Signature Bank Reports 2022 Third Quarter Results

• Net Income for the 2022 Third Quarter Increased $117.0 Million, or 48.5 Percent, to a Record $358.5 Million, or $5.57 Diluted Earnings Per Share, Versus $241.4 Million, or $3.88 Diluted Earnings Per Share, Reported in the 2021 Third Quarter. Pre-Tax, Pre-Provision Earnings for the 2022 Third Quarter Were a Record $492.3 Million, an Increase of $161.3 Million, or 48.7 Percent, Compared with $331.0 Million for the 2021 Third Quarter

• Return on Common Equity Reaches a Record 18.4 Percent for the 2022 Third Quarter

• Total Deposits in the Third Quarter Declined $1.34 Billion to $102.78 Billion. The Decline Was Primarily Driven by the Digital Asset Banking Team, Which Declined $3.0 Billion. This Decrease was Offset by Deposit Growth of $1.7 Billion Coming From Other Businesses. Total Deposits for the Prior Twelve Months Have Grown $7.21 Billion, or 7.5 Percent

• For the 2022 Third Quarter, Loans Increased $1.84 Billion, or 2.6 Percent, to $73.84 Billion. Since the End of the 2021 Third Quarter, Loans Have Increased 26.0 Percent, or $15.25 Billion

• For the 2022 Third Quarter, Non-Accrual Loans Increased $17.4 Million to $185.3 Million, or 0.25 Percent of Total Loans, at September 30, 2022, Versus $167.9 Million, or 0.23 Percent, at the End of the 2022 Second Quarter

• Net Interest Margin on a Tax-Equivalent Basis Increased to 2.38 Percent, Compared With 2.23 Percent for the 2022 Second Quarter and 1.88 Percent for the 2021 Third Quarter

• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 8.47 Percent, 10.11 Percent, 10.90 Percent, and 11.99 Percent, Respectively, at September 30, 2022. Signature Bank Remains Significantly Above FDIC “Well Capitalized” Standards. Tangible Common Equity Ratio was 6.10 Percent

• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After November 10, 2022 to Common Shareholders of Record at the Close of Business on October 28, 2022. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After December 30, 2022 to Preferred Shareholders of Record at the Close of Business on December 16, 2022

• In the 2022 Third Quarter, the Bank Hired Two Private Client Banking Teams; One in New York and One on the West Coast. This Brings the Total Teams Hired to 12 for the Year. Additionally, Our Newest National Banking Practice, the Health Care Banking and Finance Team, Launched in the Second Quarter of 2022

Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its third quarter ended September 30, 2022.

Net income for the 2022 third quarter was a record $358.5 million, or $5.57 diluted earnings per share, versus $241.4 million, or $3.88 diluted earnings per share, for the 2021 third quarter. The increase in net income for the 2022 third quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong loan and securities growth, higher interest rates, as well as the utilization of our excess cash. Pre-tax, pre-provision earnings were a record $492.3 million, representing an increase of $161.3 million, or 48.7 percent, compared with $331.0 million for the 2021 third quarter.

Net interest income for the 2022 third quarter reached $674.0 million, up $193.1 million, or 40.2 percent, when compared with the 2021 third quarter. This increase is primarily due to growth in average interest-earning assets, higher prevailing market interest rates, and the utilization of our excess cash. Total assets reached $114.47 billion at September 30, 2022, an increase of $6.62 billion, or 6.1 percent, from $107.85 billion at September 30, 2021. Average assets for the 2022 third quarter reached $114.60 billion, an increase of $12.11 billion, or 11.8 percent, compared with the 2021 third quarter.

Deposits for the 2022 third quarter decreased $1.34 billion to $102.78 billion, including a non-interest bearing deposit reduction of $4.03 billion, which brings our non-interest bearing mix to 36.4 percent of deposits at September 30, 2022. Overall deposit growth for the last twelve months was 7.5 percent, or $7.21 billion. Average deposits for the 2022 third quarter reached $102.66 billion, a decrease of $4.03 billion when compared with the prior quarter.

