Business Wire | Oct 20, 2020 05:00AM EDT

Signature Bank Reports 2020 Third Quarter Results

Oct. 20, 2020

NEW YORK--(BUSINESS WIRE)--Oct. 20, 2020--Signature Bank (Nasdaq: SBNY), a New York-based full-service commercial bank, today announced results for its third quarter ended September 30, 2020.

Net income for the 2020 third quarter was $138.6 million, or $2.62 diluted earnings per share, versus $148.1 million, or $2.74 diluted earnings per share, for the 2019 third quarter. The decrease in net income for the 2020 third quarter, versus the comparable quarter last year, is due to an increase in the provision for credit losses of $51.5 million predominantly due to effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision earnings were $252.4 million, representing an increase of $43.9 million, or 21.1 percent, compared with $208.4 million for the 2019 third quarter.

Net interest income for the 2020 third quarter reached $388.7 million, up $60.7 million, or 18.5 percent, when compared with the 2019 third quarter. This increase is primarily due to growth in average interest-earning assets. Total assets reached $63.76 billion at September 30, 2020, an increase of $14.37 billion, or 29.1 percent, from $49.39 billion at September 30, 2019. Average assets for the 2020 third quarter reached $61.56 billion, an increase of $11.96 billion, or 24.1 percent, compared with the 2019 third quarter.

Deposits for the 2020 third quarter rose $4.11 billion to $54.34 billion at September 30, 2020. When compared with deposits at September 30, 2019, overall deposit growth for the last twelve months was 39.1 percent, or $15.28 billion. Average deposits for the 2020 third quarter reached $51.62 billion, an increase of $4.24 billion.

"Signature Bank continues to realize extraordinary growth during a protracted and challenging recovery from the COVID-19 pandemic. Our founding business philosophy to provide a client-centric, single point-of-contact model led by experienced group directors still distinguishes Signature Bank in the marketplace, particularly in times of distress. We've successfully navigated many challenges before and inevitably there will be others. While we don't always know when or in what form they will materialize, we always knew it was important to be well diversified. As expected, our new initiatives are being embraced by clients, allowing us to continue to deliver solid results during these unsettling times," explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

"I want to take this opportunity to thank all our colleagues for their continued unwavering commitment to the Bank and its clients as well as their ability to stay focused on the positive throughout this pandemic. They clearly recognized the enormity of the challenge in front of all of us, and met it head on. This dedication and effort is reflected in our third quarter performance, our corporate culture and the strength of our franchise, as we executed on many fronts. Our strong deposit growth, which is up $13.96 billion for the first nine months of 2020 was again driven by across-the-board performance stemming from all our deposit gathering initiatives. Core loans increased solidly again this quarter, up $5.12 billion year-to-date. And, the Bank's pre-tax pre-provision earnings grew $43.9 million, or 21.1 percent. Additionally, we were able to dramatically reduce principal and interest deferrals to 5.0 percent of total loans, and are proud of the ways in which we worked closely with our clients," DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: "While current times are very challenging on both the personal and professional fronts for our Signature Bank colleagues, it is also an appropriate time to be proud of what we have accomplished as an organization. Clients often share how grateful they are that their bankers stand ready to listen while offering sage advice and acting as a sounding board on difficult strategic decisions. We believe we have never been closer to our clients, and throughout these unprecedented times, they know we are in the trenches right alongside them. This message has been resounding with both current and new clients as we have achieved greater deposit growth in the first nine months of this year than in our first nine years of business. The Bank continues to expand its business lines and geographic presence as we witness the first fruits of a variety of initiatives put into place over the past several years. We diversified our business in ways that those who remember our NYC roots find pleasantly surprising."

Capital

At the start of the 2020 fourth quarter, the Bank issued $375.0 million of subordinated debt in a public offering. Proceeds from the offering will be used for general corporate purposes. The Bank's Tier 1 leverage, common equity Tier 1 risk-based, Tier 1 risk-based, and total risk-based capital ratios were approximately 8.56 percent, 10.26 percent, 10.26 percent, and 11.98 percent, respectively, as of September 30, 2020. 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's tangible common equity ratio remains strong at 7.75 percent. The Bank defines tangible common equity ratio as the ratio of tangible common equity to adjusted tangible assets and calculates this ratio by dividing total consolidated common shareholders' equity by consolidated total assets.

The Bank declared a cash dividend of $0.56 per share, payable on or after November 13, 2020 to common stockholders of record at the close of business on November 2, 2020. In the third quarter of 2020, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on July 31, 2020.

Net Interest Income

Net interest income for the 2020 third quarter was $388.7 million, an increase of $60.7 million, or 18.5 percent, versus the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $60.81 billion for the 2020 third quarter represent an increase of $11.98 billion, or 24.5 percent, from the 2019 third quarter. Yield on interest-earning assets on a tax-equivalent basis for the 2020 third quarter decreased 78 basis points to 3.16 percent, compared to the third quarter of last year.

Average cost of deposits and average cost of funds for the third quarter of 2020 decreased by 70 and 74 basis points, to 0.51 percent and 0.66 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2020 third quarter was 2.55 percent versus 2.68 percent reported in the 2019 third quarter and 2.77 percent in the 2020 second quarter. Excluding loan prepayment penalties in both quarters, linked quarter core net interest margin on a tax-equivalent basis decreased 17 basis points to 2.52 percent. The 2020 third quarter net interest margin was negatively affected by 21 basis points due to significant excess cash balances driven by strong deposit growth.

Provision for Credit Losses

The Bank's provision for credit losses for the third quarter of 2020 was $52.7 million, compared with $93.0 million for the 2020 second quarter and $1.2 million for the 2019 third quarter. The Bank's elevated provision for credit losses for the third quarter was predominantly attributable to effects of COVID-19 on the U.S. economy. Additionally, this is the third quarter since the bank adopted CECL on January 1, 2020.

