Signature Bank Reports 2021 Fourth Quarter and Year-End Results

• Net Income for the 2021 Fourth Quarter Was A Record $272.0 Million, or $4.34 Diluted Earnings Per Share, Versus $173.0 Million, or $3.26 Diluted Earnings Per Share, Reported in the 2020 Fourth Quarter. Pre-Tax, Pre-Provision Earnings for the 2021 Fourth Quarter Were $385.4 Million, an Increase of $123.9 Million, or 47.4 Percent, Compared with $261.5 Million for the 2020 Fourth Quarter

• Net Income for 2021 Was A Record $918.4 Million, or $15.03 Diluted Earnings Per Share, Compared with $528.4 Million or $9.96 Diluted Earnings Per Share in 2020. Pre-Tax, Pre-Provision Earnings for 2021 Were $1.30 Billion, an Increase of $317.5 Million, or 32.4 Percent, Compared with $980.3 Million for 2020

• Total Deposits in the Fourth Quarter Increased $10.57 Billion to $106.13 Billion, While Average Deposits Increased $9.88 Billion, or 10.9 Percent

• Total Deposits Grew a Record $42.82 Billion, or 67.6 Percent, in 2021. Average Deposits for 2021 Grew to $85.31 Billion, Representing a Record Increase of $34.75 Billion, or 68.7 Percent, Versus $50.56 Billion in 2020

• For the 2021 Fourth Quarter, Loans Increased a Record $6.28 Billion. Since Year-end 2020, Loans Increased a Record $16.03 Billion, or 32.8 Percent

• Non-Accrual Loans Were $218.3 Million, or 0.34 Percent of Total Loans, at December 31, 2021, Versus $165.4 Million, or 0.28 Percent, at the End of the 2021 Third Quarter and $120.2 Million, or 0.25 Percent, at the End of the 2020 Fourth Quarter

• COVID-19 Related Non-Payment Deferrals Reduced by $1.30 Billion to $8.3 Million, or 99.4 Percent as of December 31, 2021 Compared to $1.31 Billion at December 31, 2020

• Net Interest Margin on a Tax-Equivalent Basis was 1.91 Percent, Compared With 1.88 Percent for the 2021 Third Quarter and 2.23 Percent for the 2020 Fourth Quarter. Significant Excess Cash Balances From Continued Strong Deposit Flows Negatively Impacted Core Net Interest Margin by 52 Basis Points

• Tier 1 Leverage, Common Equity Tier 1 Risk-Based, Tier 1 Risk-Based, and Total Risk-Based Capital Ratios were 7.27 Percent, 9.58 Percent, 10.49 Percent, and 11.73 Percent, Respectively, at December 31, 2021. Signature Bank Remains Significantly Above FDIC "Well Capitalized" Standards. Tangible Common Equity Ratio was 6.02 Percent

• The Bank Declared a Cash Dividend of $0.56 Per Share, Payable on or After February 11, 2022 to Common Shareholders of Record at the Close of Business on January 28, 2022. The Bank Also Declared a Cash Dividend of $12.50 Per Share Payable on or After March 30, 2022 to Preferred Shareholders of Record at the Close of Business on March 18, 2022

• During 2021, the Bank On-boarded Eight Private Client Banking Teams in Total: Two Teams in New York, Four Teams on the West Coast, as well as the Corporate Mortgage Finance and the SBA Origination Teams. Additionally, the Bank Added Numerous Group Directors to Existing Teams and Signature Financial Added Several Executive Sales Officers Across Their National Footprint

Signature Bank (NASDAQ:SBNY), a New York-based full-service commercial bank, today announced results for its fourth quarter ended December 31, 2021.

Net income for the 2021 fourth quarter was $272.0 million, or $4.34 diluted earnings per share, versus $173.0 million, or $3.26 diluted earnings per share, for the 2020 fourth quarter. The increase in net income for the 2021 fourth quarter, versus the comparable quarter last year, is primarily the result of an increase in net interest income, fueled by strong average deposit and loan growth, as well as a higher provision for credit losses booked in the fourth quarter of 2020 predominantly due to the effects of COVID-19 on the U.S. economy. Pre-tax, pre-provision earnings were $385.4 million for the 2021 fourth quarter, representing an increase of $123.9 million, or 47.4 percent, compared with $261.5 million for the 2020 fourth quarter.

Net interest income for the 2021 fourth quarter rose $140.9 million, or 35.7 percent, to $535.9 million, when compared with the fourth quarter of 2020. This increase is primarily due to growth in average interest-earning assets. Total assets reached $118.45 billion at December 31, 2021, expanding $44.56 billion, or 60.3 percent, from $73.89 billion at December 31, 2020. Average assets for the 2021 fourth quarter reached $112.73 billion, an increase of $40.92 billion, or 57.0 percent, versus the comparable period a year ago.

