SBNY - Earnings call transcript Q3 2021

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Operator

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

You may begin.

Joseph DePaolo

Thank you for Signature morning, and today Good quarter the call. third Bank you, for XXXX conference joining Emma. us results thank

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

Susan Lewis

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

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

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

statements would, often project, should, words goals, expect, believe, other target, seek, opportunity may, will, intend, as potential, estimate expressions. anticipate, could, or similar Forward-looking plan, such include

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

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

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

Joseph DePaolo

Mortgage and detail. Thank financial I colleague, Bank's billion overview will with York, and many in address of quarter our surpassed Howell, your remarks. notable greater Signature Digital contributions blockchain-based the results; I by York of -- my the bank's our in review old will now end provide the Banking assets legacy our will our continued risk team New $XXX performance which our and then the on the Operating Eric into growth Chief success you, billion third blockchain-driven the organization. Eric Asset in driven comprise some banking quarterly which The and the of our growth, growth widespread platform, Signet, Officer, legacy Specialized in New milestone franchises, dramatic be was questions team, Susan. at a payments teams banking of $XX the Banking deposit from to our Signet platform, including Solutions the teams. collective

grew in Banking which Our our our growth was a core core outstanding. growth -- Fund driven record Division, $X billion by loan

Although some point-of-contact the have bankers day businesses always the come clients. we fruition, single which opened top only client-centric remains as of industry since adhered doors. their from to well to these our recently consistent attracts as our across our invariably We've model, approach

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

Looking billion. this billion grew quarter, deposits. average while $XX billion deposits $XX Deposits also $XX.X at to XX.X% or increased

was the Signet Asset billion which Digital $X.X driven platform. This billion, on quarter's by Banking growth the team, grew growth $X.X of deposits including

Specialized $X.X grew billion. Mortgage Banking Solutions the Additionally, team

which Group Coast banking quarter, New billion, and or in teams billion remarkable Since deposits furthering includes third $XX.X Venture West teams This $XXX $XXX XXXX $X.X exceeded X York our the $XX.X ago. million. the loan-to-deposit the Our at grew increased of The million New that Banking reduction teams billion. down increased grew X our banking year from $XXX XX%, growth. and XX% deposits ratio, average a now York XX% end stands in just increased million

deposits deposits total worth a of deposits. earlier, largely billion. noninterest-bearing quarter, $XX.X This can to billion the DDA increased increased That's stated Signet billion, I grew $X.X of in by attributable growth high to tremendous platform, our adoption XX% Noninterest-bearing During $X.X represents saying quarter. billion which, the twice. this be as which $X.X

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

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

by facilities. loans grew increase this in the XX driven was $XX banking core fund or prior primarily billion again loans capital XX.X%. the For The quarter months, call

teams Our opportunities. are to on existing capitalize positioned well

our originations our our welcome business, warehouse corporate finance and mortgaging further to help diversification. growth mortgage which SBA also will and platform, We

Now turning credit to quality.

portfolio Our well. to continues perform

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

they As $XXX were XX, at million. were as and of they are now $XXX there XXXX, $XXX million; XX, were July of $X.X million; they at October XX, April billion; at year-end

million the to quarter, $XXX.X or for with expectations. end the points $XXX.X within points second loans basis we're loans. loans million from modifications. billion, points So basis Non-accrual well $X.X our was XXXX, XX when were for million of of or XX total or total basis That's it non-payment now $XXX of XX compared down XXXX

to within XX-day are loans well of range past $XX.X XX due million. our normal Our

past Our XX-day at due $XX.X million. plus loans were

loans, third expectations. have delayed for basis net $XX.X $X.X closed. within this, of dues -- were average normal and However, quarter, I the XX-day million for allowance excluding X much to basis coverage Net facilities for be $XX.X that the were again or secured stand fund ratio decreased at losses will charge-offs loans very XXX%. bank's or XX the to range quarter banking credit quarter point been the XXXX renewals at This losses quarter. continues the like our and for million. healthy with the past quarter of subsequently credit points would to second XXXX call there charge-offs XXXX XXXX government-guaranteed XXX% $X were for have allowance XXX would compared points plus for a well million loans Adjusted third within points. out the PPP were capital for second The to and with higher credit brought losses for that the XX that provision $X.X basis compared the million our million for well

