Signature Bank Earns $2.21 per Share

This morning, Signature Bank (SBNY) kicked off the second-quarter earnings season for our Buy List stocks. The bank reported quarterly earnings of $2.21 per share which matched Wall Street’s consensus.

But there’s a big caveat to that number. It doesn’t include Signature’s “provision expense and write-downs for the taxi medallion portfolio.” As we’ve known, SBNY took at bath on those medallion loans. Uber and others have knocked that entire industry. But as I’ve said, this is a known problem and SBNY has been working on it.

“We did not, nor did any others, foresee the dramatic decline in taxi medallion values caused by a combination of rapid radical disruption by app-based hailing systems and inaction by governmental authorities. We did, however, see the disruption coming in time to set an upper limit on loan amounts and to stop our lending earlier than most,” said Scott A. Shay, Chairman of the Board.

Net interest margin, the key metric for any bank, was 3.11% during Q2. That’s pretty good. Overall, this was an OK quarter for Signature. It’s largely what I expected. The shares dropped sharply at the open, but recovered some ground. SBNY is currently down about 1.5%.

Posted by on July 19th, 2017 at 1:47 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.