Signature Bank Reports 2021 Third Quarter Results

• Net Income for the 2021 Third Quarter Increased $102.9 Million, or 74.2 Percent, to a Record $241.4 Million, or $3.88 Diluted Earnings Per Share, Versus $138.6 Million, or $2.62 Diluted Earnings Per Share, Reported in the 2020 Third Quarter

• Pre-Tax, Pre-Provision Earnings for the 2021 Third Quarter Was a Record $331.0 Million, an Increase of $78.6 Million, or 31.2 Percent, Compared with $252.4 Million for the 2020 Third Quarter

• Total Deposits in the Third Quarter Grew $10.00 Billion to $95.57 Billion, While Average Deposits Increased $9.97 Billion. Total Deposits for the Prior Twelve Months Have Grown $41.23 Billion, or 75.9 Percent

• For the 2021 Third Quarter, Loans Increased $4.08 Billion, or 7.5 Percent, to $58.59 Billion. Core Loans (Excluding Paycheck Protection Program Loans) for the Quarter Increased a Record $5.01 Billion. Since the End of the 2020 Third Quarter, Core Loans Have Increased 29.4 Percent, or $12.99 Billion

• Non-Accrual Loans Were $165.4 Million, or 0.28 Percent of Total Loans, at September 30, 2021, Versus $136.1 Million, or 0.25 Percent, at the End of the 2021 Second Quarter and $81.3 Million, or 0.18 Percent, at the End of the 2020 Third Quarter

• COVID-19 Related Non-Payment Deferrals Reduced by $1.06 Billion to $254.2 Million, or 80.6 Percent as of October 10, 2021 Compared to $1.31 Billion at December 31, 2020

• Significant Excess Cash Balances From Continued Strong Deposit Flows Negatively Impacted Net Interest Margin by 59 Basis Points. Net Interest Margin on a Tax-Equivalent Basis was 1.88 Percent, Compared With 2.02 Percent for the 2021 Second Quarter and 2.55 Percent for the 2020 Third Quarter

• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 7.83 Percent, 10.49 Percent, 11.53 Percent, and 12.96 Percent, Respectively, at September 30, 2021. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.45 percent

• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After November 12, 2021 to Common Shareholders of Record at the Close of Business on October 29, 2021. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After December 30, 2021 to Preferred Shareholders of Record at the Close of Business on December 17, 2021

• During the Third Quarter, the Bank Raised $654.8 Million of Common Stock in a Public Offering

• In the 2021 Third Quarter, the Bank On-boarded One Large Private Client Banking Team in New York. This Brings the Total Team Hires to Eight for the Year: Two Teams in New York, Four Teams on the West Coast, as Well as the Corporate Mortgage Finance and the SBA Origination Teams

Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its third quarter ended September 30, 2021.

Net income for the 2021 third quarter was $241.4 million, or $3.88 diluted earnings per share, versus $138.6 million, or $2.62 diluted earnings per share, for the 2020 third quarter. The increase in net income for the 2021 third quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong average deposit and loan growth, as well as a higher provision for credit losses booked in the third quarter of 2020, which was predominantly due to the effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision earnings were $331.0 million, representing an increase of $78.6 million, or 31.2 percent, compared with $252.4 million for the 2020 third quarter.

Net interest income for the 2021 third quarter reached $480.9 million, up $92.2 million, or 23.7 percent, when compared with the 2020 third quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $107.85 billion at September 30, 2021, an increase of $44.09 billion, or 69.2 percent, from $63.76 billion at September 30, 2020. Average assets for the 2021 third quarter reached $102.49 billion, an increase of $40.93 billion, or 66.5 percent, compared with the 2020 third quarter.

Deposits for the 2021 third quarter increased $10.00 billion to $95.57 billion, including an increase of non-interest bearing deposits of $5.71 billion, which brings our non-interest bearing mix to 36.0 percent of deposits at September 30, 2021. When compared with deposits at September 30, 2020, overall deposit growth for the last twelve months was 75.9 percent, or $41.23 billion. Average deposits for the 2021 third quarter reached $90.71 billion, an increase of $9.97 billion.

“As Signature Bank surpasses the $100 billion mark, I feel compelled to reflect on what we have accomplished. Since our founding in 2001, and throughout the past several quarters in particular, the Bank realized dramatic growth. This was driven by the collective success of our legacy banking teams in New York, our blockchain-based payments platform, Signet™, and the many low-risk franchises which now comprise our organization. The deposit growth of $10.00 billion in the third quarter continued to be widespread, with notable contributions from our Digital Assets Banking team, including growth on the Signet™ platform, the Specialized Mortgage Banking Solutions team, and the New York-based legacy banking teams. Our core loan growth, driven by our Fund Banking Division, grew a record $5.01 billion in outstandings. Although some of these businesses have only recently come to fruition, our approach remained consistent since the day we opened our doors. We’ve always adhered to our client-centric, single-point-of-contact model, which invariably attracts top bankers from across the industry as well as their clients,” said Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