it Eric, point finance York, X year, York. on the and New the XXXX private success. the banking team to he corporate in to large in to team. This realize we in New X key brings onboarded quarter, the I'll bank Coast X hires continue greater Now front where will this turn call, the West well At in quarter's for SBA client total the the over expanding review X on as third as In mortgage financial and originations detail. results team the to team the

Eric Howell

on XXXX Joe, you, compared points. income from income million the from an basis increase good balances for quarter. XXXX our for basis flows, second emphasis and XX to third decrease margin second Again, an is which Thank points significant X.XX% I'll of due interest cash X.XX% was the interest morning, our to declined XX% focus by massive start income, on margin or quarter. reviewing the quarter, everyone. net impacted excess of Net increase million The it growth. net third $XXX.X quarter, XX growing from net deposit by interest margin. $XX.X with reached $XXX.X or XXXX With and the X.X% million, interest

billion funding decreased Let's quarter The rates a in floating asset billion X.XX%. the $XX.X quarter average yields in on to from portfolio quarter. XXXX decreased during again driven linked as which bank to the asset the quarter excess look to $X.X asset for decrease and securities grew lower yields the points overall points basis to costs yields X.XX% basis was securities. cash third linked investment for as by well massive rate the Yields balances, Interest-earning XX due XX reinvestment at moment. the

going interest the quarter. to in end investing most X.XX years, which was We lower in rates portfolio that to a it for anticipated and quarter. was duration rates fortunately, to environment our the better an were the securities, of at for Additionally, increased be increase of the due

second the day opportunistic last with on commercial commercial saw However, turning And of purchases loan we throughout in And $X we invest. quarter quarter. by loans decreased which the XXXX which billion the average to on our in compared did literally $X.X points quarter. XX X.XX% portfolio Yields the mortgages therefore, that increase were billion, securities settled to we to and limited as portfolio. includes windows basis

from both penalties prepayment points. XX basis yields by decreased Excluding quarters,

liabilities. at looking Now

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

needs. fees where of expense. to rate over increase decreased liability-sensitive rate for decreased commitment XX% same quarter XX%, driven $XXX.X charges or rising the versus the mildly focus an to now well And years. to by of due to to growing quarter, loans, cost the income, comprise bank our the points ago. despite both we teams and income grow from points growing And growth bank's our The which positioned is to our the to $XX.X core margin due $X.X treasury the for support $XXX XX in environment. by million of principally of base, makes private significantly cost million balance balances, out in which from fees. and addition a funding team costs. up meet basis During on risk like Noninterest for efficiency with XXXX million the X in million compared operating unused to shift banking bank's deposit continues sheet year. for XX.X% last XX% or period noninterest advantage client our now X average to the cash portfolio, to compression gain the fees floating and asset-sensitive borrowing was rate was deposit new to substantial our third several from The leverage; and of $XXX.X us expense The reduction the management mostly coupled million, was XXXX the comparable with year loan a the plan million by take on rise extremely of achieved versus third ratio noninterest our our significant third And a and point improved With basis quarter quarter. last dramatic and to operational The X.X%. for increase XXXX in when as quarter the overall the points, increase result, period moved funds $XX.X driven profile, interest decreased service I'd hiring borrowings basis has a XX.X% balances XX.X% our and to

turning to quickly taxes. Now

tax This one-time lowered This tax rate million which multiple quarter, the XX.X% we to included benefited and for tax in totaled from our credits. solar million items, $X.X quarter. $X.X

