Signature Bank Standing Out With Above-Average Growth Potential

Given how investors are prioritizing positive operating leverage with banks, you might think that Signature Bank’s (SBNY) negative operating leverage would be hurting sentiment. What’s really happening is that investors are prizing operating leverage in the absence of evidence of growth – in other words, what is spending more on opex getting its investors? In the case of Signature, the bank is following a clear strategy of building its business, including multiple growth drivers, and with two straight quarters of better than expected pre-provision profit performance, the shares are up about 17% since I last recommended them (beating its peer group by over 12%).

I don’t see quite the same undervaluation as before, but I still see upside and strong bank growth stories are rare enough as it is. Up to around $160, this is still a name I’d consider buying.

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Signature Bank Standing Out With Above-Average Growth Potential