SBNY - Signature Bank: Buy This High-Quality Regional Bank At Only 11x Earnings

• There is elevated risk in buying a regional bank, as lack of scale and high regulatory costs typically equate to lower returns on equity.
• With Signature Bank, they stand above the herd, with impressive ROE’s and earnings growth since its founding in 2001.
• The bank is a turnaround play however, as it suffers from a base in New York City, clearly a difficult environment in which to operate.
• But SBNY carries a conservative portfolio of loans (under 60% LTV’s),and has already booked significant reserves to account for future losses.
• Our medium to long term targets are $120 to $200, from $109 today.

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