Net charge-offs for the 2020 third quarter were $10.5 million, or 0.09 percent of average loans, on an annualized basis, versus $4.6 million, or 0.04 percent, for the 2020 second quarter and net charge-offs of $2.9 million, or 0.03 percent, for the 2019 third quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2020 third quarter was $24.2 million, up $9.5 million when compared with $14.7 million reported in the 2019 third quarter. The increase was driven by increases in fees and service charges, net gains on sales of securities and net gains on sales of loans.

Non-interest expense for the third quarter of 2020 was $160.6 million, an increase of $26.3 million, or 19.6 percent, versus $134.3 million reported in the 2019 third quarter. The increase was predominantly due to a rise of $14.9 million in salaries and benefits from the significant hiring of 17 private client banking teams on the West Coast during the first three quarters of 2020. Additionally, the Bank incurred $6.8 million in penalty expense associated with the prepayment of $1.05 billion in borrowings.

The Bank's efficiency ratio was 38.9 percent for the 2020 third quarter compared with 39.2 percent for the same period a year ago, and 38.0 percent for the second quarter of 2020.

Loans

Loans, excluding loans held for sale, grew $1.01 billion, or 2.2 percent, during the third quarter of 2020 to $46.21 billion, compared with $45.20 billion at June 30, 2020. Average loans, excluding loans held for sale, reached $45.42 billion in the 2020 third quarter, growing $2.69 billion, or 6.3 percent, from the 2020 second quarter and $7.59 billion, or 20.1 percent, from the 2019 third quarter. For the eighth consecutive quarter, the increase in loans was primarily driven by growth in commercial and industrial loans, led by capital call facilities to private equity funds.

At September 30, 2020, non-accrual loans were $81.3 million, representing 0.18 percent of total loans and 0.13 percent of total assets, compared with non-accrual loans of $46.9 million, or 0.10 percent of total loans, at June 30, 2020 and $32.5 million, or 0.09 percent of total loans, at September 30, 2019. The ratio of allowance for credit losses for loans and leases to total loans at September 30, 2020 was 1.05 percent, versus 0.98 percent at June 30, 2020 and 0.64 percent at September 30, 2019. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 596 percent for the 2020 third quarter versus 947 percent for the second quarter of 2020 and 746 percent for the 2019 third quarter.

COVID-19 Related Loan Modifications

As of October 15, 2020, total principal and interest (P&I) deferrals significantly decreased to $2.31 billion, or 5.0 percent of the Bank's total loan portfolio from their peak level as of June 30, 2020. Additionally, 2.1 percent of the loan book is currently comprised of modified 90 day interest-only payments. The positive trend is the result of the Bank's ability to work closely with its clients toward reasonable resolutions.

As of September 30, As of October 15, 2020 2020

(dollars in millions) Total Portfolio P&I Deferrals

Balance LTV DSCR Balance % of LTV DSCR Portfolio

Multi Family $ 15,297 59% 1.36 642 4.2% 58% 1.26

RetailNeighborhood 2,160 57% 1.66 191 8.8% 54% 1.61

Mixed Use 1,122 58% 1.35 168 15.0% 58% 1.24

Commercial Condo / Co-op 988 55% 1.26 223 22.6% 55% 1.05

Single Tenant 692 53% 1.65 8 1.2% 57% 1.53

Other 605 56% 1.58 62 10.2% 52% 1.52

Total Retail 5,567 56% 1.52 652 11.7% 55% 1.31

Office 4,036 55% 1.66 524 13.0% 54% 1.36

Acquisition,Development, andConstruction (ADC)(1) 1,376 51% 0.42 171 12.4% 60% 0.27

Industrial 557 51% 1.83 9 1.6% 39% 1.38

Hotel 77 44% 1.81 - 0.0% - -

Land 38 21% 1.98 - 0.0% - -

Other 284 47% 1.48 27 9.5% 58% 1.33

Total CRE 27,232 57% 1.40 2,025 7.4% 56% 1.22

Fund Banking, VentureBanking, and ABL 9,216 - 0.0%

Signature Financial 4,739 127 2.7%

Traditional C&I 2,486 130 5.2%

Total C&I 16,441 257 1.6%

PPP Loans 1,985 - 0.0%

Residential and Consumer 593 31 5.2%

Other Loans, premiums,deferred fees, and costs (39) - 0.0%

Total Portfolio $ 46,212 2,313 5.0%

(1) ADC loans predominantly consist of loans for properties that have been acquired by our clients for refurbishment and are not ground up construction loans. The DSCR reported for ADC loans does not include credit enhancements, such as rental holdbacks, reserves, and personal guarantees. Conference Call

Signature Bank's management will host a conference call to review results of the 2020 third quarter on Tuesday, October 20, 2020, at 10:00 AM ET. All participants should dial 866-359-8135 at least ten minutes prior to the start of the call and reference conference ID #7186596. International callers should dial 901-300-3484.

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. To listen to a telephone replay of the conference call, please dial 800-585-8367 or 404-537-3406 and enter conference ID #7186596. The replay will be available from approximately 1:00 PM ET on Tuesday, October 20, 2020 through 11:59 PM ET on Friday, October 23, 2020.

About Signature Bank

Signature Bank, member FDIC, is a New York-based, full-service commercial bank with 36 private client offices throughout the metropolitan New York area, including Connecticut as well as in California and North Carolina. The Bank's growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers.

Signature Bank's specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing. Signature Securities Group Corporation, a wholly owned Bank subsidiary, is a licensed broker-dealer, investment adviser and member FINRA/SIPC, offering investment, brokerage, asset management and insurance products and services.

The Bank's revolutionary blockchain-based digital payments platform, Signet(tm), allows the Bank's commercial clients to make real-time payments in U.S. dollars, 24/7/365. Signature Bank is the first FDIC-insured bank to launch a blockchain-based digital payments platform, and Signet is the first such platform to be approved for use by the NYS Department of Financial Services.

Since commencing operations in May 2001, the Bank has emerged as one of the top 40 largest banks in the U.S., based on deposits (S&P Global Market Intelligence).

For more information, please visit 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 that are subject to risks and uncertainties. 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 future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams and other hires, new office openings, our business strategy and the impact of the COVID-19 pandemic on each of the foregoing and on our business overall. These 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. 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, which is having an unprecedented impact on all aspects of our operations, the financial services industry and the economy as a whole. 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. Additional risks are described in our quarterly and annual reports filed with the FDIC. 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. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.

