Signature Bank Reports 2011 Fourth Quarter and Year-End Results

• Net Income for the 2011 Fourth Quarter Reached a Record $40.0 Million, or $0.85 Diluted Earnings Per Share, An Increase of $9.6 Million, or 31.8 Percent, from $30.3 Million, or $0.72 Diluted Earnings Per Share Reported in the 2010 Fourth Quarter.
• Net Income for 2011 Reached a Record $149.5 Million or $3.37 Diluted Earnings Per Share, Compared with $102.1 Million or $2.46 Diluted Earnings Per Share in 2010, Up $47.5 Million, or 46.5 Percent.
• Deposits in the Fourth Quarter Rose $566.2 Million to $11.75 Billion.
• Deposits for 2011 Grew a Record $2.31 Billion, or 24.5 Percent. Core Deposits Up a Record $2.13 Billion, or 24.2 Percent. Average Deposits for 2011 at $10.86 Billion, Representing an Increase of $2.4 Billion, or 28.5 Percent, Versus $8.45 Billion in 2010.
• Loans Increased $407.2 Million, or 6.3 Percent, to $6.85 Billion in the 2011 Fourth Quarter. Since Year-end 2010, Loans Increased a Record $1.61 Billion, or 30.6 Percent.
• Non-Accrual Loans Decreased to $42.2 Million, or 0.62 Percent of Total Loans, at December 31, 2011, Versus $51.1 Million, or 0.79 Percent of Total Loans, at the End of the 2011 Third Quarter. Non-Accrual Loans at Year-end 2010 were $34.1 Million, or 0.65 Percent of Total Loans.
• Net Interest Margin Was 3.55 Percent for the 2011 Fourth Quarter, Compared with 3.51 Percent for the 2011 Third Quarter and 3.50 Percent for the 2010 Fourth Quarter. The Linked-Quarter Increase Was Due to an Increase in Loan Prepayment Penalty Income and Decreased Average Cash Balances From the July 2011 Capital Raise.
• Core Net Interest Margin for the 2011 Fourth Quarter was 3.46 Percent, Compared with 3.50 Percent for the 2011 Third Quarter, Excluding Loan Prepayment Penalty Income in Both Quarters and the Effect of the Increase in Average Cash Balances Due to the Capital Raise in the 2011 Third Quarter
• Tier 1 Leverage, Tier 1 Risk-Based and Total Risk-Based Capital Ratios were 9.67 Percent, 17.08 Percent and 18.17 Percent, Respectively, at December 31, 2011. Signature Bank Remains Significantly Above FDIC "Well-Capitalized" Standards. Tangible Common Equity Ratio was 9.60 Percent.
• One Private Client Banking Team Joined During the 2011 Fourth Quarter; Seven During the Full Year. 78 Teams Comprised the Bank's Private Client Banking Network at Year-end.

NEW YORK--(BUSINESS WIRE)-- Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter and year ended December 31, 2011. Net income for the 2011 fourth quarter reached a record $40.0 million, or $0.85 diluted earnings per share, compared with $30.3 million, or $0.72 diluted earnings per share, for the 2010 fourth quarter. The record net income for the 2011 fourth quarter, when compared with the same period last year, is primarily the result of an increase in net interest income, fueled by core deposit growth and continued loan growth. These factors were partially offset by a decrease in non-interest income and an increase in non-interest expenses.

Net interest income for the 2011 fourth quarter rose $29.4 million, or 30.6 percent, to $125.3 million, compared with the fourth quarter of 2010. This increase is primarily due to growth in average interest-earning assets. Total assets reached $14.67 billion at December 31, 2011, expanding $2.99 billion, or 25.6 percent, from $11.67 billion at December 31, 2010. Average assets for the 2011 fourth quarter reached $14.28 billion, an increase of $3.11 billion, or 27.9 percent, versus the comparable period a year ago.

Deposits for the 2011 fourth quarter rose $566.2 million, or 5.1 percent, to $11.75 billion at December 31, 2011. Overall deposit growth in 2011 was 24.5 percent, or a record $2.31 billion, when compared with deposits at the end of 2010. Excluding short-term escrow and brokered deposits of $646.1 million at year-end 2010 and $831.8 million at year-end 2011, core deposits increased a record $2.13 billion, or 24.2 percent, in 2011. Average total deposits for 2011 were $10.86 billion, growing $2.4 billion, or 28.5 percent, versus average total deposits of $8.45 billion for 2010.

