Signature Bank enters new business lines, markets to fuel growth
Signature Bank on Thursday reported higher quarterly profits, as the New York bank takes steps to diversify away from its commercial-real-estate-heavy loan book.
Signature earned $155.4 million during the third quarter, or 25% more than in the same quarter last year. Earnings per share were $2.84, or one penny higher than the mean estimate of analysts compiled by FactSet Research Systems.
In a press release announcing the results, President and CEO Joseph DePaolo noted that the $45.9 billion-asset bank has recently expanded to San Francisco, and also added new business lines, such as capital call lines for private equity firms and banking services to digital-asset and blockchain technology companies.
“We must take measured risks to fuel future growth, but they are far less than the long-range risks of comfortable inaction,” DePaolo said. “We believe the initiatives upon which we are embarking today will set the stage for the Signature Bank of tomorrow.”
During the quarter, net interest income rose 5% to $324.8 million, even as the net interest margin dipped 17 basis points, to 2.87%. The provision for credit losses fell 49%, to $7.3 million.
Total loans increased 5% to $35.1 billion, thanks to steady growth in commercial loans, mortgages and leases.
Fee-based revenue plunged 44%, to $4.5 million, mostly due to a charge associated with amortization on tax-credit investments.
Noninterest expenses jumped 11%, to $117.2 million, on higher salaries from the addition of new teams, as well as administrative costs from risk and compliance activities.