FINANCIAL TABLES ATTACHED

(1) ADC loans predominantly consist of loans for properties that have beenacquired by our clients for refurbishment and are not ground up constructionloans. The DSCR reported for ADC loans does not include credit enhancements,such as rental holdbacks, reserves, and personal guarantees. Conference Call

Signature Bank's management will host a conference call to review results of the 2020 third quarter on Tuesday, October 20, 2020, at 10:00 AM ET. All participants should dial 866-359-8135 at least ten minutes prior to the start of the call and reference conference ID #7186596. International callers should dial 901-300-3484.

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. To listen to a telephone replay of the conference call, please dial 800-585-8367 or 404-537-3406 and enter conference ID #7186596. The replay will be available from approximately 1:00 PM ET on Tuesday, October 20, 2020 through 11:59 PM ET on Friday, October 23, 2020.

About Signature Bank

Signature Bank, member FDIC, is a New York-based, full-service commercial bank with 36 private client offices throughout the metropolitan New York area, including Connecticut as well as in California and North Carolina. The Bank's growing network of private client banking teams serves the needs of privately owned businesses, their owners and senior managers.

Signature Bank's specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing. Signature Securities Group Corporation, a wholly owned Bank subsidiary, is a licensed broker-dealer, investment adviser and member FINRA/SIPC, offering investment, brokerage, asset management and insurance products and services.

The Bank's revolutionary blockchain-based digital payments platform, Signet(tm), allows the Bank's commercial clients to make real-time payments in U.S. dollars, 24/7/365. Signature Bank is the first FDIC-insured bank to launch a blockchain-based digital payments platform, and Signet is the first such platform to be approved for use by the NYS Department of Financial Services.

Since commencing operations in May 2001, the Bank has emerged as one of the top 40 largest banks in the U.S., based on deposits (S&P Global Market Intelligence).

For more information, please visit 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 that are subject to risks and uncertainties. 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 future results, interest rates and the interest rate environment, loan and deposit growth, loan performance, operations, new private client teams and other hires, new office openings, our business strategy and the impact of the COVID-19 pandemic on each of the foregoing and on our business overall. These 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. 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, which is having an unprecedented impact on all aspects of our operations, the financial services industry and the economy as a whole. 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. Additional risks are described in our quarterly and annual reports filed with the FDIC. 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. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this release or elsewhere might not reflect actual results.

FINANCIAL TABLES ATTACHED

SIGNATURE BANKCONSOLIDATED STATEMENTS OF INCOME(unaudited) Three months Nine months ended ended September 30, September 30,

(dollars in thousands, except per share 2020 2019 2020 2019amounts)INTEREST AND DIVIDEND INCOMELoans held for sale $ 692 1,284 2,334 3,653

Loans and leases, net 416,617 399,552 1,234,894 1,179,659

Securities available-for-sale 45,251 56,534 144,683 173,532

Securities held-to-maturity 14,036 15,238 42,660 46,292

Other investments 4,896 11,447 18,517 27,144

Total interest income 481,492 484,055 1,443,088 1,430,280

INTEREST EXPENSEDeposits 66,069 118,308 231,359 331,802

Federal funds purchased and securitiessold underagreements to repurchase 680 1,154 2,147 13,437

Federal Home Loan Bank borrowings 20,174 32,929 67,914 100,814

Subordinated debt 5,856 3,645 17,560 10,928

Total interest expense 92,779 156,036 318,980 456,981

Net interest income before provision for 388,713 328,019 1,124,108 973,299credit lossesProvision for credit losses 52,664 1,164 212,495 12,881

Net interest income after provision for 336,049 326,855 911,613 960,418credit lossesNON-INTEREST INCOMECommissions 3,183 3,452 9,710 10,831

Fees and service charges 10,871 8,178 31,772 23,752

Net gains on sales of securities 3,623 120 3,623 1,034

Net gains on sales of loans 4,996 2,752 9,552 8,880

Other income (1) 1,540 214 (3,600 ) 1,191

Total non-interest income 24,213 14,716 51,057 45,688

NON-INTEREST EXPENSESalaries and benefits 101,306 86,438 293,422 250,753

Occupancy and equipment 11,618 10,854 33,437 32,476

Information technology 11,324 10,098 31,797 27,552

FDIC assessment fees 3,190 3,191 9,787 9,538

Professional fees 3,399 4,075 12,931 10,693

Other general and administrative 29,726 19,639 75,028 60,235

Total non-interest expense 160,563 134,295 456,402 391,247

Income before income taxes 199,699 207,276 506,268 614,859

Income tax expense 61,149 59,158 150,918 175,985

$ 148,118 355,350 438,874Net income 138,550

PER COMMON SHARE DATAEarnings per share - basic $ 2.62 2.75 6.73 8.10

Earnings per share - diluted $ 2.62 2.74 6.70 8.07

Dividends per common share $ 0.56 0.56 1.68 1.68

(1) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(1) Effective January 1, 2020, we changed our accounting policy for LowIncome Housing Tax Credit ("LIHTC") investments from the equity method tothe proportional amortization method as it was determined to be thepreferable method. All applicable prior period amounts have beenretroactively restated to conform to the new accounting policy.SIGNATURE BANKCONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONSeptember 30,

December 31,

2020

2019

(dollars in thousands, except shares and per share amounts)(unaudited)

ASSETSCash and due from banks$ 6,255,490

702,277

Short-term investments157,747

87,555

Total cash and cash equivalents6,413,237

789,832

Securities available-for-sale (amortized cost $7,463,431 at September 30, 2020and $7,186,493 at December 31, 2019); (allowance for credit losses$4 at September 30, 2020)7,501,267

7,143,864

Securities held-to-maturity (fair value $2,148,286 at September 30, 2020and $2,115,541 at December 31, 2019); (allowance for credit losses$60 at September 30, 2020)2,084,252

