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Shareholder Letter - November 2009
Dear Shareholder:
It was only a year ago when the headlines were dominated by stories about the biggest financial crisis in 70 years. I am pleased to report Signature Bancorp, Inc. has continued to generate profits and grow our Bank with a focus on safety and soundness.
For the nine months ended September 30, 2009, our net income totaled $2,061,000, which is slightly higher than our net income ($2,004,000) earned for the same period last year. The increased net income is attributed to the growth in our assets and a higher net interest margin in the third quarter. Our bottom line has been impacted by the increases in FDIC insurance premium, and by our strategy of building and maintaining a healthy loan loss reserve. The increased FDIC premiums and assessments have added $466,000 in additional expense in 2009 compared to 2008.
The current local and national economic conditions have had some impact on our loan portfolio. We are continuously monitoring and evaluating the financial condition of our borrowers. We have prudently added $800,000 to our Allowance for Loan Losses. We have not charged off any loans in 2009, but may see some level of charge-offs in the fourth quarter. We are confident the level of loan loss reserves is sufficient to absorb any realized losses.
The Bank’s balance sheet growth has continued in 2009. The most significant highlight is the growth in our core deposit balances. Our reputation for Gold Standard Service has helped us establish new relationships throughout the year. Our loan portfolio growth has been steady in 2009 and is projected to show a strong increase by the end of this year.
The attachment highlights our financial results in more detail. We are prudently managing our Bank for long-term asset and profitability growth. We are well positioned for additional loan and deposit growth which will result in renewed profit growth as our economy recovers.
We are grateful for your continued support and your confidence in our company. Please contact us if you have any questions.
Very truly yours,
Richard J. Brunner
President & CEO
Shareholder Letter - September 2009
September 1, 2009
Dear Shareholder:
At our annual shareholders meeting in April, I reported on the safe, sound, secure and strong financial results of 2008 that produced a stock valuation of $41.00 per share. I also announced we would engage Austin Associates LLC to perform semi-annual stock valuations beginning this year. I am pleased to report the value of your investment in Signature Bancorp, Inc. has increased to $42.00 per share as of June 30, 2009. This 2.4% increase in value compares favorably to the SNL Bank Index which was down 15%, and the NASDAQ Bank index which was down 16% for the first half of this year.
Our core strategy of providing premium service to our clients continues to serve us well even during difficult economic times. Many banks, both large and small, continue to struggle through this volatile economic cycle. Unfortunately, the increasing number of bank failures has an indirect impact on the healthy banks like ours. The primary impact is the significant increase in FDIC insurance premiums. In an effort to maintain the solvency of the FDIC insurance fund, all banks are being required to pay more into the insurance fund. In May, a special assessment approved by the FDIC, amounted to $200,000 for Signature Bank, N.A. The special assessment reduced our net income for the first half of the year by $133,500. As a result, our year to date net income is level with last year. Excluding this special assessment, our net income would have been $1.5 million or 10% higher than last year.
On the attached page, several performance metrics highlight our overall financial position. We are experiencing solid growth in our core deposit balances which will serve us well long-term. Additionally, we remain well capitalized and have the necessary liquidity to fund future loan growth.
Credit quality was stable for the first half of 2009 but remains a concern. While the bank did not experience any loan charge-offs we added $350,000 to the reserve for loan losses. The added reserves are provided as a pre-caution against future loan losses. As we review client financial statements we are observing weaknesses which may lead to downgrading certain credits. As credits are downgraded we prudently set aside additional reserves.
As we enter the second half of 2009, we are cautiously optimistic our financial performance will continue to exceed 2008 results. The key factors that could impact our final results are the potential of an additional FDIC assessment and further credit deterioration beyond our current forecasts.
We hope you are encouraged by our first half results and stock valuation. As always, we thank you for your continued support and hope we continue to meet your expectations. We have an experienced staff of professionals that welcome your referrals and are prepared to help you meet your financial needs.
Very truly yours,
Richard J. Brunner
President & CEO
Shareholder Letter - Spring 2009
In light of the significant events in the financial markets the past few weeks, I wanted to reiterate the strength and stability of Signature Bank, N.A.