Excluding common effective of $XXX the tax raised these XX.X%. rate offering have And been bank during would equity quarter. the to for turning The through public a million capital. quarter benefits, the

now, sheet ratios third As of XXXX risk-based strengthened by X regulatory augment a profile call a the evidenced to ratio and well quarter. Joe. ratio risk-based of of all excess common and balance turn as I'll remain you. relatively And the in XX.XX% the Thank as result, capital of requirements low-risk of equity back total Tier and XX.XX% the

Joseph DePaolo

franchise quarter pre-tax loan earnings our of of growth, Bottom strength we yet strong collective deposit another strong record led The to delivered line, core growth, net record record another Eric. Thanks, quarter. income. and pre-provision

the cash our of significant future deposit for We across from board excess a sheet. positioned are that has to robust growth the the led on level given balance well

our the to will our portfolio businesses. as continue put through cash to both securities loan prudently well existing use We lending as our and in portfolio new

Our higher drive steadfast our shareholders. for deployment earnings will ultimately

and that often continues the record to organizational optimal is confirms with industry-leading of stem capital approach growth investing disruptions Our M&A, best organic track Bank's from method underestimated. to the coupled that our deployment. which avoid Signature to are people efficiency cultural path in paramount all for be and the is

to our and us future to into to colleagues, Looking will their invest look institution chapter. has brought culminate has forward It has always been that we bright Bank. this continue We and ahead, Signature in dedication efforts that the continue driving ahead. next be will to a become

Now, before get want happy call to you I answer operator, to we questions encourage vaccinated. over the might everyone, But to are just any the I please turn have. Emma,

I'll Now, to Emma. over turn you. Thank it

Operator

[Operator Instructions].

first question comes from Stanley. Ken Our with Morgan Zerbe

Kenneth Zerbe

payment quarters? data able the couple last may and you volume any in much Are is flowing Signet, to over how of through provide that of have terms how changed

Eric Howell

Yes, some Ken, we can provide around that. statistics

XXX were quarter XXX -- Our slightly for billion, million billion. the of transfer down volumes sorry, from quarter prior the

Kenneth Zerbe

or I trying over time. that's ago? that was where sense a quarter get And up you. to year of a first don't how know, just say, I'm ramped Got maybe,

Eric Howell

not was billion we about we're XXX. volume. Xx. all Year-to-date, of up We're XXX If at relevant, were look at It we so. in XXXX,

Xx So we this be more Xx than year. we'll than more we last this were year were year -- that

Kenneth Zerbe

Got it.

versus Okay. a bit have team just small Joe, where break elaborate the little you of by can And then much was you're amount paying us those, growth those of you on sense? the your I really interest help you platform. that makes coming on out interest know you're you adoption that noninterest-bearing deposit you how paying crypto like, not in. pays driven question. think, if that deposits I mentioned or very the Signet where how deposits do some banking But interest on just digital delineate just -- the understand that Perfect. Can second more?

Joseph DePaolo

operating interest pay the don't accounts. we Well, on

But I average, X less team So have for about digital about and teams. we interest-bearing. the of funds on for that their the cost all is XX% say, XX% basis of about cost in deposits of funds noninterest-bearing than the the team would other of points are

So driving they've deposits down. the of cost digital been

Kenneth Zerbe

Got you.

can Okay. maybe I All right. Did loans helpful. then squeeze just this And Bitcoin one if quarter? any do in. That's question backed last you

Joseph DePaolo

far all $XX which X quarter We think did And million. the thus for done third loan, year. we've for I the that's

X We expect maybe others. to or do X

Operator

Our next comes Matthew Stephens from question with Inc. Breese

Matthew Breese

Maybe loan growth. turning to

This well of quarter's guidance. performance was ahead

you you growth going recalibrate weren't curious quarter expecting? your Just happened throughout on what the And maybe the could expectations course of loan that just forward?