2,101,970

Federal Home Loan Bank stock171,678

231,339

Loans held for sale420,170

290,593

Loans and leases46,212,092

39,109,623

Allowance for credit losses for loans and leases(484,923)

(249,989)

Loans and leases, net45,727,169

38,859,634

Premises and equipment, net79,370

66,419

Operating lease right-of-use assets216,311

217,578

Accrued interest and dividends receivable249,926

147,527

Other assets (1)896,933

743,053

Total assets$ 63,760,313

50,591,809

LIABILITIES AND SHAREHOLDERS' EQUITYDepositsNon-interest-bearing$ 16,284,599

13,016,931

Interest-bearing38,054,106

27,366,276

Total deposits54,338,705

40,383,207

Federal funds purchased and securities sold under agreementsto repurchase150,000

150,000

Federal Home Loan Bank borrowings2,839,245

4,142,144

Subordinated debt457,156

456,119

Operating lease liabilities243,827

242,587

Accrued expenses and other liabilities748,181

472,554

Total liabilities58,777,114

45,846,611

Shareholders' equityPreferred stock, par value $.01 per share; 61,000,000 shares authorized;none issued at September 30, 2020 and December 31, 2019-

-

Common stock, par value $.01 per share; 64,000,000 shares authorized;55,520,128 shares issued and 53,563,305 outstanding at September 30, 2020;55,427,631 shares issued and 53,519,644 outstanding at December 31, 2019555

554

Additional paid-in capital1,862,142

1,871,571

Retained earnings (1)3,405,273

3,172,273

Treasury stock, 1,900,315 shares at September 30, 2020 and 1,907,987 sharesat December 31, 2019(232,647)

(233,570)

Accumulated other comprehensive loss(52,124)

(65,630)

Total shareholders' equity4,983,199

4,745,198

Total liabilities and shareholders' equity$ 63,760,313

50,591,809

SIGNATURE BANKCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION September December 30, 31,

2020 2019

(dollars in thousands, except shares and per share (unaudited) amounts)ASSETSCash and due from banks $ 6,255,490 702,277

Short-term investments 157,747 87,555

Total cash and cash equivalents 6,413,237 789,832

Securities available-for-sale (amortized cost $7,463,431at September 30, 2020and $7,186,493 at December 31, 2019); (allowance forcredit losses$4 at September 30, 2020) 7,501,267 7,143,864

Securities held-to-maturity (fair value $2,148,286 atSeptember 30, 2020and $2,115,541 at December 31, 2019); (allowance forcredit losses$60 at September 30, 2020) 2,084,252 2,101,970

Federal Home Loan Bank stock 171,678 231,339

Loans held for sale 420,170 290,593

Loans and leases 46,212,092 39,109,623

Allowance for credit losses for loans and leases (484,923) (249,989)

Loans and leases, net 45,727,169 38,859,634

Premises and equipment, net 79,370 66,419

Operating lease right-of-use assets 216,311 217,578

Accrued interest and dividends receivable 249,926 147,527

Other assets (1) 896,933 743,053

$ 50,591,809 Total assets 63,760,313

LIABILITIES AND SHAREHOLDERS' EQUITYDeposits $ 13,016,931Non-interest-bearing 16,284,599

Interest-bearing 38,054,106 27,366,276

Total deposits 54,338,705 40,383,207

Federal funds purchased and securities sold underagreementsto repurchase 150,000 150,000

Federal Home Loan Bank borrowings 2,839,245 4,142,144

Subordinated debt 457,156 456,119

Operating lease liabilities 243,827 242,587

Accrued expenses and other liabilities 748,181 472,554

Total liabilities 58,777,114 45,846,611

Shareholders' equityPreferred stock, par value $.01 per share; 61,000,000shares authorized;none issued at September 30, 2020 and December 31, 2019 - -

Common stock, par value $.01 per share; 64,000,000shares authorized;55,520,128 shares issued and 53,563,305 outstanding atSeptember 30, 2020;55,427,631 shares issued and 53,519,644 outstanding at 555 554December 31, 2019Additional paid-in capital 1,862,142 1,871,571

Retained earnings (1) 3,405,273 3,172,273

Treasury stock, 1,900,315 shares at September 30, 2020 (232,647) (233,570)and 1,907,987 sharesat December 31, 2019Accumulated other comprehensive loss (52,124) (65,630)

Total shareholders' equity 4,983,199 4,745,198

$ 50,591,809 Total liabilities and shareholders' equity 63,760,313

(1) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(1) Effective January 1, 2020, we changed our accounting policy for Low IncomeHousing Tax Credit ("LIHTC") investments from the equity method to theproportional amortization method as it was determined to be the preferablemethod. All applicable prior period amounts have been retroactively restated toconform to the new accounting policy.SIGNATURE BANKFINANCIAL SUMMARY, CAPITAL RATIOS, ASSET QUALITY(unaudited)Three months ended September 30,

Nine months ended September 30,

(in thousands, except ratios and per share amounts)2020

2019 (6)

2020

2019 (6)

PER COMMON SHARENet income - basic$ 2.62

$ 2.75

$ 6.73

$ 8.10

Net income - diluted$ 2.62

$ 2.74

$ 6.70

$ 8.07

Average shares outstanding - basic52,673

53,722

52,631

54,032

Average shares outstanding - diluted52,835

53,830

52,824

54,224

Book value$ 93.03

$ 86.98

$ 93.03

$ 86.98

SELECTED FINANCIAL DATAReturn on average total assets0.90%

1.18%

0.83%

1.20%

Return on average shareholders' equity11.20%

12.56%

9.76%

12.89%

Efficiency ratio (1)38.88%

39.18%

38.84%

38.40%

Yield on interest-earning assets3.15%

3.93%

3.45%

3.99%

Yield on interest-earning assets, tax-equivalent basis (1)(2)3.16%

3.94%

3.46%

4.00%

Cost of deposits and borrowings0.66%

1.40%

0.83%

1.40%

Net interest margin2.54%

2.67%

2.68%

2.71%

Net interest margin, tax-equivalent basis (2)(3)2.55%

2.68%

2.69%

2.72%

SIGNATURE BANKFINANCIAL SUMMARY, CAPITAL RATIOS, ASSETQUALITY(unaudited) Three months Nine months ended ended September 30, September 30,

