About half of Signature Bank’s $ 55 billion in loans
“It will clearly take some time to return to pre-pandemic activity levels,” CEO Joseph DePaolo said in a conference call on Tuesday. “But it’s encouraging to see this great city come alive again.”
Bank data shows that loans on which interest was paid but no principal rose by $ 200 million to $ 3.8 billion in the second quarter. A spokeswoman said the increase was due to deferred loans that were “modified” when interest payments resumed.
The improving urban economy helped the bank nearly double net income to $ 215 million in the second quarter. Total loans increased 7% – a remarkable feat when many lenders report little to no loan growth. The bank’s stock, which rallied twice as fast as its peer group over the past 12 months, rose 6% today.
However, Signature and other lenders may not be able to remain patient with struggling borrowers much longer. In June, President Joe Biden extended the federal mortgage foreclosure moratorium to July 31.
“With recent employment numbers, it’s hard to see how he can take it any further,” said Mayra Rodriguez Valladares, executive director at MRV Associates, a financial advisory firm. “Lifting the moratorium could really lead to an increase in the number of defaults that would hit banks.”