SBNY - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Signature Bank's 2021 Second Quarter Results Conference Call. Hosting the call today for Signature Bank are Joseph J. DePaolo, President and Chief Executive Officer; and Eric R. Howell, Senior Executive Vice President and Chief Operating Officer. Today's call is being recorded. participants floor placed your will the all mode a questions time, presentation. the and be this have in been listen-only following At opened for over pleasure It turn now Instructions] J. my [Operator the is floor to Joseph to DePaolo, President Officer. and Executive Chief

You may begin.

Joseph DePaolo

and morning second today XXXX you for results conference call. Good for Nicole. joining Signature the you, thank Thank Bank's quarter us

Before forward-looking ahead, go disclaimer. I Susan. begin my formal remarks, Susan Please Lewis will read the

Susan Lewis

all the statements contain Thank of made time-to-time and you, call Joe. Litigation representatives within This uncertainties. by XXXX subject Securities forward-looking Private and statements of that meaning conference the our Act to from Reform are risks

which You subject difficult may and beyond undue to reliance to to place our should and be control. risks those of uncertainties relating not business statements are are numerous and our predict because they operations on all environment,

Forward-looking concerning statements on the loan team the the and strategy openings, interest interest deposit rates foregoing each operations, business environment, results, hires, new and business future growth, COVID-XX loan our pandemic private of client the and office performance, include rate overall. of our new impact information and

you risks, differ you annual and cause the statements, filed you should involve not guarantees review and reports factors in that understand for should assumptions As which forward-looking materially carefully to with include of from performance These further consider those actual quarterly information. results. statements. They these results statements could or the described our that forward-looking are uncertainties in FDIC, those

any date which Bank only the speak mind on You Signature should made. as were keep forward-looking statements that by made in they of

the Joe. turn to to like I'd back Now, call

Joseph DePaolo

the growth. quarterly of the and of service Howell, Chief I our single-point-of-contact quarter The performance greater bank's will of Operating another address at provide Officer success remarks. end Eric the results, then in and Eric yet significant review Bank's Susan. our will questions detail. has Thank Signature financial model in your will resulted I some overview you, into

years, both bank goals and core transformed several increasing We achieve while the past set and deposits. has continuing grow dramatically credit diversification, organically. During the asset-sensitive, specific and geographic becoming grown of to

a from capital. XX% of As concentration to variable liability-sensitive, we our XXX% nearly CRE rate. from loan now reduced XXX% asset-sensitive We our of to result, portfolio with shifted

Our which has XX%. low peaked loan ratio, to to deposit a XXX%, moved at of

founding entered we Bankers Offices, of Additionally, Banking Coast the objectives It our while witnessed is extraordinary Client banking second our entrepreneurial deposits model. the which growth markets we these achieve through continuing the across at increase to quarters. trends of saw the new within quarter York Throughout the several the New industry. Veteran past hiring organically Private of power single-point-of-contact our strong during XXXX, we The for clearly speed we operations. demonstrates same West

and demonstrating Our our with securities a common growth $X.X units record cash $XX.X all $X.X return teams of the business led franchise. and equity from the growth income, billion emanates strength quarter within than by based A strong to ever growth expenses billion driven of income, growth net of before the coupled profile on institution, fee put more division, in well-established of to core we fund of loan of a expansion than record strong our consecutive XX%. of banking record contained was our and use more broad and billion deposit to portfolio. third Record

organic pure successful. to We institution the growth has this on made that focus continue

record increase for $XX.X The reported quarter a decrease with share an the increase earnings per last as earnings impacted for of or XX growth Now, year. record compared a the of XXXX share $XXX.X was earnings. predominantly driven well second let's Net income take million were was of $XXX.X as pre-provision Pre-tax compared XXXX per $XXX.X in a $XX.X by the second $X.XX look losses, substantially with in second $XXX.X XXXX. million, quarter. through million earnings XX.X% or or provision quarter last over second million substantial at million with XXXX a $X.XX quarter months, billion for diluted COVID-XX in the the was the in asset by period credit same which income