(in thousands, except ratios and per share 2020 2019 2020 2019amounts) (6) (6)

PER COMMON SHARENet income - basic $ 2.62 $ 2.75 $ 6.73 $ 8.10

Net income - diluted $ 2.62 $ 2.74 $ 6.70 $ 8.07

Average shares outstanding - basic 52,673 53,722 52,631 54,032

Average shares outstanding - diluted 52,835 53,830 52,824 54,224

$ $ $ $Book value 93.03 86.98 93.03 86.98

SELECTED FINANCIAL DATAReturn on average total assets 0.90% 1.18% 0.83% 1.20%

Return on average shareholders' equity 11.20% 12.56% 9.76% 12.89%

Efficiency ratio (1) 38.88% 39.18% 38.84% 38.40%

Yield on interest-earning assets 3.15% 3.93% 3.45% 3.99%

Yield on interest-earning assets, 3.16% 3.94% 3.46% 4.00%tax-equivalent basis (1)(2)Cost of deposits and borrowings 0.66% 1.40% 0.83% 1.40%

Net interest margin 2.54% 2.67% 2.68% 2.71%

Net interest margin, tax-equivalent basis (2) 2.55% 2.68% 2.69% 2.72%(3)(1) See "Non-GAAP Financial Measures" for related calculation.(2) Based on the 21 percent U.S. federal statutory tax rate for the periods presented. The tax-equivalent basis is considered a non-GAAP financial measure and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. This ratio is a metric used by management to evaluate the impact of tax-exempt assets on the Bank's yield on interest-earning assets and net interest margin.(3) See "Net Interest Margin Analysis" for related calculation.(1) See "Non-GAAP Financial Measures" for related calculation.(2) Based on the 21 percent U.S. federal statutory tax rate for the periodspresented. The tax-equivalent basis is considered a non-GAAP financialmeasure and should be considered in addition to, not as a substitute for orsuperior to, financial measures determined in accordance with GAAP. Thisratio is a metric used by management to evaluate the impact of tax-exemptassets on the Bank's yield on interest-earning assets and net interestmargin.(3) See "Net Interest Margin Analysis" for related calculation.September 30, 2020

June 30, 2020

December 31, 2019 (6)

September 30, 2019 (6)

CAPITAL RATIOSTangible common equity (4)7.75%

7.99%

9.30%

9.46%

Tier 1 leverage (5)8.56%

8.76%

9.55%

9.61%

Common equity Tier 1 risk-based (5)10.26%

10.43%

11.56%

11.89%

Tier 1 risk-based (5)10.26%

10.43%

11.56%

11.89%

Total risk-based (5)11.98%

12.16%

13.26%

13.14%

ASSET QUALITYNon-accrual loans$ 81,305

$ 46,939

$ 57,355

$ 32,539

Allowance for loan and lease losses$ 484,923

$ 444,672

$ 249,989

$ 242,754

Allowance for loan and lease losses to non-accrual loans596.42%

947.34%

435.86%

746.04%

Allowance for loan and lease losses to total loans1.05%

0.98%

0.64%

0.64%

Non-accrual loans to total loans0.18%

0.10%

0.15%

0.09%

Quarterly net charge-offs (recoveries) to average loans, annualized0.09%

0.04%

0.03%

0.03%

September June December September 30, 30, 31, 30, 2020 2020 2019 2019 (6) (6)

CAPITAL RATIOS

Tangible common equity (4) 7.75% 7.99% 9.30% 9.46%

Tier 1 leverage (5) 8.56% 8.76% 9.55% 9.61%

Common equity Tier 1 risk-based (5) 10.26% 10.43% 11.56% 11.89%

Tier 1 risk-based (5) 10.26% 10.43% 11.56% 11.89%

Total risk-based (5) 11.98% 12.16% 13.26% 13.14%



ASSET QUALITY

$ 81,305 $ $ 57,355 $ 32,539Non-accrual loans 46,939

$ 484,923 $ $ $ 242,754Allowance for loan and lease losses 444,672 249,989

Allowance for loan and lease losses 596.42% 947.34% 435.86% 746.04%to non-accrual loansAllowance for loan and lease losses 1.05% 0.98% 0.64% 0.64%to total loansNon-accrual loans to total loans 0.18% 0.10% 0.15% 0.09%

Quarterly net charge-offs 0.09% 0.04% 0.03% 0.03%(recoveries) to average loans,annualized(4) We define tangible common equity as the ratio of total tangible common equity to total tangible assets (the "TCE ratio"). Tangible common equity is considered to be a non-GAAP financial measure and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. The TCE ratio is a metric used by management to evaluate the adequacy of our capital levels. In addition to tangible common equity, management uses other metrics, such as Tier 1 capital related ratios, to evaluate capital levels. See "Non-GAAP Financial Measures" for related calculation.(5) September 30, 2020 ratios are preliminary.(6) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(4) We define tangible common equity as the ratio of total tangible commonequity to total tangible assets (the "TCE ratio"). Tangible common equity isconsidered to be a non-GAAP financial measure and should be considered inaddition to, not as a substitute for or superior to, financial measuresdetermined in accordance with GAAP. The TCE ratio is a metric used bymanagement to evaluate the adequacy of our capital levels. In addition totangible common equity, management uses other metrics, such as Tier 1capital related ratios, to evaluate capital levels. See "Non-GAAP FinancialMeasures" for related calculation.(5) September 30, 2020 ratios are preliminary.(6) Effective January 1, 2020, we changed our accounting policy for LowIncome Housing Tax Credit ("LIHTC") investments from the equity method tothe proportional amortization method as it was determined to be thepreferable method. All applicable prior period amounts have beenretroactively restated to conform to the new accounting policy.SIGNATURE BANKNET INTEREST MARGIN ANALYSIS(unaudited)Three months endedThree months endedSeptember 30, 2020September 30, 2019(dollars in thousands)AverageBalanceInterestIncome/ExpenseAverageYield/RateAverageBalanceInterestIncome/ExpenseAverageYield/RateINTEREST-EARNING ASSETSShort-term investments$ 5,584,666

