Commercial lenders have not had it easy since the start of the pandemic, but Signature Bank is emerging from its Covid slump in a major way.
An earnings call on Tuesday detailed a strong third quarter for the lender, which CEO Joseph DePaolo referred to as a “perfect storm.” Loan deferrals have shrunk, the company’s stock is soaring and net income is surging, Crain’s reports, a year after Signature Bank struggled to collect loan payments from business borrowers.
On the loan deferral front, Signature Bank reported deferrals made up $254 million — only 0.4 percent — of its portfolio, a marked improvement from about 9 percent reported in January.
Signature Bank is also seeing more activity from the previous quarter. Loans jumped almost 10 percent to $59 billion and deposits grew by $10 billion, Crain’s reports. Net income went through the roof as well, rising 74 percent to $241 million.
It’s been a big year for the lender’s stock as well. In the past 12 months, the stock has gained 250 percent, easily outpacing the 79 percent gain of the KBW Bank.
The lender’s improvements have outpaced its competitors, but could be slowed in coming months. An analyst from Janney Montgomery Scott told Crain’s that nonaccrual loans rose by $29 billion in the third quarter, suggesting borrower struggles to come.
Still, DePaolo lauded the indicators announced in the earnings call, saying, “We’re coming through the pandemic in a very, very favorable way.”
In recent months, business has appeared to continue as usual for the 21-year-old bank. In July, the company gave a $30 million mortgage to Park Tower Group for a parcel at 16 Dupont Street in Greenpoint, as well as an adjacent parcel. Park Tower and Brookfield Properties are developing the 22-acre Greenpoint Landing, a master-planned community on the Brooklyn waterfront.
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[Crain’s] — Holden Walter-Warner