Looking at record our a deposits, deposits XX.X%, record deposits $XX.X this or billion billion average grew billion. increased quarter, $XX.X $XX.X

by grew grew $X.X billion quarter's banking teams, grew Mortgage billion. nearly driven New million. banking deposits growth was digital our million $XXX $XXX which which billion, billion. increased deposits Banking Venture increased Since Solutions nearly Banking quarter, the $X.X second our quarter. increased remarkable $XXX and XXXX the teams The The million that Coast or billion Banking Group, by asset This teams Specialized which team, over $X.X the which team of XX deposits the average $XX.X grew York including XX.X%, $XX.X and for West each exceeding end

a represents deposits. quarter, of deposits the total $X.X During to high $XX.X billion non-interest billion XX.X% which increased

last efficient well the raises plus led That's an did it we believe but acquiring increase in bank, Our or this XX of $XX.X far the since U.S. deposit as quarter top earnings capital by use equivalent second We as growth of year. of assets retention of XX.X% billion to is the capital. completely total most organically. the

PPP Core record $XX during billion. to increased billion lending look a or businesses. XXXX $X.X loans to at the X% or second quarter take let's excluding Now loans our

$X quarter For banking new capital and keyword or the primarily months, XX.X%. new, a facility. increase driven prior core call by XX was in again fund it's this The loans loans billion grew

upon recovering our We are businesses in to well-positioned our and opportunities lending all economy. on capitalize pipeline based

quality, credit our perform well. to to portfolio Turning continues

trend out point bank's positively. non-payment the to COVID-XX related continue modifications first me Let

compared April the and basis XXXX of were quarter. $XXX.X $X.X a at $XXX.X of that billion they since billion. from in We with $XXX year-end loans off loans and or basis million, or of $X.X slightly as total XX above July XX, total non-payment billion. of or XX were $XXX billion year-end first XXXX, Non-accrual to at knocked they loans, As modifications. At they now XX million went are X.X% million $X.X million, points points

charge-offs XXXX $XX declined range, million million, loans due healthy due past at within first X.XX%, to with for the XXXX XXX%. very, and and allowance $X.X Despite at remained coverage second Our with and Net due past excluding loans credit credit quarter. $XX.X loss would to the secured losses $X.X points XXXX a allowance past quarter government our with be million remained point average for from in of stands the XXXX losses million $XX.X for compared $XX.X plus bank's $XX low million loans basis a the quarter for ratio, very quarter. XX ratio provision the credit compared XX-day the loans, it decreased to like well that $XX.X PPP second very higher or million. losses first normal at would the X.XX%. I out much for guaranteed banking fund to loans, The

over which At our of call and to on announced is as expanding where we earlier in continue greater the XXXX success, as quarter team, this Banking West the team quarter. the Coast, X he'll new detail. review to results the turn one two on in quarter's the financial the lending I'll front Eric SBA second lending well Now, onboarded realize bank we point, Client to in teams initiatives Private the

Eric Howell

flows, The first points an and annualized $XX.X with quarter. emphasis cash Again, second focused interest income X.X% on quarter Net that margin. entire decrease or start of impacted which the XX million, for X.XX% for XXXX we're Joe, margin to significant interest not XXXX of interest rate growing by declined income everyone. the and our XX.X% morning deposit you, the massive basis excess on from good to With net I'll XX%. margin is eight compared net net growth $XXX.X reached increase was income from due first by margin. an basis interest the reviewing points. quarter, million balances Thank and growth

for the for portfolio XXXX quarter, our both by by as driven investing Yields floating basis four on increased to loans XXXX $X.X quarters, overall to securities points. XX on again portfolio quarter a points X.XX% the at with and securities as billion Let's the duration the from throughout due second Interest the securities X reinvestment XX the bank penalties during balances and increased the in commercial in and windows billion. excluding decreased cash to commercial basis quarter compared well to to billion average $XX.X in We And look in which prepayment decrease quarter to excess loan And grew moment. X.XX opportunistic basis asset were at rate increase yields the X.XX%. decline end lower average $X.X years, decreased the asset which earning our rates rates of yields to due The which the invest. to by quarter. able X.XX% points linked therefore was we asset to yields the as a was portfolio turning saw funding massive portfolio basis decreased mortgages length we were to points from quarter. quarter yields first yields costs