1,877

0.13%

1,285,289

7,173

2.21%

Investment securities9,633,122

62,306

2.59%

9,569,671

76,046

3.18%

Commercial loans, mortgages and leases (1)45,251,833

416,597

3.66%

37,621,834

398,523

4.20%

Residential mortgages and consumer loans172,233

1,623

3.75%

213,251

2,385

4.44%

Loans held for sale172,154

692

1.60%

139,332

1,284

3.66%

Total interest-earning assets60,814,008

483,095

3.16%

48,829,377

485,411

3.94%

Non-interest-earning assets (2)745,523

767,483

Total assets$ 61,559,531

49,596,860

INTEREST-BEARING LIABILITIESInterest-bearing depositsNOW and interest-bearing demand$ 9,476,192

15,728

0.66%

4,304,971

21,078

1.94%

Money market24,114,937

42,131

0.70%

19,431,159

81,088

1.66%

Time deposits2,034,445

8,210

1.61%

2,677,536

16,142

2.39%

Non-interest-bearing demand deposits15,991,893

-

-

12,266,945

-

-

Total deposits51,617,467

66,069

0.51%

38,680,611

118,308

1.21%

Subordinated debt456,927

5,856

5.13%

258,636

3,645

5.64%

Other borrowings3,732,941

20,854

2.22%

5,212,259

34,083

2.59%

Total deposits and borrowings55,807,335

92,779

0.66%

44,151,506

156,036

1.40%

Other non-interest-bearing liabilitiesand shareholders' equity (2)5,752,196

5,445,354

Total liabilities and shareholders' equity$ 61,559,531

49,596,860

OTHER DATANet interest income / interest rate spread (1)390,316

2.50%

329,375

2.54%

Tax-equivalent adjustment(1,603)

(1,356)

Net interest income, as reported388,713

328,019

Net interest margin2.54%

2.67%

Tax-equivalent effect0.01%

0.01%

Net interest margin on a tax-equivalent basis (1)2.55%

2.68%

Ratio of average interest-earning assetsto average interest-bearing liabilities108.97%

110.60%

SIGNATURE BANKNET INTEREST MARGINANALYSIS(unaudited) Three months ended Three months ended September 30, 2020 September 30, 2019 Average Interest Average Average Interest Average(dollars in thousands) Balance Income/ Yield/ Balance Income/ Yield/ Expense Rate Expense RateINTEREST-EARNINGASSETS $ 1,877 0.13% 1,285,289 7,173 2.21%Short-term investments 5,584,666

Investment securities 9,633,122 62,306 2.59% 9,569,671 76,046 3.18%

Commercial loans, 45,251,833 416,597 3.66% 37,621,834 398,523 4.20%mortgages and leases(1)Residential mortgages 172,233 1,623 3.75% 213,251 2,385 4.44%and consumer loansLoans held for sale 172,154 692 1.60% 139,332 1,284 3.66%

Total interest-earning 60,814,008 483,095 3.16% 48,829,377 485,411 3.94%assetsNon-interest-earning 745,523 767,483assets (2) $ 49,596,860Total assets 61,559,531

INTEREST-BEARINGLIABILITIESInterest-bearingdepositsNOW and $ 15,728 0.66% 4,304,971 21,078 1.94%interest-bearing 9,476,192demandMoney market 24,114,937 42,131 0.70% 19,431,159 81,088 1.66%

Time deposits 2,034,445 8,210 1.61% 2,677,536 16,142 2.39%

Non-interest-bearing 15,991,893 - - 12,266,945 - -demand depositsTotal deposits 51,617,467 66,069 0.51% 38,680,611 118,308 1.21%

Subordinated debt 456,927 5,856 5.13% 258,636 3,645 5.64%

Other borrowings 3,732,941 20,854 2.22% 5,212,259 34,083 2.59%

Total deposits and 55,807,335 92,779 0.66% 44,151,506 156,036 1.40%borrowingsOthernon-interest-bearingliabilitiesand shareholders' 5,752,196 5,445,354equity (2)Total liabilities and $ 49,596,860shareholders' equity 61,559,531

OTHER DATANet interest income / 390,316 2.50% 329,375 2.54%interest rate spread(1)Tax-equivalent (1,603) (1,356)adjustmentNet interest income, 388,713 328,019as reportedNet interest margin 2.54% 2.67%

Tax-equivalent effect 0.01% 0.01%

Net interest margin on 2.55% 2.68%a tax-equivalent basis(1)Ratio of averageinterest-earningassetsto average 108.97% 110.60%interest-bearingliabilities(1) Presented on a tax-equivalent, non-GAAP, basis for municipal leasing and financing transactions using the U.S. federal statutory tax rate of 21 percent for the periods presented.(2) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(1) Presented on a tax-equivalent, non-GAAP, basis for municipal leasing andfinancing transactions using the U.S. federal statutory tax rate of 21 percentfor the periods presented.(2) Effective January 1, 2020, we changed our accounting policy for Low IncomeHousing Tax Credit ("LIHTC") investments from the equity method to theproportional amortization method as it was determined to be the preferablemethod. All applicable prior period amounts have been retroactively restated toconform to the new accounting policy.SIGNATURE BANKNET INTEREST MARGIN ANALYSIS(unaudited)Nine months endedNine months endedSeptember 30, 2020September 30, 2019(dollars in thousands)AverageBalanceInterestIncome/ExpenseAverageYield/RateAverageBalanceInterestIncome/ExpenseAverageYield/RateINTEREST-EARNING ASSETSShort-term investments$ 3,664,001

8,179

0.30%

759,275

13,372

2.35%

Investment securities9,538,078

197,681

2.76%

9,568,596

233,596

3.26%

Commercial loans, mortgages and leases (1)42,399,557

1,234,245

3.89%

37,296,197

1,176,139

4.22%

Residential mortgages and consumer loans179,996

5,298

3.93%

215,350

7,331

4.55%

Loans held for sale160,371

2,334

1.94%

146,868

3,653

3.33%

Total interest-earning assets55,942,003

1,447,737

3.46%

47,986,286

1,434,091

4.00%

Non-interest-earning assets (2)910,273

750,381

Total assets$ 56,852,276

48,736,667

INTEREST-BEARING LIABILITIESInterest-bearing depositsNOW and interest-bearing demand$ 7,581,051