"Here we are on the heels of another successful year for Signature Bank where we again reported record results across all key metrics. Our prudent and methodical approach delivered record deposit and loan growth resulting in the 4th consecutive year of record net income," said Joseph J. DePaolo, President and Chief Executive Officer.

"Throughout the year, Signature Bank was recognized for its ability to deliver record financial performance and provide stellar service through our single-point-of-contact model, where we attract veteran bankers and afford them a workplace to build solid, lasting client relationships. This is evidenced by the Bank's numerous acknowledgments received during 2011, including, among others: Forbes, ranked the 5th Best Bank in America; our inaugural appearance on both Fortune's 100 fastest growing companies list and Crain's New York Business 2011 Best Places to Work in NYC list; and, Crain's New York Business Fastest Growing Public Companies listing, where the Bank ranked 7th. These achievements are indicative of our ongoing commitment to cater to privately owned businesses and their owners through our distinctive, proven relationship-based model," DePaolo added.

Scott A. Shay, Chairman of the Board, added: "Time and again, we have demonstrated to the marketplace the strength and integrity of our growing institution. 2011 marked another year of record performance, where we maintained solid credit quality and net interest margin, proved again our strong capital position and successfully cared for our clients through exceptional service. Our persistence in focusing on, first and foremost, the needs of privately owned businesses and depositor safety, has allowed Signature Bank to stand out in the economic landscape. While our accomplishments were reflected in the many high rankings we achieved this past year from several prestigious third parties, it is the high marks we consistently receive from our dedicated clients that enable the Bank to continually deliver on our mission and commitment."

Capital

The Bank's tier 1 leverage, tier 1 risk-based, and total risk-based capital ratios were approximately 9.67 percent, 17.08 percent and 18.17 percent, respectively, as of December 31, 2011. Each of these ratios is well in excess of regulatory requirements. The Bank's strong risk-based capital ratios reflect the relatively low risk profile of the Bank's balance sheet. The Bank's tangible common equity ratio remains strong at 9.60 percent. The Bank defines the tangible common equity ratio as the ratio of tangible common equity to adjusted tangible assets and calculates this ratio by dividing total consolidated common shareholders' equity by consolidated total assets.

Net Interest Income

Net interest income for the 2011 fourth quarter was $125.3 million, up $29.4 million, or 30.6 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $14.02 billion for the 2011 fourth quarter represent an increase of $3.13 billion, or 28.8 percent, from the 2010 fourth quarter. Yield on interest-earning assets for the 2011 fourth quarter decreased 18 basis points, to 4.38 percent, versus the fourth quarter of last year. This decrease was primarily attributable to lower prevailing interest rates.

Average cost of deposits and average cost of funds for the 2011 fourth quarter decreased by 18 and 23 basis points to 0.76 percent and 0.91 percent, respectively, versus the comparable period a year ago. These decreases were predominantly due to lower prevailing interest rates.

Net interest margin for the 2011 fourth quarter was 3.55 percent versus 3.50 percent reported in the 2010 fourth quarter. On a linked quarter basis, net interest margin increased four basis points. The linked quarter increase was primarily due to higher prepayment penalty income, lower deposit costs, continued loan growth and the investment of excess cash balances.

Excluding loan prepayment penalty income in both quarters and the effect of the increase in average cash balances due to the capital raise in the 2011 third quarter, linked quarter core margin declined four basis points to 3.46 percent.

Provision for Loan Losses

The Bank's provision for loan losses for the fourth quarter of 2011 was $14.6 million, an increase of $1.0 million, or 7.4 percent, versus the 2010 fourth quarter. The increase was driven largely by an increase in loan growth and provisions to recognize the potential effect of the economic environment. This was partially offset by a decrease in charge-offs of $2.7 million.

Net charge-offs for the fourth quarter of 2011 were $11.9 million, or 0.71 percent of average loans on an annualized basis, versus $7.0 million, or 0.44 percent, for the 2011 third quarter and $14.6 million, or 1.16 percent, for the 2010 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2011 fourth quarter was $7.9 million, down $2.1 million from $10.0 million reported in the fourth quarter of last year. The decline was predominantly due to a decrease of $2.0 million in net gains on sales of securities and loans.

Non-interest expense for the 2011 fourth quarter was $47.1 million, an increase of $6.1 million, or 15.0 percent, versus $41.0 million reported in the 2010 fourth quarter. The increase was primarily a result of the addition of new private client banking teams.

The Bank's efficiency ratio improved to 35.4 percent for the fourth quarter of 2011 compared with 38.7 percent for the same period a year ago. The improvement was primarily due to growth in net interest income coupled with expense containment.