Now coming pace. our rate to XX looking as in downward the to this basis low points quarters quarter seven the slower points at at overall environment due our We lower a cost rates. liabilities, basis gradually anticipate trend this continue decreased albeit deposit interest to relationship-based we deposit

points, support XX.X% or augment continues our of XX% of the year. ratio substantial risk-based and the of in the second new by and risk-based XX.XX% margin evidenced to was last to regulatory needs. the the result all from growing XXXX of hiring Tier as period XXXX X private comparable of common for as a requirements The cash driven due quarter, balances when of meet quarter as for mostly was despite to average sheet points the gains risk a the million turning borrowing XX.XX% teams XX.X% banking capital is million the equity and the increase And of remain funds ratios the The quarter. basis our ago. non-interest service the basis for same quarter. growth the and non-interest on costs. $XX.X XXXX due XX with loans. cost focus to second expense million rise income, Non-interest of And achieved increase of with X.X%. for overall $XXX.X sales by the million net million and $XX.X by to charges and the quarter $XX.X relatively to gain a XX.X%, million ratio quarter total During well profile fees Bank reduction second of and bank's XX the and deposit $XXX.X increased capital; $XXX in balance improved expense, compression on on team operating period to balances, low operational efficiency the we cost points and excess ratio And second the X income principally client year by versus leverage decreased or compared to significant to basis borrowings decreased addition The growing in versus for XXXX

robust April our redeemed X.X I'll interest Given our we of back on debt Thank turn will further And subordinated rate million XX, Joe. which total $XXX a reduce risk-based now to call in of quarters. expense the coming ratio, you. at percent

Joseph DePaolo

of deposit an franchise collective growth, our record for pre-provision another positioned led core record income. Thanks, strength line, are future. the The and strong to we long net of growth, quarter record delivered Eric. quarter earnings and well record unbelievable Bottom we pretax

restaurants see pre-pandemic Broadway my had recovery to most returned We to for Signature the but to the return Bank. encouraging great onset on It's is see is selling the vibrancy look shows future bright city again, it office. pandemic. full forward capacity, going to to We in levels, great and importantly New and busy continued tickets since to a a some York bullish time and colleagues take this Really streets of country. City have been to it the activity

questions vaccinated. Now, get happy that answer call but turn listening want you to I I we just to encourage over to Nicole, have, before are everyone any the might please

I'll the Nicole. call over turn to Now

Operator

you. [Operator Instructions] Thank

Our come line the first Alexopoulos question JPMorgan. of with will from Steven

Steven Alexopoulos

Good morning, everybody.

Joseph DePaolo

good morning, Steve. Hey,

Steven Alexopoulos

crypto increase digital buy dip. in start crypto have said as and actually as assets the past, institutional side. you've of that just right, Bitcoin When asset your on ramp guys I'll model, I volumes, the the such in step in seen you're right, I in about customers price as you fallen have the to know economy. think an the in

at So, matter crypto growth that a of of potential keeper. the relates really the Do the it business? we prices as and of bridge like think assets to fluctuations all the

Eric Howell

we've gone we've early no years seen in over mostly continue correlation. just to deposits periods absolutely we've seen, We've back that And latest last and deposit deeper price when dips a the climb. the the leveled our our when down. look prices deposits went that. our correlation climbed, at dive and to whatsoever. or with And up, went we've prices and off actually several over year-and-a-half, there's on There But and seen we've climb, flows taking are no the seen

correlation So, deposit we're price currencies of flows. just not between these of seeing a digital and any the our

Steven Alexopoulos

Okay. Maybe are maybe pipeline and customers you many customers? sense how the helpful. a for That's platform can give now us new what's in the

Eric Howell

for certainly don't We have but total, the new client robust pipeline a is clients.