We have built the Bank on a philosophy of providing premium service to our clients and managing our balance sheet in a conservative manner. Our loans are made to people and companies in our local community that have a track record of success. It is important to note:
• We have a quality, diversified loan portfolio.
• We have no subprime mortgage loans.
• We have never invested in any mortgage backed securities.
• We have no common stock or preferred stock holdings in FNMA (Fannie Mae) or FHLMC (Freddie Mac).
• Our capital position is considered “well capitalized” per the regulatory definition.
• Year to date, the Bank’s net income has increased 20% over last year.
• We have been attracting numerous desirable banking relationships, and we are excited about the opportunities to add more clients over the coming year.
Recently, there have been a number of reports about the safety of banks. We encourage you to visit two websites (www.bankrate.com and www.bauerfinancial.com) which provide an independent rating concerning the safety of individual banks. I am pleased to report we are rated as a 4 star institution placing us in the “recommended” or “strong” category.
As always, we appreciate your business and your support of Signature Bank, N.A. If we can be of service or answer any questions, please call us.
Very truly yours,
Richard J. Brunner
President & CEO
Shareholder Letter - October 2008
October 31, 2008
Dear Shareholder:
I am pleased to report continued growth in assets, deposits and net income at Signature Bancorp, Inc. During this unprecedented period in the financial services industry, we have experienced an increase in business thanks to the referrals and support of our clients and shareholders.
Reports, opinions, and questions in the banking industry have been in abundance recently. In light of this situation, I felt it was appropriate to expand my typical quarterly shareholder update. Below, I have provided a discussion of our financial performance and stability along with our approach to recent FDIC and U.S. Treasury Department programs. Our September 30, 2008 financial statements are also included.
Net Income
Signature Bancorp’s net income totaled $2,004,000 compared to $1,547,000 for the same period last year – a 26% increase. This total includes a $500,000 increase in our loan loss provision expense compared to last year (see Loan Portfolio discussion below). The strong growth in net income is a result of continued loan and deposit growth as well as prudent expense management.
Loan Portfolio
During 2008, we have been able to grow our loan portfolio by $22 million, and we have a strong backlog of loans scheduled to close in the fourth quarter. This loan growth is reflective of our strategy of providing loans to successful businesses and individuals in the local community. Despite the current economic conditions, our level of non-performing loans remains at a very low and manageable level.
We have proudly reported 26 straight quarters of growing financial performance without any loan charge-offs. Unfortunately, our perfect string has been broken - we recently recognized an $8,700 charge-off which will be reported in the fourth quarter. Based on the economic forecasts for the next 12-18 months, we have proactively been adding to our loan loss reserves as mentioned above in the net income discussion. At September 30, 2008, our loan loss reserve stood at a healthy $4.5 million, which is sufficient to protect against any future bad loans.
Thank you for your continued support and confidence in Signature Bank, N.A.
Very truly yours,
Richard J. Brunner
President & CEO
Shareholder Letter - July 2008
July 25, 2008
Dear Shareholder
I am pleased to report Signature Bank, N.A. continues to achieve sound, profitable growth in 2008. We have concentrated on a consistent and stable approach to our target market. The focus on our core strategy has produced the following highlights:
Total Assets reached $376.8 million at June 30, 2008 – an increase of $24.5 million year-to-date.
Net Income for the first six months totaled $1,340,000, representing a 33% increase over the same period last year. The growth in our net income helps continue to build our strong capital position.
Our loan quality remains solid and stable. This is evidenced by no loan charge-offs in our history and no loan delinquencies as of June 30, 2008.
These results are quite a contrast to much of what you have been reading in the headlines about the banking industry. The reports have generated a number of conversations regarding FDIC insurance. We have a very knowledgeable staff who can guide you through the various strategies to ensure the safety of your deposits. Please give us a call if we can be of assistance.
Thank you for your continued support and confidence in Signature Bank, N.A.
Very truly yours,
Richard J. Brunner
President & CEO
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