Deposits for the 2021 fourth quarter increased $10.57 billion, or 11.1 percent to $106.13 billion, including non-interest bearing deposit growth of $9.98 billion. Non-interest bearing deposits now represent 41.8 percent of total deposits. Overall deposit growth for the last twelve months was 67.6 percent, or $42.82 billion, when compared with deposits at the end of 2020. Average total deposits for 2021 were $85.31 billion, growing $34.75 billion, or 68.7 percent, versus average total deposits of $50.56 billion for 2020.

"2021, which marks Signature Bank's 20th anniversary, was a sensational year in terms of growth and achievements. All our businesses contributed to the Bank's stellar performance -- whether it be from our established New York banking franchise and emerging West Coast presence to our newer, nationwide businesses. The performance includes a multitude of accomplishments, such as record growth in deposits of $42.8 billion, which comes on the heels of our 2020 record deposit growth of $22.9 billion. Additionally, growth in non-interest bearing deposits, core loans and investment securities, all reached record levels. It is our founding, client-centric model that drives this robust organic growth, and, when combined with the inherent, best-in-class operating efficiencies of Signature Bank, it results in record revenue growth and record net income. In 2021, we did in fact execute on all we said we would -- and then some. Throughout the 20 years we have been in business, we seldom take time to acknowledge our achievements, such as our recent inclusion in the S&P 500 Index, for which we are very honored. Instead, we remain focused on our bright future and commitment to staying at the forefront of innovation as the financial services industry continues to undergo digital transformation," explained Signature Bank President and Chief Executive Officer Joseph J. DePaolo.

"Signature Bank's theme for our 20th year anniversary is ‘Looking Forward. Giving Back.' We plan to make this our permanent purpose and it will be embedded within our distinguished logo. We're proud of the many strides made this year and value the meaningful ways our 1,800+ colleagues gave back. As we enter another year, we are saddened by the continued effects the pandemic has had on many of our colleagues and their families. We have not yet regained the normalcy we all can recall but look ahead positively by concentrating our efforts on doing more for one other and the world at large. To quote the legendary Winston Churchill, ‘We make a living by what we get, we make a life by what we give'. And, we will continue to give," DePaolo concluded.

Scott A. Shay, Chairman of the Board, added: "It is humbling, amazing and gratifying to all of us who were present at the opening of our doors to have gone from perhaps the smallest bank in the country to a $100 billion enterprise, purely organically. No colleague or client is at Signature Bank because they were acquired from a legacy bank. Rather, they all are here because they want to be. We started the Bank with a set of values centered around a single point of contact, depositor safety and top-notch service. Twenty years later, those same tenets remain at our core."

"We have been innovators since we opened our doors. This pertains to all we have achieved, including both our Metro New York and West Coast expansion, formation of our Specialized Mortgage Services, Fund Banking Division, Venture Banking Group, Digital Assets and more. Lastly, our recent admittance to the S&P 500 is acknowledgment of all the hard work of our colleagues put forth each and every day."

"Financial technologies are rapidly transforming, and remain at the forefront of the new types of industries this disruption is creating. We understood then – and recognize even more now – the importance of this novel arena because of our abilities to adapt to market disruption. We are committed to evolving to better serve our institutional clients as we continue to adapt within the fast-developing world of digital assets," Shay concluded.

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 7.27 percent, 9.58 percent, 10.49 percent, and 11.73 percent, respectively, as of December 31, 2021. 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 6.02 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 February 11, 2022 to common stockholders of record at the close of business on January 28, 2022. The Bank also declared a cash dividend of $12.50 per share payable on or after March 30, 2022 to preferred shareholders of record at the close of business on March 18, 2022. In the fourth quarter of 2021, the Bank paid a cash dividend of $0.56 per share to common stockholders of record at the close of business on October 29, 2021. The Bank also paid a cash dividend of $12.50 per share to preferred shareholders of record at the close of business on December 17, 2021.

Net Interest Income

Net interest income for the 2021 fourth quarter was $535.9 million, up $140.9 million, or 35.7 percent, when compared with the same period last year, primarily due to growth in average interest-earning assets. Average interest-earning assets of $111.63 billion for the 2021 fourth quarter represent an increase of $40.79 billion, or 57.6 percent, from the 2020 fourth quarter. Due to the current low interest rate environment, the yield on interest-earning assets for the 2021 fourth quarter fell 59 basis points to 2.16 percent, compared to the fourth quarter of last year.

Average cost of deposits and average cost of funds for the fourth quarter of 2021 decreased 23 and 30 basis points, to 0.19 percent and 0.27 percent, respectively, versus the comparable period a year ago.