Steven Alexopoulos

Okay. full-year going deposit team? view, in so Thanks. why more And to is your the $X from the being each now one, how it question expected, is expectations? we row full-year you're billion, billion like than maybe prior quarters much coming relates than realistically, right, should it's is And final a growth to quarter; asset it multiple digital maybe mean, a $XX range of in about guidance, I in that stronger the on think just

Joseph DePaolo

hard initiatives are in, And to that That's has into of $X we between still such businesses a would doing the billion. that and one deposit but normal say the billion well. a billion $XX there's that we got the because billion turned very us billion very growth question, our expectation the to that $XX is deposits quarterly answer, full-fledged a expectation in $X proud very, to very answer in quarters, $X $X question could would wide come now range basis, on billion a we're to two and for last be

Steven Alexopoulos

for taking Thanks terrific. questions. Okay, my

Eric Howell

number we're clients, clients about XXX back on last quarter. last Sure. question And that circle XXX versus of to just Steve,

Steven Alexopoulos

great. Oh, color. great, Thanks XXX, for the

Operator

from UBS. the The of next come line Vandervliet will question Brock with

Brock Vandervliet

you. Thank

is? just total what kind reserve bit deposits mainly operational you is, could that on exchanges, crypto from a that's of, whether If of accounts, away that peel whether the it's what growth, deposit composed accounts, transaction what it's

Joseph DePaolo

and $XXX and reserves down, coin $X.X exchanges end coin $XXX and traders, asset The and million, technology growth digital stable institutional are or and and $X.X it's digital of and desks in is OTC March billion, about the of the miners it's about million, is digital take. OTC exchanges was end about institutional technology billion, June give digital about asset Broken miners. and reserves, $X.X billion, stable desks, traders blockchain are blockchain

Brock Vandervliet

talk Got color you Steve where about covered in any it, terms securities further rates, lending initiative okay. could the your stands of just that growth And this, and further monetizing you have?

Joseph DePaolo

August, our somewhere do I end very, crawl we walk, to want, end out. run, We we July, going best could walk of want this walk, selecting be expect the one want it It's to of be to We're before business. the next The the of very said expectations not first testing beginning just only loan we be We cautious. to week. are this loan, we're to walk and very normal picking, clients. before we just we're

Brock Vandervliet

Got it.

Okay, back queue. you. the Thank I'll step in

Eric Howell

Brock. Thank you,

Operator

come the Fargo Jared will question Wells of next The from Shaw securities. line with

Jared Shaw

good morning. Hey guys,

Eric Howell

Good morning, Jared.

Jared Shaw

commercial you're off, commercial loan guess pricing really in just you're you at, seeing I be, been on bit bit I the a loan coupled has commercial pull side? Maybe in to growth a or how loan little you strong you're is your banks with tough guess which what a spreads little for maybe what comment seeing just pricing? of less price little little your, you're about just terms able to up loan looking yield, the Hey, can better? it customers about a able stable talk hold to a commercial sensitive,

Eric Howell

had little equal five that the Jared, in bottom I to and the now come portfolios kind helpful we're a that in that's there, a of putting we're to of we generally, least close is mean year, our yields pickup of bit to reaching we've three runoff the the a and Financial. at belly seeing pretty Well, the on curve, Signature

see the down, as basis bit we a about that quarter. there the in years But some up amortization that spreads XX unfortunately, were so Generally, fee they better from And bump quarter pullback out some also we're a a the we'll for So that starts of lasts PPP point get during accelerate. for. the long quarter. little to how seeing

Jared Shaw

Okay, ratios some I'm thanks. pressure ratio. tighter the How ratios coming on strong with flow liquidity capital to side, risk lot cash little you of based the are stronger in obviously, side here base on on commercial broader would here? on capital a getting than putting you And they're like them apart from where a just or trending see comfortable sorry, the then the is

Joseph DePaolo

always ratios, sustain We we be capital. stronger projections that shy have growth, outsized, sustained raising would to earnings expect. we But if current really but the see for about earnings, have we like we some growth not our could

Jared Shaw

And Eric, thanks. finally in just on what were purchases great, if missed quarter, guess, I then new that? I for sorry yields securities Okay, me the the

Eric Howell

to the in XXX securities. of floating range, inclusive Probably rate which XXX is

Jared Shaw

thank Okay, you.

