Signature Bank in New York more than tripled its loan-loss reserves for taxi medallion and other loans in the second quarter yet still managed a double-digit increase in profits primarily on loan growth.
The $36 billion-asset Signature said Wednesday that net income rose 13% to $102.2 million year over year. Signature attributed that gain primarily to a 19% increase in net interest income to $282 million as loans rose 30.1% to $26.7 billion.
Still, profits were curtailed because the company boosted its loan-loss provision to $33 million from $9 million; the additional $24 million in reserves was primarily for troubled taxi medallion loans in Chicago, the bank said.
Gains were also hampered by an 8.7% increase in noninterest expenses to $92.3 million that the bank attributed primarily to its recruitment of new private-client bankers and added costs in risk management and compliance.
Noninterest income increased 35% to $13 million mostly due to a $4.4 million increase in net gains on securities sales.