Joseph DePaolo

that banking capital had the Well, a number made third in group, drawn they we the commitments prior quarter to fund they of had call that down on.

that was piece. So the one --

it were piece -- both is direct call perfect of well. small storm. and lot Another that, and was participate them to There to a loans I'll for do it opportunities, as the large

on thing -- because that any fourth just something we it anything So one wasn't happened. recalibrate based quarter good quarter drove so that the wouldn't third things many the it,

Eric Howell

quarter. often hard quarter us predict. fourth tends in pay and see lines the clients the down to for bit do And to choppier We kind of a be

billion at So fourth the growth quarter. we're for $X.X in looking billion guidance to loan $X

Matthew Breese

Great.

sheet the billion, without $XXX test then the the guys expect maybe about on holding a is of Dodd-Frank from now excludes you company, operate little stress we any or Okay. just that you through bit regulatory that should does a that? changes Could any front Or test. front? stress balance Act talk the And you

Eric Howell

and mark systemically I can that billion. between anything come we're to those systemically $XXX billion think us important, and $XXX $XXX would important. of be would play the render be billion into doing at Most considered don't

banking is and model simple. straightforward Our pretty

go time We've resolution that. that do doubt some got we'll the to But to plan. that thing do there. highly X submit is would I the So a have regulators

ability our a model a that. banking So we very and straightforward do to pretty simple we're Again, about structure. feel comfortable

really difficult shouldn't So for together put it resolution us be to a plan.

Joseph DePaolo

be And that sooner expected expected will will be XXXX. notified we resolution get if plan in than later,

Eric as we said, certainly time. So have

Matthew Breese

Great.

ton position start just cash be there's see of a cash Last you is. you I obviously maybe talk what -- point are go all bank to me billion. deposit actually participant hoping about certain that than we the what average a -- think do I to the you can asset classes. just the an a reserve and start mandating bit balances the had. the cash to inflection. just A At bit you need of in stablecoin And lot we a bank? expect for little lower. think on see more Okay. issuers is certain the That's the as to balance We of talk your one sheet, was could on normalized turn to in about that hold Should Signature could cash $XX needs little

Joseph DePaolo

It's legacy difficult there, It's about in they've is first and flows new they've because time whole determine been to Particularly the of businesses the out pandemic these their been because question if the that be will we to deposit are both deposit Coast, that part here. all hard the draw answering clients. have in think continuing flows. what you under the West a

of bring So start hard as they more to to quickly. that deposits deploy in, the it's

we of coming flows. have depends SBA have asset next really that and lending, one lending X the going it the on the have that this on had So quarter we verticals, side that But another board on, deposit have we new first and of vertical good on the XXXX. quarter we either the is warehouse we be or will things

will us. deployment that help So

part positive but expect did their not like estate coming a commercial here, certainly early in they real the of on, way. We that tenure will start in

past. the pretty we that have, can levels been than it much were to we we're -- get that whatever we in So deploy cash they've confident higher

Eric Howell

we in for much it of we improved what was most environment have and invest can today, that that's last a quarter. from certainly -- Well securities

predict a balance to to again, tough say billion well. Normalized deploy probably we're as growing in billion cash able hold sheet. cash now. balance we'll $XX So to But I'd $XX is the overall because, there we're be

amount Joe got do that we said, have drive it's that in that future the future, We've engine it's a cash deposit as we'll be for very and say, hard place to us -- of predict seen significant we've in growth. of to the so. deploy growth hard because able So we need to deposit to to

our growth a We negative rise, growth deposit our anticipate, couple now X rising through will do And that history. So moderates right? all in near have to grow of these impossible rate moderate, we've although that billion deposit did in stronger interest only the really quarter we quarter deploy we perpetuity. to should that's signal in we happens, and been economy see as of had growth monetize asset environments of see of we that think us history, going curve, which $XX classes to a that and balances. steeper yield we're give plenty then where rates will cash into, And a when