Operator

The line Stanley. Morgan with next question of will the come from Ken Zerbe

Ken Zerbe

Eric, Thanks. quick great. off mentioned higher was quarter? this Hi, PPP fees, Starting amount what that really with you one,

Eric Howell

million. $XX About

Ken Zerbe

quarter, think it, was right? versus I $X Got last million, it

Eric Howell

that right. Yes, sounds

Ken Zerbe

I of this But the ton Got like obviously, feels about so at in, last growing just a point? it securities given of investing are in it, okay. in guess portfolio here, additional from how the you yields just much thinking have you quarter, have cash. terms securities since come

Eric Howell

to it's a ultra, but the will our opportunistic, sense, we them, right heck right on for the rates, that that extent that's going ultra selective. much hands do that now search at we're investments really get a be point. can't it ultra we make there's whole will a this don't mean, we robust I to given year, particularly can doesn't rates going pickup function on now, be is of XX invest selective lot of the We're But where five hopeful understand have treasury in world. a in to sense be very everything makes floating year and

Joseph DePaolo

That's adding more why lending on vertical on the we're side.

Ken Zerbe

would it, but of about and of down similar it the about like that's when some your inflows possibly understood. been digital between my amount of the with from agree the towards heard and a no, away honestly, shifted of decline question, there price going seen no, more narrative just difficulty]… correlation your feels think banking investors but And is through they've volumes then and maybe bitcoin transaction a deposit last I Got the possibly, just sort enough has you you of business a maybe I know approach. [technical the around maybe retail coming -- crypto don't -- trend, transactions have transactions, because in I've Signet, and

Eric Howell

[Technical volume difficulty] full-year more of of our double our share ecosystem are was year-to-date than -- that and XXXX. for our what volumes

So, the just Signature but that acceptance of it's space. in say significant a seen we've again, volume Bank because pick-up, to hard of

Ken Zerbe

Got it.

Okay, thank all you. right,

Joseph DePaolo

welcome. You're

Operator

next the from The Dave Rochester Point. of will Compass come line question with

Dave Rochester

Hey, good guys. morning, quarter. Nice

Joseph DePaolo

Dave. you, Thank

Susan Lewis

Hi, Good Dave. morning.

Dave Rochester

on $X.X on-balance detail digital That's all Good I deposit billion that's side. sheet, the appreciated the about you definitely morning. right? talked all a

Joseph DePaolo

right. That's

Susan Lewis

Yes.

Dave Rochester

sheet? And do how much you have off-balance

Joseph DePaolo

$X.X About billion.

Dave Rochester

great. Okay,

So, sounds And quarter? seen total to Can relationship issuance kept about you've and you like. Circle it billion this kind benefits if circulation the grow last go about year, could talk that area you've XXXX. $XXX In just you $XX deck, then, they today. to billion $XX right it maybe now, could announced the expanded recent estimated from Circle USDC by looking it's of most at that any of around I'm billion

talk expanded mean there, just relationship given that your you what for just Signature? can about So, can

Joseph DePaolo

be a market, operating go the any the deposits, side, keeping And give point in non-interest-bearing having give cap us paying more want That's process us than sheet with the interest-bearing on money we're doing, that it, point. excess and our if at basis they to getting a on and some which of we'll deposits. into the over accounts. more, Well, we're then, off-balance more will

operating putting putting substantial. expect now So, we we're any we're more not the not pretty stable to any reserves -- more coin planning be other which right than on accounts,

Dave Rochester

of it to -- think to get take the and change your would coin that to on-balance What sheet you more piece, add some do decision you portfolio? stable there

Joseph DePaolo

take to take fee off-balance excess only some not the sheet sheet we With more in collect billion deposits, cash, where can prudent on-balance improvement income. $XX plus

Dave Rochester

Yes.

could the So, cash on you that's term? down you something that bring later source as longer balances

Joseph DePaolo

Yes.

