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Signature Bank's (SBNY) Q3 Earnings Top Estimates, Stock Up
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Shares of Signature Bank (SBNY - Free Report) have rallied 1.9%, following the release of third-quarter 2019 results. Earnings of $2.75 per share outpaced the Zacks Consensus Estimate of $2.70. However, the bottom-line figure decreased 3.2% from the prior-year quarter’s reported tally.
Results reflect growth in revenues, loan and deposit balances, supported by a significant decline in provisions. However, fall in net interest margin (NIM) and escalating expenses were major drags.
Net income for the third quarter came in at $148.7 million, down 4.3% compared with the previous-year quarter.
Signature Bank’s total revenues inched up 1.4% from the prior-year quarter to $334 million. However, the top line missed the Zacks Consensus Estimate of $339.1 million.
Net interest income increased 1% year over year to $328 million, backed by rise in average interest earning assets. However, NIM contracted 20 basis points to 2.68%.
Non-interest income was $6 million, up nearly 33.3% year over year. This upside primarily stemmed from an increase in fees and services charges, along with rise in all the other components.
Non-interest expenses of $134.3 million flared up 14.6% from the prior-year quarter. This upsurge chiefly stemmed from rise in all components of expenses, partially offset by lower FDIC assessment fees.
Efficiency ratio was 40.2% as of Sep 30, 2019 compared with 35.6% reported as of Sep 30, 2018. Higher ratio indicates fall in profitability.
The company’s loans and leases, as of Sep 30, 2019, were $37.9 billion, rising marginally on a sequential basis. Further, total deposits rose 8.2% sequentially to $39.1 billion.
Credit Quality: Mixed Bag
The company recorded net charge offs of $2.9 million in the third quarter compared with the prior-year quarter’s $0.011million. In addition, provision for loan and lease losses plummeted 84.2% year over year to $1.2 million.
The ratio of non-accrual loans to total loans was 0.09%, down from the 0.38% recorded in the prior-year quarter.
Capital Ratios
As of Sep 30, 2019, Tier 1 risk-based capital ratio was 11.91% compared with 12.16% on Sep 30, 2018. In addition, total risk-based capital ratio was 13.16% compared with the prior-year quarter’s 13.47%. Tangible common equity ratio was 9.51% as of Sep 30, 2019, up from the 9.15% recorded at the end of September 2018.
Return on average assets was 1.19% in the reported quarter compared with the year-earlier quarter’s 1.36%. As of Sep 30, 2019, return on average common stockholders' equity was 12.55%, down from 14.71% recorded at the end of September 2018.
Capital Deployment
During the September-end quarter, the company repurchased 629,503 shares of common stock, at a total cost of $75 million.
Our Viewpoint
Steady growth in revenues, loan and deposit balances will further boost Signature Bank’s profitability. Moreover, capital-deployment actions reflect the bank’s solid balance-sheet position. Also, improved capital ratios are on the positive side for its financials. Nevertheless, rising expenses and contracting NIM are major near-term concerns.
Performance & Earnings Release Dates of Other Banks
Texas Capital Bancshares Inc. (TCBI - Free Report) reported earnings per share of $1.70 in third-quarter 2019, beating the Zacks Consensus Estimate of $1.49. Further, results compare favorably with the prior-year quarter’s $1.65. Rise in revenues was a positive factor. Further, results reflect organic growth, with significant rise in loans and deposit balances. Nonetheless, elevated expenses were on the downside.
PNC Financial (PNC - Free Report) reported positive earnings surprise of 5% in the third quarter. Earnings per share of $2.94 outpaced the Zacks Consensus Estimate of $2.80. The bottom line also reflected a 4.3% jump from the prior-year quarter’s reported figure. Higher revenues, driven by higher net interest income and escalating fee income, aided the company’s results. Nevertheless, rise in costs and provisions were headwinds.