Loans

Loans, excluding loans held for sale, expanded $407.2 million, or 6.3 percent, during the 2011 fourth quarter to $6.85 billion, versus $6.44 billion at September 30, 2011. At December 31, 2011, loans accounted for 46.7 percent of total assets, compared with 46.5 percent at the end of the 2011 third quarter and 44.9 percent at the end of 2010. Average loans, excluding loans held for sale, reached $6.65 billion in the 2011 fourth quarter, growing $386.6 million, or 6.2 percent, from the 2011 third quarter and $1.65 billion, or 32.9 percent, from the fourth quarter of 2010. The increase in loans for the quarter and the year was primarily driven by growth in commercial real estate and multi-family loans underwritten within the Bank's stringent standards.

At December 31, 2011, non-accrual loans were $42.2 million, representing 0.62 percent of total loans and 0.29 percent of total assets, versus non-accrual loans of $51.1 million, or 0.79 percent of total loans, at September 30, 2011 and $34.1 million, or 0.65 percent of total loans, at December 31, 2010. At the end of the 2011 fourth quarter, the ratio of allowance for loan losses to total loans was 1.26 percent, versus 1.30 percent at September 30, 2011 and 1.29 percent at December 31, 2010. Additionally, the ratio of allowance for loan losses to non-accrual loans, or the coverage ratio, was 204 percent for the 2011 fourth quarter versus 163 percent for the 2011 third quarter and 197 percent for the 2010 fourth quarter.

Conference Call

Signature Bank's management will host a conference call to review results of the 2011 fourth quarter and year-end on Tuesday, January 24, 2012, at 10:00 AM ET. All participants should dial 480-629-9645 at least ten minutes prior to the start of the call.

To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Bank's web site at , click on the "Investor Relations" tab, then select "Company News," followed by "Conference Calls," to access the link to the call. To listen to a telephone replay of the conference call, please dial 303-590-3030 and enter reservation identification number 4503216. The replay will be available from approximately 12:00 PM ET on Tuesday, January 24, 2012 through 11:59 PM ET on Friday, January 27, 2012.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 25 private client offices throughout the New York metropolitan area. The Bank's growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers. Signature Bank offers a wide variety of business and personal banking products and services as well as investment, brokerage, asset management and insurance products and services through its subsidiary, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC.

Signature Bank's 25 offices are located: In Manhattan (9) - 261 Madison Avenue; 300 Park Avenue; 71 Broadway; 565 Fifth Avenue; 950 Third Avenue; 200 Park Avenue South; 1020 Madison Avenue; 50 West 57th Street and 2 Penn Plaza. Brooklyn (3) - 26 Court Street; 84 Broadway and 6321 New Utrecht Avenue. Westchester (2) - 1C Quaker Ridge Road, New Rochelle and 360 Hamilton Avenue, White Plains. Long Island (6) - 1225 Franklin Avenue, Garden City; 279 Sunrise Highway, Rockville Centre; 68 South Service Road, Melville; 923 Broadway, Woodmere; 40 Cuttermill Road, Great Neck and 100 Jericho Quadrangle, Jericho. Queens (3) - 36-36 33rd Street, Long Island City; 78-27 37th Avenue, Jackson Heights and 8936 Sutphin Blvd., Jamaica. Bronx (1) - 421 Hunts Point Avenue, Bronx. Staten Island (1) - 2066 Hylan Blvd.

This press release and oral statements made from time to time by our representatives contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties.Forward-looking statements include information concerning our future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client team hires, new office openings and business strategy.These statements often include words such as "may," "believe," "expect," "anticipate," "intend," "plan," "estimate" or other similar expressions.As you consider forward-looking statements, you should understand that these statements are not guarantees of performance or results.They involve risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward-looking statements.These factors include but are not limited to: (i) prevailing economic conditions; (ii) changes in interest rates, loan demand, real estate values and competition, any of which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance, including earnings on interest-bearing assets; (iii) the level of defaults, losses and prepayments on loans made by us, whether held in portfolio or sold in the whole loan secondary markets, which can materially affect charge-off levels and required credit loss reserve levels; (iv) changes in the banking and other financial services regulatory environment and (v) competition for qualified personnel and desirable office locations.Additional risks are described in our quarterly and annual reports filed with the FDIC.You should keep in mind that any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time, and we cannot predict these events or how they may affect the Bank.Signature Bank has no duty to, and does not intend to, update or revise the forward-looking statements after the date on which they are made.In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.