Dave Rochester

maybe Perfect. switching… then And just

Joseph DePaolo

have and reserve us, them stable with the but they [Indiscernible] DDA, that reserves, is every in their coin coin account. an not clients stable interest-bearing keep

Dave Rochester

then, have verticals growth you sort given how And do to that. guys that you've in the appreciate kinds coming back-half? billion you billion to $X the that blow these all just loan feel about of side, Okay, maybe three you've through to of talked seems about It got switching the guidance, those in online I mortgage loan $X per least here capacity that maybe maybe give And quarter? in that'd think at your each of $XXX front, the any growth a contributing fourth recently regarding you then, side, on if could growth for million expectations talked starting more $X the be updates you quarter. about warehouse just on the to billion just great, like segments

So, that some verticals, on more work done great as any to hear? updates it'd those on be you've

Eric Howell

$X the the to billion be due in the usually that not is well, third of we'll growth and really range. We've billion loan seen slowest third that that pandemic. our For take year were quarter people quarter able to given last $X vacations specifically, to -- quarter

be in loan August, July bit. and out affect lot there's that months We that of that our and of expect the will growth people a a see we'll

billion to billion to hoping $X quarter. So, we're the for a third $X

business the fourth million $XXX I the certainly that $XXX potentially to kick in to anticipate million, the warehouse in we we're the that's quarter then There's of space. the in We quarter. the quarter, hope think And at be third possible. For we an will that greater fourth mortgage can bit. a do in high-end for hoping mortgage do that equal little do range. amount that warehouse to can And

sure. So, for that'll be beneficial to the growth

line that that you anticipate space that paperwork, processes the loans. government start systems, really our quarter. the with in and on that systems your in and they'll important in to ensure up your still We're SBA putting guarantee have have On the to your everything fourth government mostly we in very place. side, It's

longer but quarter, be in lesser a growth us little get up business. the much should that take a to it'll and mortgage So, bit warehouse to in it beneficial albeit, to running, extent the fourth

Dave Rochester

All thanks, right. Great, guys.

Susan Lewis

Thank you, Dave.

Joseph DePaolo

you. Thank

Operator

will Poonawala of next Ebrahim question of America. with the come The line Bank from

Ebrahim Poonawala

Good morning.

Joseph DePaolo

Ebrahim. Good morning,

Ebrahim Poonawala

just if on an guess first teams both just us give the things update portfolio deposits Coast about growing I the could West expansion, bit on -- we of loans? that question, little a and hiring talk where on stand and the

Eric Howell

Well, two then we hired brought there quarter, on in we've and addition in another headquartered board, in then teams first Sacramento. the hired several we teams to in business the and that second quarter, SBA that's the

So, a we're the that setting there's we're the this for And to anticipate more few pretty that in pleased XXXX. really stage then year. teams pipeline hire for we

we're the billion improved existing deposits to we're want million the of $X.X and and build also We've teams, about number loans that that to -- something to $XXX to-date I directors say is on pleased with the done So, added in approach out. we've in have but pipeline our Coast. West hiring there. got to we've a very continue And we about

Joseph DePaolo

been Nick circumstances have of under had a a Signature Bank wasn't the them terrific pandemic. there done most never job, when at

work And so, now Los in going back they're -- had masks again. with Angeles especially they've to to

So, so environment. business the or to positive under they've grow been able circumstances not

Ebrahim Poonawala

what market. we terms If you should about going expect talked in forward, deposit difficult you you like, that, look PD loan first in to I the growth of decent pick-up get of guess, West to Coast very in as tied billion and be to maybe is brand growth? both terms the always Eric, for delivering starts we recognition the

Eric Howell

Yes.

Joseph DePaolo

Yes.

Ebrahim Poonawala

Got it. on I And guess other the side…

Eric Howell

we're we Joe years. during fact pretty LA started our that to said pandemic, next the franchise pickup we'll Especially see spending, course over right? the a good from So, the about them given there what really in of several

Joseph DePaolo

clients the teleconferencing. West We've been Coast through meeting on

Ebrahim Poonawala

you're the And multifamily I guess your any Thanks book? Understood. for give but back Are space? clients, in life York that the just the about of how any are us signs pick-up, targeting I sense you just seeing a or you home, New activity retaining of know thinking color. relationship-based the market? for

Joseph DePaolo

activity, really in wasn't pick-up substantial pick-up years interest be a nice X.X%, would on a in We better. and deal, seeing it If them deal, fairly government it. involved, a activity. gave the XX government We're had a

Eric Howell

that very last it's is the competitive; phase? one crypto still question, in about customers, headway guess, talked Signet And there so I case use it. any previously Well, got test for beyond we've or

Joseph DePaolo

to it's come of I would it say testing in test phase, the phase. still but was out soon

Ebrahim Poonawala

Got it. Thanks taking my for questions.