Synovus Financial (SNV - Free Report) is slated to report results on Oct 22.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Signature Bank's (SBNY) Q3 Earnings Top Estimates, Stock Up
Shares of Signature Bank (SBNY - Free Report) have rallied 1.9%, following the release of third-quarter 2019 results. Earnings of $2.75 per share outpaced the Zacks Consensus Estimate of $2.70. However, the bottom-line figure decreased 3.2% from the prior-year quarter’s reported tally.
Results reflect growth in revenues, loan and deposit balances, supported by a significant decline in provisions. However, fall in net interest margin (NIM) and escalating expenses were major drags.
Net income for the third quarter came in at $148.7 million, down 4.3% compared with the previous-year quarter.
Revenues Rise, Loans & Deposits Increase, Expenses Escalate
Signature Bank’s total revenues inched up 1.4% from the prior-year quarter to $334 million. However, the top line missed the Zacks Consensus Estimate of $339.1 million.
Net interest income increased 1% year over year to $328 million, backed by rise in average interest earning assets. However, NIM contracted 20 basis points to 2.68%.
Non-interest income was $6 million, up nearly 33.3% year over year. This upside primarily stemmed from an increase in fees and services charges, along with rise in all the other components.
Non-interest expenses of $134.3 million flared up 14.6% from the prior-year quarter. This upsurge chiefly stemmed from rise in all components of expenses, partially offset by lower FDIC assessment fees.
Efficiency ratio was 40.2% as of Sep 30, 2019 compared with 35.6% reported as of Sep 30, 2018. Higher ratio indicates fall in profitability.
The company’s loans and leases, as of Sep 30, 2019, were $37.9 billion, rising marginally on a sequential basis. Further, total deposits rose 8.2% sequentially to $39.1 billion.
Credit Quality: Mixed Bag
The company recorded net charge offs of $2.9 million in the third quarter compared with the prior-year quarter’s $0.011million. In addition, provision for loan and lease losses plummeted 84.2% year over year to $1.2 million.
The ratio of non-accrual loans to total loans was 0.09%, down from the 0.38% recorded in the prior-year quarter.
Capital Ratios
As of Sep 30, 2019, Tier 1 risk-based capital ratio was 11.91% compared with 12.16% on Sep 30, 2018. In addition, total risk-based capital ratio was 13.16% compared with the prior-year quarter’s 13.47%. Tangible common equity ratio was 9.51% as of Sep 30, 2019, up from the 9.15% recorded at the end of September 2018.
Return on average assets was 1.19% in the reported quarter compared with the year-earlier quarter’s 1.36%. As of Sep 30, 2019, return on average common stockholders' equity was 12.55%, down from 14.71% recorded at the end of September 2018.
Capital Deployment
During the September-end quarter, the company repurchased 629,503 shares of common stock, at a total cost of $75 million.
Our Viewpoint
Steady growth in revenues, loan and deposit balances will further boost Signature Bank’s profitability. Moreover, capital-deployment actions reflect the bank’s solid balance-sheet position. Also, improved capital ratios are on the positive side for its financials. Nevertheless, rising expenses and contracting NIM are major near-term concerns.
Signature Bank Price, Consensus and EPS Surprise
Signature Bank price-consensus-eps-surprise-chart | Signature Bank Quote
Currently, Signature Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Dates of Other Banks
Texas Capital Bancshares Inc. (TCBI - Free Report) reported earnings per share of $1.70 in third-quarter 2019, beating the Zacks Consensus Estimate of $1.49. Further, results compare favorably with the prior-year quarter’s $1.65. Rise in revenues was a positive factor. Further, results reflect organic growth, with significant rise in loans and deposit balances. Nonetheless, elevated expenses were on the downside.
PNC Financial (PNC - Free Report) reported positive earnings surprise of 5% in the third quarter. Earnings per share of $2.94 outpaced the Zacks Consensus Estimate of $2.80. The bottom line also reflected a 4.3% jump from the prior-year quarter’s reported figure. Higher revenues, driven by higher net interest income and escalating fee income, aided the company’s results. Nevertheless, rise in costs and provisions were headwinds.
Synovus Financial (SNV - Free Report) is slated to report results on Oct 22.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>