Crypto-friendly bank sees a 30% lower Q1 net income

on Apr 24, 2020
Updated: Apr 28, 2020
  • Signature Bank noted a 30% drop in Q1 2020 net income, which comes as a consequence of coronavirus.
  • However, the bank noticed significant growth in net interest income, deposits, lending business and more.
  • The bank did not provide details about the performance of its blockchain-based payments platform, Signet.

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A crypto-friendly bank known as Signature Bank recently reported a significant drop in its net income. The bank revealed that its income for Q1 2020 came in around 30% lower than last year.

This year’s first quarter only brought in around $99.6 million. In comparison, Q1 2019 net income stood at $143.5, as the bank reported this Thursday, April 23rd.

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What caused the drop?

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According to the bank, the drop in income comes as a consequence of an increase in the provision for credit losses. The total increase comes as quite a large figure itself, totaling at $60.5 million. However, the bank believes that the situation came as the result of the COVID-19 pandemic, and not for any other reason.

The bank also noticed a significant earnings-per-share (EPS) drop in the first quarter of this year. The EPS sat at $1.88, while the estimates predicted the value of $2.18. In both cases, the value would have been lower than last year, when it sat at $2.63.

The bank performed better in other areas

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On a positive side, the bank’s net interest income surged by 9.2% in this quarter. The bank reported that “This increase is primarily due to growth in average interest-earning assets.

Its deposits also grew by as much as 15%, hitting the total of $42.24 billion in the first quarter. This is, once again, a better performance than what Signature Bank saw in 2019.

In fact, its CEO and president, Joseph DePaolo, stated that “This was the second-best quarter of deposit growth we ever reported.” He added that Q1 2020 stands as the third quarter in a row that the bank exceeded $1 billion in deposits in total, as well as average deposit growth.

After Q1 2019, deposits have been almost on a constant rise, increasing by $5.6 billion in total. Meanwhile, the average deposit grew $4.7 billion.

Loans are on the rise again, being 5% higher in Q1 2020 than they were a year earlier. DePaolo explained that this increase comes as a consequence of the new fund banking capital call facilities.

The same is true for the bank’s pre-tax and pre-provision earnings. Those also grew by 5%, sitting at $218.5 million in the first quarter of 2020. Last year, the total stood at $207.9 million.

Lastly, it should be noted that these results do not include details regarding Signet, the bank’s blockchain-based platform. In fact, information about Signet is unknown, and there is no data regarding how many clients it has or its volumes in Q1.