Joseph DePaolo

Thank you, Ebrahim.

Operator

The next come from with will Jefferies. of question line Haire Casey the

Casey Haire

where you guys, Yes. guys. morning, that where Good of balance-wise? Thanks. overall overall that concentration crypto you that the Question, deposits? there a And deposit limit know, on franchise, percentage as want today is to higher is any a you don't go

Joseph DePaolo

able if the the $XX would what know our because we amongst we're we It's all in world, about what you the to limits billion, asset be little the now able had one, categories along competitors to -- different wouldn't digital we tell but and wouldn't be are, doing. to you give

Casey Haire

and off-balance you Understood, earlier, that I mentioned think you much sheet. of $XX how -- that sheet? is How billion, much billion off-balance okay, is $X.X there's

Eric Howell

now. off-balance that's billion right $X It's sheet

Casey Haire

the utilizing weighted vehicle sheet that risk leverage shape, your but And TCE because off-balance would from certainly would help, and certainly are you preventing know the I great in Tier benefit Okay. X more, from… what's ratios

Joseph DePaolo

We would a more, the returns certainly decimal. it's but use it

one points. institution, going it, about they point, a the they're a two off-balance can basis bit little money market on if basis because another We're funds, talking amount of return a to substantial So money. do sheet from more get it's of

Casey Haire

you, All okay. right, got

Joseph DePaolo

We're sheet whatever off-balance products When on use a we'll quicker $XXX,XXX rise, a rates balance than on interest that ago, that millennium the years in is, getting basis. million quarter. we we rise like as getting we were that. the that'll income it whenever sheet will $X.XX is So, use less quarterly have. than But because fee money market,

earn we right income would certainly and it it can circumstance. do by substantial sheet, under the fee off-balance we So putting

Casey Haire

double-digits Got from I'm grind continue the included guide? last your with that expenses that gets Do very here? third line you, just I'm for much does charge? FHLB quarter the And side. thanks. And in that the then stripped of the a came 'XX to lower in out guidance. one, assuming in we the expense on assuming math

Eric Howell

Now to it's and $XX probably it's and continue quarter, million at go included. that $XX and I in see to the with decline. it all we'll $XX $XX $XX million then looking to $XX to million, third We're mean, million expense in growth million down million

Casey Haire

you. excellent. Okay, Thank

Joseph DePaolo

Casey. you, Thank

Eric Howell

Casey. you, Thank

Operator

The next with the Inc. question will Breese come line of Matthew Stephens from

Matthew Breese

break or Hey, buckets, morning. the stable and just at Signet down balances the accounts coin? then Good the perhaps, Could various it crypto appreciate I to point. what's operating this accounts the overall you the in

Eric Howell

we -- through Matthew, we've in We've billion, exchanges, to overall blockchain got billion $X.X we in and in it OTC traders, digital can't Yes, almost billion $X.X are $X.X happy and digital Signet. technology that $X.X about with already, and miners, that done billion so coin desk asset $X.X in billion billion stable $X.X again. of go institutional

Matthew Breese

it. Got

Okay. What What least you rate to think most deposit would of tested. And do the categories, changes you to be these be sensitive betas. about rate as never kind them we've sensitive? seen various expect the

Joseph DePaolo

money money five reserve the exchange we for is the stable reserves, in coin clients, sensitive. one like stable them asset coin probably and keeping least is keeping Digital in non-interest-bearing, interest-bearing. But, have some

hard now right kind of most will determine sensitive. be to who it's So,

Matthew Breese

Understood.

your the predict estimated XX% range or XX%. go. some can Okay. prepared acceleration? And coming you on NII you quarters, to quarters annualize do think NII Can Eric, there handful of mentioned Are give in over expect or it's you outcome or And at or stable where handful focused about then, remarks, us you is of growth. last

Eric Howell

the on so continued the -- Acceleration, the get past. rate see say, we're not in It's that up guidance we that tough to growth. environment something against, we'll given but

Matthew Breese

Okay.

