Tuesday, Signature Bank (SBNY), a New York-based full-service commercial bank, reported higher net income for the second quarter, attributing to growth in both core deposits and loans as well as net interest margin expansion. On an adjusted basis, earnings per share for the quarter came in above analysts' estimates.
For the three months ended June 30, net income available to common shareholders increased to $11.98 million from $10.85 million in the prior-year quarter. On a per-share basis, earnings declined to $0.32 from $0.36 last year.
Excluding the after-tax expense of a $3.5 million FDIC special assessment, net income rose to $13.9 million, or $0.38 per share, up 28.5%. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share. Analysts' estimates typically exclude special items.
Net interest income increased to $60.55 million from $45.05 million in the second quarter of 2008, up 34.1%, as average interest-earning assets for the quarter rose 24.1%.
The provision for loan losses was $9.4 million, up 55.8%, and the increase was primarily driven by the growth in the loan portfolio, combined with an increase in non-performing loans and provisions to counter the effect of the deteriorating economic environment on the Bank's loan portfolio, the company said.
Total non-interest income decreased to $7.32 million from $9.77 million in 2008, primarily a result of a decline in commissions and trading income.
Core deposits during the quarter increased 8.8%. Loans, excluding loans held for sale, increased 5.6% to $3.77 billion at June 30, 2009, versus $3.57 billion at March 31, 2009, the company said. Net interest margin on a tax-equivalent basis for the quarter increased 25 basis points to 3.39% compared with the same period a year ago.
For the six months ended June 30, net income available to common shareholders decreased to $14.39 million from $20.70 million in the same period last year. Earnings per share decreased to $0.40 from $0.69 last year.
Six-month earnings results include the negative effect of the $10.2 million deemed dividend associated with the difference between the redemption payment and the carrying value of the preferred stock repurchased from the United States Department of the Treasury, the company said.
Net interest income increased to $118.05 million from $86.27 in 2008. Total non-interest income decreased to $17.71 million from $19.62 million a year ago.
Provision for loan losses rose to $18.997 million from $12.437 million in the first half last year.
Monday, SBNY closed the regular trading session at $30.69 on the Nasdaq.
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