“Our approach to organic growth, coupled with our industry-leading efficiency, continues to be the best method for capital deployment. Signature Bank’s track record confirms that investing in people is paramount, and the optimal path is to avoid all of the cultural and organizational disruptions that stem from M&A, which are often underestimated. Looking ahead, we will continue to invest in our colleagues whose dedication has brought us to this next chapter. It has always been and will continue to be their efforts that culminate into the thriving institution that has become Signature Bank,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “We started as a bank with $50 million in assets, and now, just 20 years later, passed the $100 billion mark purely organically. We believe there is no bank in the history of the U.S. that has grown organically to $100 billion on an inflation-adjusted basis in the same time frame. Organic growth in our case equates to every single banker choosing to work with us and their clients electing to follow them along with many new clients who came to the bank from elsewhere because they heard of our great service and focus on safety. We have not inherited any clients or had legacy ones since we founded the institution ourselves. Clients trust us, and we don’t take their trust lightly. We remain committed to providing sleep-at-night safety for our depositors while providing exceptional service. In addition, we continue to identify emerging, safe technologies to afford our clients the ability to transact their business ever more efficiently. We truly believe that the best is yet to come for Signature Bank."

Capital

The Bank’s Tier 1 leverage, common equity Tier 1 risk-based, Tier 1 risk-based, and total risk-based capital ratios were approximately 7.83 percent, 10.49 percent, 11.53 percent, and 12.96 percent, respectively, as of September 30, 2021. 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. During the quarter, the Bank raised $654.8 million of common equity in a public offering.

The Bank declared a cash dividend of $0.56 per share, payable on or after November 12, 2021 to common stockholders of record at the close of business on October 29, 2021. The Bank also declared a cash dividend of $12.50 per share payable on December 30, 2021 to preferred shareholders of record at the close of business on December 17, 2021. In the third quarter of 2021, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on July 30, 2021. The Bank also paid a cash dividend of $12.50 per share to preferred shareholders of record at the close of business on September 17, 2021.

Net Interest Income

Net interest income for the 2021 third quarter was $480.9 million, an increase of $92.2 million, or 23.7 percent, versus the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $101.66 billion for the 2021 third quarter represent an increase of $40.85 billion, or 67.2 percent, from the 2020 third quarter. Yield on interest-earning assets for the 2021 third quarter decreased 98 basis points to 2.18 percent, compared to the third quarter of last year.

Average cost of deposits and average cost of funds for the third quarter of 2021 decreased by 29 and 34 basis points, to 0.22 percent and 0.32 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2021 third quarter was 1.88 percent versus 2.55 percent reported in the 2020 third quarter and 2.02 percent in the 2021 second quarter. Excluding loan prepayment penalties in both quarters, linked quarter core net interest margin on a tax-equivalent basis decreased 12 basis points to 1.87 percent. The 2021 third quarter net interest margin was negatively affected by 59 basis points due to significant excess cash balances driven by record deposit growth.

Provision for Credit Losses

The Bank’s provision for credit losses for the third quarter of 2021 was $4.0 million, compared with $8.3 million for the 2021 second quarter and $52.7 million for the 2020 third quarter. The decrease in the provision for credit losses for the third quarter was predominantly attributable to improved macroeconomic conditions compared with the same period last year.

Net charge offs for the 2021 third quarter were $17.3 million, or 0.12 percent of average loans, on an annualized basis, versus $15.3 million, or 0.12 percent, for the 2021 second quarter and net charge offs of $10.5 million, or 0.09 percent, for the 2020 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2021 third quarter was $31.4 million, up $7.2 million when compared with $24.2 million reported in the 2020 third quarter. The increase was driven by growth of $9.2 million in fees and service charges.

Non-interest expense for the third quarter of 2021 was $181.2 million, an increase of $20.7 million, or 12.9 percent, versus $160.6 million reported in the 2020 third quarter. The increase was predominantly due to a rise of $15.6 million in salaries and benefits from the significant hiring of private client banking teams, and operational support to meet the Bank's growing needs.

The Bank’s efficiency ratio improved to 35.4 percent for the 2021 third quarter compared with 38.9 percent for the same period a year ago, and 35.8 percent for the second quarter of 2021.

Loans

Loans, excluding loans held for sale, grew $4.08 billion, or 7.5 percent, during the third quarter of 2021 to $58.59 billion, compared with $54.51 billion at June 30, 2021. Core loans (excluding Paycheck Protection Program loans) grew a record $5.01 billion, or 9.6 percent, during the third quarter of 2021 to $57.21 billion, compared with $52.20 billion at June 30, 2021. Average loans, excluding loans held for sale, reached $55.45 billion in the 2021 third quarter, growing $2.98 billion, or 5.7 percent, from the 2021 second quarter and $10.03 billion, or 22.1 percent, from the 2020 third quarter.

