Will Record Earnings Become the Norm at Signature Bank?

Signature Bank (NASDAQ: SBNY), which operates in the cryptocurrency space, generated record diluted earnings per share of $3.88 in the third quarter, up from record earnings per share in the second quarter of $3.57. The bank has now generated record earnings for four straight quarters, with Signature's differentiation in the crypto space proving to be a huge growth driver of the overall business. Will record earnings at Signature become the norm? Let's take a look.

Signature is one of the few banks that cater to institutional cryptocurrency traders and crypto exchanges. Its Signet real-time payments platform allows customers to complete instant transactions with one another, which is beneficial to crypto traders because cryptocurrencies trade round the clock. The platform helps bring in lots of zero-cost and very cheap deposits that Signet can then deploy into loans and securities.

Signet has been so successful in bringing in deposits, it has been difficult for Signature to keep up with deployment. In Q3, the bank grew non-interest-bearing deposits by $5.7 billion, while total deposits grew roughly $10 billion in the quarter. In terms of deployment, Signature grew total loan balances by about $4 billion and then invested $2.2 billion into securities.

Source Fool.com