“Throughout the past two decades, Signature Bank has continued to emerge a stronger institution, despite navigating challenging economic landscapes at times. The Bank’s ongoing success is directly attributed to our deliberate focus on what we can control, as well as the distinctive competitive advantages of our enterprise. These include our ability to recruit best-in-class banking teams and national lending practices affording them the platform needed to service their clients. The strong relationships our colleagues forge today are the foundation of the franchise we are growing for tomorrow. As Warren Buffett once said, ‘Someone is sitting in the shade today because someone planted a tree a long time ago.’ This theme is the basis on which we service each and every client who selected Signature Bank as their bank-of-choice,” said Joseph J. DePaolo, Signature Bank President and Chief Executive Officer.

“We have always preferred to assess our performance based on the metrics we can control — such as growth in client relationships — rather than on external macroeconomic forces beyond our control. Through our founding single-point-of-contact model — which delivers high levels of client care and service — we have maintained strong client relationships while also adding many new ones across all our business lines. During the 2022 third quarter, the Bank added over 1,000 new client business relationships across the institution. The momentum that continues to build on the client expansion front today translates into deep relationships that bear fruit from that shady tree tomorrow,” DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: “It is during tumultuous times that Signature Bank’s strengths really stand out. Our Group Directors and National Banking Practice Leaders act as trusted advisors to our clients and foster a feeling that we are all in it together.

"As Joe alluded to, the Bank put several long-term strategies in place to grow its business and serve more clients. To this end, our innovations in the digital world with our Signet™ payments platform helped our clients better operate their businesses. As the payment space further evolves, so will Signature Bank, ensuring our clients and shareholders benefit from new developments.

"Our technology advancements, client retention and expansion and business diversification all contributed to the $114.47 billion in assets we reached in the third quarter. These efforts, coupled with exceptional returns on capital, excellent credit metrics and an emphasis on safe, less risky assets, continues to shape the future successes of Signature Bank."

Net Interest Income

Net interest income for the 2022 third quarter was $674.0 million, an increase of $193.1 million, or 40.2 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets and higher prevailing market interest rates. Average interest-earning assets of $112.61 billion for the 2022 third quarter represent an increase of $10.95 billion, or 10.8 percent, from the 2021 third quarter. Due to higher interest rates across all of our asset classes, the yield on interest-earning assets for the 2022 third quarter increased 127 basis points to 3.45 percent, compared to the third quarter of last year.

Average cost of deposits and average cost of funds for the third quarter of 2022 increased by 89 and 82 basis points, to 1.11 percent and 1.14 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2022 third quarter was 2.38 percent versus 1.88 percent reported in the 2021 third quarter and 2.23 percent in the 2022 second quarter.

Provision for Credit Losses

The Bank’s provision for credit losses for the third quarter of 2022 was $29.1 million, compared with $4.2 million for the 2022 second quarter and $4.0 million for the 2021 third quarter. The increase in the provision for credit losses for the 2022 third quarter, compared to the same quarter last year, was predominantly attributable to a deteriorating macroeconomic forecast compared with the same period last year.

Net charge offs for the 2022 third quarter were $10.2 million, or 0.06 percent of average loans, on an annualized basis, versus 19.7 million, or 0.11 percent, for the 2022 second quarter and net charge offs of $17.3 million, or 0.12 percent, for the 2021 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2022 third quarter was $43.8 million, up $12.4 million when compared with $31.4 million reported in the 2021 third quarter. The increase was primarily driven by a $9.0 million increase in fees and service charges and a $4.8 million increase in other income, including foreign currency activity, as well as mark-to-market gains related to our non-hedging derivatives.

Non-interest expense for the third quarter of 2022 was $225.5 million, an increase of $44.2 million, or 24.4 percent, versus $181.2 million reported in the 2021 third quarter. The increase was predominantly due to the addition of new private client banking teams, national banking practices, and operational personnel, as well as client activity related expenses that have increased with the growth in our clients and businesses.