Joseph DePaolo

Eric we Something a that day. in on that $X quarter. on last future billion Eric had investment settled said securities we that very for early is deployment have pointed fourth had the with out bright the

income didn't the in that loans So had we and contribute to and quarter. net XX that of days interest fund $X.X settle billion last the in

So in very bright income the fourth net for looks quarter. us interest

Operator

America from Bank Ebrahim We'll Poonawala next take our of question with

Ebrahim Poonawala

points, is your basis Joe, maybe the that the follow-up anywhere guess statement a of and securities points book. I above The Eric, curve part XX start year. X-year basis around of X-year to just the XX on quick

of Is in you appreciate up, on the color incremental Eric, securities Would billion? size is that. terms could $X $X if quarter billion? during any you the it purchase Just could

Eric Howell

have curve a much we how be payoffs But it It's $X we be It as it range. similarly as there. it It's could could now, somewhere long have in bit $X yield that a lot see the situated billion. stays little because is to of Ebrahim. do as pushing probably billion,

portfolio. now, but cash fair if deploy we we is a So XX-year a and a X-year -- have amount into where position it of the can

Joseph DePaolo

today. investment fourth the be in would on are growth record a definitely securities where in we quarter It based

Ebrahim Poonawala

essentially When on just raise of lot second quarter. And and at the you obviously were a equity Understood. so risk-weighted the Tier where did capital. X you in you have leverage, look you're capital, you

about give growth Just some would equity thing, thinking again remind context but management, thinking be how us good for you're capital another us about a this? you're mean raise, it around potential how I

Eric Howell

position in early good raise today in did we with quarter. We're a the the that last

our extended that's an of capital that's to growth, levels if we're to So going raising outsized capital, we are. feel and good be going we look, shy and see our But to about period answer. not about continue answer, what's be where our

Ebrahim Poonawala

the just it. price correlated is that? It How should And a They I'm volumes I clients. mentioned. feels quarter-over-quarter. the obviously, Understood. on you're down adding backdrop, activity quick we totally you that, is get Eric, then transfer were read not with Bitcoin follow-up, into like increasing. assuming But

can the to in at, terms an the what's things looking should think outlook Circle if talk drop? the if the update there? Just us us how partnership, sequential about And where we we give of stand, metric are you that's on

Eric Howell

is Look, quarter XXX volume in a We means. any near added we're don't decline early by think quarter. of the in clients I on trend still ecosystem. this X

So or billion the and in $X over up $X that's deposits in we're positive, billion in quarter. deposits

us. that's key for So driver the

bank, at as so Joe lower play this rest average. deposit the -- we for have pointed than So of on is cost the us a out,

innings, go yet. the we've early and in we're ways So got to a

Joseph DePaolo

last of it of we're year. the think ahead that Just Xx

Ebrahim Poonawala

And update, Okay. that any and Joe, No is partnership on like how the growing? understood. Circle

Joseph DePaolo

great have We relationship a with Circle.

now doing a tremendous with operating amount up We operating continue on accounts. business accounts to many business. are and of do Signet opened They their

well, is flourish. partnership going see it the to continue So and we

Operator

We'll Brock with UBS. our next take from question Vandervliet

Brock Vandervliet

that Ken's to on going the Just relationship. question million -- XX securities lending back

seems That particularly there. if a you're is how very and that some -- what regulatory Is slowly been you're You've so, going And regulatory key clarity the there on approaching awaiting? been it? building market like business. thoughtful you've

Joseph DePaolo

We're vertical on We do the we to be think it for out, borrower. to test slowly. it's like we to others of going credit the to best the just where underwrite which We to We're underlying We're going as the state clients. it we're loans go it deployment. a to just depend readiness to did. It's great going for not going take wanted going not best a a accept also the without that can pay we I just actually being, collateral, as let's collateral, borrower million to but it on drive do that's Bitcoin just about want going the and a Where as accept if it we will which It's going worrying quarter, back we underwrite deployment say, $XXX great depend wouldn't levels. everyone. not do something to to any collateral. not we're for to

