Sterne, Agee & Leach on Signature Bank

From Barron’s:

Our top organic growth pick is Signature Bank.

Universal banks continue to treat their customers…universally bad. We highlighted in our note dated Sept. 15 that management indicated that customer irritation was higher this year than it was a year ago. The irritation has been caused by initiatives at multiple “mega banks” to segment employees and customers — driving middle-market commercial clients into Signature Bank’s (ticker: SBNY) hands.


Since third-quarter results were reported, the 2015 consensus earnings-per-share estimate has moved higher to $6.76, which is in-line with our 2015 EPS estimate of $6.75. However, our 2016 EPS estimate of $8.00 remains above the Street’s view of $7.81. Our model reflects year-over-year average-earning-assets (AEA) growth of 25% in 2014, 20% in 2015 and 16% in 2016. Our price target is $136, or 17 times our 2016 EPS estimate (long-term average: about 18 times)

I won’t even attempt a 2016 EPS estimate for SBNY, but if $8 is right, then the bank is going for a very good price.

Posted by on December 30th, 2014 at 11:18 am

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