Signature Bank Remains A Top Pick At Deutsche Bank

Signature Bank SBNY received a bullish vote of confidence Tuesday from Deutsche Bank, which reiterated its Buy rating and price target of $181.

Deutsche Bank analyst Dave Rochester said he has “increased confidence” in projections for Signature’s EPS growth. Signature reported its fourth-quarter and year-end results on January 19.

Report Review, Analyst's Take

Deutsche’s EPS estimate for Signature at the close of the first quarter of 2017 is $2.14 and $9.54 for the year.

Investors could still focus on the commercial real estate and multifamily markets and want to see “how slow it can go” before driving Signature’s pricing past its sector as a whole, Rochester said.

Signature is expected to see more commercial and industrial loan growth and less growth in commercial real estate and multifamily loans in fiscal 2017, according to Deutsche’s report.

Signature’s own guidance conservatively projects its net interest margin to grow by 1 to 2 basis points per quarter this year.

The New York-based bank is seeing deterioration in cash flows from the financing of taxi medallions in the Big Apple, Rochester said, while one of three major taxi fleet owners in Chicago came current on medallion loans in the fourth quarter of 2016.

Signature saw a similarly bullish upgrade from Barclays in September.