Signature Bank in New York on Thursday reported a sharp increase in profits, as a lower set-aside for problem taxi loans took a smaller bite out of its results.
The $41.3 billion-asset company earned $124.5 million in the third quarter, or 64% more than a year earlier. Earnings per share were $2.29, or 11 cents higher than the consensus among analysts polled by Bloomberg.
After taking a large provision for taxi medallion loans a year earlier, mostly for bad credits in Chicago, Signature slashed its provision by 82% to $14.3 million.
Net interest income climbed 6% to $308.8 million. The net interest margin dipped 9 basis points, to 3.04%. Total loans rose 8% to $31 billion from a mix of commercial real estate and specialty finance credits.
Fee-based income declined 27% to $8.1 billion, thanks to lower gains on the sales of securities.
Noninterest expenses increased 10% to $105.6 million, mostly from higher salaries and benefits.
In a press release Thursday, CEO Joseph DePaolo acknowledged the ongoing issues in Signature's taxi loan book, as well as lingering worries about the health of the commercial real estate market.
"While we recognize there have been some near-term challenges for Signature, our ability to attract veteran bankers and on-board core clients has continued unabated," DePaolo said.