|Shares Out. (in M):||57||P/E||0||0|
|Market Cap (in $M):||14,009||P/FCF||0||0|
|Net Debt (in $M):||0||EBIT||0||0|
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Signature Bank (“SBNY”) is a well-run, high-quality commercial bank with robust growth opportunities. The stock has appreciated materially from its lows in late 2020, but we believe it remains underappreciated. Earnings power is growing materially faster than reported earnings as asset growth significantly lags deposit growth and provision expense remains high compared to history and to other banks that are now releasing reserves. We think the stock trades for ~15.5x 2021 earnings that can compound in the high teens for the next several years. Using a 17.5x multiple on 2026E earnings, we get a ~$650 stock price, or a 23% five-year IRR (24% including the dividend) without material interest rate improvement or accounting for excess capital. For VIC aficionados, there are three other write-ups dating from as far back as 2007 if you’d like to chart the company’s history and assorted debates over the years.
Recent history obfuscates return structure
Taxi Medallions (2016-2018)
Emerging growth engines
Misunderstood earnings power
Balance sheet composition
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