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Signature Bank Poised to Grow Organically: Should You Hold?
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On Nov 18, we issued an updated research report on Signature Bank (SBNY - Free Report) . The company remains well positioned for organic growth, supported by a rise in loan and deposit balances. Further, it is likely to gain from strong capital position. However, operating expenses are witnessing a rise.
Persistent rise in loans and deposit balances reflects Signature Bank’s organic growth potential. Deposits recorded a five-year (2014-2018) CAGR of 12.7%, backed by rising non-interest bearing and interest bearing deposits. Also, loans witnessed a CAGR of 19.3%.
Further, the company’s top line benefits from net interest income growth, which witnessed a CAGR of 12.8% with support from rising average interest earning assets.
Signature Bank’s strong capital position backs its efforts to expand operations by making strategic hires, and opening new divisions and platforms. Also, it keeps the company well poised to undertake opportunistic expansions in different regions, thereby improving its prospects.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have rallied 5.6% compared with 3.9% growth of the industry.
However, costs witnessed a CAGR of 13.5% over the last five years (ended 2018). The increase was largely due to investments in technology and rise in salaries due to addition of new private client banking teams, including the Fund Banking Division and the Venture Banking Group. Management expects expenses to jump 12-16% in 2019.
Further, a higher interest rate environment is a headwind for Signature Bank’s net interest margin (NIM) due to its liability sensitive balance sheet. Notably, NIM declined from 3.36% in 2013 to 2.92% in 2018. The contraction resulted from rise in average cost of funds.
Led by these concerns, analysts seem to have a slightly bearish stance on Signature Bank. The Zacks Consensus Estimate for earnings has been lowered for 2019 and 2020 over the past 30 days.
Stocks to Consider
Salisbury Bancorp has witnessed upward earnings estimate revisions for 2019 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has rallied 19%, year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Bancorp’s (TBBK - Free Report) current-year earnings estimates have been revised upward over the past 60 days. Further, the company’s shares have gained 37.6% in the year-to-date period. At present, it flaunts a Zacks Rank of 1.
Metropolitan Bank Holding Corp. (MCB - Free Report) ongoing-year earnings estimate has moved north in 60 days’ time. Additionally, the stock has appreciated 47%, so far this year. It currently sports a Zacks Rank #1.
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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 8 stocks to watch. The report is only available for a limited time.
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Signature Bank Poised to Grow Organically: Should You Hold?
On Nov 18, we issued an updated research report on Signature Bank (SBNY - Free Report) . The company remains well positioned for organic growth, supported by a rise in loan and deposit balances. Further, it is likely to gain from strong capital position. However, operating expenses are witnessing a rise.
Persistent rise in loans and deposit balances reflects Signature Bank’s organic growth potential. Deposits recorded a five-year (2014-2018) CAGR of 12.7%, backed by rising non-interest bearing and interest bearing deposits. Also, loans witnessed a CAGR of 19.3%.
Further, the company’s top line benefits from net interest income growth, which witnessed a CAGR of 12.8% with support from rising average interest earning assets.
Signature Bank’s strong capital position backs its efforts to expand operations by making strategic hires, and opening new divisions and platforms. Also, it keeps the company well poised to undertake opportunistic expansions in different regions, thereby improving its prospects.
Over the past six months, shares of this Zacks Rank #3 (Hold) company have rallied 5.6% compared with 3.9% growth of the industry.
However, costs witnessed a CAGR of 13.5% over the last five years (ended 2018). The increase was largely due to investments in technology and rise in salaries due to addition of new private client banking teams, including the Fund Banking Division and the Venture Banking Group. Management expects expenses to jump 12-16% in 2019.
Further, a higher interest rate environment is a headwind for Signature Bank’s net interest margin (NIM) due to its liability sensitive balance sheet. Notably, NIM declined from 3.36% in 2013 to 2.92% in 2018. The contraction resulted from rise in average cost of funds.
Led by these concerns, analysts seem to have a slightly bearish stance on Signature Bank. The Zacks Consensus Estimate for earnings has been lowered for 2019 and 2020 over the past 30 days.
Stocks to Consider
Salisbury Bancorp has witnessed upward earnings estimate revisions for 2019 over the past 60 days. Moreover, this Zacks #1 Ranked (Strong Buy) stock has rallied 19%, year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Bancorp’s (TBBK - Free Report) current-year earnings estimates have been revised upward over the past 60 days. Further, the company’s shares have gained 37.6% in the year-to-date period. At present, it flaunts a Zacks Rank of 1.
Metropolitan Bank Holding Corp. (MCB - Free Report) ongoing-year earnings estimate has moved north in 60 days’ time. Additionally, the stock has appreciated 47%, so far this year. It currently sports a Zacks Rank #1.
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 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>