Signature Bank Q4 Earnings Outperform

Signature Bank (NASDAQ: SBNY) reported better-than-expected Q4 earnings, driven by a rise in net interest income (NII) and lower provision for credit losses. 

Results in Detail 

The commercial bank reported earnings per share of $4.34 in the quarter, topping analysts’ expectations of $3.95 per share. It reported earnings of $3.26 per share in the same quarter last year. 

Also, pre-tax, pre-provision earnings were $385.4 million, up 47.4% year-over-year. NII jumped 35.7% year-over-year to $535.9 million on the back of growth in average interest-earning assets.  

Additionally, non-interest income grew 38.4% to $33.5 million, mainly driven by elevated fees and service charges. The provision for credit losses reduced substantially to $6.9 million from the prior-year quarter. 

On the negative side, the net interest margin on a tax-equivalent basis was 1.91%, down from 2.23% in the prior-year quarter. Signature Bank reported non-interest expenses of $183.9 million, up 16.7%. 

Full-year 2021 Results 

For 2021, Signature Bank recorded earnings of $15.03 per share, compared with $9.96 per share in the prior year. NII came in at $1.9 billion, up 26.7% year-over-year, while non-interest income surged 60.8% to $120.9 million. 

Loans and Deposits Portfolio 

As of December 2021, net loans and leases stood at $64.4 billion, up 33.3% year-over-year, while total deposits grew 67.6% to $106.1 billion. 

Official Comments 

Looking forward, Signature Bank’s Chairman of the Board Scott A. Shay commented, “Financial technologies are rapidly transforming, and remain at the forefront of the new types of industries this disruption is creating. We understood then – and recognize even more now – the importance of this novel arena because of our abilities to adapt to market disruption. We are committed to evolving to better serve our institutional clients as we continue to adapt within the fast-developing world of digital assets.” 

Wall Street’s Take 

Shares of Signature Bank have exploded 137.6% over the past year, while the stock still scores a Strong Buy consensus rating, based on 11 unanimous Buys. That’s alongside an average Signature Bank stock prediction of $397.27, which implies 8.72% upside potential to current levels. 

Smart Score 

Signature Bank scores a “Perfect 10” from TipRanks’ Smart Score rating system. This makes it one of TipRanks’ Top Stocks and implies that the stock has strong potential to outperform market expectations. Signature Bank stock is expected to benefit from recently reported strong earnings, boosting investors’ optimism on the stock.

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