Net interest margin on a tax-equivalent basis for the 2021 fourth quarter was 1.91 percent versus 2.23 percent reported in the 2020 fourth quarter and 1.88 percent in the 2021 third quarter. Excluding loan prepayment penalties in both quarters, linked quarter core net interest margin on a tax-equivalent basis increased 2 basis points to 1.89 percent. The 2021 fourth quarter core net interest margin was negatively affected by 52 basis points due to significant excess cash balances driven by record deposit growth.

Provision for Credit Losses

The Bank's provision for credit losses for the fourth quarter of 2021 was $6.9 million, a decrease of $28.72 million, or 80.7 percent, versus the 2020 fourth quarter. The decrease in the provision for credit losses for the fourth quarter was predominantly attributable to improved macroeconomic conditions compared with the same period last year.

Net charge-offs for the 2021 fourth quarter were $33.7 million, or 0.22 percent of average loans, on an annualized basis, versus $17.3 million, or 0.12 percent, for the 2021 third quarter and net charge-offs of $11.4 million, or 0.10 percent, for the 2020 fourth quarter.

Non-Interest Income and Non-Interest Expense

Non-interest income for the 2021 fourth quarter was $33.5 million, up $9.3 million when compared with $24.2 million reported in the 2020 fourth quarter. The increase was driven by growth of $6.9 million in fees and service charges.

Non-interest expense for the fourth quarter of 2021 was $183.9 million, an increase of $26.3 million, or 16.7 percent, versus $157.7 million reported in the 2020 fourth quarter. The increase was predominantly due to a rise of $27.4 million in salaries and benefits from the significant hiring of private client banking teams, and operational support to meet the Bank's growing needs.

The Bank's efficiency ratio improved to 32.3 percent for the 2021 fourth quarter compared with 37.6 percent for the same period a year ago, and 35.4 percent for the third quarter of 2021.

Loans

Loans, excluding loans held for sale, grew $6.28 billion, or 10.7 percent, during the 2021 fourth quarter to $64.86 billion, versus $58.59 billion at September 30, 2021. Core loans (excluding Paycheck Protection Program loans) grew a record $6.82 billion, or 11.9 percent, during the fourth quarter of 2021 to $64.03 billion, compared with $57.21 billion at September 30, 2021. Average loans, excluding loans held for sale, reached $60.50 billion in the 2021 fourth quarter, growing $5.04 billion, or 9.1 percent, from the 2021 third quarter and $13.11 billion, or 27.7 percent, from the fourth quarter of 2020.

At December 31, 2021, non-accrual loans were $218.3 million, representing 0.34 percent of total loans and 0.18 percent of total assets, compared with non-accrual loans of $165.4 million, or 0.28 percent of total loans, at September 30, 2021 and $120.2 million, or 0.25 percent of total loans, at December 31, 2020. At December 31, 2021, the ratio of allowance for credit losses for loans and leases to total loans, was 0.73 percent, versus 0.85 percent at September 30, 2021 and 1.04 percent at December 31, 2020. Additionally, the ratio of allowance for credit losses for loans and leases to non-accrual loans, or the coverage ratio, was 217 percent for the 2021 fourth quarter versus 303 percent for the third quarter of 2021 and 423 percent for the 2020 fourth quarter.

COVID-19 Related Loan Modifications

As of December 31, 2021, total non-payment deferrals were $8.3 million, or 0.01 percent of the Bank's total loan portfolio and primarily related to our multi-family commercial real estate portfolio, compared with non-payment deferrals of $1.31 billion, or 2.7 percent of total loans, at December 31, 2020. The positive trend is the result of the continued economic recovery coming out of the lows of the COVID-19 pandemic.

Additionally, the Bank has made other COVID-19 related modifications that have resulted in the receipt of modified principal and interest payments totaling 2.9 percent of the loan book.

Conference Call

Signature Bank's management will host a conference call to review results of the 2021 fourth quarter and year ended December 31, 2021 on Tuesday, January 18, 2022 at 9:00 AM ET. All U.S. participants should dial 866-518-6930 and international callers should dial 203-518-9797 at least ten minutes prior to the start of the call and reference conference ID SBNYQ421.

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 800-938-1598 or 402-220-1545 and enter conference ID SBNYQ421. The replay will be available from approximately 12:00 PM ET on Tuesday, January 18, 2022 through 11:59 PM ET on Friday, January 21, 2022.

About Signature Bank

Signature Bank (NASDAQ:SBNY), member FDIC, is a New York-based full-service commercial bank with 37 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: 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 solution to be approved for use by the NYS Department of Financial Services.

Signature Bank placed 22nd 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 team 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. 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. 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) core net interest margin, tax-equivalent basis excluding loan prepayment penalty income, (v) pre-tax, pre-provision earnings, and (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:

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 core net interest margin on a tax-equivalent basis excluding loan prepayment penalty income:

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

The following table reconciles loans and leases (as reported) to core loans (excluding Paycheck Protection Program ("PPP") loans):

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