So I forward. wouldn’t depend going on it

Brock Vandervliet

And you And be funds? shifting whether over you how how the regulatory deposits, specific money shake treating do to that market digital there about could are as talk it Fed-regulated may much out? them stablecoin? bank a changes And think coming, may that means or

Joseph DePaolo

Well.

we reserve. that billion have And stablecoin they're have clients, operating dollar in another on we but reserves, $X are billion we $X.X that stablecoin their deposits, are not have for then accounts. in also First, the are

is in $X.X deposits billion in billion call total digital, billion. is the stablecoin X.X -- deposits digital strict reserves is interest-bearing billion. it and total the So which $XX $XX of

Brock Vandervliet

in And how playing do the terms there there in risk of change a issues template? is see of a you -- out regulatory

Joseph DePaolo

From by on FDIC-insured is wanted they that in what treasuries. in -- understand we and/or hear deposits what banks we

market bank deposits. to had could we’ve or in they treasuries our money treasuries, put with put that the So if want clients deposits, in That's at discussions stablecoin. the in they

Eric Howell

in team York and that regulated, welcome do that where crypto versed DFS be certainly done they us, need strong and that, and and expect And ultimately to as we it with continue technology, appreciate have others U.S. I fintechs we around work really well and and they well well, in a understand that as that's For that with are they'll we relates mean, supporters. has others regulation -- we Brock, regulations the New that, already to financial well the highly the been will really there's us, and lot right? as have DFS hopefully, to a

Joseph DePaolo

that ready actually And welcoming because a number and small. and the in eliminate even regulatory regulation competitors, competition position some or a are new live our to It because stablecoin willing actually of the guidance. eliminates will be able under they're regulation they're of clients

Operator

next Our with Casey Jefferies. Haire question comes from

Casey Haire

securities the on build, rate $X that is the that was up today? the And on got at quarter? you the follow to that the specifically end Wanted rates. of billion reinvestment then where What

Eric Howell

somewhere I'm it's to going to range, there. Xs X.XX, X.XX mid the in low say to X.X, probably in

what I we're mark the in. and Now investing over we're XXX think

Casey Haire

any in you Okay. the color on a And mix Just composition? you're is of some today? there regular type then Are securities? change, Eric, doing and buying pass-through floaters what

Eric Howell

I buys agency long time. mean same some debentures, been it's we've But such. opportunistic and of a it's banks that done The for type on in we're still the regional agency plays securities same we've that buying got defensive debt and -- pools, more CMOs, MBS callable agency we've of the really.

Casey Haire

of weighting securities, -- risk-weighted as cash from types risk the for into what ratios? Okay. Understood. perspective, is you And from a these what rotate management capital the

Eric Howell

XX%, it's this. to bucket, think X% it's XX% in think I of the I right? most

Casey Haire

trying Very yield what's per can provide on terms get color in you a year. can any coming add And good. then this the new or to Just of loan sense guide expenses? vertical, to the either quarter this growth Okay. quarter, loan what of next

Eric Howell

team, warehouse they've Yes. well got lending the over... In mortgage

Casey Haire

-- I new Actually, about the the or going mortgage was talking that SBA? the other with, not -- team warehouse you're

Eric Howell

they're ramped to A per fully probably little I say. SBA. X when in growth. looking to X year Or billion at mean, early billion we're

Casey Haire

capital Okay. And similar a yield type warehouse? mortgage call as

Eric Howell

spread that business. bit hopefully, higher, little I'd probably more a a similar, little say in

Operator

Jared Fargo next Wells our Shaw We'll Securities. with from question take

Jared Shaw

on past? sort this like versus that transaction the Signet. of circling the Just size average quarter what looking Has been we've back done? is seen that What's moving Or around? in

Eric Howell

size transactions. of actual have don't I

Jared. Sorry,

Jared Shaw

or bigger getting it Is magnitude. of Order or smaller just...?

