This New York Regional Bank Stock Is on the Move
After a difficult year in 2020, most banks are looking to turn the corner and improve profitability in 2021. But the nearly $74 billion asset Signature Bank (NASDAQ: SBNY) in New York City looks poised to break out and chart a new trajectory for growth and profits. The bank had a phenomenal fourth quarter to close out 2020 and its relatively new lending and payments products are quickly gaining traction. This makes Signature Bank an attractive play for the future, even with the stock recently trading at 1.5 times book value. Here's why.
For the full year of 2020, Signature Bank's earnings dropped about 8.4% compared to 2019. But the bank's fourth-quarter earnings of $3.26 per share set new records, up more than 18% from the fourth quarter of 2019.
The bank achieved this by growing net interest income, the overall profit that banks make on loans, by roughly $56 million in the fourth quarter compared to the same period the year before. On the year, net interest income grew by more than $200 million. Now, a lot of this came from deposit costs repricing downward after the Federal Reserve abruptly lowered rates last March. But interest income also grew in the fourth quarter and in 2020 on the whole, which is a huge achievement in the ultra-low-rate environment.
Source Fool.com
