SIVB - As Credit Stabilizes Signature Bank's Growth Story Comes Into Play

• Signature posted a core earnings beat in the fourth quarter, but most of the beat was driven by taxes and credit, as spread income was hit hard by excess liquidity.
• Non-performing loans are increasing and charge-offs will spike in 2021, but deferrals are below 3%, most stressed borrowers have at least resumed interest payments, and NYC rents are stabilizing.
• Signature has a credible plan to generate impressive growth in the coming years, while also diversifying the business, by focusing on new/expanded lending and fee-generating opportunities.
• Double-digit core earnings growth can support double-digit annualized total returns from here, making Signature an attractive higher-risk/higher-reward opportunity.

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