It has been about a month since the last earnings report for Signature Bank (SBNY Quick QuoteSBNY - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Signature Bank due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Signature Bank Q1 Earnings Beat Estimates on Higher Revenues

Signature Bank reported first-quarter 2021 earnings per share of $3.24, beating the Zacks Consensus Estimate of $2.83. Also, the bottom line grew 72.3% year over year.

Higher loan and deposit balances supported NII growth. This, along with increase in non-interest income and lower provisions, were the tailwinds. However, rise in operating expenses and lower interest rates were the undermining factors.

Net income was $190.5 million, jumping 91.3% from the prior-year quarter. Also, pre-tax pre-provision earnings came in at $272.8 million, up 24.9%.

Revenues, Loans & Deposits Rise; Expenses Up

Total revenues jumped 21.2% from the prior-year quarter to $439.2 million. The top line, also, surpassed the Zacks Consensus Estimate of $427.1 million.

NII climbed 16.7% to $406.5 million on increase in average interest earning assets. However, net interest margin (on tax-equivalent basis) contracted 69 basis points (bps) to 2.10%.

Non-interest income was $32.7 million, up substantially from $14.2 million in the year-ago quarter. Growth in all the components led to the jump.

Non-interest expenses of $166.4 million rose 15.6%. This upsurge chiefly stemmed from rise in salaries and benefits due to massive hiring of private client banking teams.

Efficiency ratio was 37.88%, down from 39.72% reported as of Mar 31, 2020. A lower ratio indicates a rise in profitability.

Net loans and leases, as of Mar 31, 2021, were $50.4 billion, up 4.4% sequentially. Also, total deposits rose 16.8% to $74 billion.

Credit Quality: Mixed Bag

Net charge-offs were $17.9 million during the March quarter, up substantially from $1.7 million recorded in the prior-year quarter. Further, the ratio of non-accrual loans to total loans was 0.26%, up 11 bps.

Also, allowance for credit losses for loans and leases was $521.8 million, up 46.4%. However, provision for loan and lease losses plunged 53.8% to $30.9 million, mainly driven by improved macroeconomic conditions.

Capital & Profitability Ratios Improve

As of Mar 31, 2021, Tier 1 risk-based capital ratio was 12.18%, up from 11.05% on Mar 31, 2020. Furthermore, total risk-based capital ratio was 14.41% compared with the prior-year quarter’s 12.77%.

Return on average assets was 0.97% in the reported quarter compared with the year-earlier quarter’s 0.78%. As of Mar 31, 2021, return on average common stockholders' equity was 13.02%, up from 8.42%.

Outlook

The company expects loan growth per quarter to be in the range of $1 billion to $2 billion. Thus, for full-year 2021, loan growth is anticipated to be between $4 billion to $8 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

At this time, Signature Bank has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Signature Bank has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.