Joseph DePaolo

of banks is more which One upon interest that -- we've bps. most have XX We were to we things deposits. ability of one had quarter. XX things we continue down runway will the the the been to And where than help, for first drop our were quarter we to on a interest

the points. were seven drop basis In basis month of lower we're that XX a we in that's trending So And June, at the than points. month July. of of

the quarter below in quarter. third basis down hoping it it basis the quarter/first So And for points quarter, we're at to in we're XX XX get XXXX. can fourth XX below we the down points get to

been growth So done to others we'll have do to be costs so reduce with of so. say, coupled interest-bearing, assets interest-earning already not to continued where our have able or able

Matthew Breese

West it one is it's Do model to model it like on you last we're your well. give this feel the successful, markets the then like confidence the you And additional Does confidence Coast would feels successful? the to introduce me, going single-point-of-contact gives map? expansion be most and for -- does you

Joseph DePaolo

players big California in large successful It's you're the a the state. are, talking that. where where the next we about players Dallas, most are, like state. moving And cities whether to big Chicago, is we're are around places the And very

we're Los San mentioned, Angeles Francisco, and Eric Sacramento, As already there.

sense on plans are other that going have where states and right going we're And the to we're We to make now Coast. along talk the about with go not California, we're to West there. really until

Matthew Breese

Understood.

Eric Howell

more model opportunistic but we geographies, right. we've as this at it that we be been we've different right, this always proven can and geographically. works, that Right, But to can take point certainly opportunistic,

we that what banks metropolitan dominate, the That's bank with. to right. So densely mega our built it's compete populated areas

California So elsewhere. to again in done do it we're we've going it now and

Matthew Breese

markets? cash after billion think the new about in deploy cash, and we that which $XX the you does of it, of the and accelerate that timeframe might deployment As go

Eric Howell

When group down talent. that up to of quite markets, too we're difficult book sauce, us comes right, number of we've not then our execute looking not And a we'd to at really or sense, a to location but a that do, there's onboard bankers secret rather find we circled with resources. and we can of go our it away shown, number new frankly finding now. much a at, our a business, can bankers bankers the markets of them, for it's give new and if open strain And do to we model. makes can on without look there the We of we've then to it

Matthew Breese

it. I had. That's Thank all I you. appreciate

Joseph DePaolo

you. Thank

Operator

line The with Chris next question McGratty will come KBW. the from of

Chris McGratty

the the of pretty can in help movement with There's Hey, quarter. the rate? line big tax the other swings on tax some income, rate non-interest good there, Thanks. a morning. Maybe income and question and you the kind us

Eric Howell

affected March line markets income had. on by contracts other our that some we derivative the Yes, was

will quarter. next some back a out but normalize income, get a we in quarter, normal. year, quarter XX% we some anticipate around bit that the had, to growth to there So last be of noise hopefully If we contracts that third of that'll look third in XX% the non-interest should was derivative so

going the use forward. and As of tax tax rate rate effective for XX%

Chris McGratty

the on longer Anything more the the out that's this about you given on you quarter. or momentum talked debt kind growth, deposit stuff retired one in horizon, funding, the just the of in the there? duration then, else is And

Eric Howell

to approximately we've three out. not borrowings that is some next borrowings that will be the XX coming some $XXX but come able a we'll to are do coming to billion Then quarter. that got a will, there million that, the There's do in repay significant months amount, that after about short-term,

So, makes us them are we to for it although off, sense now run we will let probably of assessing those. whether some prepay

Chris McGratty

thanks. Great,

Eric Howell

you, Thank Chris.

Joseph DePaolo

Chris. time This in you, our allotted teleconference. Thank today's concludes

to of conference, archive day. listen XXX-XXXX, have call ID can to (XXX) disconnect webcast conference be at like time, dial and you'd a your If this and Please to a www.signatureny.com. at of wonderful refer replay today's this found A XXXXXXX. lines also please

Signature Bank (SBNY) 20 Jul 212021 Q2 Earnings call transcript