Signature Bank Corp. in New York says it is postponing its fourth-quarter and full-year earnings report because it needs more time to determine the market value of asset-backed securities in its investment portfolio.
The $5.6 billion-asset company announced the delay late Wednesday, saying it would schedule a new release date "shortly." On Tuesday, Signature had said it would report earnings before the market opened Thursday.
In heavy trading Thursday, Signature's shares fell 3.4%, at $33.51.
Albert Savastano, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, calculated the potential writedown in a research note Thursday and reiterated his "outperform" rating on the stock.
As of the third quarter Signature's asset-backed securities totaled $200 million, or about 6.5% of its $3.2 billion investment portfolio, Mr. Savastano wrote.
The asset-backed securities had a fair value of $197 million at the time, compared with an amortized cost of $209 million, implying a 6.6% decline in value, he wrote.
If Signature realized a decline of that size for the fourth quarter, it would reduce fourth-quarter earnings per share to 8 cents, from an estimated 36 cents, Mr. Savastano wrote. And if the value of the securities declined by an additional 10%, it would translate into a loss of 30 cents a share, he wrote.
Despite the possible writedown, Mr. Savastano wrote, he would remain "comfortable" with Signature's capital levels, confident that its operating fundamentals are strong, and in expectation of loan growth continuing at an accelerated pace.
In the third quarter Signature's profit jumped 30% from the year earlier, to $10.7 million, due to deposit and loan growth. Earnings per share were up 29%, to 36 cents, beating the average of analysts' expectations by a penny.