FINANCIAL TABLES ATTACHED

SIGNATURE BANK
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
			Three months ended December 31,										Twelve months ended December 31,
(dollars in thousands, except per share amounts)				2011				2010					2011				2010
INTEREST AND DIVIDEND INCOME
Loans held for sale			$	962				1,309					3,772				4,020
Loans, net				90,908				70,992					333,395				264,898
Securities available-for-sale				57,849				48,196					223,129				180,543
Securities held-to-maturity				4,690				4,146					18,403				15,254
Other short-term investments				386				498					1,817				1,815
	Total interest income			154,795				125,141					580,516				466,530
INTEREST EXPENSE
Deposits				22,438				21,931					91,100				87,963
Federal funds purchased and securities sold under
agreements to repurchase				5,722				5,200					22,324				24,010
Federal Home Loan Bank advances				1,368				2,104					7,305				9,698
Other short-term borrowings				-				-					-				1
	Total interest expense			29,528				29,235					120,729				121,672
Net interest income before provision for loan losses				125,267				95,906					459,787				344,858
Provision for loan losses				14,581				13,578					51,876				46,372
Net interest income after provision for loan losses				110,686				82,328					407,911				298,486
NON-INTEREST INCOME
Commissions				2,186				2,503					9,058				9,063
Fees and service charges				3,571				3,716					15,022				14,119
Net gains on sales of securities				1,229				2,616					14,387				25,367
Net gains on sales of loans				807				1,445					4,054				6,054
Other-than-temporary impairment losses on securities:
Total impairment losses on securities				(621	)			(5,279	)				(12,272	)			(38,613	)
Portion of loss recognized in other comprehensive income (before taxes)				280				4,620					10,183				24,437
Net impairment losses on securities recognized in earnings				(341	)			(659	)				(2,089	)			(14,176	)
Net trading income				109				59					319				124
Other income				341				327					1,287				2,097
	Total non-interest income			7,902				10,007					42,038				42,648
NON-INTEREST EXPENSE
Salaries and benefits				30,107				24,644					114,537				99,728
Occupancy and equipment				4,282				3,861					16,303				14,861
Other general and administrative				12,742				12,472					51,884				50,307
	Total non-interest expense			47,131				40,977					182,724				164,896
Income before income taxes				71,457				51,358					267,225				176,238
Income tax expense				31,482				21,032					117,699				74,187
Net income			$	39,975				30,326					149,526				102,051
PER COMMON SHARE DATA
Earnings per share - basic			$	0.87				0.74					3.43				2.49
Earnings per share - diluted			$	0.85				0.72					3.37				2.46

SIGNATURE BANK
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

SIGNATURE BANK
FINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY
(unaudited)
			Three months ended December 31,									Twelve months ended December 31,
(dollars in thousands, except ratios and per share amounts)			2011				2010					2011				2010
PER COMMON SHARE
Net income - basic			$	0.87			$	0.74				$	3.43			$	2.49
Net income - diluted			$	0.85			$	0.72				$	3.37			$	2.46
Average shares outstanding - basic				46,179				41,129					43,622				40,923
Average shares outstanding - diluted				47,025				41,830					44,418				41,558
Book value			$	30.49			$	22.84				$	30.49			$	22.84
SELECTED FINANCIAL DATA
Return on average total assets				1.11%				1.08%					1.14%				0.99%
Return on average shareholders' equity				11.44%				12.91%					12.71%				11.67%
Efficiency ratio (1)				35.39%				38.69%					36.41%				42.55%
Efficiency ratio excluding net gains on sales of securities   and net impairment losses on securities recognized   in earnings (1)				35.63%				39.42%					37.33%				43.82%
Yield on interest-earning assets				4.38%				4.56%					4.50%				4.67%
Cost of deposits and borrowings				0.91%				1.14%					1.01%				1.30%
Net interest margin				3.55%				3.50%					3.57%				3.45%

(1)		The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income before provision for loan losses and non-interest income.