At September 30, 2021, non-accrual loans were $165.4 million, representing 0.28 percent of total loans and 0.15 percent of total assets, compared with non-accrual loans of $136.1 million, or 0.25 percent of total loans, at June 30, 2021 and $81.3 million, or 0.18 percent of total loans, at September 30, 2020. The ratio of allowance for credit losses for loans and leases to total loans at September 30, 2021 was 0.85 percent, versus 0.94 percent at June 30, 2021 and 1.05 percent at September 30, 2020. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 303 percent for the 2021 third quarter versus 378 percent for the second quarter of 2021 and 596 percent for the 2020 third quarter.

COVID-19 Related Loan Modifications

As of October 10, 2021, total non-payment deferrals were $254.2 million, or 0.43 percent of the Bank’s total loan portfolio, compared with non-payment deferrals of $308.7 million, or 0.57 percent of total loans, at July 15, 2021, and $11.08 billion, or 24.5 percent of total loans at their peak level as of June 30, 2020. The positive trend is the result of the continued economic recovery coming out of the lows of the COVID-19 pandemic.

Additionally, the Bank has made other COVID-19 related modifications that have resulted in the receipt of modified principal and interest payments totaling 4.7 percent of the loan book.

Conference Call

Signature Bank’s management will host a conference call to review results of the 2021 third quarter on Tuesday, October 19, 2021, at 9:00 AM ET. All participants should dial 866-342-8591 at least ten minutes prior to the start of the call and reference conference ID SBNYQ321. International callers should dial 203-518-9713.

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 www.signatureny.com, click on “Investor Information,” "Quarterly Results/Conference Calls" to access the link to the call. To listen to a telephone replay of the conference call, please dial 800-723-0488 or 402-220-2651 and enter conference ID SBNYQ321. The replay will be available from approximately 12:00 PM ET on Tuesday, October 19, 2021 through 11:59 PM ET on Friday, October 22, 2021.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 37 private client offices throughout the metropolitan New York area, as well as those in Connecticut, California and North Carolina. Through its single-point-of-contact approach, the Bank’s private client banking teams primarily serve the needs of privately owned businesses, their owners and senior managers. The Bank has two wholly owned subsidiaries: Signature Financial, LLC, provides equipment finance and leasing; and, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC, offers investment, brokerage, asset management and insurance products and services. Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform. Signet™ allows commercial clients to make real-time payments in U.S. dollars, 24/7/365 and was also the first solution to be approved for use by the NYS Department of Financial Services.

Signature Bank placed 22nd on S&P Global’s list of the largest banks in the U.S., based on deposits.

For more information, please visit https://www.signatureny.com/.

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. You should not place undue reliance on those statements because they are subject to numerous risks and uncertainties relating to our operations and business environment, all of which are difficult to predict and may be beyond our control. Forward-looking statements include information concerning our expectations regarding future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client team hires, new office openings, business strategy and the impact of the COVID-19 pandemic on each of the foregoing and on our business overall. Forward looking statements often include words such as "may," "believe," "expect," "anticipate," "intend," “potential,” “opportunity,” “could,” “project,” “seek,” “target,” “goal,” “should,” “will,” “would,” "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 and can change as a result of many possible events or factors, not all of which are known to us or in our control. 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 monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; (v) changes in the banking and other financial services regulatory environment, (vi) our ability to maintain the continuity, integrity, security and safety of our operations and (vii) competition for qualified personnel and desirable office locations. All of these factors are subject to additional uncertainty in the context of the COVID-19 pandemic, which is having an unprecedented impact on all aspects of our operations, the financial services industry and the economy as a whole. Additional risks are described in our quarterly and annual reports filed with the FDIC. Although we believe that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or our beliefs, assumptions and expectations were incorrect, our business, financial condition, liquidity or results of operations may vary materially from those expressed in our forward-looking statements. 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.

FINANCIAL TABLES ATTACHED

SIGNATURE BANK

NON-GAAP FINANCIAL MEASURES

(unaudited)

This press release contains both financial measures based on GAAP and non-GAAP financial measures where management believes that the presentation of certain 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 include the Bank's (i) tangible common equity ratio, (ii) efficiency ratio, (iii) yield on interest-earning assets, tax-equivalent basis, (iv) core net interest margin, tax-equivalent basis excluding loan prepayment penalty income, (v) pre-tax, pre-provision earnings, and (vi) loans and leases to core loans (excluding Paycheck Protection Program loans). 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 presents the tangible common equity ratio calculation:

The following table presents the efficiency ratio calculation:

The following table reconciles yield on interest-earning assets to the yield on interest-earning assets on a tax-equivalent basis:

The following table reconciles net interest margin (as reported) to core net interest margin on a tax-equivalent basis excluding loan prepayment penalty income:

The following table reconciles net income (as reported) to pre-tax, pre-provision earnings:

The following table reconciles loans and leases (as reported) to core loans (excluding Paycheck Protection Program ("PPP") loans):

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