48,614

0.86%

4,158,317

62,453

2.01%

Money market22,383,896

151,419

0.90%

18,710,445

224,736

1.61%

Time deposits

2,211,097

31,326

1.89%

2,521,132

44,613

2.37%

Non-interest-bearing demand deposits14,553,396

-

-

11,980,330

-

-

Total deposits46,729,440

231,359

0.66%

37,370,224

331,802

1.19%

Subordinated debt456,584

17,560

5.13%

258,440

10,928

5.64%

Other borrowings4,078,348

70,061

2.29%

5,871,966

114,251

2.60%

Total deposits and borrowings51,264,372

318,980

0.83%

43,500,630

456,981

1.40%

Other non-interest-bearing liabilitiesand shareholders' equity (2)5,587,904

5,236,037

Total liabilities and shareholders' equity$ 56,852,276

48,736,667

OTHER DATANet interest income / interest rate spread (1)1,128,757

2.63%

977,110

2.60%

Tax-equivalent adjustment(4,649)

(3,811)

Net interest income, as reported1,124,108

973,299

Net interest margin2.68%

2.71%

Tax-equivalent effect0.01%

0.01%

Net interest margin on a tax-equivalent basis (1)2.69%

2.72%

Ratio of average interest-earning assetsto average interest-bearing liabilities109.12%

110.31%

SIGNATURE BANKNET INTEREST MARGINANALYSIS(unaudited) Nine months ended Nine months ended September 30, 2020 September 30, 2019(dollars in Average Interest Average Average Interest Averagethousands) Balance Income/ Yield/ Balance Income/ Yield/ Expense Rate Expense RateINTEREST-EARNINGASSETSShort-term $ 8,179 0.30% 759,275 13,372 2.35%investments 3,664,001

Investment 9,538,078 197,681 2.76% 9,568,596 233,596 3.26%securitiesCommercial loans, 42,399,557 1,234,245 3.89% 37,296,197 1,176,139 4.22%mortgages and leases(1)Residential 179,996 5,298 3.93% 215,350 7,331 4.55%mortgages andconsumer loansLoans held for sale 160,371 2,334 1.94% 146,868 3,653 3.33%

Total 55,942,003 1,447,737 3.46% 47,986,286 1,434,091 4.00%interest-earningassetsNon-interest-earning 910,273 750,381assets (2) $ 48,736,667Total assets 56,852,276

INTEREST-BEARINGLIABILITIESInterest-bearingdepositsNOW and $ 48,614 0.86% 4,158,317 62,453 2.01%interest-bearing 7,581,051demandMoney market 22,383,896 151,419 0.90% 18,710,445 224,736 1.61%

Time deposits 2,211,097 31,326 1.89% 2,521,132 44,613 2.37%

Non-interest-bearing 14,553,396 - - 11,980,330 - -demand depositsTotal deposits 46,729,440 231,359 0.66% 37,370,224 331,802 1.19%

Subordinated debt 456,584 17,560 5.13% 258,440 10,928 5.64%

Other borrowings 4,078,348 70,061 2.29% 5,871,966 114,251 2.60%

Total deposits and 51,264,372 318,980 0.83% 43,500,630 456,981 1.40%borrowingsOthernon-interest-bearingliabilitiesand shareholders' 5,587,904 5,236,037equity (2)Total liabilities $ 48,736,667and shareholders' 56,852,276equityOTHER DATANet interest income 1,128,757 2.63% 977,110 2.60%/ interest ratespread (1)Tax-equivalent (4,649) (3,811)adjustmentNet interest income, 1,124,108 973,299as reportedNet interest margin 2.68% 2.71%

Tax-equivalent 0.01% 0.01%effectNet interest margin 2.69% 2.72%on a tax-equivalentbasis (1)Ratio of averageinterest-earningassetsto average 109.12% 110.31%interest-bearingliabilities(1) Presented on a tax-equivalent, non-GAAP, basis for municipal leasing and financing transactions using the U.S. federal statutory tax rate of 21 percent for the periods presented.(2) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(1) Presented on a tax-equivalent, non-GAAP, basis for municipal leasing andfinancing transactions using the U.S. federal statutory tax rate of 21 percentfor the periods presented.(2) Effective January 1, 2020, we changed our accounting policy for Low IncomeHousing Tax Credit ("LIHTC") investments from the equity method to theproportional amortization method as it was determined to be the preferablemethod. All applicable prior period amounts have been retroactively restated toconform to the new accounting policy.SIGNATURE BANKNON-GAAP FINANCIAL MEASURES(unaudited)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) core net interest margin, tax-equivalent basis excluding loan prepayment penalty income, (v) pre-tax, pre-provision earnings, (vi) loans and leases to core loans excluding Paycheck Protection Program loans. 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:(dollars in thousands)September 30, 2020

June 30, 2020

December 31, 2019 (1)

September 30, 2019 (1)

Consolidated common shareholders' equity$ 4,983,199

4,862,582

4,745,198

4,717,841

Intangible assets43,768

46,385

45,907

49,213

Consolidated tangible common shareholders' equity (TCE)$ 4,939,431

4,816,197

4,699,291

4,668,628

Consolidated total assets$ 63,760,313

60,349,808

50,591,809

49,387,741

Intangible assets43,768

46,385

45,907

49,213

Consolidated tangible total assets (TTA)$ 63,716,545

60,303,423

50,545,902

49,338,528

Tangible common equity ratio (TCE/TTA)7.75%

7.99%

9.30%

9.46%

The following table presents the efficiency ratio calculation:Three months ended September 30,

Nine months ended September 30,

(dollars in thousands)2020

2019 (1)

2020

2019 (1)