Despite the significant team hiring, the launch of the Healthcare Banking and Finance team, and considerable operational investment, the Bank’s efficiency ratio was 31.4 percent for the 2022 third quarter compared with 35.4 percent for the same period a year ago, and 30.6 percent for the second quarter of 2022.

Income Taxes

Income tax expense for the third quarter of 2022 included an increase in tax benefits associated with sustainable finance lending. This lowered our quarterly effective tax rate to 22.6 percent compared with 26.2 percent for the same period a year ago, and 28.2 percent for the second quarter of 2022.

Loans

Loans, excluding loans held for sale, grew $1.84 billion, or 2.6 percent, during the third quarter of 2022 to $73.84 billion, compared with $72.00 billion at June 30, 2022. Average loans, excluding loans held for sale, reached $73.47 billion in the 2022 third quarter, growing $4.80 billion, or 7.0 percent, from the 2022 second quarter and $18.01 billion, or 32.5 percent, from the 2021 third quarter.

At September 30, 2022, non-accrual loans were $185.3 million, representing 0.25 percent of total loans and 0.16 percent of total assets, compared with non-accrual loans of $167.9 million, or 0.23 percent of total loans, at June 30, 2022 and $165.4 million, or 0.28 percent of total loans, at September 30, 2021. The ratio of allowance for credit losses for loans and leases to total loans at September 30, 2022 was 0.63 percent, versus 0.62 percent at June 30, 2022 and 0.85 percent at September 30, 2021. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 251 percent for the 2022 third quarter versus 266 percent for the second quarter of 2022 and 303 percent for the 2021 third quarter.

Capital

The Bank’s Tier 1 leverage, common equity Tier 1 risk-based, Tier 1 risk-based, and total risk-based capital ratios were approximately 8.47 percent, 10.11 percent, 10.90 percent, and 11.99 percent, respectively, as of September 30, 2022. Each of these ratios is well in excess of regulatory requirements. The Bank’s strong risk-based capital ratios reflect the relatively low risk profile of the Bank’s balance sheet.

The Bank declared a cash dividend of $0.56 per share, payable on or after November 10, 2022 to common stockholders of record at the close of business on October 28, 2022. The Bank also declared a cash dividend of $12.50 per share payable on December 30, 2022 to preferred shareholders of record at the close of business on December 16, 2022. In the third quarter of 2022, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on July 29, 2022. The Bank also paid a cash dividend of $12.50 per share to preferred shareholders of record at the close of business on September 16, 2022.

Conference Call

Signature Bank’s management will host a conference call to review results of its 2022 third quarter on Tuesday, October 18, 2022, at 9:00 AM ET. All participants should dial 800-225-9448 and international callers should dial 203-518-9708, at least ten minutes prior to the start of the call and reference conference ID SBNYQ322.

To hear a live web simulcast or to listen to the archived web cast following completion of the call, please visit the Bank’s web site at www.signatureny.com, click on “Investor Information,” "Quarterly Results/Conference Calls" to access the link to the call.

An earnings slide presentation accompanying the call will be accessible through the live web cast and available on Signature Bank’s website here.

To listen to a telephone replay of the conference call, please dial 800-723-0520 or 402-220-2653. The replay will be available from approximately 12:00 PM ET on Tuesday, October 18, 2022 through 11:59 PM ET on Friday, October 21, 2022.

About Signature Bank

Signature Bank, member FDIC, is a New York-based full-service commercial bank with 40 private client offices throughout the metropolitan New York area, as well as those in Connecticut, California and North Carolina. Through its single-point-of-contact approach, the Bank’s private client banking teams primarily serve the needs of privately owned businesses, their owners and senior managers. The Bank has two wholly owned subsidiaries: Signature Financial, LLC, provides equipment finance and leasing; and, Signature Securities Group Corporation, a licensed broker-dealer, investment adviser and member FINRA/SIPC, offers investment, brokerage, asset management and insurance products and services. Signature Bank was the first FDIC-insured bank to launch a blockchain-based digital payments platform. Signet™ allows commercial clients to make real-time payments in U.S. dollars, 24/7/365 and was also the first blockchain-based solution to be approved for use by the NYS Department of Financial Services.

