net interest margin narrowed by four basis points to 3.27%.
Noninterest income fell 21% to $9.8 million. Signature cited a $4.2 million decrease in net gains on the sales of securities.
Noninterest expense grew 16.4% to $84.9 million, with the bank citing the hiring of private client banking teams, investment in its specialty finance division and higher costs for risk management and compliance. Signature's efficiency ratio improved by 90 basis points to 34.5%.
During the quarter, Signature moved $170 million of loans for taxi medallions in Chicago to its watch list and it continues to refinance the loans as troubled debt restructurings, Morgan Stanley analyst Ken Zerbe wrote in a research note. Overall, Signature's net chargeoffs rose to $2.6 million from $718,000.