Joseph DePaolo

other banks level. They're very only because the that retail larger institutional and little is retail, than and we do high have

to So going high. it’s institutional pretty at level be

Jared Shaw

Or the Okay. there and has real Any multifamily, are you grown the CRE while, And potentially capital bit. little stabilized have here? growth? stable just been side, stable a thoughts there balances then, estate commercial the at balances keeping look you on and to market you've a I and reengaging happy shifting seeing guess, when for as

Joseph DePaolo

ready We're multi-year -- have balance the and We deal experience annual with the to that the to an we've it's the us some in keep asset to a pandemic, on still the experience, of been what [jockey] little dealing reengagement. We were years that's multigenerational, pandemic. a basis. you growing We has to have. bet on. think want through helped for with able and strong Because

that portfolio, And led the has way. we comfortable line that the rest through very, not level that a past, us keep with, to coming years what did albeit so favorable very pandemic believe now, grow in a we we're the to with but we're in grow percentage-wise to at right the it it the to should organization. of And in continue

Operator

We'll with Steven next Alexopoulos to JPMorgan.

Steven Alexopoulos

start And the Signet? on some them announce digital the they Are either providing of that banks many difficult new to seen an the business, you guys how are it deposits. now on-ramp seeing to smaller holding exchanges to asset wanted I for space? we've one replicate entrants into or stablecoin would be

Joseph DePaolo

said space where survive not on entering it X Signet Well, X -- this digital way. for them other banks I years. But ecosystem. ecosystems, some product type to the blockchain, a not use the they be are would years ago, the within should necessarily put of let's

that So they number want that's announcements think own. merge. their there avoid And years to on mergers, blockchain to expect technology the have we to of that's or on left be and banks coming the of And going go. because a X there been we blockchain they're on will

about any you So particular are bank? talking

Steven Alexopoulos

more now in couple like business, they're seen Bancorp said holding of other stablecoin Customers from companies. small. saying we've the been that And there's Well, small deposits a banks they're now

So we're just hearing rumblings.

newer and entrants what offer really can use Signet proprietary wondering is how these to today? off-the-shelf just basically I'm replicate you fintechs guys So

Joseph DePaolo

surprised were it took this actually. long we Well, that

that And sooner. it expected ownership We occurred with Bank, we piece seat have that on would excited Customers board we're ownership Tassat. in have -- we Particularly actually are a board Tassat. on piece because a meaningful of have a of they

clients, in to first With have we don't that hard for have team think customers, things with enhancements team that it's and announcements well a us So and that years doing. because they with do quarter, we has we do the we'll get team the making products, the we'll to them if space and new want or a and continuously we they're that the for fourth upcoming into of probably experience digital I this a But of some And do we're bankers it ecosystems things have digital that be handles other team quarters, to Signet, Signet have don't us because you handles in a all well. other that bodes to have and into of like space. have experience. the with announce looking

the at So were having goes all we out with I first because there. we're a concerned having -- coupled not being experience first out way there us. and And think for long

Eric Howell

others room play. ecosystem massive it's to growing a And for with

Steven Alexopoulos

the adding which platform? driver that the with Eric, and more institutions here? to your more follow about those up on Is at to is hold so stage in Signet volumes is quarter. more slowed like commentary that you, the has in on earlier institutions seeing Or simply a accelerate, more third bigger volume deposits about the it bit this growth

Joseph DePaolo

large, the I must the it. I'm say, sure not pretty in transactions really averages. volumes are drive keep It's the I don’t although they have Signet and if I much -- how

all. in on are looking rate we we've and not the So compared actually now. past we're years, what it done a concerned at at right fourfold We're to

Steven Alexopoulos

one. helpful. credit. final just want That's to And to X Joe, shift

million. increase Just quarter, any linked the NPLs color on in $XX this quarter about

