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Signature Bank (SBNY) Reports Higher Deposits, Share Buybacks
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Signature Bank (SBNY - Free Report) announced its updated financial performance as of Mar 8, 2023, underlining a strong financial position and limited digital-asset-related deposit balances amid crypto headwinds.
The company’s exposure in the digital asset space is limited to U.S. dollar deposits, and it is making efforts to deliberately reduce these deposits further.
Management noted, “We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses. We have built a strong reputation serving commercial clients through nine business lines and reached in excess of $100 billion in assets by continually executing our single-point-of-contact, relationship-based model where banking teams are capable of meeting all client needs.”
Balance Sheet Position Indicates Strength
The bank’s stable commercial banking business model enabled it to accumulate more than $100 billion in assets across nine national business lines, and around 130 commercial banking teams in metropolitan New York area and West Coast regions.
The company’s deposit balances were $89.17 billion as of Mar 8, indicating an increase of $576 million from the 2022 end. Digital asset-related client deposit reduction aggregated $1.27 billion. With this, digital asset-related client deposits stood at $16.52 billion as of Mar 8.
In a mid-quarter financial update provided as of Mar 1, the company reported a decline of $826 million in spot deposit balances. Hence, the rebound in the deposit balance in a week indicates the bank’s diversified deposit mix. It has more than 80% of deposits coming from middle market businesses, such as law firms, accounting practices, healthcare companies, manufacturing companies and real estate management firms.
The company reported loan balances of $71.81 billion, indicating a decline of 2.7% from the 2022 end. The decline in loans likely resulted from the bank’s strategy of reducing loan balances in its larger business lines.
High Capital Level, Decent Liquidity Support Capital Deployments
SBNY’s common equity tier 1 risk-based capital ratio of 10.42% is in excess of regulatory requirements and underlines a high level of capital.
The company’s liquidity (as of Mar 8) comprises $4.54 billion in cash held on the balance sheet and $26.41 billion in marketable liquid securities. It had borrowing balances (excluding subordinated debt) of $6.58 billion, with an additional capacity of $29.01 billion.
Also, investment-grade credit ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Services render the company favorable access to debt at attractive rates.
Supported by high capital levels and sufficient liquidity, the company is focusing on capital deployments in the forms of share repurchases and dividend hikes to reward shareholders.
Since the start of the quarter through Mar 8, the company repurchased $55 million of common stock. As of 2022 end, there was $450 million remaining under the share repurchase authorization.
In January 2023, SBNY announced a 25% increase in its common stock dividend to $2.80 per share annually, reflecting the first increase since the dividend was initiated in 2018.
The bank’s shares have plunged 21.2% in the year-to-date period compared with the industry’s fall of 1.9%.
Image Source: Zacks Investment Research
SBNY currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
A couple of better-ranked stocks from the finance space are The Bank of New York Mellon (BK - Free Report) and State Street (STT - Free Report) .
The Zacks Consensus Estimate for BNY Mellon’s current-year earnings has moved 2.7% higher over the past 30 days. Its shares have gained 8.4% in the past six months. Currently, BK sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State Street currently carries a Zacks Rank #2 (Buy). Its earnings estimates for 2023 have been revised 1.7% upward over the past 30 days. In the past six months, STT’s shares have rallied 11.7%.
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Signature Bank (SBNY) Reports Higher Deposits, Share Buybacks
Signature Bank (SBNY - Free Report) announced its updated financial performance as of Mar 8, 2023, underlining a strong financial position and limited digital-asset-related deposit balances amid crypto headwinds.
The company’s exposure in the digital asset space is limited to U.S. dollar deposits, and it is making efforts to deliberately reduce these deposits further.
Management noted, “We want to make it clear again that Signature Bank is a well-diversified, full-service commercial bank with more than two decades of history and solid performance serving middle market businesses. We have built a strong reputation serving commercial clients through nine business lines and reached in excess of $100 billion in assets by continually executing our single-point-of-contact, relationship-based model where banking teams are capable of meeting all client needs.”
Balance Sheet Position Indicates Strength
The bank’s stable commercial banking business model enabled it to accumulate more than $100 billion in assets across nine national business lines, and around 130 commercial banking teams in metropolitan New York area and West Coast regions.
The company’s deposit balances were $89.17 billion as of Mar 8, indicating an increase of $576 million from the 2022 end. Digital asset-related client deposit reduction aggregated $1.27 billion. With this, digital asset-related client deposits stood at $16.52 billion as of Mar 8.
In a mid-quarter financial update provided as of Mar 1, the company reported a decline of $826 million in spot deposit balances. Hence, the rebound in the deposit balance in a week indicates the bank’s diversified deposit mix. It has more than 80% of deposits coming from middle market businesses, such as law firms, accounting practices, healthcare companies, manufacturing companies and real estate management firms.
The company reported loan balances of $71.81 billion, indicating a decline of 2.7% from the 2022 end. The decline in loans likely resulted from the bank’s strategy of reducing loan balances in its larger business lines.
High Capital Level, Decent Liquidity Support Capital Deployments
SBNY’s common equity tier 1 risk-based capital ratio of 10.42% is in excess of regulatory requirements and underlines a high level of capital.
The company’s liquidity (as of Mar 8) comprises $4.54 billion in cash held on the balance sheet and $26.41 billion in marketable liquid securities. It had borrowing balances (excluding subordinated debt) of $6.58 billion, with an additional capacity of $29.01 billion.
Also, investment-grade credit ratings from Fitch Ratings, Kroll Bond Rating Agency and Moody’s Investors Services render the company favorable access to debt at attractive rates.
Supported by high capital levels and sufficient liquidity, the company is focusing on capital deployments in the forms of share repurchases and dividend hikes to reward shareholders.
Since the start of the quarter through Mar 8, the company repurchased $55 million of common stock. As of 2022 end, there was $450 million remaining under the share repurchase authorization.
In January 2023, SBNY announced a 25% increase in its common stock dividend to $2.80 per share annually, reflecting the first increase since the dividend was initiated in 2018.
The bank’s shares have plunged 21.2% in the year-to-date period compared with the industry’s fall of 1.9%.
Image Source: Zacks Investment Research
SBNY currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
A couple of better-ranked stocks from the finance space are The Bank of New York Mellon (BK - Free Report) and State Street (STT - Free Report) .
The Zacks Consensus Estimate for BNY Mellon’s current-year earnings has moved 2.7% higher over the past 30 days. Its shares have gained 8.4% in the past six months. Currently, BK sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State Street currently carries a Zacks Rank #2 (Buy). Its earnings estimates for 2023 have been revised 1.7% upward over the past 30 days. In the past six months, STT’s shares have rallied 11.7%.