Signature Bank placed 19^th on S&P Global’s list of the largest banks in the U.S., based on deposits.

For more information, please visit https://www.signatureny.com/.

This press release and oral statements made from time to time by our representatives contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous risks and uncertainties relating to our operations and business environment, all of which are difficult to predict and may be beyond our control. Forward-looking statements include information concerning our expectations regarding future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams' hires, new office openings, business strategy and the impact of the COVID-19 pandemic on each of the foregoing and on our business overall. Forward-looking statements often include words such as "may," "believe," "expect," "anticipate," "intend," “potential,” “opportunity,” “could,” “project,” “seek,” “target,” “goal,” “should,” “will,” “would,” "plan," "estimate" or other similar expressions. Forward-looking statements may also address our sustainability progress, plans, and goals (including climate change and environmental-related matters and disclosures), which may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. As you consider forward-looking statements, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions that could cause actual results to differ materially from those in the forward-looking statements and can change as a result of many possible events or factors, not all of which are known to us or in our control. These factors include but are not limited to: (i) prevailing economic conditions; (ii) changes in interest rates, loan demand, real estate values and competition, any of which can materially affect origination levels and gain on sale results in our business, as well as other aspects of our financial performance, including earnings on interest-bearing assets; (iii) the level of defaults, losses and prepayments on loans made by us, whether held in portfolio or sold in the whole loan secondary markets, which can materially affect charge-off levels and required credit loss reserve levels; (iv) changes in monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; (v) changes in the banking and other financial services regulatory environment; (vi) our ability to maintain the continuity, integrity, security and safety of our operations and (vii) competition for qualified personnel and desirable office locations. All of these factors are subject to additional uncertainty in the context of the COVID-19 pandemic and the conflict in Ukraine, which are having impacts on all aspects of our operations, the financial services industry and the economy as a whole. Additional risks are described in our quarterly and annual reports filed with the FDIC. Although we believe that these forward-looking statements are based on reasonable assumptions, beliefs and expectations, if a change occurs or our beliefs, assumptions and expectations were incorrect, our business, financial condition, liquidity or results of operations may vary materially from those expressed in our forward-looking statements. You should keep in mind that any forward-looking statements made by Signature Bank speak only as of the date on which they were made. New risks and uncertainties come up from time to time, and we cannot predict these events or how they may affect the Bank. Signature Bank has no duty to, and does not intend to, update or revise the forward-looking statements after the date on which they are made.

FINANCIAL TABLES ATTACHED

SIGNATURE BANK

NON-GAAP FINANCIAL MEASURES

(unaudited)

This press release contains both financial measures based on GAAP and non-GAAP financial measures where management believes that the presentation of certain non-GAAP financial measures assists investors when comparing results period-to-period in a more consistent manner and provides a better measure of Signature Bank's results. These non-GAAP measures include the Bank's (i) tangible common equity ratio, (ii) efficiency ratio, (iii) yield on interest-earning assets, tax-equivalent basis, (iv) net interest margin, tax-equivalent basis, and (v) pre-tax, pre-provision earnings. These non-GAAP measures should not be considered a substitute for GAAP-basis measures and results. We strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

The following table presents the tangible common equity ratio calculation:

The following table presents the efficiency ratio calculation:

The following table reconciles yield on interest-earning assets to the yield on interest-earning assets on a tax-equivalent basis:

The following table reconciles net interest margin (as reported) to net interest margin on a tax-equivalent basis:

The following table reconciles net income (as reported) to pre-tax, pre-provision earnings:

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