Eric Howell

to that fully are expect our effect still the as nonaccruals dealing going with increase really Steve. pandemic, Yes. We of we're

surprise a Most a going But clearly, curing. to into some go went our not are little out coming the it's loans of bit. nonaccrual. that up So are of are non-pay that nonaccruals

no is bright losses to I be of surprise to contained. which pretty some well you put our us able out want appear under really it if absorb call that that, to spot, coming think the new it. we provisions, that were able charge-offs any saw substantial have modeling, nonaccruals to climb. that But it's we CECL easily to are And up we

quarters through effects COVID. last think the as that for we continue to lingering I you're going several see of work

Operator

We'll take with from Seaport Research. our next question Bishop David

David Bishop

I us the new in my what -- targets there? for it. and of touching SBA, But and the started mortgage Most maybe terms verticals, been expectations But you have answered. remind think, asked questions the the upon or warehouse Eric, growth

Eric Howell

the early first we much quarter, this type slower fourth so which a in more SBA origination to loans, That's Yes. in granular XXX on We quarter. be did going our growth, love.

I XX XX, think fourth XX to million XX. then and if $XX to And XX we do to quarter, that it's be great. next hopefully, to $XX can XX, million originations in the would year, in

give a is when million there. range out So I'm several years you're a now. being that $XXX wide $XXX That million. to to going you looking fairly from business mature

to say, in Let's goes. But the they've almost I business, a see now mortgage want $XXX how finance million pipeline. to got growth. $X in warehouse it million In $XXX the billion, year

We say, close even high expect, on lines draws anywhere as million, of as be and would of XX% end but $XXX roughly $XXX that. to will let's maybe to really be million much that the from

hundred quarter, see could vertical million in of and a billion year per be the billion growth dollars should going of in we to that fourth So out couple of forward. $X $X that growth

Operator

go McGratty Chris with to next KBW. We'll

Chris McGratty

Wondering, if fee provide trajectory you and momentum? run the income the rate on the could update expense given Eric, an

Eric Howell

Yes.

fourth of last expense quarter had the items front, one-time level that in some On a the to year expenses. led we of low

We've stay I lines -- to quarters. to initiatives. in growth hopefully though, we're higher our next then what Chris, on probably undertaking business need the out our to massive in that So to for a And brought down third we've Might really seen And technology. into number. people, of our and year, to when expense year. XX% a quarter last XX get XX compared trend fourth back and few and there we're range. for be we XX% growth it's in and start operations quarters, prior number fourth we some a the up in to invest in in this years, to year Similar we'll going pop think then

with of we ratio that about to have and talking being see there, putting level to a hefty gained our that the efficiencies go still efficiency should see on. said, expense level So the be we're growth and revenue going continue of even spend down we're All next year is for sure.

Chris McGratty

in And great. just maybe kind that XX.X% then then the a The that fees, tax is PPP couple remaining what of third That's rate, us? housekeeping. of also was where quarter? earned And and you're guiding

Eric Howell

Yes.

closer going be the On probably taxes, it's to to XX%.

seeing benefits. are We some ongoing

be should say, $XX.X $XX.X fees, which the the X over effective million remaining PPP X we've next got happen of So recognized, the rate going forward. on recognized million. third XX% we I'd quarter And to to quarters. In

Operator

We'll go Long next with David to Raymond James

David Long

But Coast, Coast. on Just in pretty it's West I late to guys add bankers Is that see the that of build? year something And to that maybe first the of in your you good is there what pipeline and some have the half versus look likely guys in that the West to just would know year? the continue done you next curious is this to rest year. more expansion anything there, additional

Eric Howell

for year point pipeline but mean No. next of we're at the year. this here mostly might there a a California. setting do I in existing for number I teams the to add year, We in have stage and banker the think this teams we

teams I'd in anywhere, say, X to X pipeline. the from So

as part guidance So in expenses the of growth that's the well.

Operator

conference. and today's concludes allotted time This our

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

Signature Bank (SBNY) 19 Oct 212021 Q3 Earnings call transcript