HHow much a stock’s price changes over time is an important factor for most investors. Not only can price performance impact your portfolio, it can also help you compare investment results across sectors and industries.
Another factor that can sway investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you had invested in Signature Bank (SBNY) ten years ago? It may not have been easy to hold on to SBNY all this time, but if it was, how much would your investment be worth today?
Details of Signature Bank business
With that in mind, let’s take a look at the main business drivers of Signature Bank.
Signature Bank is a New York-based, full-service commercial bank with 37 private client offices located in the New York metropolitan area, Connecticut, California and North Carolina. These offices consist of a growing network of retail banking teams that cater to private business customers, their owners and senior executives. Founded in 2001, the company offers equipment financing and leasing products through its subsidiary – Signature Financial LLC. It became a member of the S&P 500 Index on December 20, 2021.
The Company’s Signature Securities Group Corporation subsidiary provides brokerage, asset management and insurance products and services, while the Signature Public Funding subsidiary offers municipal finance, lending and credit- tax-exempt lease to government entities.
In addition, the company securitizes and sells secured portions of US Small Business Administration (SBA) loans.
It pays through the following two segments.
Commercial banking (contributing to 92% of total revenue in 2020): This segment includes commercial real estate lending, commercial and industrial lending, fund banking, venture capital banking and other fundraising activities. commercial deposits.
Specialized Financing (8%): This segment includes financing and leasing products, including financing and/or leasing of equipment, transportation, commercial marine, municipal and national franchise.
As of December 31, 2021, the company had $118.4 billion in assets, $64.3 billion in loans, excluding loans held for sale, $106.1 billion in deposits and 7.8 billions of dollars in equity.
To note: Some information will be updated once the company files its final 10K.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a bit of risk. If you invested in Signature Bank ten years ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1,000 investment made in February 2012 would be worth $5,836.50, or a gain of 483.65%, as of February 23, 2022, and this return excludes dividends but includes price increases.
The S&P 500 rose 217.07% and the price of gold rose 2.58% over the same period in comparison.
Looking ahead, analysts expect more upside for SBNY.
Signature Bank shares have outperformed the industry over the past six months. The company has an impressive track record of surprise earnings, beating the Zacks consensus estimate for the past four quarters. Its fourth-quarter 2021 results reflect higher revenues, supported by robust growth in loans and deposits, while lower interest rates and high spending have been spoilsports. Going forward, new lending verticals and solid economic growth should support robust balance sheet growth. This, combined with rising deposits, sets the stage for Signature Bank’s net interest income (NII) growth in the coming quarters. However, low interest rates continue to affect Signature Bank’s margins, while high costs due to rising wages are likely to hurt the bottom line. Nonetheless, strong liquidity and consistent earnings are positives.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.