Non-interest expense (NIE)$ 160,563

134,295

456,402

391,247

Net interest income before provision for loan and lease losses388,713

328,019

1,124,108

973,299

Other non-interest income24,213

14,716

51,057

45,688

Total income (TI)$ 412,926

342,735

1,175,165

1,018,987

Efficiency ratio (NIE/TI)38.88%

39.18%

38.84%

38.40%

The following table reconciles yield on interest-earning assets to the yield on interest-earning assets on a tax-equivalent basis:Three months ended September 30,

Nine months ended September 30,

(dollars in thousands)2020

2019 (1)

2020

2019 (1)

Interest income (as reported)$ 481,492

484,055

1,443,088

1,430,280

Tax-equivalent adjustment1,603

1,356

4,649

3,811

Interest income, tax-equivalent basis$ 483,095

485,411

1,447,737

1,434,091

Interest-earnings assets$ 60,814,008

48,829,377

55,942,003

47,986,286

Yield on interest-earning assets3.15%

3.93%

3.45%

3.99%

Tax-equivalent effect0.01%

0.01%

0.01%

0.01%

Yield on interest-earning assets, tax-equivalent basis3.16%

3.94%

3.46%

4.00%

SIGNATURE BANKNON-GAAP FINANCIALMEASURES(unaudited) Management believes that the presentation of certain non-GAAP financialmeasures assists investors when comparing results period-to-period in a moreconsistent 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-equivalentbasis, (iv) core net interest margin, tax-equivalent basis excluding loanprepayment penalty income, (v) pre-tax, pre-provision earnings, (vi) loans andleases to core loans excluding Paycheck Protection Program loans. Thesenon-GAAP measures should not be considered a substitute for GAAP-basis measuresand results. We strongly encourage investors to review our consolidatedfinancial statements in their entirety and not to rely on any single financialmeasure. Because non-GAAP financial measures are not standardized, it may notbe possible to compare these financial measures with other companies' non-GAAPfinancial measures having the same or similar names. The following table presents the tangible common equity ratio calculation: September 30, June 30, December 31, September 30,(dollars in thousands) 2020 2020 2019 (1) 2019 (1)

Consolidated common $ 4,983,199 4,862,582 4,745,198 4,717,841shareholders' equityIntangible assets 43,768 46,385 45,907 49,213

Consolidated tangible $ 4,939,431 4,816,197 4,699,291 4,668,628common shareholders'equity (TCE) Consolidated total assets $ 63,760,313 60,349,808 50,591,809 49,387,741

Intangible assets 43,768 46,385 45,907 49,213

Consolidated tangible $ 63,716,545 60,303,423 50,545,902 49,338,528total assets (TTA)Tangible common equity 7.75% 7.99% 9.30% 9.46%ratio (TCE/TTA) The following table presents the efficiency ratio calculation: Three months ended Nine months ended September 30, September 30,

(dollars in thousands) 2020 2019 (1) 2020 2019 (1)

Non-interest expense (NIE) $ 160,563 134,295 456,402 391,247

Net interest income before 388,713 328,019 1,124,108 973,299provision for loan andlease lossesOther non-interest income 24,213 14,716 51,057 45,688

Total income (TI) $ 412,926 342,735 1,175,165 1,018,987

Efficiency ratio (NIE/TI) 38.88% 39.18% 38.84% 38.40%

The following table reconciles yield on interest-earning assets to the yield oninterest-earning assets on a tax-equivalent basis: Three months ended Nine months ended September 30, September 30,

(dollars in thousands) 2020 2019 (1) 2020 2019 (1)

Interest income (as $ 481,492 484,055 1,443,088 1,430,280reported)Tax-equivalent adjustment 1,603 1,356 4,649 3,811

Interest income, $ 483,095 485,411 1,447,737 1,434,091tax-equivalent basisInterest-earnings assets $ 60,814,008 48,829,377 55,942,003 47,986,286

Yield on interest-earning 3.15% 3.93% 3.45% 3.99%assetsTax-equivalent effect 0.01% 0.01% 0.01% 0.01%

Yield on interest-earning 3.16% 3.94% 3.46% 4.00%assets, tax-equivalentbasis(1) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.(1) Effective January 1, 2020, we changed our accounting policy for Low IncomeHousing Tax Credit ("LIHTC") investments from the equity method to theproportional amortization method as it was determined to be the preferablemethod. All applicable prior period amounts have been retroactively restated toconform to the new accounting policy.

SIGNATURE BANKNON-GAAP FINANCIAL MEASURES(unaudited)The following table reconciles net interest margin (as reported) to core net interest margin on a tax-equivalent basis excluding loan prepayment penalty income:Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

Net interest margin (as reported)2.54%

2.67%

2.68%

2.71%

Tax-equivalent adjustment0.01%

0.01%

0.01%

0.01%

Margin contribution from loan prepayment penalty income(0.03)%

(0.02)%

(0.06)%

(0.02)%

Core net interest margin, tax-equivalent basis excluding loan prepayment penalty income2.52%

2.66%

2.63%

2.70%

The following table reconciles net income (as reported) to pre-tax, pre-provision earnings:Three months ended September 30,

Nine months ended September 30,

(dollars in thousands)2020

2019 (1)

2020

2019 (1)

Net income (as reported)$ 138,550

148,118

355,350

438,874

Income tax expense61,149

59,158

150,918

175,985

Provision for credit losses52,664

1,164

212,495

12,881

Pre-tax, pre-provision earnings$ 252,363

208,440

718,763

627,740

(1) Effective January 1, 2020, we changed our accounting policy for Low Income Housing Tax Credit ("LIHTC") investments from the equity method to the proportional amortization method as it was determined to be the preferable method. All applicable prior period amounts have been retroactively restated to conform to the new accounting policy.The following table reconciles loans and leases (as reported) to core loans excluding Paycheck Protection Program ("PPP") loans :(dollars in thousands)September 30, 2020

June 30, 2020

December 31, 2019

September 30, 2019

Loans and leases (as reported)$ 46,212,092

45,200,572

39,109,623

37,937,031

PPP loans1,985,357

1,961,966

-

-

Core loans excluding PPP loans$ 44,226,735

43,238,606

39,109,623

37,937,031

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