			December 31, 2011				September 30, 2011					December 31, 2010
CAPITAL RATIOS
Tangible common equity (2)				9.60%				9.85%					8.09%
Tier 1 leverage				9.67%				9.84%					8.62%
Tier 1 risk-based				17.08%				17.28%					14.21%
Total risk-based				18.17%				18.37%					15.21%
ASSET QUALITY
Non-accrual loans			$	42,218			$	51,134				$	34,134
Allowance for loan losses			$	86,162			$	83,526				$	67,396
Allowance for loan losses to non-accrual loans				204.09%				163.35%					197.45%
Allowance for loan losses to total loans				1.26%				1.30%					1.29%
Non-accrual loans to total loans				0.62%				0.79%					0.65%
Quarterly net charge-offs to average loans (annualized)				0.71%				0.44%					1.16%

(2)		We define tangible common equity as the ratio of tangible common equity to adjusted tangible assets (the "TCE ratio") and calculate this ratio by dividing total consolidated common shareholders' equity by consolidated total assets (we had no intangible assets at any of the dates presented above). Tangible common equity is considered to be a non-GAAP financial measure and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The TCE ratio is a metric used by management to evaluate the adequacy of our capital levels. In addition to tangible common equity, management uses other metrics, such as Tier 1 capital related ratios, to evaluate capital levels.

SIGNATURE BANK

NET INTEREST MARGIN ANALYSIS

(unaudited)

Three months ended

Three months ended

December 31, 2011

December 30, 2010

(dollars in thousands)

Average Balance

Interest Income/ Expense

Average Yield/ Rate

Average Balance

Interest Income/ Expense

Average Yield/ Rate

INTEREST-EARNING ASSETS

SIGNATURE BANK
NET INTEREST MARGIN ANALYSIS
(unaudited)
		Twelve months ended											Twelve months ended
		December 31, 2011											December 31, 2010
(dollars in thousands)		Average Balance				Interest Income/ Expense			Average Yield/ Rate				Average Balance			Interest Income/ Expense			Average Yield/ Rate
INTEREST-EARNING ASSETS
Short-term investments		$	119,393			355			0.30%				194,864			519			0.27%
Investment securities			6,455,877			242,994			3.76%				4,875,482			197,093			4.04%
Commercial loans and commercial   mortgages			5,674,616			310,044			5.46%				4,319,014			241,885			5.60%
Residential mortgages			179,987			8,326			4.63%				182,995			9,336			5.10%
Consumer loans			198,264			15,025			7.58%				194,407			13,677			7.04%
Loans held for sale			261,647			3,772			1.44%				233,508			4,020			1.72%
Total interest-earning assets			12,889,784			580,516			4.50%				10,000,270			466,530			4.67%
Non-interest-earning assets			273,106										315,051
Total assets		$	13,162,890										10,315,321
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW and interest-bearing demand			632,804			3,269			0.52%				724,458			4,014			0.55%
Money market			6,611,992			71,557			1.08%				4,816,609			65,279			1.36%
Time deposits			916,992			16,274			1.77%				892,186			18,670			2.09%
Non-interest-bearing demand deposits			2,702,236			-			-				2,020,265			-			-
Total deposits			10,864,024			91,100			0.84%				8,453,518			87,963			1.04%
Borrowings			1,073,430			29,629			2.76%				913,199			33,709			3.69%
Total deposits and borrowings			11,937,454			120,729			1.01%				9,366,717			121,672			1.30%
Other non-interest-bearing liabilities
and shareholders' equity			1,225,436										948,604
Total liabilities and shareholders' equity		$	13,162,890										10,315,321
OTHER DATA
Net interest income / interest rate spread						459,787			3.49%							344,858			3.37%
Net interest margin									3.57%										3.45%
Ratio of average interest-earning assets
to average interest-bearing liabilities									107.98%										106.76%

SIGNATURE BANK
NON-GAAP FINANCIAL MEASURES
(unaudited)
Management believes that the presentation of the Bank's (i) tangible common equity ratio and (ii) core net interest margin excluding loan prepayment penalty income, which are non-GAAP financial measures, assists investors when comparing results period-to-period in a more consistent manner and provides a better measure of Signature Bank's results. These non-GAAP measures should not be considered a substitute for GAAP-basis measures and results. We strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
The following table reconciles net interest margin (as reported) to core net interest margin, excluding loan prepayment penalty income:
				Three months ended December 31,						Twelve months ended December 31,
				2011		2010				2011		2010
Net interest margin (as reported)				3.55%		3.50%				3.57%		3.45%
Margin contribution from loan prepayment penalty income				(0.09)%		(0.02)%				(0.08)%		(0.02)%
Core net interest margin, excluding loan prepayment penalty income				3.46%		3.48%				3.49%		3.43%

Signature Bank
Investor Contact:
Eric R. Howell, 646-822-1402
Chief Financial Officer
[e-mail]
or
Media Contact:
Susan J. Lewis, 646-822-1825
[e-mail]

Source: Signature Bank

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